Global Warming and German Agriculture

This study uses the concept of shadow prices for measuring the impacts of climate change. Estimation of a restricted profit function rather than a cost or a production function increases the explanatory power of the agroclimate approach because of an endogenous output structure. Using micro-based panel data on Western German farmers, the results im-ply that the agricul-tural production process is significantly influenced by climate conditions. By linking this model with a climate-change scenario, a remarkable positive shadow value is found for the German agricultural sector. Interestingly, the spatial distribution of the gains shows no concentration on those regions, which currently suffer from insufficient temperature. Finally, the importance of an endogenous output structure is confirmed by the finding that the de-sired product mix will drastically change.

The Impact of SMP and EMU on German Banking

This study assesses the impact of the single market program (SMP) and the European monetary union (EMU) on the German banking sector. As a main result, the introduction of the EMU can be assessed as more important for the German banking system than the SMP because of the relative liberal conditions prior to the SMP. To maintain or enhance profitability in an environment of decreasing margins, all banks will increase their efforts to reduce costs. On the product side, the disintermediation process is expected to speed up. As a consequence, the traditional system of universal banks could be somewhat changed: A partial retreat of savings as well as cooperative banks from investment banking, accompanied by increasing market shares in the branch-based retail business. For commercial banks, the consultation-intense investment business is very attractive. On the retail sector, a specialization on direct banking allows for additional customers from abroad as well as for high growth rates in the brokerage business.

Innovative Slowdown, Productivity Reversal? - Estimating the Impact of R&D on Technological Change

Motivated by the recent reversal in labor productivity growth, this paper is analyzing the relationship between R&D expenditures and productivity. Time series data of the German manufacturing industry is used to estimate a variable cost function, with the stock of knowledge being modeled as a quasifix input. The estimates show that the extracted yield is non-constant over the observation period. Current rates of return on own R&D are found to be significantly lower than during the sixties, and no signs of a significant reversal are detected. The long-term elasticity of production costs with respect to R&D reduced from –0.04 to just -0.02, the elasticity of labor demand from –0.40 to -0.15. Since the growth rates of research expenditures were also declining, the contribution of R&D to productivity growth is currently stagnating at the lowest level since 1960.technology, innovation, research and development, productivity

How Different are Wages from Wage Potentials? - Analyzing the earnings disadvantage of immigrants in Germany

Immigrants in Germany display a poor earnings performance relative to natives. Arguing that human capital endowments identify earnings potentials rather than actual earnings, this paper estimates a stochastic earnings frontier and searches for systematic differences between natives and migrants in terms of distance to the frontier. GSOEP-Data of the year 2000 is used for estimation. The empirical results clearly support the frontier assumption, but – surprisingly – find natives and immigrants at about the same distance to the frontier. Assuming a half-normal distribution of the wage-inefficiency term, both groups trans­formed on average a modest 81% share of their potential income into market earnings. Due to the similar positions of natives and immigrants relative to the frontier, the wage discrimination hypothesis is rejected. Actually, human capital differentials are clearly the most important source for wage inequality. The earnings frontiers of immigrants from Eastern Europe as well as from Turkey are steeper than the respective frontier of natives, which supports the assimilation hypothesis. No assimilation is found for migrants from the European Union and from the former Yugoslavia.Stochastic Wage Frontier, Inefficiency, Immigration, Assimilation, Discrimination, Human Capital Approach

Land Prices and Climate Conditions - Evaluating the Greenhouse Damage for the German Agricultural Sector

Using an exhaustive panel dataset of the German agricultural sector, this paper is evaluating the relationship between climate conditions and land prices. The main advantage of this so-called hedonic approach is the consideration of the full range of adaptation options to the climatic environment. A Box-Cox form is employed to allow for very flexible relationships between land prices, warmth, moisture, and different socioeconomic variables. In a second step, the estimated results are used to forecast the impact of global climate change on the farming sector. The results show that a change of the temperature level has stronger impacts than a change of rainfall. Using a greenhouse warming scenario, German farmers are expected to be winners of climate change at least in the short run. Maximum gains are estimated with a temperature increase of +1.0°C against the current levels. Should the temperature increase surpass 1.8°C, however, the impact on the farming sector is clearly negative.agriculture; farming land; hedonic approach; climate change; environmental valuation; global warming; impact study

Native-Immigrant Wage Differentials in Germany - Assimilation, Discrimination, or Human Capital?

