Aging, Asset Markets, and Asset Returns: A View From Europe to Asia

The extent of the demographic changes is dramatic especially in some Asian and European countries. This paper investigates the effect of aging on global asset markets and asset returns, focusing on markets for productive capital, and especially on interactions between European and Asian economic development. Aging has complex effects on the markets for real capital. If elderly people save less than younger people, interest rates will increase. At the same time, however, the younger generation becomes smaller, which reduces the demand for new investment. The equilibrium effect is thus uncertain. Our multicountry computational equilibrium model delivers a subtle picture: there will be some decline in the return from productive capital, but it is relatively small. We find noticeable interaction effects between labor market and pension reforms in Europe on the one hand, and the demographic and economic developments in Asia, especially India and China, on the other hand.     

Öffentliches und Geheimes

In the second half of 2009, the entire media agenda in Germany was dominated by the swine flu, next to the German Federal Parliament elections. Criticism was voiced in the media against the pharmaceutical industry for lobbying the nationwide swine flu vaccination, which was widely considered nothing but a product of the industry’s lobbying power. In order to avoid the usual interviews with lobbyists, we attempted to apply a new methodological framework approach in analysing lobbying processes and key stakeholders in the public sphere—and outside. Crucial to the diversified approach, which involves quantitative content analysis of media coverage and press releases, are interviews with journalists, lobbyists’ network analysis and internet research on biographies. Although a conspiracy could not be conclusively proven, the results do indicate associations that validate the criticism of the industry’s lobbying activities.     

Weak Property Rights and Holdup in R&D

We study how the sequence of financing of R&D varies according to the ease with which property rights over knowledge can be defined. There are two financiers: a venture capitalist (VC) and a corporation. The knowledge acquired in costly research becomes embodied in the researcher's human capital, and she may hold up the financier and walk away with the project to develop it elsewhere. The main results are: (1) When property rights are strong, research is always funded by the VC, development is performed efficiently, and breakaways from the VC to the corporation are observed in equilibrium. (2) When property rights are weak, projects may be financed by the VC or the corporation, or may remain unfunded. (3) When property rights are weak, no breakaways occur in equilibrium; local spillovers and strong product market competition increase the likelihood that research projects will get funding. (4) The equilibrium sequence of R&D finance need not be first-best efficient. (5) In equilibrium, and controlling for the strength of property rights, VCs finance projects that are more profitable on average.     

Brain drain or brain bank? The impact of skilled emigration on poor-country innovation

The development prospects of a poor country or region depend in part on its capacity for innovation. In turn, the productivity of its innovators, whom are often concentrated around urban centers, depends on their access to technological knowledge. The emigration of highly skilled individuals weakens local knowledge networks (brain drain) but may also help remaining innovators access valuable knowledge accumulated abroad (brain bank). We develop a model in which the size of the optimal innovator Diaspora depends on the competing strengths of co-location and Diaspora effects for accessing knowledge. Then, using patent citation data associated with inventions from India, we estimate the key co-location and Diaspora parameters. The net effect of innovator emigration is to harm domestic knowledge access, on average. However, knowledge access conferred by the Diaspora is particularly valuable in the production of India’s most important inventions as measured by citations received. Thus, our findings imply that the optimal emigration level may depend, at least partly, on the relative value resulting from the most cited compared to average inventions.     

Regionale Vernetzung als Beitrag zum Unternehmenserfolg – Entwicklung und Management von Cluster-Initiativen

Regional networking can help companies to gain competitive advantage, provided that the network is actively coordinated and managed. For this purpose, cluster initiatives aiming at delivering potentials for success for their members arouse in many regions in previous years. Based on literature, this article analyzes the different stages of development of a cluster initiative and the specific tasks of the cluster management in these stages. Applying the relational and the resource-based view, we explain possible company’s competitive advantages resulting from cooperation. Subsequently, we distinguish each stage and describe the specific tasks of the different protagonists of a cluster. Finally, we discuss these theoretic findings of how to develop cluster initiatives and their applicability by a case study of the HESSENMETALL Cluster Initiative and derive implications for science and management.     

The relationship between development, investments, insecurity and social conditions in Colombia: a dynamic approach

In this paper, we investigate the relationship between economic development, investments, savings, insecurity and social conditions in Colombian departments. Using a dynamic heterogeneous panel analysis, we study the effects of insecurity and social conditions on economic development through an estimation of panel data cointegration techniques. The models applied in this study suggest a long-term relationship among economic development, investments, savings, social conditions and insecurity. Investments, savings and human development index have a positive and significant coefficient, which indicates that these variables produce incentives for economic development, whereas GINI and homicides have a negative relationship, demonstrating that these variables undermine economic development. All findings are important in the design of strategies and policies that strengthen income distribution equality, a key factor that determines growth and development through adequate government expenditures that encourage savings and investment decisions with the aim to improve welfare and the standard of living.     

The Capitalization of Public Services and Amenities into Land Prices — Empirical Evidence from German Communities

Applying the hedonic approach to land prices, this article investigates the capitalization of public services and pure amenities in a cross section of German communities. Possible spillover effects from neighboring municipalities are explicitly included in the analysis and prove to be of considerable importance. Estimates of the impacts of local attributes on land prices are obtained taking into account the spatial structure among unobserved variables. The results confirm that differences in land prices are largely attributable to local conditions and policies. This implies a significant degree of mobility as well as high estimation of local attributes on the part of German households.