Newsletter April 2019

Once again this year, 22 managers from the People’s Republic of China attended the ZEW training programme “Fit for Partnership with Germany” from 18 March to 12 April 2019. During the programme, ZEW’s training experts provided managers from various sectors of the Chinese economy with the necessary knowledge for collaborating with German SMEs in numerous training and coaching sessions.

After a long period of speculation, Deutsche Bank and Commerzbank are now actually holding talks about a possible merger of the two banks. This is mainly driven by the political desire to create a national champion in the banking sector that can compete with international players. The problem is, however, that both banks are in an economically ailing condition. So how would a possible merger affect financial market stability in Germany and Europe? According to ZEW financial economist Jesper Riedler, it is not so much the size as the interdependencies and integration in the global financial system that are important in this case.
 

What effects does common and cross ownership have on competition? How are two-sided markets developing? What role do data play in company mergers? These were some of many issues discussed at the eighth annual conference of the Mannheim Centre for Competition and Innovation (MaCCI) on 28 and 29 March 2019. The internationally renowned conference was organised by ZEW in cooperation with the University of Mannheim.

Whether you are interested in doing an internship, an apprenticeship or in getting started in science: ZEW – as one of the leading economic research institutions in Europe – is the ideal place to kick-start your career. This year, the ZEW human resources department once again attended the University of Mannheim’s CareerFair to provide information on career options at ZEW. Students had the opportunity to ask members of the HR team career-related questions on 9 April 2019 between 10 a.m. and 4 p.m. at the Ehrenhof in Mannheim.

The European sovereign debt crisis has underlined the economic and financial vulnerability of the euro area. In the event of another crisis, public debt can quickly rise to an unsustainable level. Hence, alternatives are needed to mitigate future debt crisis. One possibility would be to introduce a sovereign debt restructuring mechanism (SDRM), a kind of international insolvency procedure. The Lunch Debate on 28 March 2019 in the Representation of the State of Baden-Württemberg to the European Union in Brussels organised by ZEW in cooperation with the research network EconPol Europe, brought together experts who discussed this pressing issue.

ZEW is pleased to announce the Leibniz Network’s eleventh interdisciplinary conference on Real Estate Markets and Capital Markets (ReCapNet) in Mannheim on 14 and 15 November 2019. The event is open to all researchers interested in the interactions between real estate markets and capital markets. This year’s conference focuses particularly on real estate asset pricing. A list of further potential topics is included in the call for papers. Submissions on these and related areas at the intersection of real estate finance and real estate economics are encouraged. Moreover, all authors whose paper has been rated positively may choose to submit their paper for a special issue in the Journal of Real Estate Finance and Economics. Please submit full papers in PDF format and a short note indicating if you are interested in submitting your paper for the special issue to recapnet@zew.de no later than 14 July 2019.

ZEW hosts the sixth international annual MaTax Conference on taxation research on 12 and 13 September 2019. The event is organised by the Leibniz ScienceCampus MannheimTaxation (MaTax), a joint initiative of the University of Mannheim and ZEW. Alan Auerbach (University of California, Berkeley) and Jake Thornock (Brigham Young University) will be this year’s keynote speakers. We invite submissions on all topics broadly related to tax research, including papers from the fields of economics, law, political science, and other disciplines as well as interdisciplinary contributions. The conference focuses particularly on applied and empirical papers related to business taxation, tax avoidance and evasion, behavioural responses to taxation, tax harmonization in the European Union, political economy of taxation, international taxation, tax law, and taxation of the financial sector. Please submit your paper or extended abstract to MaTax@zew.de no later than 31 May 2019.

Eyub Yegen was a visiting researcher in ZEW’s Research Department “Economics of Innovation and Industrial Dynamics” from 1 to 15 April 2019. He is a doctoral researcher in the Rotman PhD Program at the University of Toronto, Canada. His research focuses on firm efficiency, political economy, institutional investors, product market competition, firm performance and industrial organisation. During his visit, he worked with ZEW researcher Niklas Dürr on topics relating to minority and common ownership. He is also currently working on various topics with leading scholars such as Nancy Rose from MIT, Marianne Bertrand from Chicago Booth, Raymond Fisman from Boston University, David Matsa from Northwestern University, Todd Gormley from Washington University, and Francesco Trebbi from the University of British Columbia.

Professor Jens Horbach was a visiting researcher at the ZEW Research Department “Economics of Innovation and Industrial Dynamics” from 1 to 4 April 2019. He is professor of economics at the Faculty of Business of the University of Applied Sciences Augsburg. His research interests lie in the fields of environmental innovation, innovation behaviour of enterprises, and environmental and energy policy. During his stay, he worked with ZEW researcher Dr. Christian Rammer on two joint research papers that investigate business innovation in the recycling economy and dynamic aspects of environmental innovations and environmental regulations.

