Newsletter January 2020

Britain’s imminent withdrawal from the EU will mark a historic date for Europe. On this date, a Brexit transition period kicks in, which will last until the end of the year, allowing the UK and the rest of the EU to negotiate their future relations. President of ZEW Mannheim, Professor Achim Wambach, comments on this matter.

ZEW Mannheim and the University of Strasbourg, one of France’s universities of excellence, officially sealed their long-standing cooperation today. Professor Catherine Florentz, Vice-President for Research and Doctoral Education at the University of Strasbourg, ZEW President Professor Achim Wambach and ZEW Director Thomas Kohl signed the cooperation agreement in Strasbourg.

At her annual New Year’s address, the German Chancellor Angela Merkel renewed her commitment to climate action: “I will do everything in my power to ensure that Germany does its part – ecologically, economically, societally – to get climate change under control.” Climate policy is becoming increasingly important in Germany. In August 2019, the Cabinet passed the Structural Development Act for German coal-mining regions; three months later, it rolled out a new climate bill. What is more, federal and state authorities recently agreed on a timetable for phasing out coal.

It’s not just a new year, but a new decade. What’s in store for Germany, Europe, and the world? In his first New Year’s Lecture at ZEW Mannheim on Thursday, 23 January, ZEW President Professor Achim Wambach talked about which developments will determine the global economy in the near future – and how the EU can position itself to compete with the other two major economic powers, China and the USA.

A delegation of the FDP/DVP parliamentary group in the state parliament of Baden-Württemberg, headed by Professor Erik Schweickert MdL, chairman of the economic committee of the state parliament, and Gabriele Reich-Gutjahr MdL, economic policy spokeswoman, visited ZEW on 14 January 2020.

Be it the climate emergency, Green Deal, climate conference, or the climate package: Germany is taking climate policy seriously. On 13 January 2020, Peter Altmaier, Federal Minister of Economic Affairs and Energy, gave a talk at ZEW Mannheim about where the Federal Republic of Germany stands in terms of climate policy, the energy transition, and how it should all progress. Within the context of the research project “Dialogue on the Economics of Climate Change”, Altmaier spoke at ZEW as part of its First-Hand Information on Economic Policy event series before an audience of some 220 guests from the realms of business, science and society.

How to shape a successful energy transition in Germany, how democratic climate policy is implemented nationally and internationally, and what role Germany has to play in all of this were focal points of the talk.

Irrespective of political tensions and concerns about democracy and the rule of law, recent years have seen Turkey, Russia and China expand their attractiveness as business locations. This was one conclusion of the “Länderindex Familienunternehmen – Emerging Markets” (“Country Index for Family Businesses – Emerging Markets”), a study that ZEW Mannheim carried out for the Foundation for Family Businesses. The study ranks Russia in first place, followed by Turkey and China.

ZEW Mannheim is pleased to announce the ninth Mannheim Energy Conference on 28 and 29 May 2020. International scholars in the field of environmental and 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) in PDF format to energy2020@zew.de no later than 16 February 2020.
 

ZEW Mannheim is pleased to announce a workshop on Taxation and Informality in Mannheim on 5 and 6 June 2020. The event is organised by the Leibniz ScienceCampus MannheimTaxation, a joint initiative of the University of Mannheim and ZEW. This workshop focuses on the nexus between taxation and informality, how individuals and firms operate in both formal and informal sectors, and how their actions are shaped by tax systems. Submissions on topics related to behavioural responses to taxation, tax enforcement, tax compliance, and informality, both in the context of developed and developing countries are welcome. Please send a paper or an extended abstract to tax-informality2020@zew.de no later than 15 February 2020.

ZEW Mannheim will hold its eigthteenth Conference on the Economics of Information and Communication Technologies (ICT) in Mannheim on 2 and 3 July 2020. 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 a paper as a PDF or MS Word file to ict-conference@zew.de no later than 10 March 2020.

The Volksbank Weinheim Stiftung in cooperation with ZEW Mannheim have granted the research award “Zukunft der Arbeitswelt” (“Future World of Work”) for the seventh time. Dr. Steffen Viete received the award for the best doctoral thesis. The prize for the best master’s thesis in economics went to Katia Gallegos Torres. The award was presented at yesterday’s New Year’s reception of the Volksbank Weinheim. Thomas Kohl, director of ZEW and member of the jury that awards the science prize, held the laudatory speech on the two winners.

