Newsletter November 2017

The wave of refugees arriving in Germany in 2015 has presented the country with the challenge of integrating these migrants into society. Researchers at ZEW have been conducting an investigation into the integration process by following a group of refugees involved in the inclusive football project HEIMSTÄRKE (“home strength”), which encourages the integration of refugees into society and the labour market through sport. ZEW education economist Friedhelm Pfeiffer discusses the study and its possible implications for both policy-makers and refugees.

Europe is facing a conundrum when it comes to innovation. Despite high levels of investment in research and many market-leading global companies being based on the continent, most disruptive and radical innovations are coming from other parts of the world. One reason for this is the shortage in funding available to European companies – a shortage that is currently being filled by what are known as “business angels”, that is, private investors who support young companies and start-ups with both their capital and expertise. How can Europe benefit from business angel investment more than it does already?

This was the central question posed at the ZEW Lunch Debate entitled “On Angel’s Wings: Can Business Angels Stimulate European Innovation?” which took place on 22 November 2017 at the Representation of the State of Baden-Württemberg to the European Union in Brussels.

One fifth of start-up companies based in Baden-Württemberg are academic spin-offs, that is, companies where at least one of the founders previously worked or currently works in a scientific research institution. This puts Baden-Württemberg in Southwest Germany above the average share of academic spin-offs for the other German states, where 17 per cent of start-up businesses have origins in the field of scientific research. This is one of the findings of a special analysis of the most recent IAB/ZEW Start-up Panel conducted by the Mannheim-based Centre for European Economic Research (ZEW) specifically for Baden-Württemberg on behalf of L-Bank.

On 2 and 3 November 2017, the Centre for European Economic Research (ZEW) hosted the ninth interdisciplinary conference of the Leibniz network on Real Estate Markets and Capital Markets (ReCapNet). Over the course of the two-day conference, 25 participants from around the world discussed the latest research on commercial real estate markets.

How can we encourage businesses to implement digitalisation measures? What does a fair and efficient tax system look like? Why are high school students also affected by employment benefits such as Hartz IV? Is there still hope for the European emissions trading system? How can we most effectively integrate highly skilled migrants into the labour market? These are some of the questions that the student teams from the Southwest region will have to tackle over the course of the high school economics competition YES! – Young Economic Summit in 2018.

During the competition, researchers of the Centre for European Economic Research (ZEW) will once again be assisting the students by providing scientific expertise.

What is virtual reality, what challenges does it pose for society, and how can small and medium-sized enterprises (SMEs) make the most of this new technology? These are just some of the questions that were discussed by experts from the worlds of business and research in front of an audience of around 90 guests invited to ZEW in Mannheim on 15 November 2017. This was the second ever Tech Talk organised by the Volksbank Weinheim and mittelstand-rhein-neckar.de. The topic of this year’s event was “Virtual Reality – Trends and Practical Solutions for SMEs”.

On 6 and 7 November 2017, the Centre for European Economic Research (ZEW) in Mannheim hosted the seventh MaCCI Law and Economics Conference on Big Data. The roughly 65 participants from academia, governmental organizations, and private companies discussed recent developments relating to big data and other topics in the field of law and economics.

On 13. November 2017, the Centre for European Economic Research (ZEW) received a visit from a Chinese delegation of high-ranking representatives from academia, politics and business. The group, made up of representatives from a number of different Chinese regions, visited Mannheim as part of the city-to-city cooperation set up by the EU Commission under the „International Urban Cooperation“ (IUC) programme. Mannheim is currently the only German city participating in the International Urban Cooperation and has been paired with the Chinese city of Chongqing.

During their visit at ZEW, the group gained insights into, among other things, innovative research in small and medium-sized enterprises and research funding.

How can we raise awareness among private households about saving energy at home? What is the key to running a successful energy saving campaign? And how can the impact of such a campaign on actual energy usage be scientifically assessed? These are some of the questions addressed by ZEW environmental economists in presenting their latest research findings at the side event “Energy Savings in Housing” held alongside the official negotiations at the UN Climate Change Conference (COP23) in Bonn.

How can the founding of start-up businesses be made quick and effective? This was the question tackled by the winning student team from BBS Wirtschaft 1 Ludwisghafen over the course of the YES! – Young Economic Summit with the support of ZEW researchers. Their idea of a “company gateway” for start-ups secured them first place in a vote conducted among all the competing teams. At the official award ceremony held at the Federal Ministry for Economic Affairs and Energy in Berlin, Minister Brigitte Zypries presented the YES! Award to the team from Ludwigshafen for coming up with the most convincing idea in the competition.
 

The team from Ludwigshafen beat off stiff competition from teams from 13 other schools from Baden-Württemberg, Hesse, Rhineland-Palatinate, Saarland and Schleswig-Holstein.

