Newsletter August 2018

The new season for the first division of the Bundesliga kicks off this week. Second division matches have already started, with the two teams relegated in the previous season, 1. FC Cologne and Hamburg SV, hoping to make it back into the first division. Meanwhile, all the teams in the top league will be trying to stop Bayern Munich from winning the German championship for the seventh year in a row. The fans are all hoping for a gripping season of competition. When it comes to marketing the games, however, competition is nowhere to be seen. The German Football League (DFL) has the exclusive rights to market the games. This is a billion-euro enterprise, with the DFL expected to net 4.64 billion euros over the next four seasons from 2017/18 to 2020/21.

How can the economy grow sustainably and in an environmentally friendly manner? What role do education and cultural heritage play in this? And how can the green transformation succeed? These and other global challenges will be discussed by high-level speakers at this year’s Beijing Humboldt Forum (BHF) in the Chinese capital from 15 to 17 September 2018. The interdisciplinary forum, established in 2013, is organised by the Centre for European Economic Research (ZEW) in cooperation with the University of International Business and Economics (UIBE) in Beijing and the Alexander von Humboldt Foundation.

International tax competition is increasingly concentrated on companies with high intangible assets. At the same time, decision-makers are increasingly implementing measures to counteract this tax competition – frequently perceived as excessive and unfair –, leading to additional costs for all companies in Germany. In addition, the German tax system is becoming less and less attractive compared to other countries. The interplay of these three developments is posing a threat to the competitiveness of German family-run businesses in particular.

These are the findings of a recent study carried out by the Centre for European Economic Research (ZEW) in Mannheim on behalf of the Foundation for Family Businesses in Germany and Europe.

On 9 August 2018, the exhibition ship MS Wissenschaft cast anchor at the Stresemannufer in Bonn and welcomed its first guests on board for a press conference and tour of the exhibition entitled “Working Life of the Future”. ZEW economist Dr. Ulrich Zierahn was on board to present the interactive touch-screen exhibit “Fit for the Job Market of the Future” put together by the ZEW Research Department “Labour Markets, Human Resources and Social Policy”.

With their book entitled „Digitaler Wohlstand für alle. Ein Update der sozialen Marktwirtschaft ist möglich“, ZEW President Professor Achim Wambach and Hans-Christian Müller, editor at the German business newspaper Handelsblatt, have made it to the final ten shortlisted for the German Economics Book Prize 2018. In their book, they deal with the question of how the principles of social market economy can be secured in the digital age. The prize will be awarded at the Frankfurt Book Fair on 12 October. The 222-page publication by the two economists will be published by Campus Verlag on 7 September 2018 (in German only).

Google’s parent company Alphabet is an impressive corporation. With a current market value of around 837 ­bil­­lion dollars, it is among the top three most valuable companies in the world. With the exemption of Amazon, Alphabet spends more money on research and development than any other company. In 2017 this amounted to 14 billion dollars. By comparison, in that same year Volkswagen spent 12 billion dollars on R&D. And while ten years ago top Ivy League graduates would flock to Wall Street to find work, now firms in Silicon Valley – and Google in particu­lar – are at the top of their list of potential employers.

Consumers have benefited greatly from the way Google has revolutionised how we search for information online and created a far-reaching, high-performance ecosystem for mobile applications in the form of Android.

The Centre for European Economic Research (ZEW) and the Collaborative Research Center SFB 884 “Political Economy of Reforms” at the University of Mannheim are pleased to announce the workshop entitled “Understanding Policy Preferences Using Experimental Methods”, which will take place on 17 and 18 December 2018. The event aims to improve the understanding of the formation of policy preferences and of public opinion towards policies. We welcome submissions of applied empirical papers that deal with these research topics. There will be a particular focus on contributions using survey experiments to study preference formation. We also encourage submissions that use randomized field and lab experiments. Methodological contributions on these empirical approaches are also welcome. The workshop is at the intersection of economics and political sciences, but we welcome submissions from other related disciplines as well. Please submit your paper, extended abstract or experimental protocol via e-mail to surveyworkshop@zew.de no later than 14 September 2018.

Within the framework of a study tour, a group of 22 research fellows from the Alexander von Humboldt Foundation (AvH) visited ZEW. In addition to promoting international research cooperation, the AvH also provides opportunities for highly-qualified researchers from different disciplines to undertake extended research stays in Germany. Through programme features like study tours, the research fellowship aims to provide scientists with insights into the cultural, political and economic diversity of Germany.

From 13 to 24 August 2018, professors in the Chinese Master’s programme of International Business are visiting the Centre for European Economic Research (ZEW) to participate in the “MIB Faculty Programme”. The two-week qualification programme is taking place for the second time following last year’s successful launch.

Dr. Yufen Wang is a visiting researcher in ZEW’s Research Department “Economics of Innovation and Industrial Dynamics” from 2 July 2018 to 27 June 2019. She is an associate professor at the School of Health Economics and Management at the Nanjing University of Chinese Medicine. Her stay at ZEW is funded by the “Overseas Visiting Scholar Program for University Prominent Young & Middle-aged Teachers and Presidents” run by the Jiangsu Province in China. During her stay, her research activities will focus on the relationship between the structure of innovation networks and technological innovation in Germany’s biotechnology and pharmaceutical industries. Her research aims to promote technological innovation within the private and the public sector.

Broadband expansion in Germany is currently making only slow progress, with some regions having still no access to high-speed internet. This goes hand in hand with a lower Internet presence of German companies, since companies in regions with only limited broadband availability are considerably less likely to operate their own company website. These are the findings of a study conducted by the Centre for European Economic Research (ZEW) in Mannheim.