Barbara Boggiano is a visiting researcher in ZEW’s Research Department “Labour Markets and Human Resources” on a scholarship from the German Academic Exchange Service (DAAD) from 1 October 2019 to 31 July 2020. She is a PhD candidate in economics at the University of Leicester, UK. Her research interests lie in the fields of applied microeconometrics, as well as labour and health economics. During her stay, Barbara Boggiano is working together with ZEW researcher Dr. Sarra Ben Yahmed on a project that aims to examine how job requirements in working long hours affect fertility decisions such as the timing of child birth among high skilled females. The project also examines whether family policies may change this relationship. To this purpose, the analysis exploits longitudinal datasets from France and the UK with detailed information on working hours and fertility.
 

According to the most recent survey for January (13–22 January 2020), the expectations regarding the Chinese economy have remained almost unchanged. 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 8.7 points, 0.2 points higher than in the previous month (December 2019: minus 8.9 points). Since April 2018, the CEP indicator has thus remained in the negative almost without interruption.

The debate about the speed limit on German motorways has so far been guided mainly by emotional rather than objective arguments. What is missing is a careful examination of the causal effects of a speed limit. The German automobile association ADAC has now also spoken out in favour of determining the effects of a speed limit on the basis of reliable research results. Professor Martin Kesternich, deputy head of the Research Department “Environmental and Resource Economics, Environmental Management” at ZEW Mannheim, explains what an optimal study could look like using a randomised field experiment to identify the causal effects of a speed limit on road safety.
 

At its second meeting under the recently appointed ECB President Christine Lagarde, the ECB Governing Council decided to make no further changes to its monetary policy. This leaves the deposit rate at its current level of minus 0.5 per cent. Furthermore, the net purchase of assets with a monthly volume of 20 billion euros, which were taken up again in November 2019, will be continued. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at ZEW Mannheim, comments on this matter.

The federal government aims to develop a data strategy to significantly increase the availability and use of data in Germany. To this end, the government presented the key points of a data strategy in November 2019. With a view to today’s first hearing on the data strategy at the Federal Chancellery, Professor Irene Bertschek, head of the Research Department “Digital Economy” at ZEW Mannheim and one of the experts invited to the hearing, comments on this matter.

The ZEW Indicator of Economic Sentiment for Germany has again risen sharply at the beginning of 2020. In January, the indicator stands at 26.7 points, 16.0 points higher than in the previous month. This is the indicator’s highest value since July 2015. The assessment of the economic situation in Germany has also improved considerably in the current survey, with the corresponding indicator climbing to a level of minus 9.5 points, 10.4 points higher than in December.

Whether students have to repeat a class does not necessarily depend solely on their individual school performance. Instead, schools can also use their scope for decision-making when it comes to promoting students to the next grade so as to influence the number and size of classes per grade. Since the financing of schools depends on the number of classes, decisions on repetitions can be based on strategic considerations in individual cases. This is particularly pronounced in the first grade of primary school, when students are not yet graded and schools have greater discretion in retention decisions, according to the findings of an empirical study conducted by ZEW Mannheim.

German citizens think it is time for an income tax overhaul, with more than 90 per cent expressing the wish for a simplified system. According to the respondents, deductions and allowances in the German tax system are of particular benefit to high-earning households, and the acceptance of tax concessions increases only if they compensate for special circumstances. There is, however, a lack of awareness regarding the disadvantages that a simplification of the income tax system would entail. These are the results of an evaluation of a representative survey carried out as part of a recent study by ZEW Mannheim.

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

Josefine Diekhof, Verena Eckl, Bastian Krieger, Georg Licht, Thu-Van Nguyen, Bettina Peters, Christian Rammer, and Gero Stenke
Knowledge Flows Between Science and Industry and How to Measure Them

Krüger, Miriam, Jan Kinne, David Lenz, and Bernd Resch
The Digital Layer: How Innovative Firms Relate on the Web

Matteo Alpino
Mitigating the Tradeoff Between Proportionality and Accountability in Electoral Systems: Evidence from the Italian Senate 1994 – 2006

Anja Roth and Michaela Slotwinski
Gender Norms and Income Misreporting Within Households

Janna Axenbeck and Patrick Breithaupt
Web-Based Innovation Indicators – Which Firm Website Characteristics Relate to Firm-Level Innovation Activity?

