Newsletter September 2019

The Mannheim Centre for Competition and Innovation (MaCCI) – a joint initiative of the ZEW and the University of Mannheim – is hosting the MaCCI Law and Economics Conference on 14 and 15 November 2019 at ZEW in Mannheim. This year’s topics include the law and economics of procedures for the protection of intellectual property. The aim of the conference is to promote exchange between international academics and representatives of public authorities as well as legal and economic advisors.

The Leibniz ScienceCampus “Mannheim Taxation” (MaTax), a joint initiative by ZEW and the University of Mannheim, examines how a sustainable tax system must be designed in order to meet new economic and social challenges. In September 2019, the sixth annual MaTax conference took place in Mannheim, where almost 80 participants from all over the world discussed current work in the field of tax research.

How can asylum seekers be successfully integrated into the Rhine-Neckar region? This question was investigated within the framework of the interdisciplinary project “Real-World Laboratory: Asylum Seekers in the Rhine-Neckar Region”, for which ZEW was a project partner. In an interview, PD Dr. Friedhelm Pfeiffer, member of the board of directors of the Real-World Laboratory and deputy head of the Research Department “Labour Markets and Human Resources”, sheds light on the main findings of the project that ZEW recently completed with its partners.

The ZEW President and Chair of the Monopolies Commission Professor Achim Wambach, together with other members of the expert panel, drew attention today in Berlin to competition problems associated with the energy transition. The problems mainly concern the construction of charging stations for electric vehicles in municipalities, tenders for wind energy, and price supervision in wholesale electricity. These points emerge from the current sector report for the energy markets in Germany, which the Monopolies Commission submitted to the Federal Ministry for Economics and Energy.

Which policy measures have proven effective in the fight against inner-city pollution? How should supply-side developments in electromobility be assessed, and how are consumers reacting to the various incentives to reduce emissions? These and other economic questions related to the emissions caused by the mobility sector will be addressed during the ZEW Session at this year’s Beijing Humboldt Forum (BHF), which will take place in the Chinese capital on 21–23 September 2019. Within the framework of the event, researchers from China, Germany and the US will present their research on this topic.

In July and August 2019, four summer courses on qualifications for young academics took place for the first time at ZEW. The ZEW Summer Courses are part of a close cooperation with the University of Mannheim within the framework of the PhD track of the Center for Doctoral Studies in Economics (CDSE) and were made possible thanks to the support of the state of Baden-Württemberg. Around 40 young researchers from ZEW and the University of Mannheim took part in the four courses on current economic issues.

The German Real Estate Financing Index (DIFI) of ZEW and JLL hardly changed at all in the third quarter of 2019, remaining negative at minus 10.8 points (plus 0.3 points compared to the previous quarter). In particular, financing expectations are deteriorating significantly, no longer able to be offset by a slightly positive assessment of the financing situation. The main reason for this is the persistently poor assessment of the situation of stationary retail.

European emissions trading has effectively linked economics and climate protection for some time now. But the public seems to be unaware of its success. The German Federal Government’s climate cabinet should work to extend European emissions trading to the transport and heating sectors. The first step should be to introduce emissions markets in these sectors throughout Germany, argues ZEW President Professor Achim Wambach in his latest opinion piece.

For the third time, professors from the Chinese Master’s programme of International Business (MIB) were visiting ZEW from 12 to 22 August 2019 to participate in the “MIB Faculty Programme”. The advanced training programme is an important component of ZEW's multifaceted cooperation with renowned institutions in China.

At the 34th Annual Conference of the European Economic Association (EEA) from 26 to 30 August 2019 at the University of Manchester, participating ZEW scientists presented current research results in five lectures, discussing them in various sessions with researchers from all over Europe. The 72nd European Annual Meeting of the Econometric Society (ESEM) took place at the same time as the EEA.

The Mannheim Centre for Competition and Innovation (MaCCI), a joint initiative of ZEW and the University of Mannheim, is pleased to announce its 2020 annual conference in Mannheim on 5 and 6 March 2020. The conference provides a platform for exchange and discussion on topics in competition- and innovation-related research. Researchers are invited to submit papers from all fields of competition law and economics. Theoretical and empirical papers as well as case studies are welcome. We especially encourage legal experts to submit contributions with a focus on EU competition law and/or comparative competition law. Please submit full papers as well as extended abstracts in PDF format to macciannual2020@zew.de no later than 15 November 2019.

