Newsletter September 2016

The Centre for European Economic Research (ZEW), the University of International Business and Economics (UIBE) and the Alexander von Humboldt Foundation jointly organised this year's Beijing Humboldt Forum in the Chinese capital on September 17–18, 2016. As part of the forum, ZEW organised a session on "The Digitization of the Economy." During the session, ZEW researchers Professor Irene Bertschek and Dr. Fabienne Rasel engaged in a discussion with international guests regarding developments, implications and changes resulting from Industry 4.0 and the digitization of the economy.

In 2012 Edvard Munch's "The Scream" was auctioned by Sotheby's for a record price of nearly 120 million dollars. The painting was sold using the English auction format, meaning the auction started with a low minimum bid and ended when no one was willing to bid more. This auction format raises interesting questions, however: Was the buyer of "The Scream" potentially willing to pay more? More specifically: Could the painting have been sold for an even higher price given a different set of auction rules? "Market design" is a new economic subfield that seeks to answer questions such as these.

Since the German interurban bus sector underwent extensive deregulations in 2013, licensed bus companies have been able to offer regularly scheduled services on routes of over 50 kilometres. The ZEW Economist Kai Hüschelrath has singled out the sector as a perfect example for the success of European deregulation and despite the spate of recent mergers sees no reason to be overly concerned about decreasing competition.

On September 1 and 2, 2016, the Centre for European Economic Research (ZEW) organised the fifth edition of the workshop on empirical tax research. Around 40 participants attended the event, which boasted a varied programme including various presentations of current empirical research findings regarding the influence of corporate taxation on corporate decision-making. The workshop was organised within the framework of the Leibniz ScienceCampus MannheimTaxation (MaTax), a joint initiative of the University of Mannheim and ZEW.

The new Seminar Programme of the Centre for European Economic Research (ZEW), valid from September 2016 until June 2017, is now available. ZEW offers scientifically grounded qualification programmes for specialists and executive staff from all areas. The seminars are tailored to specific target audiences and draw on knowledge obtained through ZEW research activities. The training seminars are held by ZEW experts in an application-oriented way.

The Federal Institute for Vocational Education and Training (BIBB), the Institute for Employment Research (IAB) and the Centre for European Economic Research (ZEW) jointly organised the fourth international TASKS Conference from September 7-9, 2016, in Mannheim. Around 70 national and international researchers attended the event and discussed labour market adjustments to digitalisation and the future of work. Among the highlights of the event were the keynote speeches held by leading international researchers. In addition, the participants had the opportunity to visit a factory of Pepperl+Fuchs, a company specialised in sensor manufacturing and process automation.

Having contributed a total of 18 presentations, the Centre for European Economic Research (ZEW) played an important role at the Annual Conference of the Verein für Socialpolitik (VfS), held at the University of Augsburg, where the Mannheim institute also hosted an information stand. From September4 to 7, 2016, about 800 researchers exchanged ideas on the core topic "Demographic Change" at the economic association's international conference.

Numerous researchers and research associates from the Centre for European Economic Research (ZEW) are included in the latest Economists Ranking published by the German newspaper "Frankfurter Allgemeine Zeitung" (F.A.Z.). Above all, ZEW President Professor Achim Wambach was able to improve his position significantly compared to the previous year, moving up from rank 39 to rank 10 in the list of the 100 most influential economists in Germany, Austria and Switzerland.

Professor Bettina Peters, deputy head of the Research Department "Economics of Innovation and Industrial Dynamics", has taken over the professorship of management at the Faculty of Law, Economics and Finance at the University of Luxembourg (FDEF) on September 1, 2016. The appointment of Peters will further strengthen ZEW's ties with the University of Luxembourg.

David R. Agrawal, PhD, was a visiting researcher in ZEW's Research Group "International Distribution and Redistribution" from May 17 to August 7, 2016. He is an assistant professor of economics as well as public policy at the University of Kentucky in Lexington, USA. His research focuses on public economics with an emphasis on taxation, fiscal federalism, migration, and fiscal policy in urban and regional contexts. During his visit, he worked with ZEW researchers on how technology adoption influences income inequality. He also completed research projects on optimal tax rates, tax avoidance and evasion. In a ZEW Research Seminar, he presented his research results on tax increases in Spain and the migration of high-income taxpayers abroad.

French and German members of parliament (MPs) are both open to granting more competencies to the EU in the fields of defence and immigration policy. There is, however, considerable disagreement on certain reform proposals for the eurozone. While the French politicians support the adoption of a joint liability scheme in form of Eurobonds and a common European Monetary Union unemployment insurance (EMU-UI), German representatives are opposing these proposals. MPs from both countries agree, however, that higher investments by Member States may serve as an instrument to spur growth in the eurozone.