Philippe Gillen
Commitment in First-Price Auctions

Karl-Martin Ehrhart and Marion Ott
How the Auction Design Influences Procurement Prices: An Experiment

Nicolas Fugger, Philippe Gillen, and Tobias Riehm
Procurement Design with Loss Averse Bidders

Maximilian Bach
Strategic Grade Retention

Sebastian Blesse, Florian Buhlmann, and Philipp Dörrenberg
Do People Really Want a Simple Tax System? Evidence on Preferences Towards Income Tax Simplification

Martin Brussig, Patrizia Aurich-Beerheide, Johannes Kirsch, Philipp Langer, Friedhelm Pfeiffer, Laura Pohlan, Boris Ivanov, Nils Pagels, Andrea Gabler, Sandra Kotlenga, Barbara Nägele, Henry Puhe, and Rita Kleinemeier
Evaluation des Bundesprogramms „Soziale Teilhabe am Arbeitsmarkt“ – Endbericht (Evaluation of the Federal Programme "Social Inclusion into the Labour Market" – Final Report)

Leonie Fischer, Friedrich Heinemann, Margit Kraus, and Daniela Steinbrenner
Länderindex Familienunternehmen – Standortfaktoren in Emerging Markets (Country Index for Family Businesses – Locational Factors in Emerging Markets)

Irene Bertschek, Jörg Ohnemus, Daniel Erdsiek, Raphaela Andres, Steffen Viete, Christian Rammer, Simone Kimpeler, and Lia Meißner
Monitoringbericht Kultur- und Kreativwirtschaft 2019 (2019 Cultural and Creative Industries Monitoring Report)

Niklas Dürr, Sandra Gottschalk, and Michael Hellwig
Zukunft Bau: Entwicklung der Marktstruktur im deutschen Baugewerbe (Future Construction: Development of the Market Structure in the German Construction Industry)

Creation of a Representative Data Base of Young Firms in North Rhine-Westfalia

The Cultural and Creative Industries in Baden-Württemberg – Start-up and Innovation Activity

Speaker: İrem Güçeri (University of Oxford, United Kingdom)
Location of the event: ZEW, Mannheim

Speaker: Julia Bredtmann (RWI – Leibniz Institute for Economic Research, Essen)
Location of the event: ZEW, Mannheim

Speaker: Tom Krebs (University of Mannheim and ZEW)
Location of the event: ZEW, Mannheim

Speaker: Heike Schweitzer (Free University of Berlin and ZEW), Tommaso Valletti (Imperial College London, United Kingdom)
Location of the event: ZEW, Mannheim

Speaker: Gunn Elisabeth Birkelund (University of Oslo), Gabriele Doblhammer (University of Rostock), Fabien Postel-Vinay (University College London), and Uta Schönberg (University College London)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Speaker: Prof. Dr. Sabina Jeschke (Deutsche Bahn AG)
Location of the event: ZEW, Mannheim

Podium: Prof. Dr. Friedrich Heinemann (ZEW), Prof. Dr. Thomas König (Chair of Political Science at the University of Mannheim), Prof. Catherine de Vries, PhD (Università Bocconi, Milan, Italy), and Marcel Haag (European Commission, General Secretariat, Brussels, Belgium)
Moderation: Jennifer Rankin (The Guardian, London, United Kingdom)
Location of the event: Representation of the State of Baden-Württemberg to the European Union, Brussels, Belgium

Picture Credits: press release from 30.01.2020: Anna Logue Fotografie/ZEW, news article from 24.01.2020: Anna Logue Fotografie/ZEW, news article from 23.01.2020: EDM Erich Dichiser, personalia article from 23.01.2020: Marco Schilling, press release from 23.01.2020: Anna Logue Fotografie/ZEW, press release from 23.01.2020: Anna Logue Fotografie/ZEW, news article from 13.01.2020: EDM Erich Dichiser, press release from 13.01.2020: iStock.com/Imgorthand, news article from 07.01.2020: iStock.com/ArtMarie, press release from 02.01.2020: iStock.com/Viktor_Gladkov
All further pictures: ©ZEW