Newsletter February 2022

Do metal processing companies in the USA make themselves appear more eco-friendly in terms of their sulphur dioxide emissions than they actually are? To investigate this, a team of researchers in collaboration with ZEW has applied a new method that combines satellite data with company data and web text mining.

Economic experts are forecasting somewhat lower real gross domestic product (GDP) growth in the eurozone, and growth expectations for Germany are declining even more significantly. The inflation rate is hitting new highs, creating uncertainty about future developments. This is the result of the business cycle tableaus by ZEW Mannheim and the German daily newspaper, Börsen-Zeitung.

The flood disaster in Germany last July claimed more than 180 lives. Since then, the question of how private households and policymakers can better prepare for extreme weather events has been raised again. In the 17th episode of the #ZEWPodcast ‘Wirtschaft · Forschung · Debatten’/‘Economy · Research · Debates’, ZEW economist Dr. Daniel Osberghaus talks about what technical precautionary measures private homeowners can take, the advantages and disadvantages of compulsory insurance in Germany and how other countries take flood precautions.

The currently very high consumer price inflation rates in the euro area are expected to remain well above the ECB’s two per cent target over the whole year 2022 before gradually declining in the medium and long term. High energy prices, scarcity of raw materials and problems in international supply chains are expected to be the main drivers of this high inflation, and are likely to last longer than previously forecast. In line with these results, the ECB is expected to increase its main refinancing rate, but only very gradually over the coming years. These are the results of a survey of financial market experts conducted by ZEW Mannheim.

The ZEW Indicator of Economic Sentiment for Germany increased in the current February 2022 survey, climbing 2.6 points to a new reading of 54.3 points. The assessment of the economic situation in Germany also improved in the current survey. The corresponding indicator rose 2.1 points to a level of minus 8.1 points.

Internet users in Germany have become increasingly indifferent and ignorant about politics over a period of 15 years. In the beginning, the diffusion of the internet contributed to people being better informed politically, but this development has been reversed in later years. In the meantime, internet usage is on the rise – as is the users’ disinterest in politics. This is shown by a recent study by ZEW Mannheim.

Many firms in Germany are planning to offer hybrid working arrangements after the end of the COVID-19 pandemic, thus enabling employees to have a part-home, part-office schedule. A business survey conducted by ZEW Mannheim in December 2021 and January 2022 now provides further insights into firms’ expectations about the allocation of working hours in the long run. In both the information economy and the manufacturing industry, firms are mainly planning to offer hybrid models in which employees work from home 1-3 days per week.

The share of employees who will work from home several times a week post COVID-19 is significantly higher than before the pandemic, according to the firms’ estimates.

The EU Commission has adopted the planned EU taxonomy for sustainable investments. This is to define which financial investments are sustainable and which are not. Investments in nuclear power and natural gas are also classified as sustainable in the regulation under certain conditions. Professor Sebastian Rausch, head of the Research Department “Environmental and Resource Economics, Environmental Management” at ZEW Mannheim, has commented on this matter.

The ZEW – Sponsors’ Association for Science and Practice at ZEW Mannheim has a new chairman: Dr. Ralph Rheinboldt, board member at Fuchs Petrolub SE, succeeds CEO of MVV Energie AG, Dr. Georg Müller, on 1 February 2022. After more than five successful years, Dr. Müller will retire from his position at the ZEW Sponsors’ Association for health reasons. Rheinboldt has already been a board member at the ZEW Sponsors’ Association since 2017.

German companies reduced their innovation spending by 3.6 per cent to 170.5 billion euros in the first year of the COVID-19 crisis. Twelve per cent of companies did not undertake any innovation activities at all due to the pandemic. At the same time, eleven per cent of the companies invested in additional product innovations in response to the pandemic situation and twelve per cent pushed ahead with additional process innovations. These are key findings of the Innovation Survey 2021, which ZEW Mannheim conducted among German companies on behalf of the German Federal Ministry of Education and Research.

The need to make economic processes sustainable and the use of digital technologies have increased significantly in recent years. In addition, it is generally assumed that digital technologies can lead to energy efficiency improvements and thus significantly reduce CO₂ emissions, especially in the energy-intensive manufacturing sector. In fact, digital technologies do reduce energy intensity in manufacturing, but to a much lesser extent than previously expected. The increased use of digital technologies in companies is therefore not necessarily accompanied by a significantly improved energy intensity. These are the key findings of a study by ZEW Mannheim.

One fourth of all private households in Germany suffered income losses at the height of the second pandemic wave. Taking into account the loss of assets, roughly 43 per cent of households faced financial setbacks. Less than a quarter of them claimed state support. These are the results of a survey conducted as part of a joint project of the University of Mannheim, ZEW Mannheim and the Leibniz Institute for Resilience Research (LIR) at the height of the second wave of the pandemic between December 2020 and January 2021.