Both the federal and state governments in Germany have pledged 340 million euros in aid for German farmers affected by drought. These funds are primarily intended to support those farmers whose livelihoods are under threat. Professor Friedrich Heinemann, head of the ZEW Research Department “Corporate Taxation and Public Finance” at the Centre for European Economic Research (ZEW) in Mannheim, comments on this issue.
 

While it would be good to see greater transparency regarding the sources of income for the EU budget in the next Multiannual Financial Framework (MFF) from 2021 to 2027, this is not going to be achieved by any of the new own resources recently suggested by the European Commission. This is the finding of an analysis conducted by Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at the Centre for European Economic Research (ZEW), Mannheim.

According to the most recent survey in August (02/08/2018–15/08/2018), the economic outlook for China has recovered again after having declined considerably in the previous five months. The CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, is currently at minus 3.7 points (July 2018: minus 10.9 points). However, the CEP indicator is still well below the long-term average of 4.3 points. Climbing 1.7 points to a level of 9.3 points, the assessment of the current economic situation in China was also more positive than the previous month.

In mid-2018, the economic sentiment among companies in the information economy are widely positive, as are expectations for the third quarter of 2018. This assessment is based on the latest reading from the ZEW Economic Sentiment Indicator for the Information Economy, which reached a level of 66.6 points in the second quarter of 2018. Compared to the previous quarter, the sentiment indicator has risen by 1.5 points. The sentiment indicator is the result of a survey conducted among firms in the German information economy by the Centre for European Economic Research (ZEW), Mannheim, in June/July 2018.

The Centre for European Economic Research (ZEW) and Fudan University have agreed to continue their monthly monitoring of China’s economic development and have expanded their cooperation in the area of fiscal policy issues. After five years of successful collaborative partnership, the two institutions now signed an agreement in Mannheim and Shanghai, setting the course for a fruitful cooperation for a further five years.

The ZEW Indicator of Economic Sentiment for Germany recorded an increase of 11.0 points in August 2018 and now stands at minus 13.7 points. Despite this marked increase, the indicator still remains significantly below its long-term average value of 23.0 points. The assessment of the current economic situation in Germany remains largely unchanged, with the corresponding indicator rising slightly by 0.2 points to a current reading of 72.6 points.

Expectations regarding the development of wholesale prices for electricity, natural gas, coal and crude oil on a six-month horizon point to a mixed picture. While energy experts expect stable to increasing prices for both electricity and natural gas, crude oil is set to become more expensive in the short term. The only exception is coal, for which a clear majority of experts anticipate a stable price development. On the long term, however, the energy market experts expect price increases for almost all energy sources within the next five years.

This is the result of the latest ZEW Energy Market Barometer, a survey carried out by the Centre for European Economic Research (ZEW), Mannheim, among energy market experts.

To ensure the widespread use of renewable energies in electricity generation, some kind of storage solution is necessary. Batteries and heat accumulators are set to play a particularly prominent role in this area over the coming decade. Along with investment costs, the environmental sustainability and social acceptance of these solutions are important factors in their successful further development. This is the main finding of the latest ZEW Energy Market Barometer, a survey carried out among energy market experts in Germany by the Centre for European Economic Research (ZEW), Mannheim.

The greater the household budget, the larger the material footprint and thus the consumption of resources in Germany. Thereby, the “material footprint”, an indicator for the consumption of resources, refers to the amount of raw materials required to produce all the goods consumed in one household. Depending on the level of prosperity, German households tend to spend their income on different goods. While both poor and wealthy households spend large shares of their respective budgets on food, housing, energy and communication, the wealthiest 25 per cent spend a particularly large share on transport.

These are the findings of a study conducted by the Centre for European Economic Research (ZEW) in Mannheim.

In order to ensure the functioning of the Stability and Growth Pact (SGP), it is necessary to simplify its rules and establish an independent monitoring body. This is the conclusion of a study on the reform of the SGP conducted by Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at the Centre for European Economic Research (ZEW), Mannheim, on behalf of the European Parliament.

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This issue contains the Focus on Europe with the following articles:

Jan Kinne; Janna Axenbeck
Web Mining of Firm Websites: A Framework for Web Scraping and a Pilot Study for Germany

Tobias Weber, Irene Bertschek and Jörg Ohnemus
DIGITAL Economy Monitoring Report 2018, Short Version

Thomas Niebel, Marianne Saam and Patrick Schulte
The Sectoral Impact of the Digitisation of the Economy

The Economic Contribution of Family Firms

Update 2018 of the Country Index for Family Enterprises

Scientific Support to the Evaluation Process of the Ministry of Economics of Baden-Wuerttemberg

Location of the event: ZEW, Mannheim

Location of the event: University of International Business and Economics, Beijing

Speaker: Professor Moritz Schularick, PhD (University of Bonn)
Location of the event: ZEW, Mannheim

Speaker: Assistant Professor Christian Moser, PhD (Columbia Business School, New York)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Head of Junior Research Group “Economics of Public Procurement”

Postdoctoral Researcher (100%) for the Research Department “Corporate Taxation and Public Finance“

Picture Credits: press release of 27 August 2018: iStock.com/Pekic, press release of 23 August 2018: digitalstock/Ben Zuckerr, press release of 22 August 2018: iStock/inakiantonana, news article of 17 August 2018: iStock.com/JeanPavonePhoto, press release of 15. August 2018: Nanmus, news article of 13. August 2018: iStock.com/gollykim, news article of 10. August 2018: Campus Verlag, press release of 08. August 2018: iStock.com/silkwayrain, press release of 06. August 2018: iStock.com/Petmal, press release of 02. August 2018: iStock.com/ansonsaw, press release of 31. July 2018: iStock.com/btgbtg
 
All further pictures: ©ZEW