INNOVATION AND EXPORT PERFORMANCE: ADJUSTMENT AND REMAINING DIFFERENCES IN EAST AND WEST GERMAN MANUFACTURING

Abstract

The economic situation in Germany 16 years after reunification is marked by the fading out of the adjustment process between East and West. This paper refers to this context analyzing the export behavior comparing firms in West and East Germany. Our estimates confirm a strong relationship between innovations and export performance as well as structural differences between East and West German firms. East German firms are less likely to export than firms in the West. Besides, West German medium technology firms are comparable in their export behavior to high tech firms while East German firms are more similar to the low technology sector. Labor productivity turns out to be more important in East Germany. We interpret these findings as a specialization of West German firms towards technologically-driven high-quality markets, whereas East German companies are faced with higher sunk costs and seem to operate more often in less dynamic, price-sensitive markets.     

The East-West German gap in revenue productivity:Just a tale of output prices?

East German manufacturers’ revenue productivity is substantially below West German levels, even three decades after German unification. Using firm-product-level data with product quantities and prices, we analyze the role of product specialization and show that the prominent “extended work bench hypothesis” cannot explain these sustained productivity differences. Eastern firms specialize in simpler product varieties generating less consumer value and being manufactured with less or cheaper inputs. Yet, such specialization cannot explain the productivity gap because Eastern firms are physically less productive for given product prices. Hence, there is a genuine price-adjusted physical productivity disadvantage of Eastern compared to Western firms.JEL: D24, L11, L2, O47     

Subjectivism,joint consumption and the state: Public goods in Staatswirtschaftslehre *

Abstract

On the basis of F.B.W. Hermann's Staatswirthschaftliche Untersuchungen and of major German, Austrian and Swedish contributions to public economics, two specific claims with regard to the Germanic influence in the development of public expenditure theory are put forward in this paper. It is contended that the German achievements concerning the conceptual clarification of public goods are: (i) important as conceptual ingredients of the modern ‘micro-based’ theory of the public sector: (ii) less closely linked to some historical and intellectual German Sonderweg (culminating in historism, a collectivistic view of social entities and a mystical glorification of the State) than is often suggested.

It is argued that these achievements rather were to a large extent inspired by the more cosmopolitan tendencies in German thought. An important influence is Kantian liberalism. Kant construed a kind of foundational interdependence between the public and the private sector. This prepares the ground for a framework of complementary institutions instead of explaining public institutions in terms of a market failure-perspective based on non-excludability: the view developed in German Idealism gives non-rivalry the pivotal role: the explanation of public institutions systematically hinges upon the existence of goods, the benefits of which are necessarily universal and hence are necessarily made available in a non-rival mode.     

Land price diffusion across borders – the case of Germany

ABSTRACT

Land market regulations are often justified by the assumption that activities of foreign and non-agricultural investors drive up prices in domestic land markets. However, empirical knowledge about the dynamics of agricultural land prices across borders is sparse. Using the German reunification as a natural experiment, we study the effect of the former inner German border on the dynamics of agricultural land prices in East and West Germany. We apply a land price diffusion model with an error correction specification to analyse spatial agricultural land markets. A novel feature of our model is its ability to distinguish price diffusion within states and across state borders. We provide evidence for a persistent border effect given that the fraction of spatially integrated counties is larger within states than across the former border. Moreover, we observe non-significant error correction terms for many counties along the former border. From a policy perspective, it is striking to realize that even 25 years after German reunification, pronounced land price differences persist. It is quite likely that price diffusion through existing borders within the EU would take even more time given language barriers, different institutional frameworks, and information asymmetries between domestic and foreign market participants.     

The impact of Fisher's Purchasing Power of Money in the German Language Area

Abstract

The paper focuses on the reception of Fisher's Purchasing Power of Money in the German language area. Despite widespread hostility of German economists to quantity theory, it was Germany where Wicksell's Interest and Prices was published in 1898, and the first foreign language translation of Fisher's book appeared in 1916. The hyperinflation in the early 1920s contributed to a greater interest in Fisher's approach. Among those economists who took the equation of exchange not only as a heuristic device, but also made some notable contributions themselves were Schumpeter, Marschak and Neisser.     

