The Impact of Regional Supply and Demand Conditions on Job Creation and Destruction

Regions are exposed to intensive competition to provide the most attractive location conditions for firms and their employees. Therefore, regional employment development depends to a decisive degree on the attractiveness of locations both on the supply and the demand side. This paper gives an empirical analysis of the impact of regional conditions on regional manufacturing employment growth. Based upon a firm-level panel of manufacturing establishments in Baden-Wuerttemberg, Germany, which can be aggregated to regional panel data for forty-four counties, both the role of supply-side and demand-side conditions and a possible impact of characteristics of the regional industry structure on regional employment growth are analysed for the period from 1980 to 1999. Moreover, the paper examines whether the impact of regional conditions on regional net employment growth is driven by their impact on regional firm-level job creation and/or job destruction. Our results indicate that supply-side conditions seem to be more important for regional employment growth than demand-side factors. While lower costs of production lead to higher regional employment growth due to lower job destruction, a better endowment with human capital and a higher regional R&D intensity stimulate employment growth by higher rates of job creation. Differences in regional firm size structure, export intensity, and other industry structure aspects are affecting job creation, but not job destruction. Moreover, the analysis reveals at least the tendency that regional location factors mainly influence either job creation or job destruction, but seldom both at the same time.Regional development, employment growth, job creation, job destruction, location conditions, manufacturing

The Targeted Negative Income Tax (TNIT) in Germany: Evidence from a Quasi Experiment

We report empirical evidence from the first field experiments to be conducted in Germany with program and control groups between 1999 and 2002. The evaluated program called ?Targeted Negative Income Tax (TNIT)? is a time-restricted employee subsidy for means-tested welfare recipients. We focus on a unique data set on welfare recipients in Mannheim and estimate the treatment effect of TNIT on participation probability. The average treatment effect is significant and lies between 6.6 and 6.8 percentage points. Since January 1st, 2005, TNIT can be offered to all means-tested long-term unemployed people in Germany by public case managers. --Field experiments,Labor Market Reform,Negative Income Tax,employee subsidy,long-term unemployment

The impact of regional and functional integration on the post-entry performance of knowledge intensive business service firms

Knowledge intensive business service firms (KIBS) are an important element of modern economies and thus attracting increasing interest in scientific research. In the existing literature it is argued that due to the important role of knowledge, innovation and user-producer interaction in the KIBS sector, functional and regional integration are particularly decisive for the firms’ post-entry development. Nevertheless, few existing studies are dealing with questions of entrepreneurship in the KIBS sector using micro firm data. This contribution gives an empirical analysis of the determinants of post-entry performance of KIBS in three German metropolitan regions. Due to the lack of suitable firm micro data, telephone interviews with 547 firm founders have been conducted. By applying multivariate estimation methods it can be shown that functional linkages to knowledge providers, customers and co-operation partners indeed matter for the performance of young KIBS. Regarding regional integration, however, especially a high diversification of spatial reach is proved to be crucial. JEL-Classification: D21, J23, L80, O30 Keywords: Employment growth; Entrepreneurship; Entry; Innovation; Knowledge-intensive business services; Post-entry performance

Determinants of Innovative Activity in Newly Founded Knowledge Intensive Business Service Firms

Innovative activity is performed to a considerable extent in the service sector, namely within the socalled knowledge intensive business services (KIBS). Nevertheless, little is known about the determinants of innovative activity in these firms. In the present paper, some of these determinants are examined on the basis of a recently created dataset of 547 newly founded German firms (KIBS Foundation Survey 2003). The results show that the access to knowledge through cooperation and networking is an important factor determining innovative activity in the KIBS sector, whereas, surprisingly, neither managerial characteristics nor spatial proximity have general influence.