As of mid-September 2019, Tabea Bucher-Koenen has accepted the position of Professor for Financial Markets at the University of Mannheim’s Business School. Professor Bucher-Koenen’s appointment, who since January 2019 has been head of the ZEW Research Department for “International Finance and Financial Management”, will deepen the cooperation between ZEW and the University of Mannheim.

Professor Anthony Strittmatter was a visiting researcher in ZEW’s Research Department “Social Policy and Redistribution” from 2 to 6 September 2019. He is an assistant professor at the Swiss Institute for Empirical Economic Research at the University of St. Gallen, Switzerland, with research focuses on causal machine learning, policy evaluation, and labour economics. During his stay, Anthony Strittmatter held a weeklong course on “Causal Machine Learning” at ZEW, where researchers got the opportunity to learn more about the use of machine learning methods for drawing causal inferences.

As part of its Digital Agenda, the German government has made considerable public funds available for nationwide broadband internet coverage in Germany. For the first time ever, a study published by ZEW shows that broadband internet access has a positive influence on regional gross domestic product (GDP). Particularly the availability of fast internet fosters regional GDP growth in rural districts. Implementing broadband internet is therefore economically beneficial not only for those districts directly affected but for their neighbouring districts as well.

In the most recent survey for September (4–18 September 2019), the expectations regarding the Chinese economy fell for the second time in a row, with the indicator dropping by 12.8 points. In the previous month, expectations had worsened by 4.8 points. The CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, is currently at minus 17.7 points (August 2019: minus 4.9 points).

Today the Climate Cabinet presented its policy package for achieving the climate targets and further developing the energy transition. ZEW President Professor Achim Wambach comments.

Introducing and issuing digital currencies such as Libra, as planned by Facebook, or Bitcoin without strict legal requirements is viewed critically by most financial market experts: around 88 per cent believe that the use of digital currencies without close regulatory supervision poses a threat to financial stability. This is the result of a special question featured in the most recent ZEW Financial Market Survey conducted with 193 financial market experts. ZEW carried out the survey in September 2019.
 

The US Federal Reserve continued the series of interest rate cuts it started in July 2019 and lowered its base rates by a further 0.25 percentage points to a range between 1.75 and 2.00 per cent. Professor Friedrich Heinemann, head of the “Corporate Taxation and Public Finance” Research Department at ZEW, comments on this matter.

In 2018, the number of start-ups in Germany decreased considerably compared to the levels recorded the previous year. This is the strongest decline since 2014, corresponding to a drop of almost four per cent (see graph). The roughly 155,000 start-ups in 2018 is 6,000 fewer than in 2017 and almost 60,000 fewer than ten years ago. But especially alarming is the fact that the number of start-ups in R&D-intensive manufacturing industries has been strongly decreasing. These are the results of an analysis carried out by the ZEW – Leibniz Centre for European Economic Research in Mannheim for the publication “Junge Unternehmen” (“Young Companies”), published in collaboration with the credit bureau Creditreform. This analysis was based on recent figures from the Mannheim Enterprise Panel (MEP) conducted by ZEW.

The ZEW Indicator of Economic Sentiment for Germany experienced a sharp rise in September 2019, making up for the significant decline witnessed in August. Currently standing at minus 22.5 points, the indicator climbed 21.6 points compared to the previous month. The indicator thus exhibits about the same level as in June, which was minus 21.1 points. It remains, however, well below the long-term average of 21.5 points.

At its meeting today, the Governing Council of the European Central Bank (ECB) has resolved to lower the base interest rate and to reduce the deposit rate from minus 0.4 to minus 0.5 per cent. The intensification of the negative interest rate will be supplemented by the introduction of a graduated interest rate system. In addition, the time horizon for the reversal of the negative interest rate regime has been extended for an indefinite period until the outlook for inflation is in line with the two per cent target. On top of this, the Council has decided to restart its asset purchase programme in November.

Professor Friedrich Heinemann, head of the “Corporate Taxation and Public Finance” Research Department at ZEW, comments on this matter.

The corporate landscape of family-run businesses in East Germany is becoming increasingly similar to that of the former West German states. Three decades after the fall of the Berlin Wall and the subsequent reunification, the composition of family-run firms in East Germany and the situation in West Germany are growing more and more alike. This is the key finding of a study carried out by ZEW on behalf of the Foundation for Family Businesses.

Were a hard Brexit to occur, companies in Europe would be confronted with an unclear legal situation, potentially leading to an intensification of international tax competition. A no-deal (hard Brexit) scenario would give Great Britain more room for national tax legislation manoeuvring, especially due to the elimination of the binding effect of European law and case law of the European Court of Justice. However, both German companies investing in the United Kingdom and British companies investing in Germany would have to face increasing tax disadvantages. As far as being an attractive business location is concerned, Germany could easily feel compelled to introduce some tax reforms.