A brief instrument to measure health-related quality-of-life in patients with bone metastasis: validation of the German version of Bone Metastases Quality-of-Life-10 (BOMET-QoL-10)

Aims: This prospective, epidemiologic study was designed to translate the original Spanish Bone Metastases Quality-of-Life-10 (BOMET-QoL-10) questionnaire and undertake a validation of the translated German version of BOMET-QoL-10 in Germany to assess health-related quality-of-life (HRQoL) in patients with bone metastases (BM).

Methods: The translation process included forward and backward translations, and a linguistic validation. Patients aged ≥18 years with histological confirmation of cancer, diagnosed with BM, life expectancy ≥6 months, and fluency in German were eligible for this study (enrolled consecutively in 33 outpatient centers in Germany). Patients were given the German version of BOMET-QoL-10, together with the European Organization for Research and Treatment of Cancer (EORTC) Quality of Life Questionnaire QLQ-C30 and EORTC QLQ-BM22 questionnaires at inclusion, 6 weeks, 3 months, and 6 months after inclusion. A debriefing questionnaire was administered at inclusion to determine patient acceptability and understanding.

Results: Data include 364 patients with BM (median age?=?68 years; females?=?71.7%). The BOMET-QoL-10 is brief and clear (median completion time?=?5?minutes; >90% of patients completed the questionnaire without assistance). The BOMET-QoL-10 forms only one overall scale. All 10 items showed a substantial correlation with the first factor (factor loading, range?=?0.58–0.86). BOMET-QoL-10 exhibits high internal consistency and reproducibility (Cronbach’s alpha?=?0.91; intra-class correlation coefficient?=?0.76). BOMET-QoL-10 showed significant correlations (range?=?0.69–0.79) both with EORTC QLQ-C30 and EORTC QLQ-BM22 within the functioning (physical, social, interference) and symptom (fatigue, pain) scales, displayed significant sensitivity to change in EORTC QLQ-BM22 scores, and proved the potential ability to detect change in HRQoL in patients with different disease status.

Limitations: There was a high proportion of females in this study, which might represent a limitation.

Conclusions: The German version of BOMET-QoL-10 is a valid, reliable, brief, and clear instrument able to measure HRQoL in patients with BM.     

Cost effectiveness of zoledronic acid in the management of skeletal metastases in hormone-refractory prostate cancer patients in France,Germany, Portugal,and the Netherlands

Abstract

Objective:

Zoledronic acid (ZOL) reduces the risk of skeletal related events (SREs) in hormone-refractory prostate cancer (HRPC) patients with bone metastases. This study assessed the cost effectiveness of ZOL for SRE management in French, German, Portuguese, and Dutch HRPC patients.

Methods:

This analysis was based on the results of a randomized phase III clinical trial wherein HRPC patients received up to 15 months of ZOL (n?=?214) or placebo (n?=?208). Clinical inputs were obtained from the trial. Costs were estimated using hospital tariffs, published, and internet sources. Quality adjusted life-years (QALYs) gained were estimated from a separate analysis of EQ-5D scores reported in the trial. Uncertainty surrounding outcomes was addressed via univariate sensitivity analyses.

Results:

ZOL patients experienced an estimated 0.759 fewer SREs and gained an estimated 0.03566 QALYs versus placebo patients. ZOL was associated with reduced SRE-related costs [net costs] (?€2396 [€1284] in France, ?€2606 [€841] in Germany, ?€3326 [€309] in Portugal and ?€3617 [€87] in the Netherlands). Costs per QALY ranged from €2430 (Netherlands) to €36,007 (France).

Conclusions:

This analysis is subject to the limitations of most cost-effectiveness analyses: it combines data from multiple sources. Nevertheless, the results strongly suggest that ZOL is cost effective versus placebo in French, German, Portuguese, and Dutch HRPC patients.     

European integration and the legacy of the post‐world war II German expulsions in East‐Central Europe

Efforts towards the formal integration of Poland and the Czech Republic into the European Union have opened the Pandora's box of issues concerning the expulsion of Germans and the confiscation of their property after the Second World War. This paper explains why Sudeten German expellees have been at the forefront of the drive for compensation and property restitution and why Czech‐German relations have been significantly more strained after 1989. As Poland and the Czech Republic prepare to join the EU, the potential for controversy over the involvement of European‐wide institutions in lingering disputes concerning the expulsions as well as over Germans acquiring property in areas formerly part of Germany is also a focus of concern.     

