A note on why more West than East German firms export

Germany is one of the most important exporters of manufacturing goods in the world, but by far not all manufacturing firms in Germany are exporters, and there is a remarkable gap between the share of exporters in all manufacturing firms between West Germany and East Germany. While in West Germany in 2004 about two in three manufacturing plants were exporters, fourteen years after re-unification this share was less than fifty percent in the former communist East Germany. Given that exports play a key role in shaping business cycles and growth in Germany, and the much higher unemployment in East compared to West Germany, promotion of exports by East German firms figure prominently on the policy agenda. However, the reasons for the large difference in the propensity to export between East and West German firms are not yet well understood, not least due to a lack of comprehensive micro data. Using unique new data and a recently introduced non-linear decomposition technique this paper shows that the huge difference in the propensity to export between West and East German plants can only partly be explained by differences in firm size, productivity, and technology intensity.

Offshoring and firm performance: self-selection,effects on performance,or both?

This paper uses unique new data for German manufacturing enterprises from matched regular surveys and a special purpose survey to investigate the causal effect of relocation of activities to a foreign country on firm performance. Compared to non-offshoring firms, firms that relocated activities were larger and more productive, and had a higher share of exports in total sales. These differences existed the year before some firms started to relocate, and this points to self-selection of “better” firms into offshoring. To investigate the causal effects of offshoring, six different variants of a matching approach are used. Contrary to what is often argued we find no evidence for a large negative causal effect of offshoring on employment in Germany.     

Redistribution from a constitutional perspective

In its traditional form, Paretian welfare economics has little to say about policies of redistribution. I argue that by adopting a constitutional perspective, elements of a theory of redistribution can be developed without recourse to interpersonal utility comparisons. Individuals who find themselves under an imperfect veil of uncertainty at a constitutional stage face a tradeoff between the costs and benefits of redistribution. The benefits consist of a reduction in the variance of a risk-averse agent's income distribution. The costs are represented by deadweight losses caused either by bureaucracy or by disincentive effects associated with the transfer scheme. My simple formal analysis shows that individuals may, even under an imperfect veil of uncertainty, be able to agree unanimously on a certain transfer policy if their personal characteristics are not too different from each other. This paper is a modified version of a chapter from my Master's thesis, submitted at the University of Bonn in 1992. Revisions were done during a stay at DELTA/Ecole Normale Supérieure, Paris. A scholarship from the German Academic Exchange Service is gratefully acknowledged. I wish to thank Urs Schweizer, Hartmut Kliemt, Niclas Berggren, and an anonymous referee of this journal for valuable comments and suggestions, which have greatly improved the paper.     

On a class of law invariant convex risk measures

We consider the class of law invariant convex risk measures with robust representation r_h,p(X)=sup_fò₀¹ [AV@R_s(X)f(s)-f^p(s)h(s)] ds\rho_{h,p}(X)=\sup_{f}\int_{0}^{1} [AV@R_{s}(X)f(s)-f^{p}(s)h(s)]\,ds, where 1≤p<∞ and h is a positive and strictly decreasing function. The supremum is taken over the set of all Radon–Nikodym derivatives corresponding to the set of all probability measures on (0,1] which are absolutely continuous with respect to Lebesgue measure. We provide necessary and sufficient conditions for the position X such that ρ _h,p (X) is real-valued and the supremum is attained. Using variational methods, an explicit formula for the maximizer is given. We exhibit two examples of such risk measures and compare them to the average value at risk.     

Länger leben — Siechtum und Pflege ohne Grenzen?

At present, our society and its social security system are not prepared to cope with the challenges resulting from the continuous increase of life expectancy. The traditional concept of disease has to be modified for serving the special needs of the elderly. The optimistic compression of disease theory is an intriguing model, but lacks prove by available data. The anti-aging boom diverts the focus from the social and financial burden that will be unevitably caused by long-term care in the future. If there will not be an — up to now unforeseeable — breakthrough in research, particularly dementia will have an enormous impact on social cost which is often underestimated.     

Rise in Occupational Mobility Especially Amongst Women and Young People

Original Papers

Rise in Occupational Mobility Especially Amongst Women and Young PeopleSuccessful jobsearch often based on personal initiative     

Bilateral Opportunism in Buyer–supplier Partnerships

ABSTRACT

Purpose

Literature analyzes interorganizational relationships mostly from a relational perspective by emphasizing partnerships’ positive aspects. Yet business reality is often less romantic and more opportunistic. Especially within the automotive industry opportunistic behaviors often cause extreme reactions in both partners, resulting in poisoned relationships. This study examines the effects of bilateral opportunism between buyers and suppliers on both partners’ relationship induced financial performance, using an automotive industrial setting of new product development (NPD) partnerships. Furthermore, we evaluate the “opportunistic fit” between both partners to assess whether partnerships are characterized by opportunistic parity or unilateral domination.     

The Post-entry Performance of Cohorts of Export Starters in German Manufacturing Industries☆

This paper investigates four cohorts of firms from German manufacturing industries that started to export between 1998 and 2002, and follows them for five years after the start. Export starters are a rare species and small in Germany. Around 30–40% of those starters studied became continuous exporters. The share of total exports contributed by export starters of a cohort is tiny in the start year, and it remains so over the years that follow. Contrary to the market selection hypothesis, there is no evidence that productivity in the start year is systematically related to survival in the export market. There is no evidence of a negative impact of a smaller firm size in the start year on the chance of surviving in the export market. Starting with a higher share of exports in total sales, however, tends to increase the probability of continuing to export.