Research
Technology-based company | Globalization | Internationalization

More than 60 per cent of new high-tech start-ups in Germany and Great Britain are active in the international arena already in their initial years of business. This is the result of a survey including 600 German and British new high-tech start-ups conducted by the Centre for European Economic Research (ZEW) in Mannheim. German executives stated in the survey that encounters at fairs, references or contacts established via industrial customers are the main stepping stones for the start-ups to be introduced to the international market.

Dates and News
ZEW | Supervisory board

In the course of the Supervisory Board meeting of the Centre for European Economic Research (ZEW), Dr. Jürgen Strube, Vice-Chairman of the Executive Board at BASF AG, was elected new Vice Chairman of the Supervisory Board.

Research
Business related service providers | Business Cycle

For the second time in a row the economic situation has failed to improve for business-related service providers. Already since the third quarter of 1998, the business situation has remained at stalemate in the consecutive quarters. On the basis of a seasonally adjusted comparison with the previous quarter, the revenues as well as the turnover have once again remained virtually unchanged in the fourth quarter of 1998. For the first time since the third quarter of 1996 this survey has shown a decline.

Research
Reform actions | Tax reform | Tax burden | European Tax Analyzer

The draft legislation for the corporate tax reform for 1999, 2000 and 2002 is on the table. However, the measures already to be implemented in 1999 fall short of expectations. They are unlikely to provoke any positive growth impetus. Instead, it shows that the changes proposed for 1999 have rather burdening effects on most industrial sectors concerning the tax situation. Furthermore, the objective of a long-term improvement in climate protection will not be achieved through the proposed ecological tax reform. For this purpose, it would make more sense to implement a European-wide environmental tax. These are the findings of an analysis carried out by the Centre for European Economic Research (ZEW) in Mannheim in collaboration with tax expert Prof. Otto H. Jacobs of the University of Mannheim.

Comment
Tax burden | Tax reform | Reform actions

The Centre for European Economic Research (ZEW) and Prof. Jacobs, chairholder at the University of Mannheim, analysed the draft legislation for the corporate tax reform for 1999, 2000 and 2002 with respect to its economic impact on the business sector, as well as some aspects concerning the tax system. Thereby, the resulting effects for the corporate tax burden induced by the planned changes in taxation were calculated by using the European Tax Analyzer, which was developed by ZEW in close cooperation with Prof. Jacobs of the University of Mannheim. In this respect, it was established that during the first step of the reform programme business conditions tend to deteriorate slightly. By contrast, the proposed measures for 2002 revealed an improvement of conditions.

Research
Metal Industry | Oil price | Commodity price

Since the oil price is lower than it has been in a long time, many a company comes up with the idea to secure a favourable purchase price for oil for themselves on the long run by buying forward. However, there has to be someone willing to offer such forward contracts in exchange for premiums. Taking advantage of such a market gap can be both profitable but also extremely loss-making. In a current study, the Mannheim-based Centre for European Economic Research (ZEW) investigates the risk of such forward transactions. The controversial aspect of this topic becomes clearly illustrated by the example of the Metallgesellschaft, which entered into long-term delivery commitments at fixed prices at the beginning of the 90s. The company had tried to secure its forward contracts through hedging strategies, and had to face losses of 1.3 billion dollars in the end.

Research
European Tax Analyzer | Tax reform | Tax burden

In the context of the coalition talks between the Social Democratic Party of Germany and Alliance‘90/The Greens, the implementation of an ecological tax reform was agreed upon. Concrete information concerning the taxation procedure, the determination of the assessment basis and exemptions provided has not been given. However, the tax rates and the tax relief provided regarding social security contributions were specified in numbers:

Research
Innovation | Eastern Germany | Productivity

Despite remarkable progress in terms of adjustment, the productivity of the East German industry is still below the West German level. However, the individual East German businesses differ considerably from one another in terms of their productivity. It is clearly demonstrated that innovative businesses, in contrast to non-innovative businesses, exhibit a far more positive development regarding productivity. Businesses that cooperate with West German or foreign shareholding companies are equally faster in reaching the West German level than independent businesses. These are the findings of a study carried out by the Centre for European Economic Research (ZEW) in Mannheim.

Research
Numbers of employment | Business related service providers | Business Cycle

The economic situation in the business-related services sector has remained at a constant high level in the third quarter of 1998. Merely the expectations concerning the earnings situation has improved once again as compared to the same quarter a year ago. All other business factors have remained unchanged, both compared to the same quarter one year ago, as well as to the previous quarter. Hence, for the second quarter in succession, there has been no improvement in the economic situation. The slight stagnation in the business-related services sector has thus far had no impact on the employment figures of this sector. In particular highly-qualified workers have good prospects of getting a job. Low-skilled workers and graduates with vocational training on the other hand have more reasons to fear for their jobs. It also becomes clear that process innovations – i.e. the use of new and substantially improved technologies – exert a negative influence on the demand for low-skilled staff. These are the findings of a representative survey carried out by the Centre for European Economic Research (ZEW) in Mannheim, in collaboration with the "Verband der Vereine Creditreform" in Neuss, in September 1998. The business-related services sector encompasses tax advisors and certified public auditors, business consultants, architects, technical consultants and planners, vehicle renting, machine renting, forwarders and logistic firms, software providers, advertising agencies and waste management firms.

Research
Employment policy | New technologies | Business related service providers | Business Cycle

One of the most serious problems of current economic policy is the high unemployment rate. Yet, whereas in the manufacturing industry jobs are continuously being phased out, the service sector is regarded as genuinely promising. In this sector, a large number of new jobs are created – however, poorly qualified workers are largely excluded from this. A current study by the Centre for European Economic Research (ZEW) in Mannheim shows that, in relation to all employees in the business-related services sector, the percentage of low-skilled workers decreased by 30 per cent between 1991 and 1996. By contrast, the share of university graduates increased by about the same percentage in this very period.

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