Newsletter January 2019

A group of 15 high school students from Bernhard Strigel Gymnasium in Memmingen visited ZEW on 30 January 2019. During the visit, the student group gained both an overview of the structure and objectives of the economic research institute as well as practical insights into the daily work.

How do macroeconomics and innovation policy interact? This question will be at the heart of the discussion between academics and policymakers at the FRAME Final Policy Conference in London on 18 and 19 February 2019. The conference will conclude the EU Horizon 2020 project FRAME (Framework for the Analysis of Research and Adoption Activities and their Macroeconomic Effects) and opens participation to a limited number of interested guests.

The question of how to implement the 2015 Paris Climate Agreement was a primary concern at the UN Climate Change Conference (COP24) in Katowice, Poland. It was also the focus of two side events organised by a team of researchers from the ZEW – Leibniz Centre for European Economic Research together with the Organisation for Economic Co-operation and Development (OECD), Paris, the Washington-based World Resources Institute, the ifo Institute in Munich, and the University of Kassel, on 4 and 8 December 2018 at COP24.

The Volksbank Weinheim Stiftung and the ZEW – Leibniz Centre for European Economic Research have granted the research award “Zukunft der Arbeitswelt” (“Future World of Work”) for the sixth time. At the New Year’s reception of the Volksbank Weinheim eG, the award was handed to ZEW researcher Dr. Laura Pohlan (29) for the best doctoral thesis and KIT graduate Viktoria Medvedenko (27) for the best master’s thesis.

On 17 and 18 December 2018, ZEW and the Collaborative Research Center SFB 884 “Political Economy of Reforms” jointly organised the workshop “Understanding Policy Preferences Using Experimental Methods”. The event brought together some 40 international scholars from different fields of empirical social sciences to discuss experimental methods for investigating how political preferences and opinions are formed.

The attendance of the ZEW – Leibniz Centre for European Economic Research at the Annual Meeting of the Allied Social Science Associations (ASSA) in Atlanta proved a great success. The world’s most important conference in economics offered plenty of opportunities for ZEW researchers to engage in scientific discussions and to present their research findings, while also providing new impulses for future research projects.

Germany moved down four places in the ranking of the most attractive locations for family businesses, landing in the bottom third of the ranking. Germany currently ranks 16th out of 21 OECD countries considered in the country index of the Foundation for Family Businesses in Germany and Europe, compiled by the ZEW – Leibniz Centre for European Economic Research. This puts the German economy in its worst position since the index was introduced. Switzerland comes top in the ranking, followed by the UK and the US. With Portugal ranking in the top 15, this marks the first time that a country formerly affected by the euro crisis achieves a better ranking than Germany.

Compared against the 35 most innovative economies around the world, Germany currently ranks fourth, as in the previous year, behind the leading countries Singapore, Switzerland and Belgium. The good position of the German innovation system is based on a well-balanced performance in all five main pillars of innovation, although Germany has been unable to reach a top position in either of them, coming in 9th in industry, 10th in science, 10th in education, 8th in government, and 12th in society. A lack of openness has been identified as a weakness of the German innovation system, with a separate indicator on openness ranking the country as only 21st.

ZEW – Leibniz Centre for European Economic Research and the Mannheim Centre for Competition and Innovation (MaCCI) are pleased to announce their eighth conference on the economics of innovation and patenting. The goal of the conference is to present new research and to stimulate discussion between international researchers. Theoretical and empirical contributions from all areas of the economics of innovation and patenting are welcome.

The ZEW will hold its seventeenth Conference on the Economics of Information and Communication Technologies (ICT) in Mannheim on 27 and 28 June 2019. The objective of the conference is to discuss recent scientific contributions to the economics of information and communication technologies (ICT) and the economics of ICT industries. Theoretical, empirical and policy-oriented contributions are welcome. Please submit papers as a PDF or MS Word file to ict-conference@zew.de no later than 1 March 2019.

Professor Martin Kesternich, deputy head of the Research Department “Environmental and Resource Economics, Environmental Management” at the ZEW – Leibniz Centre for European Economic Research in Mannheim, accepted a joint appointment by the University of Kassel and ZEW. On 1 January 2019, he took up a professorship in economics, with a special focus on environmental and resource economics, at the University of Kassel.

