Newsletter January 2018

ZEW made its own contribution to the debate surrounding EU reform and the negotiations over the upcoming seven-year Financial Framework for the years 2021 to 2027 with the Lunch Debate “The EU Budget: How Europe Can Deliver” held on 24 January 2018 in Brussels. This particular ZEW Lunch Debate was hosted jointly with the Bertelsmann Stiftung. If the high level of interest in the event is anything to go by, this topic has struck a particular chord with the public.

In early 2018, the European Commission is set to open EU budget negotiations with its own proposal for how the budget should look after 2020. During coalition negotiations in Germany, the CDU, CSU and SPD agreed on plans to increase Germany’s payments to the EU. EU Commissioner for Budget and Human Resources, Günther Oettinger, has already announced that the EU’s budget proposal will also include ideas for new sources of revenue. The EU budget and potential savings will be the focus of today’s Lunch Debate, which is part of a regular discussion series hosted in Brussels by the Centre for European Economic Research (ZEW), Mannheim.

On the subject of EU budget reforms, Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at ZEW, offers his view.

According to current estimates, the market for so-called smart textiles amounts to a value of approximately 1.3 billion euros. By 2022, global market volume could reach a value of almost five billion euros, with German markets accounting for around 700 million euros. Furthermore, for 2030 a potential market volume of 4.2 billion euros is predicted for Germany alone. These are the findings of a short report published by the Centre for European Economic Research (ZEW), Mannheim, on behalf of the Federal Ministry for Economic Affairs and Energy. The report was conducted within the framework of the monitoring process of the German cultural and creative industries, and presented in the run-up to the Berlin Fashion Week.

The Volksbank Weinheim Stiftung and the Centre for European Economic Research (ZEW) awarded the “Future World of Work” (“Zukunft der Arbeitswelt”) research prize, now in its fifth year, to two outstanding dissertations. The winners, Dr. Katja Dlouhy (30) from the University of Mannheim and Dr. André Nolte (29), a researcher at ZEW, were presented with their awards at a reception hosted by Volksbank Weinheim in January 2018. Both researchers completed their doctorates the previous year and were awarded the highest possible grade of summa cum laude.

This week, Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at the Centre for European Economic Research (ZEW), Mannheim, was invited by the European Commission to take part in a conference in Brussels to discuss the next Multiannual Financial Framework (MFR). Also in attendance at the two-day conference were a number of high-level policy-makers including the President of the European Commission Jean-Claude Juncker, EU Commissioner for Budget and Human Resources Günther H. Oettinger and German foreign minister Sigmar Gabriel.

Within the framework of a recent report on behalf of the Association of German Banks, researchers from the Centre for European Economic Research (ZEW) in Mannheim, the European School of Management and Technology in Berlin and the Frankfurt School of Finance & Management have analysed the significance of private banks for the German economy.

ZEW’s attendance at the Annual Meeting of the Allied Social Science Associations (ASSA) 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.

Of the most significant emerging economies, Turkey and Russia offer the most attractive conditions for family-run businesses. Given recent political developments in these two countries, however, China has managed to catch up, closely followed by Mexico, India and Brazil. A stable political climate and a secure institutional framework have thus proved to be decisive factors for multinational family businesses when choosing a new location. These are the principal findings of a recent study conducted by the Centre for European Economic Research (ZEW), Mannheim, on behalf of The Foundation for Family Businesses in Germany and Europe.

The study is the first to develop a country index for family businesses based on an analysis of various location factors in emerging markets.

In mid-December 2017, a Chinese delegation of researchers from Fudan University, Shanghai, visited the Centre for European Economic Research (ZEW) in Mannheim. The delegation came to ZEW to discuss the China Economic Panel (CEP), a survey which has been conducted by ZEW and Fudan University on a monthly basis since May 2013.

The Institute of Economics at TU Braunschweig and the Centre for European Economic Research (ZEW) in Mannheim are jointly organizing a workshop on modern applications of geocoded data in economics. The workshop aims to provide a platform for young scientists to network, exchange ideas, and promote their latest innovative research using nighttime lights and/or other spatial data. Submissions from all fields of economics (e.g. development economics, regional and urban economics, environmental economics and economic history) as well as related fields are welcome. All papers should have an empirical focus and make use of geocoded data. We also encourage applications focusing directly on the properties of geocoded data, remote sensing, and/or machine learning. Please submit full papers or extended abstracts to geo.econ.workshop2018@zew.de no later than 28 February 2018.

