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.

Scope for Export-Led Growth in a Large Emerging Economy: Is India Learning by Exporting?*

Abstract: The ongoing debate of the literature on learning-by-exporting is whether the conspicuously stellar performance of exporters relative to non-exporters can be, at least partially, attributed to the horizonwidening interaction with foreign consumers and learning of cost-efficient and quality enhancing production methods, or whether all of the differential is due to the self-selection of best firms into exporting. This study uses data from the 1998-2008 Prowess Database to examine how firm-level productivity paths differ between firms with varying degrees of exposure to international trade in India, the country to rank third among the most dominant economies by the year 2050. Having used Levinsohn-Petrin measure of total factor productivity and a proxy for labor productivity, we find significant ex-ante differences in productivity between exporters and non-exporters and no difference in the ex-post productivity gains. These findings suggest that even in a large emerging economy with strong absorptive capacity and a significant catch-up potential, learning-by-exporting effects are nonexistent. Rather, self-selection of more productive firms into exporting explains the productivity differential between exporters and non-exporters.

With a little help from Russia? The European Union and visa liberalization with post-Soviet states

Abstract: Secure and well-managed migration and mobility figure prominently in the European Union’s (EU) relations with its Eastern neighbors. In the framework of the European Neighborhood Policy and the Eastern Partnership, the EU relies extensively on policy conditionality as it ties the reward of visa-free travel to the adoption of specific policies by neighboring countries in order to better regulate and manage mobility and migration. However, in the post-Soviet space, migration flows and management are, to a great extent, still shaped by (post-) Soviet legacies and interdependences. As a result, Russian domestic and foreign policies shape the way migration and mobility are perceived and managed by neighborhood countries. In this article, we seek to investigate what effect these historically grown ties and current foreign policy actions exert on compliance with EU requirements for visa liberalization in Armenia, Georgia, and Moldova. In all three countries, we identify patterns of change over time and explain t...

Integrating biofuels into the DART model

Abstract: Biofuels and other forms of bioenergy have received increased attention in recent times: They have partly been acclaimed as an instrument to contribute to rural development, energy security and to fight global warming but have been increasingly come under attack for their potential to contribute to rising food prices. It has thus become clear that bioenergy cannot be evaluated independently of the rest of the economy and that national and international feedback effects are important. In this paper we describe how the CGE model DART is extended to include first-generation biofuel production technologies. DART can now be used to assess the efficiency of combined climate and bioenergy policies. As a first example the effects of a 10% biofuel target in the EU are analyzed.

Energy Use Patterns in German Industry: Evidence from Plant-Level Data

Abstract: This paper analyzes energy use and CO2 emissions of more than 78,000 German industrial establishments between 1995 and 2006. It is the first study to exploit exceptionally rich energy data that were recently matched to official micro datasets. We document that both energy use and intensity are highly dispersed across establishments. When isolating the between-sector variation in energy intensity, there is a strong positive correlation with energy use, CO2 emissions and emissions intensity. Yet there is no evidence that the scale of an industry determines its energy intensity. The dispersion of energy use within establishments of a given sector, normalized by the median, is positively correlated with that of gross output, but not with the median energy use. Similarly, there is no evidence that the median energy intensity is correlated with the within-sector dispersion of energy intensity or with that of CO2 emissions. Looking at the fuel mix across sectors, we find that more energy intensive industries rely more on fuels other than electricity, although the variability among establishments in those industries is extremely high. We also demonstrate that average fuel shares are sensitive to the skewness of the underlying distribution and recommend the use of median fuel shares for better representativeness.

Deflating asset price bubbles with leverage constraints and monetary policy

Abstract: We develop an experimental production economy to study the general equilibrium and welfare effects of speculation and stabilization policies. Participants playing the role of household-investors interact in labor, output, and, in some treatments, asset markets. Without the ability to trade assets, participants over-supply costly labor to acquire saving. The presence of asset markets improves welfare by allowing investors to substitute labor income for speculative gains. Asset prices deviate substantially from fundamental value. Leverage constraints that prevent investors from borrowing for speculation are ineffective at stabilizing asset prices. Households often circumvent the constraints by excessively supplying labor and generating increased wealth which can be used for speculation. Wealth inequality is worsened due to endogenously higher interest accumulated by borrowers and savers. An asset inflation targeting policy fuels initial asset price growth but, as interest rates rise rapidly, effectively deflates asset price deviations. With learning, the policy stabilizes asset prices and consequently interest rates, which enhances welfare and reduces inequality. We develop a model of heterogeneous expectations to rationalize our experimental findings.