Dr. Tabea Bucher-Koenen is the new head of the Research Department “International Finance and Financial Management” at the ZEW – Leibniz Centre for European Economic Research in Mannheim. Her research focuses particularly on pension schemes, social policy and financial literacy. Tabea Bucher-Koenen looks forward to commencing her work at ZEW: “I am excited about the new challenges at ZEW, and especially about the opportunity to contribute to the institute’s policy advising activities with my research findings.”

In the most recent survey for January (9–24 January 2019), expectations regarding the Chinese economy have risen by 2.2 points, to a new reading of minus 18.3 points (December 2018: minus 20.5 points). Despite the renewed increase, the indicator is still clearly in negative territory and remains well below the long-term average of 2.7 points. This sees the CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, pointing to a prolonged period of economic weakness.

The German government can count on millions of euros in tax revenue from services provided on digital marketplaces like Airbnb, the leading platform for connecting individuals offering or looking for accommodation. However, it remains to be seen whether the existing income and value-added tax regulations for service providers with digital businesses models are still adequate. In order to prevent future shortcomings, reforms for a competition-oriented taxation of service platforms could be implemented without much additional effort, thereby making taxation much more efficient.

The ZEW – Leibniz Centre for European Economic Research in Mannheim, in cooperation with the University of Mannheim, has put the recently published report commissioned by the Greens in the European Parliament under scrutiny and identified serious methodological shortcomings in the investigations. The researchers from ZEW and the University of Mannheim have found that the conclusions drawn in the report concerning the demand for greater tax transparency are ungrounded.

As expected, the Governing Council of the European Central Bank (ECB) has not made any changes to its interest rate policy in its first policy meeting this year. Professor Friedrich Heinemann, head of the “Corporate Taxation and Public Finance” Research Department at the ZEW – Leibniz Centre for European Economic Research, offers his view on the ECB’s decision.

The ZEW Indicator of Economic Sentiment for Germany recorded an increase of 2.5 points in January 2019, and now stands at minus 15.0 points. Despite this increase, the indicator is still well below the long-term average of 22.4 points. The assessment of the current economic situation in Germany once again decreased considerably in January, with the corresponding indicator falling by 17.7 points to a level of 27.6 points. This has been the lowest reading since January 2015.

A study by the Institute for Applied Economic Research (IAW), the Fraunhofer Institute for Systems and Innovation Research ISI and the ZEW – Leibniz Centre for European Economic Research has shown that Baden-Württemberg does not only host a large, innovative manufacturing sector, but is also home to many, often highly innovative producer-oriented service firms. The interaction between both sectors helps to make better use of the opportunities provided by digitalisation, including digital hybrid services. The study also points out, however, that only some manufacturing companies benefit from offering services, while others have completely or partly withdrawn from providing services.

The vast majority of MPs in the UK Parliament has rejected the Brexit deal agreed between Theresa May and the European Union. Professor Friedrich Heinemann, head of the “Corporate Taxation and Public Finance” Research Department at the ZEW – Leibniz Centre for European Economic Research, offers his view on the Brexit vote.

The situation with regard to qualified workers remains tense for German businesses. In 2017, approximately 200,000 positions in innovation-intensive sectors remained vacant, which corresponds to 18 per cent of all vacancies in Germany. A further 360,000 vacancies – 33 per cent of job openings – could either not be filled with a desired candidate or only after a longer time period. The shortage of skilled labour concerns not only academic but also professional qualifications. In contrast, German businesses were able to fill around 535,000 available positions as planned. In terms of innovation expenditure, the German economy managed to grow by 4.7 per cent compared to 2017, and the share of revenue generated through product innovations even rose by 14.5 per cent.

In the post-2020 EU Multiannual Financial Framework, the Member States of the European Union should pool their development resources in the EU budget. Joint EU funding would help to overcome the fragmentation of European development aid, while ensuring that all Member States contribute to the EU development according to their gross national income. These are the recommendations of a study on EU development policy conducted by the ZEW – Leibniz Centre for European Economic Research together with the Bertelsmann Stiftung.

From now on ZEW will bear the official name “ZEW – Leibniz-Zentrum für Europäische Wirtschaftsforschung GmbH Mannheim” (ZEW – Leibniz Centre for European Economic Research). The name change has been approved by ZEW’s shareholder and has become effective with its registration in the Commercial Register as of 1 January 2019. The new name will soon be integrated into all parts of the institute’s public image.

