Kiel Institute for the World Economy

About: Kiel Institute for the World Economy is a facility organization based out in Kiel, Germany. It is known for research contribution in the topics: Foreign direct investment & Productivity. The organization has 318 authors who have published 1909 publications receiving 42832 citations. The organization is also known as: Institut für Weltwirtschaft an der Universität Kiel.

Adaptation to cyclone risk: evidence from the global cross-section

Abstract: Understanding the feasibility and cost of adaptation is essential to management of the global climate. Unfortunately, we lack general estimates of adaptive responses to almost all climatological processes. To address this for one phenomenon, we estimate the extent of adaptation to tropical cyclones (TCs) using the global cross-section of countries. We reconstruct every TC observed during 1950–2008 to parameterize countries' TC climate and year-to-year TC exposure. We then look for evidence of adaptation by comparing deaths and damages from physically similar TC events across countries with different TC climatologies. We find that countries with more intense TC climates suffer lower marginal losses from an actual TC event, indicating that adaptation to this climatological risk occurs but that it is costly. Overall, there is strong evidence that it is both feasible and cost-effective for countries with intense TC climatologies to invest heavily in adaptation. However, marginal changes from countries' current TC climates generate persistent losses, of which only ~3% is "adapted away" in the long run.

Neighbourhood Europeanization through ENP: The Case of Ukraine*

Abstract: This article contributes to the integration of Neighbourhood Europeanization in the literature on Europeanization. Based on insights from Membership and Enlargement Europeanization, we reveal important inconsistencies of Neighbourhood Europeanization through ENP as well as a lack of robust empirical support for its effectiveness. We define core dimensions and determinants of Neighbourhood Europeanization and implement this analytical framework for the case of Ukraine. The analysis clearly demonstrates substantial asymmetries in ENP policy across the three dimensions we chose – democracy promotion, economic co-operation and JHA, which clearly reflect the inconsistency of the ENP concept: top-down formulation of EU interests combined with weak conditionality. ENP inconsistencies could however be overcome through widening linkages and improving financial support to mobilize and strengthen positive local support of EU demands and rewards.

Foreign Direct Investment, Agglomerations and Demonstration Effects: An Empirical Investigation

Abstract: Many previous studies have shown that the localisation of firms can be an important factor in attracting new foreign direct investment into a host country. What has been missing in this literature thus far, however, is an investigation into the reasons why industry clusters attract firms. We distinguish between 'efficiency agglomerations' as firms locating close to each other because they can increase their efficiency by doing so, and 'demonstration effects', whereby existing firms send signals to new investors as to the reliability of the host country and newly entering firms follow previous firms. In this Paper we try to disentangle these two effects, by examining the location of US and UK firms in Ireland. We calculate proxies for 'efficiency agglomerations' and 'demonstration effects' and include these proxies in an empirical model of the location decision of firms. For US firms, we find that both efficiency agglomeration and demonstration effects are important determinants of entry. For UK firms, however, the evidence is not as clear-cut.

Innovation and Trade with Heterogeneous Firms

Abstract: This paper examines how trade liberalization affects the innovation incentives of firms, and what this implies for industry productivity. For this purpose we develop a reciprocal dumping model of international trade with heterogeneous firms and endogenous R&D. Among the robust results that hold both in the short run when there is no entry, and in the long run under free entry are that trade liberalization increases (decreases) aggregate R&D for low (high) trade costs and increases expected industry productivity. The central results of the paper regarding firm and industry level R&D spending differ significantly from the case of homogeneous firms.