Cost-benefits of incorporating levosimendan into cardiac surgery practice: German base case

Objective:

To evaluate the cost-benefit of using levosimendan compared with dobutamine, in the perioperative treatment of patients undergoing cardiac surgery who require inotropic support.

Methods:

A two-part Markov model was designed to simulate health-state transitions of patients undergoing cardiac surgery, and estimate the short- and long-term health benefits of treatment. Hospital length of stay (LOS), mortality, medication, and adverse events were key clinical- and cost-inputs. Cost-benefits were evaluated in terms of costs and bed stays within the German healthcare system. Drug prices were calculated from the German Drug Directory (€/2014) and published literature, with a 3% annual discount rate applied. The base case analysis was for a 1-year time horizon.

Results:

The use of levosimendan vs dobutamine was associated with cost savings of €4787 per patient from the German hospital perspective due to reduced adverse events and shorter hospital LOS, leading to increased bed capacity and hospital revenue.

Limitations:

A pharmacoeconomic calculation for the specific situation of the German healthcare system that is based on international clinical trial carries a substantial risk of disregarding potentially relevant but unknown confounding factors (i.e., ICU-staffing, co-medications, standard-ICU care vs fast-tracking, etc.) that may either attenuate or increase the outcome pharmacoeconomic effects of a drug; however, since these conditions would also apply for patients treated with comparators, their net effects may not necessarily influence the conclusions.

Conclusions:

The use of levosimendan in patients undergoing cardiac surgery who require inotropic support appears to be cost-saving. The results of the analysis provide a strong rationale to run local clinical studies with pharmacoeconomic end-points which would allow a much more precise computation of the benefits of levosimendan.     

The cost-effectiveness of solifenacin vs. trospium in the treatment of patients with overactive bladder in the German National Health Service

Objective:

To carry out a cost–utility analysis comparing initial treatment of patients with overactive bladder (OAB) with solifenacin 5?mg/day versus either trospium 20?mg twice a day or trospium 60?mg/day from the perspective of the German National Health Service.

Methods:

A decision analytic model with a 3 month cycle was developed to follow a cohort of OAB patients treated with either solifenacin or trospium during a 1 year period. Costs and utilities were accumulated as patients transitioned through the four cycles in the model. Some of the solifenacin patients were titrated from 5?mg to 10?mg/day at 3 months. Utility values were obtained from the published literature and pad use was based on a US resource utilization study. Adherence rates for individual treatments were derived from a United Kingdom general practitioner database review. The change in the mean number of urgency urinary incontinence episodes/day from after 12 weeks was the main outcome measure. Baseline effectiveness values for solifenacin and trospium were calculated using the Poisson distribution. Patients who failed second-line therapy were referred to a specialist visit. Results were expressed in terms of incremental cost–utility ratios.

Results:

Total annual costs for solifenacin, trospium 20?mg and trospium 60?mg were €970.01, €860.05 and €875.05 respectively. Drug use represented 43%, 28% and 29% of total costs and pad use varied between 45% and 57%. Differences between cumulative utilities were small but favored solifenacin (0.6857 vs. 0.6802 to 0.6800). The baseline incremental cost–effectiveness ratio ranged from €16,657 to €19,893 per QALY.

Limitations:

The difference in cumulative utility favoring solifenacin was small (0.0055–0.0057 QALYs). A small absolute change in the cumulative utilities can have a marked impact on the overall incremental cost-effectiveness ratios (ICERs) and care should be taken when interpreting the results.

Conclusion:

Solifenacin would appear to be cost-effective with an ICER of no more than €20,000/QALY. However, small differences in utility between the alternatives means that the results are sensitive to adjustments in the values of the assigned utilities, effectiveness and discontinuation rates.     

Germany,the problem of leadership,and institution-building in EMU reform

ABSTRACT

This article examines the extent to which Germany has provided leadership in creating institutions to overcome the euro area crisis. Under which conditions does Germany act as a driver of institutional change, and what are the implications for the Economic and Monetary Union? Germany’s leadership record is mixed: while it took the lead in enhancing austerity, it refrained from fostering burden-sharing. As a result, EMU faces a persistent imbalance between enhanced institutions of supervision and insufficient institutions of financial assistance. Moreover, the article points out that current conditions for the emergence of German leadership in the euro area are unfavourable.     