These are the findings of a study by the Centre for European Economic Research (ZEW), which will be presented in Brussels today.

After a lengthy political dispute over a required reform of the German inheritance tax system, the mediation committee of the Federal Government and the Länder has reached a compromise. Professor Christoph Spengel, research associate at the Centre for European Economic Research (ZEW) and Chair of Business Administration and Taxation II at the University of Mannheim, comments on the recent agreement,

Today, the Organisation for Economic Co-operation and Development (OECD) published the 2016 edition of Education at a Glance, comprising the OECD’s annual indicators on education. Dr. Friedhelm Pfeiffer, deputy head of the Research Department "Labour Markets, Human Resources and Social Policy" at the Centre for European Economic Research (ZEW), comments on how well Germany fares in international comparison in terms of education.

Economic expectations for Central and Eastern Europe including Turkey (CEE region) stay unchanged in September 2016. The ZEW-Erste Group Bank Economic Sentiment Indicator for the CEE region remains at 15.4 points, the same reading as in the previous month. The ZEW-Erste Group Bank Economic Sentiment Indicator for Central and Eastern Europe reflects financial market experts’ expectations for the CEE region on a six-month time horizon. The indicator has been compiled on a monthly basis together with further financial market data by the Mannheim Centre for European Economic Research (ZEW) in collaboration with Erste Group Bank, Vienna, since 2007.

In September 2016, the ZEW-CS Indicator for the economic sentiment in Switzerland rose by 5.5 points to a reading of 2.7 points. This is the first increase of the ZEW-CS Indicator after it had been falling for the last two months. As in the previous month, optimists and pessimists hold almost equal shares among the experts. When it comes to the current economic situation in Switzerland, however, experts are less positive in their evaluation than in the previous month: The corresponding indicator declined by 3.3 points to a level of 8.0 points.

The ZEW-CS Indicator reflects the expectations of the surveyed financial market experts regarding the economic development in Switzerland on a six-month time horizon. It is calculated monthly by the Mannheim Centre for European Economic Research (ZEW) in cooperation with Credit Suisse (CS), Zurich.

German companies participating in the European Emissions Trading Scheme (EU ETS) have low expectations regarding the effectiveness of the agreement adopted at the Paris climate change conference in 2015. Approximately 60 per cent of companies do not expect that the agreement will result in a sustainable reduction of global greenhouse gas emissions. Similarly, the majority of the surveyed companies do not expect major effects on their competitiveness, employment or location of production facilities resulting from the agreement.

Most companies, however, do expect prices for emissions certificates to rise again after the past few months had seen a sharp decline in prices. This is the result of the KfW/ZEW CO2 Barometer 2016, an annual survey which has been jointly conducted by the KfW Banking Group and the Centre for European Economic Research (ZEW) since 2009 and which examines the impact of the EU ETS regime on the regulated companies.

The ZEW Indicator of Economic Sentiment for Germany remains unchanged in September 2016. The index stands at a level of 0.5 points (long-term average: 24.1 points). "The current ambiguity of economic impulses from Germany and abroad means that forecasts for the next few months are difficult. German exports, particularly to non-EU countries, as well as industrial production figures have disappointed. By contrast, the economic environment in the European Union is improving.

Overall, the ZEW Indicator of Economic Sentiment suggests that the economic situation in Germany will remain favourable in the coming six months," comments ZEW President Professor Achim Wambach.

In the past two decades the German Bundesliga has suffered from a reduced level of competition. One of the key factors for this development is the change in the players' mobility. As a result, there is an increasingly high number of top-performing players in extraordinarily good football teams. These teams tend to win more games, which leads to a reduced level of competition. This is the finding of a study carried out by the Mannheim Centre for European Economic Research (ZEW).

The latest survey carried out in August (17–31/08/2016) indicates that expectations for the Chinese economy have worsened. The CEP Indicator, which reflects the expectations of international financial market experts regarding China's macroeconomic development over the coming twelve months, has fallen by 8.5 points to a current negative reading of minus 1.9 points. The CEP Indicator therefore currently lies significantly below the long-term average of 5.8 points, seen in the period from mid 2013 to August 2016.

Expectations for the annual growth rate of the Chinese gross domestic product (GDP) have also been revised downwards. Growth of 6.5 per cent is now expected for 2016 (previously: 6.6 per cent) and in 2017, experts now expect to see growth of 6.3 per cent (previously: 6.5 per cent).

