This paper discusses the incentives for innovation when liability is limited or not. Clearly innovative activity involves risk. On the one hand, the risk of firm owners is limited if their liability is limited. On the other hand credits will be more difficult to receive if liability is limited....

This paper uses German sectorally disaggregated data to analyze the extent of economic convergence of the Bundesländer (Kreise) between 1970 (1980) and 1995 (1994). The contribution of the sectors to beta - and sigma-convergence is measured. It is shown that the growth rate of productivity of...