According to the most recent survey for April (3–17 April 2019), the economic outlook for China has improved again. The CEP Indicator, which is based on the China Economic Panel and reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, is currently at minus 11.9 points, 13.1 points higher compared to the March survey. Despite this improvement, the indicator remains below its long-term average of 1.8 points and has been doing so for 13 months now.

The assessment of the current economic situation has also improved, leaving the index at a level of minus 7.2 points, 6.7 points higher than in the previous month.

The ZEW Indicator of Economic Sentiment for Germany recorded an increase of 6.7 points in April 2019, with the corresponding indicator entering positive territory at 3.1 points. Although the indicator still remains below the long-term average of 22.2 points, economic expectations have recovered significantly from its low point in October 2018, having climbed almost 28 points since. Over the same period, however, the assessment of the economic situation in Germany has deteriorated considerably.

The corresponding indicator saw yet another decrease in April and currently stands at 5.5 points, 5.6 points lower than in the previous month. The outlook for the German economy in the coming six months thus remains greatly subdued.

At an EU summit in Brussels, the United Kingdom and the remaining Member States of the European Union agreed to move the Brexit date to 31 October 2019. However, Great Britain is also free to leave the EU at an earlier date or to cancel Brexit altogether. Professor Achim Wambach, President of the ZEW – Leibniz Centre for European Economic Research and Professor Friedrich Heinemann, head of the ZEW Research Department “Corporate Taxation and Public Finance”, offer their view on the matter.

Following last month's decision against raising its key interest rates for the first time this year, the European Central Bank (ECB) has now decided to make no further changes to its monetary policy outlook for the time being. Professor Friedrich Heinemann, head of the "Corporate Taxation and Public Finance" Research Department at ZEW, comments on the ECB's latest decision.

The Leibniz ScienceCampus “Mannheim Taxation” (MaTax), a joint science project of ZEW and the University of Mannheim, will receive 1.1 million euros in research funding from the Leibniz Association over a period of four years. This research grant was approved by the Senate of the Leibniz Association at the beginning of April 2019. In addition, the State of Baden-Württemberg will support the ScienceCampus with 0.6 million euros. During the same period, the University of Mannheim and ZEW will invest a further 2.4 million euros in tax research carried out within the framework of MaTax.

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

Christian Rammer; Alfred Spielkamp
The Distinct Features of Hidden Champions in Germany: A Dynamic Capabilities View

Florence Blandinières
Anatomy of the Medical Innovation Process – What Are the Consequences of Replicability Issues on Innovation?

Marcel Olbert; Christoph Spengel
Taxation in the Digital Economy – Recent Policy Developments and the Question of Value Creation

Mareike Bahn, Anne Berkemeier, Petra Deger, Havva Engin, Adalbert Evers, Rebecca Höhr, Oksana Kovtun-Hensel, Svenja Kück, Martin Lange, Georg Mildenberger, Friedhelm Pfeiffer, Verena Schmid, Katrin Sommerfeld, Corinna Uebel, Birgit Werner and Christina West
Reallabor Asylsuchende in der Rhein-Neckar-Region: Vielfalt an Problemen – Vielfalt an Lösungen (Real-World Laboratory Asylum Seekers in the Rhine-Neckar Region: Diversity of Problems – Diversity of Solutions)

Industry Concentration and Innovation as Driver of the Productivity Slowdown

Information Diffusion on Twitter: The Effect of Hate Speech Regulation

Speaker: Joosung Lee (University of Edinburgh, UK)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Speaker: Zohal Hessami (University of Konstanz)
Location of the event: ZEW, Mannheim

Speaker: Mark Colas (University of Oregon, United States)
Location of the event: ZEW, Mannheim

Speaker: Mark-E. Orth (German Sport University Cologne and University of Applied Science Chur, Switzerland)
Location of the Event: University of Mannheim

Speaker: Jan Stuhler (Universidad Carlos III de Madrid (UC3M), Spain)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: Ulcinj, Montenegro

Location of the event: ZEW, Mannheim

Speakers: Annika Havlik (ZEW), Prof. Dr. Friedrich Heinemann (ZEW), Dr. Mateusz Szczurek (Lead Regional Economist of the European Bank for Reconstruction and Development (ERBD), former Polish Minster for Finance and member of the European Fiscal Board), Istvan Székely, PhD (Advisor to the Commission’s DG ECFIN), Dr. Eva Zamrazilová (Chairwoman of the Czech Fiscal Council)
Location of the event: Representation of the State of Baden-Württemberg to the European Union, Brussels

Researcher in Public Economics and Industrial Organization (Doctoral Student, 100%)

Picture Credits: press release of 11 April 2019: George Clerk, news article of 08 April 2019: iStock.com/PeopleImages, news article of 01 April 2019: Philippe Veldeman Photographer in Brussels
 
All further pictures: ©ZEW