Lately, the European Central Bank’s (ECB) behaviour has given rise to high expectations in the markets it cannot, however, fulfil. The conceivable options for a renewed monetary easing are all associated with considerable side effects, making a rate cut the lesser of two evils, and the Governing Council buying new bonds a definitive no-go. In the run-up to the ECB decision on Thursday, Professor Friedrich Heinemann, head of the ZEW Research Department for “Corporate Taxation and Public Finance”, presented these central conclusions together with an expertise on the available ECB options.

There ought to be clear regulations with regards to digital platforms dominating the market, says Professor Achim Wambach, president of economic research institute ZEW in Mannheim and co-chair of the Expert Commission on Competition Law 4.0, appointed by the Federal Ministry for Economics and Energy. That’s the conclusion of the final report the Expert Commission on Competition Law 4.0 handed over to Federal Economics Minister Peter Altmaier today.

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

Anna Theresa Bührle and Christoph Spengel
Tax Law and the Transfer of Start-up Losses: A European Overview and Categorization

Peter Heindl and Rudolf Schuessler
A Deprivation-Based Assessment of Energy Poverty: Conceptual Problems and Application to Germany

Bernhard Ganglmair and Imke Reimers
Visibility of Technology and Cumulative Innovation: Evidence from Trade Secrets Laws

Eduard Brüll
Restrictions of Fixed Term Employment Contracts: Evidence from a German Reform

Florian Buhlmann, Sebastian Siegloch and Holger Stichnoth
Aufkommens-, Verteilungs- und Arbeitsangebotswirkungen einer stufenweisen Abschaffung des Solidaritätszuschlags (The Revenue, Distribution and Labour Supply Effects of a Phased Abolition of the Solidarity Surcharge)

Speaker: Erik Hornung (University of Cologne)
Location of the event: ZEW, Mannheim

Speaker: Anna Tzanaki (Lund University, Sweden)
Location of the event: ZEW, Mannheim

Speaker: Lorenzo Cappellari (Università Cattolica del Sacro Cuore, Milan, Italy)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Speaker: Anna Kerkhof (University of Cologne)
Location of the event: ZEW, Mannheim

Speaker: Marco Bertoni (University of Padova, Italy)
Location of the event: ZEW, Mannheim

Speaker: Magnus Henrekson (Research Institute of Industrial Economics (IFN), Sweden)
Location of the event: ZEW, Mannheim

Speaker: Karin Mayr-Dorn (Johannes Kepler University Linz, Austria)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Speaker: Philippe Sulger (Swiss Competition Commission in Bern, Switzerland)
Location of the event: ZEW, Mannheim

Speaker: Christian Peukert (Universidade Catolica Portuguesa, Lisbon, Portugal und Eidgenössische Technische Hochschule Zürich (ETH Zurich), Switzerland)
Location of the event: ZEW, Mannheim

Podium: Heike Göbel (moderator), Annika Havlik (ZEW), Prof. Dr. Friedrich Heinemann (ZEW), Prof. Dr. Thomas König (Professor of Political Science at the University of Mannheim), Joachim Menze (Head of the European Commission Regional Office in Munich), Guido Wolf (Baden-Württemberg Minister of Justice and European Affairs)
Location of the event: ZEW, Mannheim

Speaker: Prof. Dr. Juliane Kokott (Court of Justice of the European Union)
Location of the event: ZEW, Mannheim

Podium: Prof. Dr. Melanie Arntz (ZEW), Fabrizia Benini (European Commission), Ignacio Doreste (European Trade Union Confederation), Patrick Schwarzkopf (EUnited – European Engineering Industries Association – Director of Robotics), Dr. Ulrich Zierahn (ZEW)
Location of the event: Representation of the State Baden Württemberg to the European Commission, Brussels

Picture Credits: personalia article of 26 September 2019: Anna Logue Fotografie, press release of 20 September 2019: iStock.com/metamorworks, news article of 19 September 2019: Anna Logue Fotografie/ZEW, press release of 18 September 2019: Anna Logue Fotografie / ZEW, press release of 18 September 2019: iStock.com/TebNad, news article of 12 September 2019: JLL and ZEW, press release of 12 September 2019: Anna Logue Fotografie/ZEW, press release of 11 September 2019: iStock.com/George Clerk, press release of 10 September 2019: instamatics, press release of 9 September 2019: Anna Logue Fotografie/ZEW
 
All further pictures: © ZEW