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Begin New Search Topic International Trade and Finance Political Geography Germany Content Type Working Paper

1. Who is to suffer? Quantifying the impact of sanctions on German firms

Author:
Holger Görg, Anna Jacobs, and Saskia Meuchelbock
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
In this paper, we use a novel firm level dataset for Germany to investigate the effect of sanctions on export behaviour and performance of German firms. More specifically, we study the sanctions imposed by the EU against Russia in 2014 in response to the annexation of Crimea and Russia's countermeasures. We find a substantial negative effect on both the extensive and intensive margin of German exports. While the negative effects are strongest for firms exporting products subject to trade restrictions, we provide further evidence on the indirect effects of sanctions. Analysing the impact on broader measures of firm performance, we document that the cost of sanctions is heterogeneous across firms but overall modest. Our results reveal that the negative impact of the shock was concentrated primarily among a small number of firms that were highly dependent on Russia as an export market and those directly affected by the sanctions.
Topic:
Foreign Policy, Globalization, International Trade and Finance, Sanctions, Russia-Ukraine War, and Firm Dynamics
Political Geography:
Russia, Europe, and Germany

2. Inward FDI in Germany and its policy context, 2012

Author:
Thomas Jost
Publication Date:
04-2013
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
In 2011 and the first half of 2012, inward FDI (IFDI) flows to Germany continued to be relatively strong. Germany attracte market-seeking MNEs, as its economy showed remarkable economic growth despite the ongoing problems in many other countries of the Eurozone. In the second half of 2012, IFDI flows turned sharply negative, declining for the year as a whole to only US$ 7 billion, compared with US$ 49 billion in 2011. This decline reflects the difficult financial situation of many companies, including banks in the Eurozone, and could also dampen inflows in 2013. In the longer-term, Germany could profit again from rising FDI as its economy has successfully implemented reforms over the past decade, and the German Government has continued to keep its investment policy regime open.
Topic:
Economics, International Trade and Finance, Markets, and Foreign Direct Investment
Political Geography:
United States, Europe, and Germany

3. How Safe Is the U.S. Safe Haven?

Author:
Irwin M. Stelzer
Publication Date:
06-2012
Content Type:
Working Paper
Institution:
Hudson Institute
Abstract:
This version of the glorious sonnet composed by Emma Lazarus in 1883, and later engraved on a bronze plaque installed on the Statue of Liberty, calling the world's huddled masses to our shores, captures what it means these days to be a safe haven. Just as America proved to be such a safe haven for immigrants in the latter 19th and early 20th centuries, it is now seen as a safe haven for wealth attempting to escape Europe's tax collectors and financial chaos and recession in Europe, and for foreign central banks newly enamored of the dollar.
Topic:
Economics, International Trade and Finance, Immigration, and Monetary Policy
Political Geography:
United States, Europe, and Germany

4. State of the union Can the euro zone survive its debt crisis?

Publication Date:
04-2011
Content Type:
Working Paper
Institution:
Economist Intelligence Unit
Abstract:
In the run-up to the global financial crisis, the euro area looked very much like a microcosm of the world economy. The region as a whole grew in line with its long-term trend, and its trade position with the outside world was broadly in balance. However, the euro area's aggregate position masked large variations across the member states. In some parts of the region (notably countries on the geographical periphery), demand grew consistently faster than output; in others (like Germany), the reverse was the case. Profligacy in the periphery was funded by thrift in the "core". This arrangement suited both sides.for a time at least. While countries in the periphery enjoyed debt-fuelled booms, countries such as Germany, where domestic demand was weak, could rely on exports to keep growing.
Topic:
Debt, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
Europe and Germany

