ZEW policy briefs are four-page documents, containing brief and lucid information on ZEW research results of practical significance for business, policy, and administration. At the moment, several ZEW policy briefs are being edited.
The new federal government will be facing major economic policy challenges over the coming legislative period. On this occasion, ZEW researchers developed recommendations for an economic policy agenda in the next four years. The proposals focus on policy fields related to ZEW's research areas and advisory expertise. ZEW's recommendations include proposals for the institutional framework of a European fiscal union, reform proposals for taxation rules within the European Single Market, as well as paths toward a simplified tax system in Germany. Addressing the objectives of a cost-efficient expansion of renewables and a stable power grid, suggestions are also made for a new electricity market design. ZEW's paper draws attention to instruments to make the German innovation system fit for the future. Furthermore, recommendations address further structural reform on the German labour market, for example with respect to marginal employment or the qualification of the most vulnerable groups in the labour market.
The German electricity market is at a turning point. Electricity from renewable energy sources is gradually replacing electricity generated conventionally. Although the existing market organisation effectively promotes the expansion of renewable power generation, it also involves high costs. Furthermore, regional imbalances between power generation and demand arise. This "ZEW policy brief" gives the outline of a new organisation for the German electricity market. The cost-effective expansion of renewables and power grid stability are equally taken into account. Scarcity prices are the key instrument for a new organisation of the electricity market. Electricity producers need to be given incentives to produce power according to demand on the electricity market, so prices have to reflect the time and location of power scarcities. This can be achieved by combining a market premium for the promotion of renewables with market splitting to meet grid congestions.
A research use exemption allows companies or research institutions to use patented know-how of third parties for free without being sued for hurting patent rights. Research use exemptions vary significantly between the national laws regarding their extent and impact. It is hence interesting to ask if and how the differences in national research use exemptions influence firm's propensity to innovate. A study conducted by the Centre for European Economic Research (ZEW) shows how research use exemptions contribute to the reconciliation of patent law and the promotion of technological innovation. The study reveals that research use exemptions in patent law contribute to the dissemination of knowledge without eliminating incentives to invest in knowledge generation. In order to answer these questions, we first model varying degrees of research use exemption in a setting of cumulative innovation processes. In the second step, we substantiate our theoretical assumptions using empirical data from an online survey conducted in Germany and Australia. The results suggest that the impact of research use exemptions largely depends on their exact design. For this reason, there are no general assumptions as to the impact of research use exemptions on innovation and diffusion of knowledge.
Recent developments in information and communication technologies (ICT) and the growth of emerging economies such as China and India have not only increased international trade but have also led to offshoring of activities away from Europe. Recent developments in information and communication technologies (ICT) and the growth of emerging economies such as China and India have not only increased international trade but have also led to offshoring of activities away from Europe. A firm's decision to move production away from Europe is based on cost-benefit considerations and comparative advantage. Effective policy responses call for a sound understanding of what types of activities are subject to relocation and of the relative strengths of the European knowledge economy. A project, funded by the SEEK research programme, aims to improve our understanding of the mechanisms of company decision making and their labour-market consequences. A team of researchers examined the role of technological change and globalisation for workers' jobs and firms' competitiveness. Based on the idea that occupations are bundles of tasks, they model the bundling and unbundling of tasks and analyse the factors determining their tradability. They examine whether individuals react to offshoring by switching the tasks that make up their occupation. Finally, taking a firm-level perspective, internationally active firms are compared to domestic firms with regard to ICT use and productivity.
In knowledge-intensive economies, ideas and innovation are key drivers of a company's competitiveness and success. In such a climate a company must strategise methods designed to incentivize the generation of new ideas and build a culture that rewards the production of knowledge. Funded by ZEW's SEEK Research Programme, the research covers two empirical studies that investigate whether financial rewards such as performance independent bonuses and performance rewards foster creativity and idea generation among employees and to what extent the effect of incentives differs depending on the type of reward that is offered.
Public intervention in the automotive industry has a long, global history. In Europe, both, individual member states and the European Union (EU), often allocate public resources to automobile manufacturers through a wide variety of instruments and institutions. This willingness to offer support to the automotive industry was especially evident during the financial and economic crisis of 2009 when this sector was particularly hard hit. Against this backdrop, a recent study funded jointly by ZEW's SEEK Research Programme and the Finance Programme at the University of Leuven outlines and quantifies the different forms that public support to the European auto industry has taken over the past decade.
Internet shopping is becoming more and more popular. On price comparison sites users can obtain helpful advice, where to find the best price. A study conducted by the Centre for European Economic Research (ZEW) in Mannheim and the University of Linz shows that price comparisons are worth the effort. The results show that already ten additional competitors in the market offering the same product reduce the mark-up of the cheapest provider by 1.7 percentage points.
Start-ups, especially those in high-tech industries, are an important force for innovation. They contribute to the competitive success of the economy, and help to create new jobs. Bank financing is the most important source of external credit for newly established firms. In the last two decades, bank consolidation and regulatory changes such as Basel II have influenced banks' screening processes, leading to a greater reliance on hard information. Yet newly established firms do not have a financial track record. Publicly available information like credit ratings is rarely available for new firms.
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