Inefficiency in the German Mechanical Engineering Sector

This paper aims to examine the relative efficiency of German engineering firms using a sample of roughly 23,000 observations between 1995 and 2004. As these firms had been successful in the examination period in terms of output- and export-growth, it is expected that a majority of firms is operating quite efficiently and that the density of efficiency scores is skewed to the left. Moreover, as the German engineering industry is dominated by medium sized firms, the question arises whether these firms are the most efficient ones. Finally an increasing efficiency gap between size classes over time is important since that would be a signal for a structural problem within the industry. The analysis - using recently developed DEA methods like bootstrapping or outlier detection - contradicts the two first expectations. The firms proved to operate quite inefficiently with an overall mean of 0.69, and efficiency differs significantly with firm size whereas medium sized firms being on average the least efficient ones. When looking at changes in efficiency over time, we find a decreasing efficiency gap between size classes.DEA, German engineering firms

Mechanical Engineering: Medium-Sized Companies with Highest Savings Potential

The German mechanical engineering industry, dominated by medium-sized companies, is greatly successful - both on the domestic and on the international market. A first analysis conducted by DIW Berlin reveals that this success cannot be attributed to a better exploitation of potential efficiencies - mechanical engineering is about as efficient as other key sectors (for instance the chemical industry). In fact, despite their obvious success medium-sized mechanical engineering businesses have larger savings potential than bigger companies and even than smaller enterprises in this industry.Data envelopment analysis, German engineering firms, Efficiency, Firm size

Empiricism Meets Theory: Is the Boone-Indicator Applicable?

Boone (2008a) proposes a new competition measure based on Relative Profit Differences (RPD) with superior theoretical properties. However, the empirical applicability and robust-ness of the Boone-Indicator is still unknown. This paper aims to address that question. Using a rich, newly built, data set for German manufacturing enterprises, we test the empirical valid-ity of the Boone-Indicator using cartel cases. Our analysis reveals that the traditional regres-sion approach of the indicator fails to correctly indicate competition. A proposed augmented indicator based on RPDs performs better. The traditional Lerner-Index is still the only meas-ure that correctly indicates the expected competitive changes.Competition, Boone-Indicator, Cartels, Census Data

Temporary Agency Work and Firm Competitiveness: Evidence from German Manufacturing Firms

This paper addresses the relationship between the utilization of temporary agency workers by firms and their competitiveness measured by unit labor costs, using a rich, newly built, data set of German manufacturing enterprises. The analysis is conducted by applying different panel data models while taking the inherent selection problem into account. Making use of dynamic panel data models allows us to control for firm specific fixed effects as well as for potential endogeneity of explanatory variables. The results indicate a U-shaped relationship between the extent that temporary agency workers are used and the competitiveness of firms.temporary agency work, competitiveness, firm performance, manufacturing

German R&D-Intensive Industries: Value Added and Productivity Have Recovered Considerably after the Crisis

No large industrialized nation is as strongly specialized in the production of R&D-intensive goods as Germany. In the crisis year 2009 these export-oriented industries had to pass a crucial test. The slump in sales endangered both specialized jobs and the financing of high R&D expenditures, and thus the ability of these industries to compete technologically in the future. The Commission of Experts for Research and Innovation (Expertenkommission Forschung und Innovation - EFI), which regularly informs the German government about the status and prospects of Germany's technological performance, requires early indications about the development of R&D-intensive industries. Detailed comparative international data regarding industrial development, such as the EU KLEMS Datenbasis and the OECD STAN data, is only available with a lag of two to three years. This is why the DIW has estimated the value added and the volume of labour input for R&D-intensive industries in Germany, the US, Japan, France and the UK for the period from 2008 to 2010. This extended database is used to analyze the development of production and labour productivity up to the present.Industrial specialization, international trade, manufacturing. - industries

German Industry Succeeds with Research-Intensive Goods

As a country highly specialized in the production of investment goods, Germany has been especially hard hit by the global recession. Because the production profile of German industry is technology-intensive, however, there is reason to believe that Germany will emerge from the present economic crisis with renewed strength. In no other industrialized nation is production as heavily geared to research-intensive goods as it is here. Germany has increased its lead over its most significant rivals not only in motor vehicle manufacturing, but also in machinery, communication equipment, and medical and precision instruments. The success of German companies is based not only on compelling products, but also on the relative efficiency of their production processes compared to other countries.Industrial specialisation, Technological change, Technical efficiency

Zuviel Leiharbeit erhöht die Lohnstückkosten

Die Bedeutung der Zeitarbeit hat in Deutschland in den zurückliegenden Jahren kontinuierlich zugenommen. Inwiefern die Nutzung dieses Instruments die Wettbewerbsfähigkeit der betreffenden Unternehmen erhöht, ist Gegenstand der vorliegenden Studie. Für Unternehmen des verarbeitenden Gewerbes wurde untersucht, wie sich ein wachsender Anteil der Ausgaben für Leiharbeit an den gesamten Personalkosten auf die Wettbewerbsfähigkeit - gemessen an den Lohnstückkosten - auswirkt. Die Untersuchungsergebnisse zeigen, dass der Einsatz von Leiharbeit zunächst zu sinkenden Lohnstückkosten führt. Offenbar ist Leiharbeit aber kein Patentrezept: Steigt der Anteil der Leiharbeitskosten an den Personalkosten kontinuierlich weiter, wirkt sich dies negativ auf die Lohnstückkosten aus. Eine Unternehmensstrategie, die in großem Stil auf die Substitution von Normalarbeitsverhältnissen durch Leiharbeitskräfte abzielt, kann sich daher negativ auf die Wettbewerbsfähigkeit des Unternehmens auswirken.Temporary agency work, competitiveness, firm performance, manufacturing

Maschinenbau: mittelgroße Unternehmen mit höchsten Einsparpotentialen

Der deutsche Maschinenbau ist seit langem sowohl national als auch international sehr erfolgreich. Wie in kaum einem zweiten Sektor dominieren zudem mittelgroße Unternehmen. Eine erste Analyse des DIW Berlin zeigt, dass sich dieser Erfolg nicht auf eine volle Ausschöpfung vorhandener Effizienzpotentiale zurückführen lässt. Es finden sich vielmehr ähnliche Einsparpotentiale wie in anderen Branchen (beispielsweise der Chemieindustrie). Noch auffälliger ist, dass mittelgroße Unternehmen nicht nur im Vergleich zu großen, sondern sogar im Vergleich zu kleinen Unternehmen die größten Einsparpotentiale aufweisen.Data envelopment analysis, German engineering firms, Efficiency, Firm size

Deutsche Industrie durch forschungsintensive Güter erfolgreich

Deutschland ist mit seiner starken Spezialisierung auf die Produktion von Investitionsgütern von der weltweiten Rezession besonders betroffen. Das technologieintensive Produktionsprofil seiner Industrie spricht aber dafür, dass Deutschland gestärkt aus der gegenwärtigen Wirtschaftskrise hervorgehen wird. In keinem anderen Industrieland ist die Ausrichtung der Produktion auf forschungsintensive Güter so stark wie hierzulande. Deutschland hat gegenüber seinen wichtigsten Wettbewerbern nicht nur im Fahrzeugbau, sondern auch im Maschinenbau, in der Nachrichtentechnik, in der Medizin- und in der Messtechnik seine Spitzenposition ausgebaut. Wesentliche Grundlagen des Erfolgs der deutschen Unternehmen sind nicht nur überzeugende Produkte, sondern auch im internationalen Vergleich effiziente Produktionsweisen.Industrial specialisation, Technological change, Technical efficiency