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DIW Discussion Papers 1137 / 2011
The idea of higher wealth taxes to finance the mounting public debt in the wake of the financial crises is gaining ground in several OECD countries. We evaluate the revenue and distributional effects of a one-time capital levy on personal net wealth that is currently on the German political agenda. We use survey data from the German Socio-Economic Panel (SOEP) and estimate the net wealth distribution ...
2011| Stefan Bach, Martin Beznoska, Viktor Steiner
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DIW Discussion Papers 1136 / 2011
A recent literature has used variation just around deterministic legislative population thresholds to identify the causal effects of institutional changes. This paper reviews the use of regression discontinuity designs using such population thresholds. Our concern involves three arguments: (1) simultaneous exogenous (co-)treatment, (2) simultaneous endogenous choices and (3) manipulation and precise ...
2011| Florian Ade, Ronny Freier
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DIW Discussion Papers 1135 / 2011
This paper addresses the relationship between the utilization of temporary agency workers by firms and their competitiveness measured by unit labor costs, using a rich, newly built, data set of German manufacturing enterprises. The analysis is conducted by applying different panel data models while taking the inherent selection problem into account. Making use of dynamic panel data models allows us ...
2011| Sebastian Nielen, Alexander Schiersch
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DIW Discussion Papers 1134 / 2011
We study the effect of living in an internally displaced people's (IDP) camp on economic activity choices in post war northern Uganda. As the decision to relocate from a camp is voluntary, camp residents may be different from returnees. We merge household data with micro-level conflict data to control for endogeneity (selection of households out from camps). We find a strong effect of camp residence ...
2011| Carlos Bozzoli, Tilman Brück, Tony Muhumuza
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DIW Discussion Papers 1133 / 2011
We address the pitfalls of averaging by exploiting the longitudinal variation in aid to identify sudden and sharp increases in aid flows. Focusing on specific events, we test if aid accelerations correspond to policies and shocks in the recipient country. For a large sample of 145 recipient countries and 33 donors from 1960- 2007, we find that positive regime changes and wars are significant predictors ...
2011| Tilman Brück, Guo Xu
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DIW Discussion Papers 1132 / 2011
As building-integrated photovoltaic (PV) solutions can meet around one-third of electricity demand in Germany and China, both countries are interested in exploring this potential. PV technologies have demonstrated significant price reductions, but large-scale global application of PV requires further technology improvements and cost reductions along the value chain. We analyze policies in Germany and ...
2011| Thilo Grau, Molin Huo, Karsten Neuhoff
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DIW Discussion Papers 1131 / 2011
This paper explores the stability of the relation between money demand for M3 and inflation in the euro area by including the recent period of the financial crisis. Evidence is based on a cointegration analysis, where inflation and asset prices are allowed to enter the long run relationship. By restricting the cointegrating space, equations for money and inflation are identified. The results indicate ...
2011| Christian Dreger, Jürgen Wolters
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DIW Discussion Papers 1130 / 2011
Efforts undertaken by France to restructure the allocation of governmental competencies increased the importance of subnational governments by transferring additional tasks. This paper analyzes the efficiency of public spending on an intermediate government level for a sample of 96 départements in metropolitan France in 2008. Spending efficiency is measured using Data Envelopment Analysis (DEA). Results ...
2011| Maria Nieswand, Stefan Seifert
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DIW Discussion Papers 1129 / 2011
We develop a composite indicator measuring the performance of national innovation systems. The indicator takes into account both "hard" factors that are quantifiable (such as R&D spending, number of patents) and "soft" factors like the assessment of preconditions for innovation by managers. We apply the methodology to a set of 17 industrialized countries on a yearly basis between 2007 and 2009. The ...
2011| Heike Belitz, Marius Clemens, Christian von Hirschhausen, Jens Schmidt-Ehmcke, Axel Werwatz, Petra Zloczysti
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DIW Discussion Papers 1128 / 2011
This paper investigates the impact of new firms' quality on the magnitude of their employment effects. Our results clearly show that the quality of start-ups, measured by their affiliation with sectors and innovative industries, strongly influences the direct and the overall employment contribution of new firms. In particular, start-ups in manufacturing industries generate larger direct and overall ...
