Prof. Dr. Günter Lang

Abstract

Motivated by the high abatement costs of the Kyoto Protocol for Germany, this paper is estimating the economic impact of global warming on agriculture in that country. The hedonic approach is used as theoretical background. Stating that land prices are – among others – determined by climatic factors, this approach can consequently be used to value global warming. To avoid a priori restrictions stemming from functional forms, the land price function is modeled as quadratic Box–Cox function that nests a wide range of specifications. In a second step, the estimated results are used to forecast the impact of climate change. The results indicate that German farmers will be winners of climate change in the short run, with maximum gains occurring at a temperature increase of +0.6°C against current levels. In the long run, there may be losses from global warming. However, the net present value from climate change is under the most probable scenarios positive.

Abstract

Motivated by recent statistics that show significant growth in labor productivity, this paper seeks to analyze the long-term relationship between domestic R&D, knowledge stock and productivity dynamics. Time series data of the German manufacturing industry is used to estimate a variable cost function with the stock of knowledge being dependent upon current and past R&D spending. The estimates indicate that 50% of the effects of R&D on the knowledge stock appear within 4 years. However, the rate of return on R&D are shown to be drastically declining; recent rates of return on R&D are estimated to have reached an all-time low spanning the last 45 years. Current yields of R&D are only one third compared to the sixties. In conclusion, though the productivity slowdown of the seventies seems to have been overcome, this is not attributed to R&D investments.

Abstract

Immigrants in Germany have poor earnings performance relative to natives. Claiming that human-capital

endowments determine earnings potentials rather than actual earnings, a stochastic

earnings frontier is estimated and used to seek systematic differences between natives and migrants

for GSOEP data for the year 2000. While empirical results clearly support the frontier assumption,

natives and immigrants are surprisingly about the same with respect to the frontier. Assuming a halfnormal

distribution of the wage gap, on average, both groups transform a modest 84% share of their

potential income into market earnings. This implies wage inequality can be attributed to humancapital

differentials alone. The human-capital endowments of immigrants are largely determined

by the very low percentage who have college degrees, their slow assimilation and zero-return on

imported experience. The paper also tries to explain individual wage gaps, which are significantly

decreased in married subjects raising families, but increased in employees in small- or medium-sized

relative to larger firms. However, these variables only make minor contributions to the variance.

Abstract

Based on an unbalanced panel of all Bavarian cooperative banks for the years of 1989--97, which includes information on 283 mergers, we analyze motives and cost effects of small-scale mergers in German banking. Estimating a frontier cost function with a time-variable stochastic efficiency term, we show that positive scale and scope effects from a merger arise only if the merged unit closes part of the former branch network. When we compare actual mergers to a simulation of hypothetical mergers, size effects of observed mergers turn out to be slightly more favorable than for all possible mergers. Banks taken over by others are less efficient than the average bank in the same size class, but exhibit, on average, the same efficiency as the acquiring firms. For the post-merger phase, our empirical results provide no evidence for efficiency gains from merging, but point instead to a leveling off of differences among the merging units.

Abstract

Using 1989–1992 individual data of 757 German cooperative banks and applying the intermediation approach we specify a multi-product translog cost function for this part of the German banking industry. For all size classes moderate economies of scale can be identified. There is also evidence of economies of scope which supports the notion of universal banking. As for cost efficiency, we find that the average banks in all size classes deviate considerably from the best practice cost frontier. All banks enjoy growth of total factor productivity, which is higher for the smaller banks in the sample.