The Centre for European Economic Research (ZEW) and the Mannheim Centre for Competition and Innovation (MaCCI) are pleased to announce the seventh Mannheim Energy Conference on 14 and 15 May 2018. International scholars and practitioners in the field of energy economics are invited to discuss latest insights, new opportunities and future challenges. Advanced theoretical, empirical, and policy-oriented contributions are welcome. Interested researchers are invited to submit preferably an academic paper or an extended abstract (at least three pages), and interested professionals may submit a single-page abstract in PDF format to energy2018@zew.de no later than 11 February 2018.

The Centre for European Economic Research (ZEW) will hold its annual Conference on the Economics of Information and Communication Technologies (ICT) in Mannheim on 21 and 22 June 2018. The objective of the conference is to discuss recent scientific contributions to the economics of ICT and the economics of ICT industries. Theoretical, empirical and policy-oriented contributions are welcome. Please submit papers in PDF or MS Word format to ict-conference@zew.de no later than 1 March 2018. Participants presenting a paper pay a reduced conference fee of EUR 150.

Valentina Kolunova, a research fellow taking part in the one-year German Chancellor Fellowship programme, has been working in the ZEW Research Department “Economics of Innovation and Industrial Dynamics” since 1 November 2017. This highly renowned programme sponsored by the Alexander von Humboldt Foundation aims to promote the international leaders of tomorrow. As a host institute, the Centre for European Economic Research (ZEW), Mannheim, will be supporting Valentina Kolunova in her research project on the development of the automotive industry in Russia.

Professor Wolfgang Sofka was a visiting researcher in ZEW’s Research Department “Economics of Innovation and Industrial Dynamics” from 15 to 17 January 2018. He is Professor in Strategic and International Management at the Copenhagen Business School in Denmark. His research interests focus on innovation, knowledge search and knowledge protection. During his stay, he investigated the effects of delegating responsibilities to members of staff in startups on their innovation success.

The European Central Bank’s (ECB) latest monetary policy decision still does not give a clear indication of what will happen to its bond-purchase programme from October 2018 onwards. The ECB stands by its resolution to continue making monthly bond purchases to the sum of 30 billion euros as part of the programme until at least September 2018, “or longer if necessary”. Once again, the decision made by the ECB Governing Council even includes a statement that the programme could be expanded if the economic outlook worsens. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at the Centre for European Economic Research (ZEW), Mannheim, comments on the ECB’s decision.

The ZEW Indicator of Economic Sentiment for Germany climbed 3.0 points in January 2018, currently standing at 20.4 points. The indicator thus still remains slightly below the long-term average of 23.7 points. The assessment of the current economic situation in Germany increased by 5.9 points, with the corresponding indicator currently standing at 95.2 points.

If the CDU/CSU and SPD agree to form a governing coalition and implement their reform plans in the areas of tax and family policy, this would primarily ease the financial burden on households with children. At the same time, it is above all the middle class who would benefit from the planned reforms. Low-income households, however, also stand to benefit from these plans, which would cost the state around 13.6 billion euros per year. With regard to the households’ voting preferences, the tax reductions would yield the highest savings among supporters of the green and the liberal party (FDP). SPD and CDU/CSU voters would benefit to a more or less equal extent from the tax relief.

The European Central Bank (ECB) has increasingly been purchasing bonds from countries with high levels of public debt. This is confirmed by a comparison between the purchases made in 2015, the first year the Public Sector Purchasing Programme (PSPP) was introduced, and the purchases in 2017. This comparison was conducted as part of a recent analysis by the Centre for European Economic Research (ZEW), Mannheim.

As part of the Leibniz Economic Summit in Berlin, the president of the Centre for European Economic Research (ZEW), Professor Achim Wambach, engaged in a discussion on “Digitalisation and the Labour Market” with the heads of other economic research institutions also belonging to the Leibniz Association. Professor Achim Wambach comments on the matter: “The advancing digitalisation will bring about fundamental changes for the labour markets. Calculations conducted by ZEW have shown that by 2040, around nine per cent of current jobs in 21 OECD countries (Organisation for Economic Co-operation and Development) will be technically automatable.
 

In the most recent survey conducted in January (2–11 January 2018), expectations for the Chinese economy have improved again, rising to minus 1.1 points. In December, the indicator was still as low as minus 10.7 points. Nevertheless, the CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, is still below the long-term average of 5.0 points. The survey does, however, not reveal a downward trend in expectations. Instead, since around 2014, expectations have been seen to fluctuate around a relatively constant average value.

In their recent coalition paper released following exploratory talks about forming a “Grand Coalition”, the CDU/CSU and SPD reached key compromises on EU policy, digitalisation and Germany’s planned energy transition. Professor Achim Wambach, president of the Centre for European Economic Research (ZEW), Mannheim, offers his view on the paper.