The Impact of Functional Integration and Spatial Proximity on the Post-entry Performance of Knowledge Intensive Business Service Firms

Knowledge intensive business service firms (KIBS) are an important element of modern economies and thus attracting increasing interest in scientific research. In the existing literature it is argued that due to the important role of knowledge, innovation and userproducer interaction in the KIBS sector, functional integration and spatial proximity are particularly decisive for a firm’s development. Nevertheless, due to the absence of suitable micro data there is a lack of studies empirically analysing the impact of functional integration and regional proximity using micro firm data. Based upon newlyconducted firm micro data in three German metropolitan regions, this paper supplements the literature by giving a multivariate empirical analysis of the determinants of post-entry performance of KIBS. The results of the estimation of firm growth equations show that functional linkages to knowledge providers, customers and co-operation partners indeed matter for the performance of young KIBS. Regarding spatial proximity, however, especially a high diversification of geographical reach is proved to be crucial.Employment growth, Entrepreneurship, Entry, Firm growth, Innovation, Knowledge intensive business services, Post-entry performance

Hat die Einführung von Gewinnbeteiligungsmodellen kurzfristige positive Produktivitätswirkungen? Ergebnisse eines Propensity-Score-Matching-Ansatzes

Die Mehrzahl der bisherigen empirischen Studien zu den Produktivitätswirkungen der betrieblichen Gewinnbeteiligung gelangt zu dem Ergebnis, dass die Beteiligung der Mitarbeiter am Unternehmenserfolg einen positiven Produktivitätseffekt induziert. Problematisch ist jedoch, dass bisherige Studien häufig nur mit Querschnittsdaten arbeiten und daher unter dem Problem der reverse causality leiden könnten. Die wenigen bisher zu diesem Thema existierenden Panelstudien konzentrieren sich ebenfalls nicht auf die Analyse der Einführungsentscheidung und ihrer Folgewirkungen, da nicht zwischen der Einführung und der Existenz von Gewinnbeteiligungsmodellen unterschieden wird. Die vorliegende Studie verwendet die Wellen 2000 bis 2003 des IABBetriebspanels, um erstmals für Deutschland eine empirische Analyse der kurzfristigen Produktivitätswirkungen der Einführung von Gewinnbeteiligungsmodellen im Rahmen eines Propensity-Score-Matching-Ansatzes kombiniert mit der Differenzen-von-Differenzen-Methode vorzunehmen. Die Besonderheit liegt einerseits in der verwendeten Methodik, andererseits in der bewussten Fokussierung auf die Wirkungen der Einführung einer Gewinnbeteiligung. Insgesamt stellen die Ergebnisse das vermeintliche stilisierte Faktum der positiven Produktivitätswirkungen zumindest für die kurze Frist deutlich in Frage.Erfolgsbeteiligung, Gewinnbeteiligung, Betriebliche Personalpolitik, Produktivität, Produktivitätswirkungen, Propensity-Score-Matching

Legislative Malapportionment and the Politicization of Germany’s Intergovernmental Transfer System

Legislative bargaining theory suggests that fiscal transfers among member states of a federation are determined to a substantial degree by political bargaining powers. Malapportionment of the states' population in the legislature is claimed to lead to disproportionally higher benefits to overrepresented states. The present paper analyses empirically the distribution of fiscal transfers in Germany's intergovernmental transfer system over the period 1970-2002. It can be shown that overrepresented states in the upper house receive disproportionate shares of transfers, while malapportionment in the lower house does not seem to matter. We also find empirical evidence that overrepresentation became more important over time.legislative bargaining, overrepresentation, fiscal transfer system, Germany

The Targeted Negative Income Tax (TNIT) in Germany : Evidence from a Quasi Experiment

We report empirical evidence from the first field experiments to be conducted in Germany with program and control groups between 1999 and 2002. The evaluated program called "Targeted Negative Income Tax (TNIT)" is a time-restricted employee subsidy for means-tested welfare recipients. We focus on a unique data set on welfare recipients in Mannheim and estimate the treatment effect of TNIT on participation probability. The average treatment effect is significant and lies between 6.6 and 6.8 percentage points. Since January 1st, 2005, TNIT can be offered to all means-tested long-term unemployed people in Germany by public case managers

On the politicization of intergovernmental fiscal relations in Germany after unification

A recent decision of the German Constitutional Court requires political decision makers to revise the system of intergovernmental transfers in order to limit free bargaining among state and federal government officials. The present paper provides empirical support for the thesis that political discretion has become increasingly important in the transfer negotiations after Unification. We attempt to show why political influences gained weight relative to economic considerations in the determination of net gains. This politicization of the fiscal transfer system appears to be a consequence of the inability of policy makers to agree on a fundamental reform in the early 1990's.