Do Ukrainian Firms Benefit from FDI?

All countries are eager to attract as much foreign direct investments (FDI) as possible. At the same time FDI may have not only positive, but also negative economic effects for receiving countries. Positive effects are associated with technology transfer, efficient allocation of resources, and training of domestic workers. However, the entry of foreign firms could, e.g., lead to a decrease of labor productivity at domestic firms, which is a negative effect. The main purpose of this paper is to estimate direct and indirect effects of FDI. First, we test for direct influence of foreign direct investments on firms performance, where the latter is estimated alternatively as labor productivity and as exports. FDI notably increases both labor productivity and export volumes. Second, we look for spillover or indirect effects. There is statistical evidence that the levels of FDI in certain regional industries are associated with higher performance indicators of firms not receiving FDI in those same regional industries.JEL Classification: L1, L6, F2     

Density versus Quality in Health Care Provision: Using Household Data to Make Budgetary Choices in Ethiopia

Usage of health facilities in Ethiopia is among the lowest inthe world; raising usage rates is probably critical for improvinghealth outcomes. The government has diagnosed the principalproblem as the lack of primary health facilities and is devotinga large share of the health budget to building more facilities.But household data suggest that usage of health facilities issensitive not just to the distance to the nearest facility butalso to the quality of health care provided. If the qualityof weak facilities were raised to that currently provided bythe majority of facilities in Ethiopia, usage would rise significantly.National data suggest that given the current density and qualityof service provision, additional expenditure on improving thequality of service delivery will be more cost-effective thanincreasing the density of service provision. The budget allocationrule presented in the article can help local policymakers makedecisions about how to allocate funds between improving thequality of care and decreasing the distance to the nearest healthcare facility.     

Integration Deficits of IT Controlling

The paper is based on the thesis that IT controlling suffers from two integration deficits with regard to its methods base: On the one hand, this is a lack of synchronization between research on IT controlling methods and developments in practice; on the other hand, a lack of integration of IT controlling methods with methods of business and information systems engineering (BISE). Based on this assumption, the paper investigates historical developments in IT controlling research and practice to derive theses about the present state of method integration. The analysis finds indications for further potential for method integration and identifies these potentials. Requirements towards method integration are derived from an analysis of the identified integration potentials and two examples illustrate how to realize further integration. Accepted after two revisions by the editors of the special focus. This article is also available in German in print and via http://www.wirtschaftsinformatik.de: Strecker S, Kargl H (2009) Integrationsdefizite des IT-Controllings – Historischer Hintergrund, Analyse von Integrationspotenzialen und Methodenintegration. doi: 10.1007/s11576-009-0175-9.     

Imaginable surprise in global change science

Decisionmakers at all scales (individuals, firms, and local, national, and international governmental organizations) are concerned about reducing their vulnerability to (or the likelihood of) unexpected events, 'surprises.' After briefly and selectively reviewing the literature on uncertainty and surprise, we adopt a definition of 'surprise' that does not include the strict requirement that it apply to a wholly unexpected outcome, but rather recognizes that many events are often anticipated by some, even if not most observers. Thus, we define 'imaginable surprise' as events or processes that depart from the expectations of some definable community. Therefore, what gets labelled as 'surprise' depends on the extent to which what happens departs from community expectations and on the salience of the problem. We offer a typology of surprise that distinguishes imaginable surprises from risk and uncertainty, and develops several kinds of impediments to overcoming ignorances. These range from the need for more 'normal science' to phenomenological impediments (e.g., inherentunpredictability in some chaotic systems) to epistemological ignorance (e.g., ideological blocks to reducing ignorance). Based on the input of some two dozen scholars at an Aspen Global Change Institute Summer Workshop in 1994 *, we construct two tables in which participants offer many possible 'imaginable surprises' in the global change context, as well as their potential salience for creating unexpectedly high or low carbon dioxide emissions. Improving the anticipation of surprises is an interdisciplinary enterprise that should offer a sceptical welcoming of outlier ideas and methods.     

Beschäftigungswachstum durch effizientere Allokation auf dem Arbeitsmarkt

Die positive Entwicklung des deutschen Arbeitsmarkts führt zu einer zunehmenden Diskussion über die Qualit?t des Besch?ftigungsaufbaus. Kritiker beanstanden die Zunahme flexibler Besch?ftigungsformen und fordern mehr Regulierung. Aus ?konomischer Sicht würde die Wiedereinschr?nkung der in den vergangenen Jahren hinzugewonnenen ?ffnungsspielr?ume die Allokationsfunktion des Arbeitsmarkts schw?chen. Dabei l?sst sich der Besch?ftigungsaufbau wesentlich auf die Arbeitsmarktreformen der letzten Jahre zurückführen. Durch flexible Besch?ftigungsformen und eine besch?ftigungsorientierte Tarifpolitik wurden die Wettbewerbselemente des Arbeitsmarkts gest?rkt.     

Tax contracts and elections

In this paper we examine the impact of tax contracts as a novel institution on elections, policies, and welfare. We consider a political game in which three parties compete to form the government and voters may behave strategically. Parties have policy preferences about the level of public-good provision and benefit from perks when in office. A government raises taxes for both purposes. We show that tax contracts yield moderate policies and lead to lower perks by avoiding the formation of grand coalitions in order to win government. Moreover, in polarized societies they unambiguously improve the welfare of the median voter.