Self-employed workers in the US adjust their income if government welfare and aid programmes provide the incentive to do so. Though some make this adjustment legally by working more or fewer hours, other self-employed workers choose to illegally misreport their income. These are the findings of a study conducted by the Centre for European Economic Research (ZEW), Mannheim, in cooperation with the ifo Institute, Munich, and the Institute of Labor Economics (IZA), Bonn.

In 2018 the new German government should start pushing for the EU to redistribute responsibilities between Brussels and the Member States. For example, responsibilities such as safeguarding farmers’ income should return to the remit of the individual countries. On the other hand, EU institutions should be assuming far greater responsibility for development aid, defence and asylum policy. These are the main findings of a study initiated by the Bertelsmann Stiftung and conducted in cooperation with the Centre for European Economic Research (ZEW), Mannheim.

In the Catalan regional elections, pro-independence parties were once again able to secure a majority in the Catalan parliament. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at the Centre for European Economic Research (ZEW), Mannheim, comments on the election results.

In 2018, stocks remain as attractive for investors as in 2017, whereas government and corporate bonds, as well as real estate, are considered to be significantly less profitable investment options than in the previous year. This is the result of a special question in the ZEW Financial Market Survey conducted by the Centre for European Economic Research (ZEW) in Mannheim.

For firms in the information economy – consisting of the information and communication technologies sector, media service providers and knowledge-intensive service providers – the internet is becoming an increasingly important tool for the purchase of goods and services from foreign countries or the sale of goods and services to international customers. This is the result of a survey among firms in the German information economy, conducted on a regular basis by the Centre for European Economic Research (ZEW), Mannheim.

Our publications are available to 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

Christoph Harendt
Tax Influence on Financial Structures of M&As

John P. Weche; Achim Wambach
The Fall and Rise of Market Power in Europe

Mila Köhler
Estimating the Benefits of R&D Subsidies for Germany

Dirk Czarnitzki; Paul Hünermund; Nima Moshgbar
Public Procurement as Policy Instrument for Innovation

Reinhold Kesler; Michael Kummer; Patrick Schulte
Mobile Applications and Access to Private Data: The Supply Side of the Android Ecosystem

Christoph Grimpe; Martin Murmann; Wolfgang Sofka
The Organizational Design of High-Tech Startups and Product Innovation

Melissa Berger, Christoph Harendt, Friedrich Heinemann, Marc-Daniel Moessinger, Thomas Schwab and Stefani Weiss
How Europe Can Deliver: Optimising the Division of Competences Among the EU and its Member States

Jürgen Janger, Michael Peneder, Andreas Reinstaller, Stefan Weingärtner, Florence Blandinieres, Niklas Dürr, Stefan Frübing, Sven Heim, Bettina Peters and Christian Rammer
Measuring Competitiveness

Michael F. Maier, Steffen Viete and Margot Ody
Plattformbasierte Erwerbsarbeit: Stand der empirischen Forschung (Platform-Based Work: State of Empirical Research)

Austrian Research and Technology Report 2018

Fiscal Institutions and Reform Preferences

Structural Reform in Germany, 2013-2017

Speaker: Dr. Anne Otto (Institute for Employment Research, Nuremberg)
Location of the event: ZEW, Mannheim

Speaker: Christophe Kamps (European Central Bank, Frankfurt am Main)
Location of the event: ZEW, Mannheim

Speaker: Prof. Julien Grenet, PhD (Paris School of Economics)
Location of the event: ZEW, Mannheim

Speaker: Alexander Pitt (International Monetary Fund, Washington D.C.)
Location of the event: ZEW, Mannheim

Speaker: Prof. Dr. Nadja Dwenger (University of Hohenheim)
Location of the event: ZEW, Mannheim

Speaker: Jaakko Meriläinen (Stockholm University)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Speaker: Gianmarco Daniele (Bocconi University, Milan)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Speaker: Dr. Rolf Martin Schmitz (Chairman of the Executive Board and Chief Executive Officer of RWE AG )
Location of the event: ZEW, Mannheim

Speaker: Barbara Hey (ZEW)
Location of the event: Berlin

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

Professor for Financial Markets

Postdoctoral Researcher (100%) in the Research Department “Environmental and Resource Economics, Environmental Management“

Researcher (100%) (PhD Student or Postdoc) for the Research Group “Market Design“

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

Picture Credits: press release of 20 December 2017: iStock.com/shironosov, news article of 4 January 2018: iStock.com/anzeletti, press release of 11 January 2018: iStock.com/gollykim, news article of 11 January 2018: Marco Schilling, press release of 12 January 2018: iStock.com/MichaelUtech, press release of 22 January 2018: Stock.com/MichaelUtech, news article of 24 January 2018: iStock.com/VanDerWolf, press release of 25 January 2018: iStock.com/instamatics, news article of 26 January 2018: Eric Berghen
 
All further pictures: ©ZEW