Newsletter February 2017

What mechanisms are there to help improve the distribution of refugees in their destination countries? How can public procurement be made more efficient? And how can companies organise their supplier pool in the most effective way possible? These are just a few of the questions from the field of market design discussed by around 30 international researchers and industry practitioners at a workshop on market design held by ZEW in Mannheim on 13 and 14 February 2017 .

The new US President Donald Trump has begun to unveil the first contours of his economic policy: the threat of punitive tariffs on Mexican imports, an entry ban on immigrants from seven predominantly Muslim countries and the construction of a wall along the southern border. Professor Friedrich Heinemann, a research department head at ZEW, critically assesses the actions of the Trump administration thus far.

What is sustainable consumption? How can Europe meet the challenges associated with the rise of the right-wing parties? Is there such a thing as fair taxation? These are some of the current issues that 22 teams consisting of school students in the grades 10–12 from six different federal states will discuss over the course of the YES! – Young Economic Summit, one of the biggest school competitions aimed at young people which deals with economic and social issues.

On 17 February 2017, eleven teams of around 135 students from Baden-Württemberg, Rhineland-Palatinate, Hesse and Saarland took part in the kick-off event for the Southwest region at the Centre for European Economic Research (ZEW) in Mannheim. On 24 February 2017, there will be another kick-off event in Kiel for the eleven teams from Schleswig-Holstein and Hamburg.

2016 was not a good year for the European Union. In June, the people of the United Kingdom, the country with the second-highest GDP in Europe, voted to leave the EU. 2017 brings elections in the Netherlands, France and Germany, while an election in Italy is also likely. These elections will offer yet another platform for EU- and euro-sceptic parties to spread their message. Protectionism, as propagated by newly elected US President Donald Trump, represents the greatest danger to the world's economy in 2017.

Brexit, Trump, refugees and the eurozone crisis – in light of these serious problems facing Europe, what does the future hold for the European Union? On 1 February 2017, Professor Hans-Werner Sinn, former President of the ifo Institute and one of Germany's most outspoken economists, laid out his 15 Point Programme for the Re-establishment of Europe Post-Brexit and highlighted which reforms Germany and the EU urgently needed to implement. Around 350 guests and leading figures from the worlds of politics, science and economics gathered at the Mannheim Centre for European Economic Research (ZEW) and listened intently to Sinn's presentation, which was part of the lecture series First-Hand Information on Economic Policy.

In September 2016, the German government presented a bill setting out plans for what will be the ninth amendment to the German Act Against Restraints of Competition (GWB). What the government hopes to achieve with the ninth GWB amendment, as well as the amendment's potential legal and practical pitfalls, served as the focus of ZEW President Professor Achim Wambach's talk at an exclusive event held for members of the ZEW Sponsors' Association for Science and Practice as well as board members and directors of the Association's corporate members.

On 1 February 2017, 21 students from the Bundesverband für Volks- und Betriebswirte (bdvb) in Göttingen and Mannheim paid a visit to the Centre for European Economic Research (ZEW). The students were greeted by ZEW President Professor Achim Wambach, who gave them an overview of the work the institute does.

Companies active in multiple countries within the European Union are currently confronted with 28 different sets of corporate tax legislation. This can lead to double taxation of firms and is an open invitation for aggressive tax planning. With the aim of creating more efficient tax frameworks for companies across Europe, the European Commission reissued its proposition from 2011 for a Common Consolidated Corporate Tax Base (CCCTB) in October 2016. What are the implications of the planned reforms for the EU Member States and for private companies?

This question was the focus of the ZEW Lunch Debate "A New Proposal for Corporate Tax Reform: Is the CCCTB a Comprehensive Answer to Tax Challenges in our Globalised Economy?" which took place on 25 January 2017 at the Representation of the State of Baden-Württemberg to the European Union in Brussels.

The National School of Development (NSD) of Peking University and the Centre for European Economic Research (ZEW) are pleased to announce the fourth Annual Meeting of the International Consortium for China Studies (ICCS), entitled "Perspectives on China’s Development and the Openness of Global Markets: The Nexus of Political, Economic and Social Issues", in Mannheim on 20 and 21 June 2017. The meeting provides a platform for researchers to discuss advances in the field of China studies, with a focus on social sciences including political, economic, and social issues. We invite the submission of empirical and theoretical analyses, including policy implications. Interested researchers are invited to submit a paper in PDF format to iccs_secretariat@nsd.pku.edu.cn no later than 15 March 2017.