The European Commission has published its first ideas for the future of the Common Agricultural Policy (CAP). In its communication on “The Future of Food and Farming”, the Commission presents an outline of a future CAP which shifts more responsibility onto the Member States and takes a clearer stand with regard to environmental objectives and the fight against climate change. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at the Centre for European Economic Research (ZEW) in Mannheim, offers his view on the matter.

Companies that use vast amounts of data undertake more product innovations and display a higher innovation intensity. These innovations based on big data can bring these companies market success – but only if companies make sufficient investments in the IT skills of their employees. These are the findings of an empirical study conducted by the Centre for European Economic Research (ZEW) in Mannheim.

According to the most recent survey for November (26/10/2017–15/11/2017), the economic outlook for China dropped by 9.7 points to a new value of 7.6 points (October: 17.3 points). The CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, has once again come in well above the long-term average of 5.4 points and signals a comparatively positive outlook for Chinese economic growth.

Professor Achim Wambach, president of the Centre for European Economic Research (ZEW), Mannheim, shares his disappointment in the collapse of the coalition talks between the CDU, Greens and FDP (also known as a “Jamaica coalition” because the parties’ colours replicate the Jamaican flag), especially with regard to new design options for Germany’s energy transition.

The establishment of international markets for trading CO2 emission certificates is currently progressing at an extremely sluggish pace. This is the result, firstly, of countries that might participate in such markets having strong incentives to issue as many CO2 certificates as possible. Another reason is that governments can appoint individuals to ministerial positions – where they will be responsible for climate policy – who prioritise corporate profits over environmental protection as a means of signalling to other countries that they will have to shoulder more of the burden in terms of climate protection.

The interplay of these two mechanisms results in countries pursuing less ambitious climate policies where the primary concern is palming off the majority of the responsibility for lowering CO2 emissions onto other countries. These are the findings of a study conducted by the Centre for European Economic Research (ZEW) in Mannheim.

The ZEW Indicator of Economic Sentiment for Germany in November 2017 has once again improved on the result from the previous month. The indicator currently stands at 18.7 points, which corresponds to an increase of 1.1 points compared with the October result. The indicator, however, still remains below the long-term average of 23.7 points. “The prospects for the German economy remain encouragingly positive. Overall high levels of growth across Europe in the third quarter are supporting further growth in Germany and boosting expectations for the coming six months.

This favourable economic climate should be used to create a stronger and more robust basis for future growth,” comments ZEW President Professor Achim Wambach.

The next German government should not agree to any reform of the Eurozone that does not include the introduction of an insolvency system for Member States deep in government debt. To mark the founding conference of the „European Network for Economic and Fiscal Policy Research“ (EconPol Europe), ZEW research department head Professor Friedrich Heinemann today in Brussels presented an outline of a potential Eurozone reform.

The Centre for European Economic Research (ZEW), Mannheim, has taken a clear stance for greater transparency and openness with its new Open Access strategy. Open Access involves making research publications freely available online. With its new strategy, ZEW joins the national and international efforts, specifically the Leibniz Association’s Open Access Guidelines, aimed at making scientific knowledge available to all without any technical, legal or financial barriers.

Economic sentiment among companies in the German information economy sector has been largely positive in the third quarter of 2017, as suggested by the ZEW Sentiment Indicator for the Information Economy. The indicator takes into account the companies’ current business situation as well as their business expectations. In comparison to the previous quarter, the sentiment indicator has climbed 0.6 points to a current level of 68.3 points. This is the result of a survey conducted among firms in the German information economy by the Centre for European Economic Research (ZEW), Mannheim, in September 2017.

Southern European countries profit in a disproportionate way from the bond-buying programme of the European Central Bank (ECB), with the largest bias towards Spain and Italy. Within the framework of the Public Sector Purchase Programme (PSPP), national central banks and the ECB have purchased Spanish and Italian government bonds whose volume exceeds Spain’s and Italy’s share in gross domestic product (GPD) by around 43 billion euros and 51 billion euros, respectively. If the ECB continues its bond-buying programme in 2018, this would further extend the preferential treatment of euro countries with high debt levels. These are the findings of a current quantitative analysis by the Centre for European Economic Research (ZEW) in Mannheim.

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Maikel Pellens and Georg Licht
Business Angels: Crucial Elements of the European Financial Ecosystem

Sebastian Blesse; Pierre C. Boyer; Friedrich Heinemann; Eckhard Janeba; Anasuya Raj
European Monetary Union Reform Preferences of French and German Parliamentarians

Helene Mass; Nicolas Fugger; Vitali Gretschko; Achim Wambach
Imitation Perfection – A Simple Rule to Prevent Discrimination in Procurement

Nicolas Fugger; Philippe Gillen; Alexander Rasch; Christopher Zeppenfeld
Preferences and Decision Support in Competitive Bidding

Vitali Gretschko; Achim Wambach
Contract (Re-)Negotiation with Private and Common Values

Francesco Berlingieri
Local Labor Market Size and Qualification Mismatch

Claire Gavard; Djamel Kirat
Flexibility in the Market for International Carbon Credits and Price Dynamics Difference with European Allowances