Dynamic R&D choice and the impact of the firm's financial strength

ABSTRACT

This article investigates how a firm's financial strength affects its dynamic decision to invest in R&D. We estimate a dynamic model of R&D choice using data for German firms in high-tech manufacturing industries. The model incorporates a measure of the firm's financial strength, derived from its credit rating, which is shown to lead to substantial differences in estimates of the costs and expected long-run benefits from R&D investment. Financially strong firms have a higher probability of generating innovations from their R&D investment, and the innovations have a larger impact on productivity and profits. Averaging across all firms, the long-run benefit of investing in R&D equals 6.6% of firm value. It ranges from 11.6% for firms in a strong financial position to 2.3% for firms in a weaker financial position.     

Cost-effectiveness of continuous subcutaneous apomorphine in the treatment of Parkinson’s disease in the UK and Germany

Abstract

Background:

Parkinson’s disease (PD) is the second most common neurodegenerative disease, affecting ～5.2 million people worldwide. Continuous subcutaneous apomorphine (CSAI) represents an alternative treatment option for advanced PD with motor fluctuation. The purpose of this analysis was to estimate the cost-effectiveness of CSAI compared with Levodopa/carbidopa intestinal gel (LCIG), Deep-Brain-Stimulation (DBS) and Standard-of-care (SOC).

Methods:

A multi-country Markov-Model to simulate the long-term consequences, disease progression (Hoehn & Yahr stages 3–5, percentage of waking-time in the OFF-state), complications, and adverse events was developed. Monte-Carlo simulation accounted for uncertainty. Probabilities were derived from RCT and open-label studies. Costs were estimated from the UK and German healthcare provider’s perspective. QALYs, life-years (LYs), and costs were projected over a life-time horizon.

Results:

UK lifetime costs associated with CSAI amounts to £78,251.49 and generates 2.85 QALYs and 6.28 LYs (€104,500.08, 2.92 QALYs and 6.49 LYs for Germany). Costs associated with LCIG are £130,011.34, achieves 3.06 QALYs and 6.93 LYs (€175,004.43, 3.18 QALYs and 7.18 LYs for Germany). The incremental-cost per QALY gained (ICER) was £244,684.69 (€272,914.58). Costs for DBS are £87,730.22, associated with 2.75 QALYs and 6.38 LYs (€105,737.08, 2.85 QALYs and 6.61 LYs for Germany). CSAI dominates DBS. SOC associated UK costs are £76,793.49; 2.62 QALYs and 5.76 LYs were reached (€90,011.91, 2.73 QALYs and 6 LYs for Germany).

Conclusions:

From a health economic perspective, CSAI is a cost-effective therapy and could be seen as an alternative treatment to LCIG or DBS for patients with advanced PD.     

Comparison of treatment costs in inadequately controlled type 2 diabetes in Germany based on the APOLLO trial with insulin glargine

Abstract

Objective: A cost analysis of once-daily insulin glargine versus three-times daily insulin lispro in combination with oral antidiabetic drugs (OADs) for insulin-naive type 2 diabetes patients in Germany based on the APOLLO trial (A Parallel design comparing an Oral antidiabetic drug combination therapy with either Lantus once daily or Lispro at mealtime in type 2 diabetes patients failing Oral treatment).

Methods: Annual direct treatment costs were estimated from the perspective of the German statutory health insurance (SHI). Costs accounted for included insulin medication, disposable pens and consumable items (needles, blood glucose test strips and lancets). Sensitivity analyses (on resource use and unit costs) were performed to reflect current German practice.

Results: Average treatment costs per patient per year in the base case were €1,073 for glargine and €1,794 for lispro. Insulin costs represented 65% vs. 37% of total costs respectively. Acquisition costs of glargine were offset by the lower costs of consumable items (€380 vs. €1,139). Sensitivity analyses confirmed the robustness of the results in favour of glargine. All scenarios yielded cost savings in total treatment costs ranging from €84 to €727.

Conclusions: Combination therapy of once-daily insulin glargine versus three-times daily insulin lispro both with OADs, in the management of insulin-dependent type 2 diabetes offers the potential for substantial cost savings from the German SHI perspective.     

Karl Haushofer and geopolitics — the history of a German mythos

This essay attempts to reassess the writings of Karl Haushofer, a German professor of geopolitics during the period of the Third Reich. However, this examination is not to be another historical reflection. Instead it approaches the question what different kinds of historical reflections on Karl Haushofer as a person and his geopolitics were made in Germany and how they influenced the further geopolitical research. The different interpretations of Haushofer are examined in the form of a discourse analytic study. It shows that the different judgments concerning his work are open to diverse political interpretations.     