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

Sebastian Schmidt, Jan Kinne, Sven Lautenbach, Thomas Blaschke, David Lenz, and Bernd Resch
Greenwashing in the US Metal Industry? A Novel Approach Combining SO₂ Concentrations From Satellite Data, a Plant-Level Firm Database and Web Text Mining

Dirk Czarnitzki, Gastón P. Fernández, and Christian Rammer
Artificial Intelligence and Firm-Level Productivity

Lukas Riedel and Holger Stichnoth
Government Expenditure in the DINA Framework: Allocation Methods and Consequences for Post-Tax Income Inequality

Helena Lenihan, Kevin Mulligan, Justin Doran, Christian Rammer, and Olubunmi Ipinnaiye
R&D Grant and Tax Credit Support for Foreign-Owned Subsidiaries: Does It Pay Off?

Christian Rammer
Measuring Process Innovation Output: Results from Firm-Level Panel Data

Wayne Xinwei Wan and Thies Lindenthal
Towards Accountability in Machine Learning Applications: A System-Testing Approach

Irene Bertschek and David F. Müller
Political Ignorance and the Internet

Janna Axenbeck and Thomas Niebel
Climate Protection Potentials of Digitalized Production Processes: Microeconometric Evidence?

Günter Beck, Alfred Dijs, Xavier Jaravel, Sebastian Kessing and Sebastian Siegloch
Analyse der Verbraucherpreisentwicklung nach Senkung der Mehrwertsteuer (Analysis of Consumer Price Development After VAT Reduction)

Thomas Niebel, Robin Sack, and Mareike Seifried
IKT-Branchenbild 2021 – Volkswirtschaftliche Kennzahlen (ICT Sector Profile 2021 – Economic Key Figures)

Christian Rammer
Klimaschutz durch digitale Transformation: Realistische Perspektive oder Mythos? – CliDiTrans Endbericht (Climate Protection Through Digital Transformation: Realistic Perspective or Myth? – CliDiTrans Final Report)

Governing Multi-Scale Heterogeneities to Activate Natural Carbon Sink Potentials

Risk-Taking of Fund Managers and Capital Gains Taxation in the US

Due to the ongoing COVID-19 pandemic, the following event details may be subject to change. The current status of the events can be found in the ZEW Events Calendar. If you have any questions, please don’t hesitate to contact our event team at event@zew.de.

Speaker: Yusuke Narita (Yale University, New Haven, USA)
Location of the event: Online

Speaker: David Dorn (University of Zurich, Switzerland)
Location of the event: University of Mannheim

Speaker: Gunther Glenk (University of Mannheim)
Location of the event: Online

Speaker: Thomas Le Barbanchon (Bocconi University, Milano, Italy)
Location of the event: Online

Speaker: René Arnold (Vice President Public Affairs Strategy, Huawei Technologies, Shenzhen, China)
Location of the event: Online

Speaker: Matt Elliott (University of Cambridge, United Kingdom)
Location of the event: Online

Speaker: Mats Köster (Central European University, Vienna, Austria)
Location of the event: Online

Speaker: John Asker (University of California (UCLA), Berkeley, USA) and Frédéric Jenny (OECD and ESSEC Business School, Paris, France)
Location of the event: ZEW Mannheim

Speaker: Bettina Chlond (ZEW)
Location of the event: Online

Speaker: Alexander Teytelboym (University of Oxford, United Kingdom)
Location of the event: Online

Speaker: Barbara Biasi (Einaudi Institute of Economics and Finance (EIEF), Rome, Italy)
Location of the event: Online

Speaker: Matto Mildenberger (University of California Santa Barbara, USA)
Location of the event: Online

Speaker: Michael K. Price (The University of Alabama, Tuscaloosa, USA)
Location of the event: Online

Speakers: Koen Schoors (Ghent University, Belgium) and Paul Smeets (Maastricht University, Netherlands)
Location of the event: Online

Tenure-Track Postdoctoral Researcher (100 %, f/m/d) in the Research Department “Digital Economy”

Picture Credits: press release of 24.02.2022: ISTARI.AI, press release of 10.02.2022: Monet/Adobe Stock 361901378, press release of 03.02.2022: Anna Logue Fotografie/ZEW, press release of 01.02.2022: Anna Logue Fotografie | FUCHS PETROLUB, press release of 31.01.2022: Anna Logue Fotografie, press release of 31.01.2022: ipopba/AdobeStock208731473
All further pictures: ©ZEW