Thomas Niebel; Fabienne Rasel; Steffen Viete
BIG Data – BIG Gains? Empirical Evidence on the Link Between Big Data Analytics and Innovation

Josefine Diekhof; Uwe Cantner
Incumbents’ Responses to Innovative Entrants – A Multi-Country Dynamic Analysis

Katrin Hussinger; Maikel Pellens
Guilt by Association: How Scientific Misconduct Harms Prior Collaborators

André Nolte
The Internet Effects on Sex Crime and Murder – Evidence from the Broadband Internet Expansion in Germany

Martin Biewen; Bernd Fitzenberger; Jakob de Lazzer
Rising Wage Inequality in Germany: Increasing Heterogeneity and Changing Selection into Full-Time Work

Sarra Ben Yahmed
Gender Wage Discrimination and Trade Openness. Prejudiced Employers in an Open Industry

Olena Pfeiffer; Christoph Spengel
Tax Incentives for Research and Development and Their Use in Tax Planning

Philipp Dörrenberg; Andreas Peichl
Tax Morale and the Role of Social Norms and Reciprocity. Evidence from a Randomized Survey Experiment

Jens Horbach; Christian Rammer
Energy Transition in Germany and Regional Spillovers: What Triggers the Diffusion of Renewable Energy in Firms?

Mila Köhler; Bettina Peters
Subsidized and Non-Subsidized R&D Projects: Do They Differ?

Sebastian Blesse; Felix Rössel
Was bringen kommunale Gebietsreformen? Kausale Evidenz zu Hoffnungen, Risiken und alternativen Instrumenten (What Are the Benefits of Municipal Territorial Reforms? Causal Evidence on Hopes, Risks and Alternative Instruments)

Heike Schweitzer; Martin Peitz
Datenmärkte in der digitalisierten Wirtschaft: Funktionsdefizite und Regelungsbedarf? (Data Markets in the Digital Economy: Functional Deficits and Need for Regulation?)

Martin Murmann
Auswertungen IAB/ZEW-Gründungspanel (Evaluations IAB/ZEW Start-up Panel)

Maximilian Joseph Blömer, Florian Buhlmann, Max Löffler, Andreas Peichl and Holger Stichnoth
Grenzbelastungen im Steuer-, Abgaben- und Transfersystem (Marginal Tax Rates in the Tax, Contribution and Transfer System)

Holger Schütz, Katharina Sandbrink, Jacob Steinwede, Melanie Arntz, Michael F. Maier and Angelika Ganserer
Verbreitung, Nutzung und mögliche Probleme von Werkverträgen – Qualitative Betriebsfallstudien (Prevalence, Use and Possible Problems Concerning Service Contracts – Qualitative Case Studies in Firms)

Melanie Arntz, Angelika Ganserer, Michael F. Maier, Katharina Sandbrink, Ulrich Schasse, Holger Schütz, Jacob Steinwede and Stephan L. Thomsen
Verbreitung, Nutzung und mögliche Probleme von Werkverträgen - Quantitative Unternehmens- und Betriebsrätebefragung sowie wissenschaftliche Begleitforschung (Prevalence, Use and Possible Problems Concerning Service Contracts – Quantitative Survey Among Firms and Works Councils, and Scientific Accompanying Research)

Coordination Priority Program “The German Labor Market in a Globalized World: Challenges Through Trade, Technology and Demographics” (SPP1764)

Empirical Estimation of Electricity Demand Elasticities for Different Customer Groups in Switzerland and Implications for Energy Policies

Human Resource Management and Employee Retention: Empirical Analyses Using new Linked Employer-Employee Data II

Location of the event: ZEW, Mannheim

Speaker: Giulio Federico (Barcelona Graduate School of Economics)
Location of the event: University of Mannheim

Location of the event: ZEW, Mannheim

Speaker: Professor Ronald Davies (University College Dublin)
Location of the event: ZEW, Mannheim

Speaker: Christoph Sajons, PhD (Walter Eucken Institut Freiburg)
Location of the event: ZEW, Mannheim

Speaker: Dr. Heiko Stüber (Friedrich-Alexander University Erlangen-Nuremberg and Institute for Employment Research (IAB))
Location of the event: ZEW, Mannheim

Location of the event: Allianzforum, Berlin

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

Postdoctoral or Advanced Graduate Researcher (100%) “Public Procurement in Europe“ for the Research Department “Corporate Taxation and Public Finance“

Picture Credits: press release of 24 October 2017: iStock.com/instamatics press release of 27 October 2017: iStock.com/Peshkova, news article of 8 November 2017: ZBW, press release of 15 November 2017: iStock.com/kodda, press release of 20 November 2017: iStock.com/NatanaelGinting, news article of 20 November 2017: ZBW, news article of 24 November 2017: FKPH, press release of 27 November 2017: iStock.com/shironosov, press release of 29 November 2017: iStock.com/valio84sl
 
All further pictures: ©ZEW