On the origin and rise of central bank independence in West Germany∗

Abstract

This paper investigates the (re-)establishment of central banking in West Germany after 1945 and the history of the Bundesbank Act of 1957. The main focus is on the early emphasis on central bank independence, which at the time represented a German peculiarity. The paper inquires whether contemporary German economic thought may have provided a theoretical case for this peculiar tradition and scrutinizes the political calculus that motivated some key actors in the play. Contrary to conventional wisdom, important contradictions between the postulate of central bank independence and Ordoliberalism are identified.

JEL Classification Codes: B22, B31, E50     

Public investment programmes in the interwar period: the view from Geneva *

Abstract

Social Catholicism opposed individualistic conceptions of society in favour of an order of associative institutions fostering a communality of interests between those involved in production processes. As a consequence, guilds were idealised and their model transposed in different ways to the industrial society of the nineteenth century. This paper discusses the different streams of Social Catholicism and the theoretical roots of corporatism in natural law. It will discuss how the idea of a ‘corporative order’ is more grounded in German corporative law than in Neo-Thomism.     

Knowledge of expansion on the geopolitics of Karl Haushofer

The article deals with the intellectual history, as well as the political impact, of Karl Haushofer's concept and notion of geopolitics. It attempts to contextualise his thinking and actions in the period between the two world wars as well as during the Nazi period. Haushofer's geopolitics is perceived as a quasimaterialist ideology, which was politically directed against the stipulations of the Versailles peace treaty, but can also be interpreted as a concept with a specific German and continental ideology which opposed the abstract forms of social intercourse common to maritime and naval cultures, based on trade and exchange, as represented historically by Britain and, later, the United States. The cultural, societal and political contrast between cultures of the land and cultures of the sea are seen as one fundamental presupposition in Haushofer's thinking. The article deals with the body of knowledge he developed, his personal history under Nazism, and the impact of his thought on German territorial revisionism in the 1920s.     

Matching-adjusted indirect comparison of adalimumab vs etanercept and infliximab for the treatment of psoriatic arthritis

Abstract

Objectives:

No head-to-head trial has compared the efficacy of adalimumab vs etanercept and infliximab for psoriatic arthritis (PsA). This study implements a matching-adjusted indirect comparison technique to address that gap.

Methods:

Patient-level data from a placebo-controlled trial of adalimumab (ADEPT) were re-weighted to match average baseline characteristics from pivotal published trials of etanercept and infliximab. ADEPT patients were re-weighted by odds of enrollment in comparator trials, estimated using logistic regression. Matched-on characteristics included PsA duration, age, gender, severity, active psoriasis, and concomitant treatment. After matching, placebo-adjusted treatment arms were compared at weeks 12 (or 14) and 24. Outcomes included ACR20/50/70, PsARC, HAQ, and modified TSS. PASI50/75/90 were compared for patients with active psoriasis. Cost per responder (CPR) was assessed in the US and Germany using matching-adjusted end-points and drug list prices. Statistical significance was assessed using weighted t-tests.

Results:

After matching, adalimumab-treated patients had greater placebo-adjusted rates of ACR70 and PASI50/75/90 at week 24 compared with etanercept (all p?<?0.05). Adalimumab patients had a higher placebo-adjusted rate of ACR70 than infliximab at week 14 (p?=?0.034). Adalimumab treatment had lower CPR for ACR70 and PASI50/75/90 compared with etanercept at week 24, in both the US and Germany (all p?<?0.02). Adalimumab had lower CPR than infliximab for all outcomes at week 24 (all p?<?0.05).

Conclusion:

Adalimumab is associated with higher ACR70 and PASI50/75/90 response rates than etanercept at week 24 and a higher ACR70 response rate than infliximab at week 14. Adalimumab has significant advantages over etanercept and infliximab in CPR across multiple end-points.

Key limitations:

The matching-adjusted indirect comparison method cannot account for unobserved differences in patient characteristics across trials, and only a head-to-head randomized clinical trial can fully avoid the limitations of indirect comparisons. CPR findings are limited to the US and German markets, and may not be generalizable to other markets with different relative pricing.