The Centre for European Economic Research (ZEW) is pleased to announce the 2017 Competition and Innovation Summer School from 5–9 June 2017. This workshop, located in Cala Liberotto/Orosei in Italy, offers young researchers in the fields of innovation and competition economics the opportunity to discuss their dissertation projects within a group of experienced and renowned scholars as well as other PhD students and postdoctoral researchers in an inspiring environment. Applications are welcome from advanced PhD students and postdoc researchers. Please submit an extended abstract of the paper you intend to present, a letter of reference from your PhD supervisor and your CV to registration@euro-ciss.eu. The deadline for submission is 24 March 2017.

The Centre for European Economic Research (ZEW) is pleased to announce its 19th ZEW Summer Workshop in July 2017. This year’s workshop will cover recent theoretical, empirical, and experimental developments in the design of market institutions. Particular focus will be given to auction and matching markets. The ZEW Summer Workshop provides a forum for discussion between doctoral students and established experts in the field. Advanced doctoral students and postdocs who have completed their thesis within the last three years are encouraged to apply. Interested researchers should submit a full paper version (preliminary versions are welcome) and a CV in PDF format no later than 1 April 2017 to summerworkshop2017@zew.de. At the end of the workshop, the presenter of the best paper at the ZEW Summer Workshop will be awarded the Heinz König Young Scholar Award.

Jan Kinne, a member of the ZEW Research Department "Economics of Innovation and Industrial Dynamics", was awarded the 2017 Geoinformatics Prize for the best Master's thesis as part of a ceremony held by the Munich GI-Runde on 20 February 2017. He also received the audience award for the best thesis presentation. The award is presented annually by Runder Tisch GIS e.V. in cooperation with the Technical University of Munich.

ZEW President Professor Achim Wambach has been appointed new member of the Federal Insurance Office's Scientific Advisory Board for the Further Development of the Risk Structure Compensation Scheme. He is appointed to the Board to help develop an evaluation report regarding the Risk Structure Compensation Scheme. His appointment by the Federal Ministry of Health runs from 1 February 2017 until 30 September 2017.

On 15 February 2017, the ZEW Scientific Advisory Council met for the first time this year. This occasion also marked Professor Kai A. Konrad's debut as the council's chair. He took over the position of the long-standing chairman, Professor Friedrich Buttler, who retired at the end of last year.

According to the current survey for February (conducted between 31 January 2017 and 17 February 2017), the economic outlook for China has improved slightly. The CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, has risen by 1.7 points compared to the previous month to a current total of minus 4.2 points. This falls far below the current long-term average of 4.8 points.

The price of almost all energy sources is set to rise over the next five years. While electricity, crude oil and natural gas are expected to become more expensive, coal proves to be the exception, displaying a medium-term trend of stable to decreasing prices. In the short-term, that is until mid-2017, however, a more stable price structure is predicted for all energy sources. These are the central findings of the ZEW Energy Market Barometer, a biannual survey conducted among approximately 200 energy market experts by the Mannheim Centre for European Economic Research (ZEW).

The "YES! – Young Economic Summit", an economics competition involving schools from six different federal states in Germany, will be launched soon. This year, YES! is working together with new scientific partners from the Leibniz Association, namely the Centre for European Economic Research (ZEW) and the GIGA German Institute of Global and Area Studies. The "YES! – Young Economic Summit" is expanding from its base in North Germany to become a nationwide programme. This year, 22 teams from Schleswig-Holstein, Hamburg, Saarland, Rhineland-Palatinate, Hesse and Baden-Württemberg will compete.

There are plans for "YES!" to become a nationwide competition with 50 schools from every federal state in Germany taking part in the project by 2019. YES! is the biggest annual conference for school students in the field of economics in Germany.

There is a wide variety of possible ways for companies to use social media to bring them greater market success. However, many of these companies are still not exploiting the potential of social media to the fullest, for example, when it comes to improving their products and services. The fact that these opportunities are going to waste is alarming considering that one in every two companies in the information economy active on social media already expects the role that social media plays in a business' success to continue to increase in importance over the next two years.

