Capital-skill complementarity is tested for two different definitions of skill, using data from 32 West German manufacturing industries from 1975-1990. Using the Kmenta approximation for the CES function provides strong support for complementarity between white collar workers and capital. On the...

Non-Separable capital adjustment costs imply that investment directly affects the demand for labour and therefore justify not only the lagged dependent variable but also the presence of investment expenditures or Tobin's valuation ratio Q in labour demand estimation. On this basis we estimate a...

In this paper we analyse the impact of policy uncertainty on foreign direct investment strategies. The paper follows the real options approach, which allows to investigate the value to a firm of waiting to invest and/or disinvest, when payoffs are stochastic due to political uncertainty and...

The standard bargaining model predicts that falling international price competitiveness should exert downward pressure on wages, in addition to the effect of current unemployment. Cointegration results with aggregate British and German data confirm the model for the U.K., but fail to reveal an...

Disaggregated data from 30 two-digit manufacturing industies in the Eastern and Western parts of unified Germany are used to estimate employment from three skill categories of blue collar workers. Employment elasticities are uniformly higher in the East, and for unskilled labour. The former...

We study an overlapping generations model of human capital accumulation with threshold effects using regional data for West Germany. Our basic goal is to shed light on the growth of West German regions. The paper finds that the relative income distribution appears to be stratifying into a...

The paper bases itself on recent theoretical writings in growth economics that emphasize the effects of both own R&D efforts and of interregional technology spillovers on regions´ productivity. We propose robust estimation techniques to evaluate the R&D spillovers across West German functional...

The standard literature on working time has modelled the decisions of firms in a deterministic framework in which firms can choose between employment and overtime (given mandated standard hours). Contrary to this approach, we follow the real options approach, which allows us to investigate the...

Utilizing panel data for 19 OECD countries we find support for the hypothesis that a greater degree of product variety relative to the US helps to explain relative per capita GDP levels. The empirical work relies upon some direct measures of product variety calculated from 6-digit OECD export...

This paper first replicates Basu and Fernald's (1995) US results to find no externalities from aggregate West German manufacturing to gross industry output changes and approximately constant internal returns to scale. However, when we distinguish between upswings and downturns in aggregate...