The 2008 crash has left all the established economic doctrines - equilibrium models, real business cycles, disequilibria models - in disarray. Part of the problem is due to Smith’s "veil of ignorance": individuals unknowingly pursue society’s interest and, as a result, have no clue as to the macroeconomic effects of their actions: witness the Keynes and Leontief multipliers, the concept of value added, fiat money, Engel’s law and technical progress, to name but a few of the macrofoundations of microeconomics. A good viewpoint to take bearings anew lies in comparing the post-Great Depression institutions with those emerging from Thatcher and Reagan’s economic policies: deregulation, exogenous vs. endoge- nous money, shadow banking vs. Volcker’s Rule. Very simply, the banks, whose lending determined deposits after Roosevelt, and were a public service became private enterprises whose deposits determine lending. These underlay the great moderation preceding 2006, and the subsequent crash.

The Economic Institutions of Capitalism

The literature on international trade and firm performance grows exponentially. This paper attempts to summarize what we learn from this literature to guide future empirical and theoretical work in this area. The focus is on the empirical part of the literature that consists of recently published papers using data for firms from manufacturing or services industries to study the links between international trade (exports and imports) and dimensions of firm performance (productivity, wages, profitability and survival).

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International trade and firm performance: a survey of empirical studies since 2006

The Price of Sin: The Effects of Social Norms on Markets

This paper uses a newly available comprehensive panel data set for manufacturing enterprises from 2001 to 2005 to document the first empirical results on the relationship between imports and productivity for Germany, a leading actor on the world market for goods. Furthermore, for the first time the direction of causality in this relationship is investigated systematically by testing for self-selection of more productive firms into importing, and for productivity-enhancing effects of imports (‘learning-by-importing’). We find a positive link between importing and productivity. From an empirical model with fixed enterprise effects that controls for firm size, industry, and unobservable firm heterogeneity we see that the premia for trading internationally are about the same in West and East Germany. Compared to firms that do not trade at all two-way traders do have the highest premia, followed by firms that only export, while firms that only import have the smallest estimated premia. We find evidence for a positive impact of productivity on importing, pointing to self-selection of more productive enterprises into imports, but no clear evidence for the effect of importing on productivity due to learning-by-importing.

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Higher Productivity in Importing German Manufacturing Firms: Self-selection, Learning from Importing or Both?

While economists have been contributing to the discussion of various aspects of sustainability for decades, it is just recently that the term “sustainability economics” was used explicitly in the ecological, environmental, and resource economics community. Yet, the contributions that use the term “sustainability economics” do not refer to any explicit definition of the term, and are not obviously joined by common or unifying characteristics, such as subject focus, methodology, or institutional background. The question thus arises: What is “sustainability economics” In this essay, we systematically define and delineate “sustainability economics” in terms of its normative foundation, aims, subject matter, ontology, and genuine research agenda.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1531182_code363673.pdf?abstractid=1469961&mirid=1

What is Sustainability Economics

Im Zuge der Reformen der europaischen Eisenbahnindustrie entschieden die nationalen Regierungen Europas sowie die EU Kommission, die Eisenbahnmarkte zu liberalisieren und die Schieneninfrastruktur vom Fahrbetrieb organisatorisch zu trennen Vertikal integrierte Eisenbahnunternehmen - Unternehmen, die sowohl das Schienennetz als auch den Transportbetrieb unterhalten - ausern die Befurchtung, das eine solche Separierung Vorteile der vertikalen Integration (sogenannte Verbundvorteile) vermindern wurde und somit nicht geeignet sei, die gesamtgesellschaftliche Wohlfahrt zu erhohen In diesem Aufsatz untersuchen wir mittels einer pan-europaischen Analyse die Produktivitat europaischer Eisenbahnunternehmen und berucksichtigen dabei insbesondere etwaige Verbundvorteile indem wir uberprufen, ob integrierte Eisenbahnunternehmen eine hohere technische Effizienz aufweisen als vertikal separierte Unternehmen Dazu berechnen wir ein Data Envelopment Analysis super-efficiency bootstrapping Modell, das die Effizienz der integrierten Produktionstechnologie im Verhaltnis zu einer Referenzgruppe virtueller, aus den separierten Unternehmen konstruierter Beobachtungseinheiten berechnet Unsere Forschungsergebnisse weisen auf existierende Verbundvorteile fur die Mehrzahl der europaischen Eisenbahnunternehmen hin

https://www.iwh-halle.de/fileadmin/user_upload/publications/iwh_discussion_papers/5-06.pdf