Between 2013 and 2015, four out of five small and medium-sized enterprises (SMEs) in Germany carried out projects aimed at increasing their level of digitisation. Digitisation is certainly not a new concept for SMEs. The majority of businesses, however, spent less than 10,000 euros per year on digitisation projects during this period. Businesses with an advanced level of digitisation invest more frequently in both technological projects and competencies related to digitisation than other firms. Only a small number of businesses are concerned about the risk of additional competitive pressure from start-ups or internet companies. These are the findings of a recent study conducted by the Centre for European Economic Research (ZEW), Mannheim, in collaboration with the infas Institute for Applied Social Sciences and the KfW Group.

Our publications are available for 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

Searching for a Franco-German Consensus on the Future of Europe – Survey Results for Bundestag, Assemblée Nationale and Sénat

Eugénie Joltreau; Katrin Sommerfeld
Why Does Emissions Trading Under the EU ETS not Affect Firms’ Competitiveness? Empirical Findings from the Literature

Dirk Crass; Francisco Garcia Valero; Francesco Pitton; Christian Rammer
Protecting Innovation Through Patents and Trade Secrets: Determinants and Performance Impacts for Firms with a Single Innovation

Michael F. Maier; Maresa Sprietsma
Does it Pay to Move? Returns to Regional Mobility at the Start of the Career for Tertiary Education Graduates

Mathias Dolls; Philipp Doerrenberg; Andreas Peichl; Holger Stichnoth
Do Savings Increase in Response to Salient Information About Retirement and Expected Pensions?

Melanie Arntz, Terry Gregory, and Ulrich Zierahn (2016)
ELS Issues in Robotics and Steps to Consider them. Part 1: Robotics and Employment

Business-to-Business Relations in the Online Platform Environment

Transitions from Lower Track Secondary School to Vocational Education

Location of the event: ZEW, Mannheim

Speaker: Dr. Zwetelina Iliewa (ZEW)
Location of the event: ZEW, Mannheim

Speaker: Frederik Eidam (ZEW)
Location of the event: ZEW, Mannheim

Speaker: Dr. Thilo Klein (OECD)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Speakers: Francesc Ortega (Queens College, CUNY), Ewen Macleod (UNHCR and University of Oxford)
Location of the event: ZEW, Mannheim

Speaker: Dr. Karolin Kirschenmann (ZEW)
Location of the event: ZEW, Mannheim

Speaker: Todd Sandler, PhD (University of Texas at Dallas)
Location of the event: ZEW, Mannheim

Location of the event: Bedfort Hotel, Rue Di Midi 135, Brussels

Location of the event: ZEW, Mannheim

Speaker: Dr. Oliver Lerbs (ZEW)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Speaker: Lea Steinrücke (ZEW)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Speaker: Jesper Riedler (ZEW)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Speakers: Prof. Dr. Markus K. Brunnermeier (Edwards S. Sanford Professor of Economics and Director of the Bendheim Center for Finance at Princeton University), Prof. Dr. Sascha Steffen (ZEW)
Location of the event: ZEW, Mannheim

Speakers: Dr. Nicole Hoffmeister-Kraut (Minister of Economic Affairs, Labour and Housing of the State of Baden-Württemberg), László Andor (former EU Commissioner for Employment and Social Affairs, currently Mercator Senior Fellow at Hertie School of Governance), Torsten Arnswald (Federal Ministry of Finance, Germany), Fabien Dell (EU Commission, Cabinet of Commissioner Pierre Moscovici), Dr. Mathias Dolls (ZEW)
Moderation: Maithreyi Seetharaman
Location of the event: Representation of the State of Baden-Württemberg to the European Union, Rue Belliard 60-62, B-1040 Brussels

Speaker: Prof. Dr. Christoph M. Schmidt (Chairman of the German Council of Economic Experts and President of RWI – Leibniz Institute for Economic Research)
Veranstaltungsort: ZEW, Mannheim

Picture Credits: News Article of September 29, 2016: ©UIBE, News Article of September 8, 2016: ©Peter Neidlinger, Press Release of September 28, 2016: ©iStock.com/Joel Carillet, Press Release of September 20, 2016: ©iStock.com/Catherine Lane, Press Release of September 15, 2016: ©iStock.com/KeithBinns, Press Release of September 14, 2016: ©iStock.com/George Clerk, Press Release of September 8, 2016: ©istock.com/vm, Press Release of September 5, 2016: ©istock.com/PeopleImages
All further pictures: ©ZEW