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

Daniel Osberghaus
The Effects of Natural Disasters and Weather Variations on International Trade: A Review of the Empirical Literature

Jan Kinne; David Lenz
Predicting Innovative Firms Using Web Mining and Deep Learning

Matthias Hunold; Reinhold Kesler; Ulrich Laitenberger
Hotel Rankings of Online Travel Agents, Channel Pricing, and Consumer Protection

Marius Berger, Irene Bertschek, Wolfgang Briglauer, Verena Dutt, Birgit Gehrke, Friedrich Heinemann, Reinhold Kesler, Bastian Krieger, Moritz Lubczyk, Christian Rammer, Markus Trunschke, Simona Christine Murmann, and Insa Weilage
Structural Reform in Germany, 2013-2017

Tobias Weber, Irene Bertschek, Michael Weinzierl, Anselm Speich, Jörg Ohnemus, Christian Rammer, and Thomas Niebel
DIGITAL Economy Monitoring Report 2018: Germany as an ICT Location and Its Position in an International Comparison, Short Version

Rainer Bräutigam, Christopher Ludwig, and Christoph Spengel
Steuerlicher Reformbedarf bei Service-Plattformen (Need for Tax Reforms in the Context of Service Platforms)

Andreas Koch, Christian Lerch, Christian Rammer, Günther Klee, and Niclas Meyer
Die Bedeutung der industrienahen Dienstleistungen in Baden-Württemberg unter besonderer Berücksichtigung der Digitalisierung (The Importance of Producer-Oriented Services in Baden-Württemberg with a Special Focus on Digitalisation)

Rainer Frietsch, Torben Schubert, Alexander Feidenheimer, and Christian Rammer
Innovationsindikator 2018 (Innovation Indicator 2018)

Rainer Bräutigam, Theresa Bührle, Verena Dutt, Leonie Fischer, Friedrich Heinemann, and Margit Kraus
Länderindex Familienunternehmen (Country Index for Family Businesses)

Buy Local – A Market for Balancing Energy in Electricity Distribution Networks

Design and Impact of Admissions Rules for Schools

Effects of the National Minimum Wage on Self-Employment

Evaluating Policy Instruments for the Transformation to a Low Carbon Economy: Causal Evidence from Administrative Micro Data

Redesign Redispatch

SEEK-Project 2019: Balancing Privacy and Innovation: The Impact of the EU-GDPR on the Online Market for Mobile Applications

SEEK-Project 2019: Digitalisation and Heterogeneity

The Design of Firm’s Internal Labor Markets Under Asymmetric Information

Understanding the Market for Technologies

Speaker: Prof. Yoto Yotov (Drexel University, Philadelphia)
Location of the event: ZEW, Mannheim

Speaker: Thomas Breda (Paris School of Economics)
Location of the event: ZEW, Mannheim

Speaker: Jason Wong (Columbia University, New York)
Location of the event: ZEW, Mannheim

Speaker: Obryan Poyser (Universitat Autònoma de Barcelona (UAB))
Location of the event: ZEW, Mannheim

Location of the event: Grocers’ Hall, London

Speaker: Thilo Klein (Compass Lexecon, Washington, D.C.)
Location of the event: ZEW, Mannheim

Speaker: Andreas Mundt (President of the Bundeskartellamt)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: University of Cologne

Speaker: Prof. Dr. Ferdinand Kirchhof (former Federal Constitutional Court)
Location of the event: ZEW, Mannheim

Podium: Dr. Frederik Eidam (ZEW), Prof. Dr. Friedrich Heinemann (ZEW), Isabelle Job-Bazille, Ph.D. (Group Crédit Agricole, Paris), Lucio Pench (European Commission (DG ECFIN) )
Location of the event: Representation of the State of Baden-Württemberg to the European Union, Brussels

Picture Credits: press release of 28 January 2019: iStock.com/OhmZ, press release of 17 January 2019: iStock.com/Bestgreenscreen, press release of 15 January 2019: iStock.com/Peopleimages, press release of 10 January 2019: iStock.com/porcorex, news article of 07 January 2019: iStock.com/LeoPatrizi, news article of 21 December 2018: iStock.com/courtneyk
 
All further pictures: ©ZEW