By contrast, only around a quarter of these companies view social media as currently playing a very important role in a company's success. These are the findings of a recent survey carried out among companies in the German information economy by the Centre for European Economic Research (ZEW) in Mannheim.

The ZEW Indicator of Economic Sentiment for Germany records a decrease of 6.2 points in February 2017. The indicator now stands at 10.4 points. "The downturn in expectations is likely to be the result of the recently published unfavourable figures for industrial production, retail sales and exports. Political uncertainty regarding Brexit, the future US economic policy as well as the considerable number of upcoming elections in Europe further depresses expectations. Nevertheless, the economic environment in Germany has not significantly worsened," comments ZEW President Professor Achim Wambach.

At the Paris Climate Change Conference in 2015, the international community made the unanimous decision to limit global warming to no more than two degrees Celsius. The enthusiasm from Paris was still very much in evidence at the Marrakech Conference, where a number of states made a concrete commitment to reducing greenhouse gas emissions. At the same time, the US election has created uncertainty over the USA's future role in climate policy. The most recent report from the Federal Ministry for Economic Affairs and Energy's Academic Advisory Board provides a medium-term outlook on how further climate negotiations could lead to effective climate protection.

The aggressive tax planning efforts of multinational companies such as Google, Apple and Amazon that are aimed at effectively reducing corporate tax burdens have been the subject of public discussion for several years now. In order to combat such aggressive strategies and increase transparency in financial reporting, the Organisation for Economic Co-operation and Development (OECD) and the European Commission have proposed something called Country-by-Country-Reporting (CbCR). Through CbCR, policy-makers intend to oblige multinational companies to disclose certain country-specific tax-related information.

However, a recent study carried out by the Centre for European Economic Research (ZEW) in Mannheim shows that a CbCR is not an effective means for combatting aggressive tax planning.

Companies in the information economy are kicking off 2017 in a positive economic mood, as indicated by the ZEW sentiment indicator for this sector, which reached 67.1 points in the fourth quarter of 2017. Though the indicator fell below that of the previous quarter by 1.8 points, the consistently high value signals a positive climate among the majority of firms within the information economy. This is the result of a survey among companies in the German information economy, conducted by the Mannheim Centre for European Economic Research (ZEW) in December 2016.

German IT and telecommunication service providers are planning to increase their innovation budgets considerably until 2017. In 2015, innovation spending in the ICT service sector, which includes telecommunications, software, data processing and information services, reached a total of 11.9 billion euros. Compared to the previous year, innovation expenditure has increased by 1.2 billion euros. Innovation expenditure in the ICT service sector is set to increase further to 13.1 billion euros in 2016, and shall reach 14.4 billion euros in 2017.

As a result, ICT service providers could experience a 35 per cent increase in their innovation budgets in the space of only three years. These are the findings of the latest Sector Report on Innovation in the IT Services and Telecommunications Sector by the Centre for European Economic Research (ZEW) in Mannheim. The report is based on the German Innovation Survey conducted annually by ZEW on behalf of the Federal Ministry of Education and Research.

Our publications are available for download in PDF format. PDF files can be viewed using for example the Acrobat Reader, which you can download for free at https://acrobat. adobe. com/us/en/acrobat/pdf-reader. html

Bastian Stockinger; Thomas Zwick
Apprentice Poaching in Regional Labour Markets

Carlo Gallier; Timo Goeschl; Martin Kesternich; Johannes Lohse; Christiane Reif; Daniel Römer
Leveling Up? An Inter-Neighborhood Experiment on Parochialism and the Efficiency of Multi-level Public Goods Provision

Julia Braun; Martin Zagler
The True Art of the Tax Deal: Evidence on Aid Flows and Bilateral Double Tax Agreements

Martin Murmann
The Productivity Effects of Worker Replacement in Young Firms

Jens-Uwe Franck; Martin Peitz
Toward a Coherent Policy on Cartel Damages

Maria Theresia Evers; Ina Meier; Christoph Spengel
Country-by-Country Reporting: Tension Between Transparency and Tax Planning

Rainer Filitz; Joachim Henkel; Jörg Ohnemus
Digital Design Protection in Europe: Law, Trends, and Emerging Issues