Economies of scope in European railways: an efficiency analysis

This paper analyzes the European railroad sector to determine if economies of scope were gained by vertically integrated organizations to a degree that is large enough to justify keeping the current structure intact. The research is conducted against a backdrop of steps in the late 1980s and early 1990s to introduce more competition in the railway industry in Europe, a restructuring that involved separating infrastructure from operations. This study uses unique datasets of 54 railway companies from 27 European countries, observed over five years, from 2000 to 2004. The hypothesis that integrated railways enjoy economies of scope is tested by comparing integrated companies and unbundled ones with a distance function model. The analysis is carried out in two steps. First, the researchers estimate the technical efficiency of integrated and non-integrated railways using a non-parametric data envelopment analysis (DEA). To make a set of non-integrated railways comparable to integrated ones, they construct virtually integrated firms from samples of different specialized firms. In the second part, they apply a DEA super-efficiency model, which relates the efficiency of integrated production to a reference set of separated production. This methodology allows comparison of two different production technologies rather than one production frontier derived from all firms. The paper includes sections on: the theoretical background for the methods and previous research; the modeling approach and the data; estimation results; and conclusions. A model using only physical measures shows slight efficiency advantages for integrated companies on average and economies of scope for a majority of observations. When monetary figures are included, the advantages are even more evident. However, results for individual countries can vary because of differences in degrees to which the markets have been opened and the economies or diseconomies, in some cases, of scope in the existing integrated firms. The authors find that policy implications remain ambiguous because of these and other elements, including other, negative aspects of vertical integration.

https://www.econstor.eu/bitstream/10419/28197/1/560084331.PDF

Testing for Economies of Scope in European Railways: An Efficiency Analysis

Since the late 1990s, the European higher education system has had to face deep structural changes. With the public authorities seeking to create an environment of quasi-markets in the higher education sector, the increased competition induced by recent reforms has pushed all publicly financed higher education institutions to use their resources more efficiently. Higher education institutions increasingly now aim at differentiating themselves from their competitors in terms of the range of outputs they produce. Assuming that different market positioning strategies will have different effects on the performance of higher education institutions, this paper explores the existence of economies of scale and scope in the German higher education sector. Using an input-oriented distance function approach, we estimate the economies of scale and scope and the technical efficiency for 154 German higher education institutions from 2001 through 2007. Our results suggest that comprehensive universities should indeed orientate their activities to the concept of a full-university that combines teaching and research activities across a broad range of subjects. In contrast, praxis-oriented small and medium-sized universities of applied sciences should specialise in the teaching and research activities they conduct.

https://www.econstor.eu/bitstream/10419/57126/1/682075825.pdf

Competing in the Higher Education Market: Empirical Evidence for Economies of Scale and Scope in German Higher Education Institutions

This paper analyzes the productivity development in the German public theater sector for the seasons 1991/1992 to 2005/2006. Using a stochastic distance frontier approach that allows decomposing total factor productivity change into different sources, we examine (a) whether Baumol’s cost-disease hypothesis is valid in this sector and (b) if so, whether any negative influence of the cost-disease effect on productivity can be compensated by efficiency gains. The findings indicate an increase in real unit labor cost as a result of rising wage rates and thus do support the cost-disease hypothesis. Further, increasing returns to scale are observed for the majority of the theaters, implying that significant efficiency gains can be realized by the exploitation of scale economies. However, because of the increasing unit labor cost and an increasing scale inefficiency, we find an overall decrease in average productivity of about 8% within the sample period.

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Baumol’s cost disease, efficiency, and productivity in the performing arts: an analysis of german public theaters

In recent years the economic performance of public non-profit sectors such as cultural services has become an interesting economic issue. This is due to the high dependence of cultural institutions on public funding on the one hand and the increasing cost-pressure on public budgets on the other hand. In order to achieve an efficient, cost-minimizing resource allocation public authorities who decide on the distribution of public budgets need reliable performance indicators. Against this background, this paper analyzes the efficiency of German public theaters for the seasons 1991/1992–2005/2006. Using a stochastic frontier analysis approach, we test whether the assumption of cost-minimizing behavior is reliable in this sector. Moreover, several panel data models that differ in their ability to account for unobserved heterogeneity are applied to evaluate the impact of unobserved heterogeneity on the efficiency estimates. The results indicate that the cost-minimizing assumption cannot be maintained. Consequently, an efficiency analysis based on a cost function approach seems inappropriate in the case of German public theaters. Further, we find a considerable unobserved heterogeneity across the theaters, which causes a significant variation in the models’ efficiency estimates. This implies that failing to account for unobserved heterogeneity leads to biased efficiency values. Overall, our results suggest that there is still space for improvement in the employment of resources in the sector.

/pdf/the-efficiency-of-german-public-theaters-a-stochastic-54ixceu76q.pdf

Heike Wetzel

Papers

Economies of scope in European railways: an efficiency analysis

Testing for Economies of Scope in European Railways: An Efficiency Analysis

Competing in the Higher Education Market: Empirical Evidence for Economies of Scale and Scope in German Higher Education Institutions

Baumol’s cost disease, efficiency, and productivity in the performing arts: an analysis of german public theaters

The efficiency of German public theaters: a stochastic frontier analysis approach