2011| Michael Fritsch, Alexandra Schroeter
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DIW Discussion Papers 1127 / 2011
This paper reviews the current state of knowledge about the effect of new business formation on regional development. After a brief sketch of the origins of research on this issue, the main results of different lines of inquiry are discussed. Main issues are the development of start-up cohorts, the relative magnitude of direct and indirect effects, and results by type of entry and by industry, as well ...
2011| Michael Fritsch
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DIW Discussion Papers 1126 / 2011
Under perfect competition on the output market, first best technology subsidies in the presence of learning by doing are justified by knowledge spill overs that are not accounted for by individual companies. First best output subsidies are thus depending directly on the learning effects and are, if applicable, positive. Considering electricity markets, a setting of imperfect competition is more appropriate. ...
2011| Thure Traber, Claudia Kemfert
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DIW Discussion Papers 1125 / 2011
This study investigates the role of gender in financial risk-taking. Specifically, I ask whether female investors tend to fund less risky investment projects than males. To answer this question, I use real-life investment data collected at the largest German market for peer-to-peer lending. Investors' utility is assumed to be a function of the projects expected return and its standard deviation, whereas ...
2011| Nataliya Barasinska
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DIW Discussion Papers 1124 / 2011
In this paper, we examine beta-convergence of real per-capita income of Chinese counties. We account for both the spatial dependences between counties and the possibility of different convergence regimes. The first feature is captured by the spatial error term, whereas the second one is modeled using the spatial logit smooth transition approach. Two groups of counties can be identified: 1) counties, ...
2011| Konstantin A. Kholodilin, Eric Girardin
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DIW Discussion Papers 1123 / 2011
In direct contrast to conventional wisdom and most economic models of gender differences in age of marriage, we present robust evidence that men and women who are married to differently-aged spouses are negatively selected. Earnings analysis of married couples in the 1970, 1980, 1990 and 2000 Decennial Censuses finds that male earnings decrease with within-couple age difference, regardless of whether ...
2011| Hani Mansour, Terra McKinnish
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DIW Discussion Papers 1122 / 2011
In this paper, the extent of the shadow economy in OECD countries is investigated. The estimates of the size of the shadow economy are obtained using the panel-data techniques applied to the data on 38 OECD member states over the period 1991-2007. Our estimates tend to be somewhat lower than the alternative estimates. However, our and alternative estimates of shadow economy are quite well correlated ...
2011| Konstantin A. Kholodilin, Ulrich Thießen
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DIW Discussion Papers 1121 / 2011
This paper explores the interdependency of political institutions from the voter's perspective. Specifically, we are interested in three questions: (1) Does the partisan identity of the local mayor influence the voter's decision in the subsequent town council election?; (2) Does this partisan identity influence in ensuing higher level elections?; and (3) Do voters condition their vote for the mayor ...
2011| Florian Ade, Ronny Freier
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DIW Discussion Papers 1120 / 2011
This paper highlights the strategic role that private quality standards play in food supply chains. Considering two symmetric retailers that are exclusively supplied by a finite number of producers and endogenizing the producers' delivery choice, we show that there exist two asymmetric equilibria in the retailers' quality requirements. The asymmetry is driven by both the retailers.incentive to raise ...
2011| Vanessa von Schlippenbach, Isabel Teichmann
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DIW Discussion Papers 1119 / 2011
This paper tackles the issue of cross-section dependence for the monetary exchange rate model in the presence of unobserved common factors using panel data from 1973 until 2007 for 19 OECD countries. Applying a principal component analysis we distinguish between common factors and idiosyncratic components and determine whether non-stationarity stems from international or national stochastic trends. ...
2011| Joscha Beckmann, Ansgar Belke, Frauke Dobnik
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DIW Discussion Papers 1118 / 2011
Germany's water supply industry is characterized by a multitude of utilities and widely diverging prices, possibly resulting from structural differences beyond the control of firms' management, but also from inefficiencies. In this article we use Data Envelopment Analysis and Stochastic Frontier Analysis to determine the utilities' technical efficiency scores based on cross-sectional data from 373 ...
2011| Michael Zschille, Matthias Walter