5. Outward FDI from Germany and its policy context: update 2011

Author:
Thomas Jost
Publication Date:
09-2011
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
In 2010, German companies strongly increased their investments in foreign affiliates, with outward foreign direct investment (OFDI) flows having reached their third highest value on record (US$ 105 billion). Flows were driven by rising exports and growing profits of the German corporate sector. In 2010, the German economy made a robust recovery from the worldwide economic and financial crisis and became a growth engine among European Union (EU) countries. A further increase of OFDI is expected in 2011, as German companies are seeking to strengthen their strategic position in their main markets, although the pre-crisis level of OFDI flows of US$ 171 billion in 2007 will be hard to achieve. The German Government has continued to support the internationalization process of the German corporate sector by expanding its network of bilateral investment treaties and providing financial support and information services.
Topic:
International Trade and Finance, Markets, and Foreign Direct Investment
Political Geography:
Europe, Germany, and Ethiopia

6. The Non-Americanization of European Regulatory Styles: Data Privacy Regulation in France, Germany, Italy, and Britain

Author:
Francesca Bignami
Publication Date:
01-2010
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
European countries have experienced massive structural transformation over the past twenty-five years with the privatization of state-owned industries, the liberalization of markets, and the rise of the European Union. According to one prominent line of analysis, these changes have led to the Americanization of European regulatory styles: previously informal and cooperative modes of regulation are becoming adversarial and litigation-driven, similar to the American system. This article explores the Americanization hypothesis with a structured comparison of data privacy regulation in four countries (France, Britain, Germany, and Italy) and a review of three other policy areas. It finds that European regulatory systems are converging, but not on American-style litigation, rather on an administrative model of deterrence-oriented regulatory enforcement and industry self-regulation. The explanation for this emerging regulatory strategy is to be found in government responses to market liberalization, as well as the pressure created by the governance process of the European Union.
Topic:
Economics, International Trade and Finance, Markets, and Monetary Policy
Political Geography:
Britain, Europe, France, Germany, and Italy

7. Balancing Diversity and Efficiency in the EU's Language Regime: E Pluribus Tres for the EU Patent?

Author:
Stephanie Locatelli
Publication Date:
08-2010
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Recently, the European Commission has breathed new life into the decade-long attempt to create a patent that would protect inventors throughout the European Union with a proposal making English, French, and German the sole languages of the EU patent. This would reduce the cost of patenting, thereby stimulating research and development within the EU. But the EU-wide patent has reached an impasse as member states struggle with the question of which languages should be used. Italy in particular has opposed the exclusion of Italian, raising more general questions about the language regime in the European Union. Are diversity and efficiency mutually exclusive, or is there a formula that can satisfy both criteria? It appears, in the end, that the Commission's proposal is the most effective way of cutting costs while at the same time preserving the multilingual character of the EU. For Italy, however, the question of trilingualism in the patent system has become a kind of litmus test of its rank within the EU.
Topic:
International Trade and Finance, Treaties and Agreements, and Intellectual Property/Copyright
Political Geography:
Europe, France, and Germany

8. Beyond Convergence versus Path Dependence: The Internationalization of Industrial Relations at Ford Germany and Britain (1967–1985)

Author:
Thomas Fetzer
Publication Date:
03-2009
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
For a long time scholars of industrial relations tended to associate notions of internationalization with the debate about the cross-border convergence of industrial relations systems. Convergence versus path dependence was thus a key controversy in industrial relations studies for decades. This debate was mirrored in multinational companies when their attempts to “export” industrial relations practices to foreign subsidiaries encountered host country influences that constrained such attempts. In recent years many scholars shown the need for a wider and more complex analysis of internationalization processes that goes beyond the convergence/path dependence dichotomy. Building on this development, the paper presents a historical case study of the impact of cross-border subsidiary integration on industrial relations at Ford Germany and Ford UK between 1967 and 1985. I argue that convergence and path dependence need to be combined with a third “differential internationalization” approach that reflects the country-specific gradual change that emerges from subsidiary integration. The paper concludes by reflecting on the implications of the case study for contemporary internationalization debates.
Topic:
International Relations, Economics, Industrial Policy, and International Trade and Finance
Political Geography:
Britain, United Kingdom, and Germany