Sören Martin Bergner; Rainer Bräutigam; Maria Theresia Evers; Christoph Spengel
The Use of SME Tax Incentives in the European Union

Zhao Rong; Xiaokai Wu; Philipp Böing
The Effect of Institutional Ownership on Firm Innovation: Evidence from Chinese Listed Firms

Christoph Böhringer; Florian Landis; Miguel Angel Tovar Reaños
Cost-Effectiveness and Incidence of Renewable Energy Promotion in Germany

Maria Theresia Evers; Ina Meier; Katharina Nicolay
The Implications of Book-Tax Differences: A Meta-Analysis

Irene Bertschek, Jörg Ohnemus, and Steffen Viete
The ZEW ICT Survey 2002 to 2015: Measuring the Digital Transformation in German Firms

Maximilian Joseph Blömer, Mathias Dolls, Max Löffler, Theresa Markefke, Andreas Peichl, Holger Stichnoth, and Martin Ungerer
Analyse der Verteilung von Einkommen und Vermögen in Deutschland (Analysis of the Distribution of Income and Wealth in Germany)

Martin Brussig, Patrizia Aurich-Beerheide, Johannes Kirsch, Matthias Knuth, Friedhelm Pfeiffer, Laura Pohlan, André Nolte, Holger Bonin, Nils Pagel, Andrea Gabler, Barbara Nägele, Henry Puhe, and Rita Kleinemeier
Evaluation des Bundesprogrammes "Soziale Teilhabe am Arbeitsmarkt" - Erster Zwischenbericht (Evaluation of the Government Programme "Social Participation in the Labour Market" – Preliminary Assessment)

Christian Rammer, Marius Berger, Thorsten Doherr, Martin Hud, Paul Hünermund, Younes Iferd, Bettina Peters and Torben Schubert
Innovationsverhalten der deutschen Wirtschaft - Indikatorenbericht zur Innovationserhebung 2016 (Innovation Behaviour of the German Economy – Indicator Report on the Innovation Survey 2016)

Paul Hünermund, Georg Licht, and Christian Rammer
Evaluierung der nationalen Förderung im Förderprogramm Eurostars 1 (2008-2013) (Evaluation of National Funding in the Funding Programme Eurostars 1 (2008–2013))

Irene Bertschek, Jörg Ohnemus, Daniel Erdsiek, Simone Kimpeler, Christian Rammer, and Erduana Shala
Monitoring zu ausgewählte wirtschaftliche Eckdaten der Kultur-und Kreativwirtschaft 2016 (Monitoring of Selected Economic Key Data on the Culture and Creative Industries 2016)

Christian Rammer
Dokumentation zur Innovationserhebung 2016 (Documentation on the Innovation Survey 2016)

Analyzing the Role of Various Regulation Schemes in Incentivizing Investment in New Communications Infrastructure

Innovation Survey 2017 for Berlin

The Economy of Baden-Wuerttemberg: Analysis of Structural Features and Future Perspectives in a National and International Comparison

Wealth Taxes – International Development and Alternatives for Increasing Tax Revenue

Speaker: Prof. Nicola Dimitri (University of Siena)
Location of the event: ZEW, Mannheim

Speaker: Prof. Carlo Cambini (Turin School of Local Regulation)
Location of the event: ZEW, Mannheim

Speaker: Dr. Simon Loretz (Institute for Advanced Studies Vienna)
Location of the event: ZEW, Mannheim

Speaker: Prof. Frank Verboven (Catholic University of Leuven)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Speaker: Prof. Jaka Cepec (University of Ljubljana)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: German Institute for Economic Research (DIW) and Humboldt University of Berlin

Speaker: Jonas von Wangenheim (Humboldt-Universität zu Berlin)
Location of the event: ZEW, Mannheim

Speaker: Winfried Kretschmann (Minister President of Baden-Württemberg), Günther H. Oettinger (EU Commissioner for Budget and Human Resources ), Prof. Achim Wambach (ZEW)
Location of the event: ZEW, Mannheim

Picture Credits: News Article of 27 February 2017: ©Runder Tisch GIS e.V., Press Release of 17 February 2017: ©shutterstock.com/muratart, Press Release of 15 February 2017: ©iStockphoto.com/aniaostudio, Press Release of 6 February 2017: ©iStockphoto.com/gollykim
 
All further pictures: ©ZEW