This study uses the concept of stochastic frontiers for analyzing the income disparity between ethnic groups in West Germany. Estimation of a potential rather than an average earnings function increases the explanatory power of the human capital approach and allows for detecting discrimination as well as assimilation processes. The empirical results im-ply that the human capital gap explains more than 75% of the wage differential between natives and foreign nationalities in Germany. As for ethnic Germans migrants, their wage disparity can be explained by 50% with human capital differentials. Surprisingly, only small differences could be observed with regard to the question of earnings efficiency. On an average, inhabitants as well as immigrants transformed about 85% to 90% of their potential income into actual earnings. The sources for the individually diverging efficiency ratios are not well understood, with discrimination only found for ethnic Germans from Eastern Europe. Somewhat disappointing, the assimilation hypothesis was clearly rejected for all migrants with again the exception being ethnic Germans from Eastern Europe.

The Impact of Information Technology on Productivity in Developing Countries

The information technology (IT) revolution has resulted in a digital divide evolving between nations that have the skills and capability to absorb these new technologies, and those without. Since developing countries have assumed that the adoption of IT may be their key engine of growth, they have exerted a lot of efforts in an attempt to overcome this digital gap. This study tests whether higher IT adoption results in higher total factor productivity (TFP) growth of developing countries or not, by conducting a panel data regression for 33 developing countries over the period 2002-2006. It also examines the relative importance of IT adoption in comparison to other technological aspects such as: Technology creation, technology transfer, and enhancing individuals’ technological absorptive capacities through higher educational levels. The study concludes that IT adoption and higher educational attainment tend to relatively be the most significant factors affecting TFP growth in developing countries.Information Technology, Productivity, Digital Divide, Development

Accession Poland's to the EU - Some Lessons from International Trade Theory

The Eastern enlargement of the European Union is significantly increasing the area, where free trade of goods and services are among the core principles of all member countries. Existing economic borders between the applicant countries and the current EU members will have to be broken down, leaving no room for the protection of non-viable industries. In this paper, we apply traditional as well as new theories of international trade in order to identify sectors of the Polish economy with a comparative (dis)advantage. As a main result, human capital- as well as capital-intensive industries will be among the prominent losers of Poland's accession to the EU. This structural change will be accompanied by significant changes in the income distribution. In the long-run, inter-industry trade will be substituted by intra-industry trade. However, because of a high number of determinants, relatively little can be said about the industries which will successfully participate in intra-industry trade.EU Eastern Enlargement, International Trade Theory, Intra-industry Trade

TIME-Konvergenz - Einige Ueberlegungen aus volkswirtschaftlicher Sicht

Driven by digitalization, convergence within the telecommunication and media sector is not only a today's phenomena, but will even become more important in the future. One of the most important dimensions of convergence is vertical integration, i.e. the merging of formerly independent firms along the value chain. Analyzing the economic aspects of vertical integration in the media and telecommunication sector, it is argued in this paper that convergence is clearly positive for the merging firms themselves. However, from the consumer perspective, there are positive as well as negative effects which do not allow for an unambiguous conclusion about convergence. The expected decrease in market prices due to a vanishing double monopoly markup is in favor of the demand side. On the other side, a vertical integrated firm will probably be able to foreclosure the access to the consumers against upstream firms (e.g. content producers), thus reducing the variety of media content. In the long run, this negative effect on product differentiation may even be strengthened by building up strategic entry barriers.Digitalisierung, vertikale Integration, doppelte Marginalisierung, vertikaler Ausschluss, Vielfalt, Medien, Telekommunikation

Werbemarkt Fernsehen: Zur Eignung der Spektralanalyse als Prognoseinstrument

Over more than a decade, advertising rates per 1000 viewers, television consumption as well as the number of advertising spots have been steadily increasing. As a consequence, television has developed to the most important medium for the advertising industry and attracts a 40% share of German gross advertising spending. Motivated by the recent slump of advertising rates and of the number of spots, this paper attempts to develop a forecast model for real advertising spending on the German TV market. In a first step, spectral analysis is used to identify the most important cycles on the advertising market. In a second step, the identified cycles are entering a regression model which is the basis for making forecasts. To evaluate the forecast quality, the results are compared to a standard ARIMA model. The estimations are based on monthly data of the German TV advertising market from 1990 to 2004. Actually, the results show that the estimated cyclical pattern describes the trends on the TV advertising market very well. The cycle model is therefore a useful tool for making ex-ante forecasts of real advertising spending. Underlining the quality of the approach, the ARIMA approach is performing significantly worse than the introduced cycle model.advertising, ARIMA, cycles, forecast, spectral analysis, television