9. German Companies Engaging in China: Decision-Making Processes at Home and Management Practices in Chinese Subsidiaries

Author:
Geny Piotti
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
This paper attempts to explain why internationalization processes to China are growing despite the significant difficulties that foreign direct investments into China encounter. The answer to this question can be found in the processes of decision-making on internationalization at the company level and how these affect management practices in Chinese subsidiaries. The argument I put forward in this paper is that for the small and medium-sized enterprises the study focuses on, the decisions concerning investment in China are mainly the product of structural and legitimation pressure. Structural pressure can encourage cognitive mechanisms and behavioral consequences similar to those occurring when individuals (and organizations) cope with threat. Legitimation pressure can foster wishful thinking, which pushes actors to believe that desired options are good despite evidence to the contrary. These pressures have an impact on how well companies are prepared when they internationalize and can particularly affect some crucial management practices, leading to inefficiencies and problems in subsidiaries.
Topic:
Economics and International Trade and Finance
Political Geography:
China, Europe, Asia, and Germany

10. Eurozone Unity Under Threat?

Publication Date:
03-2009
Content Type:
Working Paper
Institution:
Oxford Economics
Abstract:
Ten years after the introduction of the euro, the onset of deep recession in the Eurozone has triggered concern that the single currency might impose intolerable strains upon some members. With some countries hit hard by the impact of the credit crunch, there are mounting concerns about a possible debt default by one or more member states, which in turn might threaten the euro and even the existence of the Eurozone. With the Eurozone economy forecast to contract by 3.1% this year, unemployment is starting to climb steeply and fiscal deficits are soaring. This has raised concerns about deteriorating public finances in a number of countries, leading to sharply wider spreads on government bonds and credit rating downgrades for Greece, Spain and Portugal, with Ireland maybe facing a similar fate soon. And repercussions from the growing economic crisis in Central and Eastern Europe are adding to the problem, with Austria particularly exposed. Rising bond spreads were always intended to be the mechanism that would restrain public spending by more profligate Eurozone countries. But the question now is whether the weaker economies can withstand the strains that a lengthy period of recession will impose and, at the same time, adopt credible medium-term spending plans to ward off the worst of the downturn and retain market confidence. With fiscal deficits already rising as a result of bank bailouts, fiscal packages and recession will push budget deficits far above the 3% of GDP target – Ireland, facing a deficit of 12% of GDP, and Spain will be worst hit. And with rising deficits and higher bond spreads pushing up the cost of debt, countries face a sharp rise in their level of indebtedness, with Greece and Italy seeing debt/GDP ratios around 100%. This deterioration could lead to a further downward spiral if the recession is prolonged and will be a test of countries' euro commitment, which has remained strong thus far despite rising social tensions in some countries. At this stage, the problems remain manageable and the risk of default or of countries leaving the euro is still very low. Bond spreads are still much lower than during much of the 1990s, when countries were striving to qualify for euro membership, and the currency risks attached to leaving the euro would be substantial. Moreover, EU countries that have been exposed to considerable currency strain over the past year are anxious to join the Eurozone as soon as possible, to take advantage of the benefits of a stable currency. While some smaller countries may experience financial difficulties, it seems inevitable that the larger Eurozone members would step in to stabilise the situation – failure to do so would risk contagion spreading to other countries, which in turn would cause even deeper problems for the euro. More policy action also seems likely to counter this threat – although the German government will probably remain reluctant to countenance the scale of expansionary fiscal policy really needed at this time. Current policies inevitably mean a long hard slog back towards fiscal rectitude in the years ahead, with monetary policy also tightening and growth slower than previously expected. Fiscal federalism may also have to be on the agenda. All this will undoubtedly lead to ongoing strains within the Eurozone. And any measures by governments that appear to be protectionist – such as the support for the French car industry – will only fuel these tensions.
Topic:
Economics, International Trade and Finance, Regional Cooperation, Treaties and Agreements, and Financial Crisis
Political Geography:
Europe and Germany