Volume 238, Issue 2 - Special Issue: Econometric Studies with Integrated Micro-data from German Official Statistics, Guest Editor: Joachim Wagner

This paper assesses firm-level effects of the single largest investment subsidy programme in Germany. The analysis considers grants allocated to firms in East German regions over the period 2007 to 2013 under the regional policy scheme Joint Task ‘Improving Regional Economic Structures’ (GRW). We apply a coarsened exact matching (CEM) in combination with a fixed effects difference-in-differences (FEDiD) estimator to identify the effects of programme participation on the treated firms. For the assessment, we use administrative data from the Federal Statistical Office and the Offices of the Länder to demonstrate that this administrative database offers a huge potential for evidence-based policy advice. The results suggest that investment subsidies have a positive impact on different dimensions of firm development, but do not affect overall firm competitiveness. We find positive short- and medium-run effects on firm employment. The effects on firm turnover remain significant and positive only in the medium-run. Gross fixed capital formation responses positively to GRW funding only during the mean implementation period of the projects but becomes insignificant afterwards. Finally, the effect of GRW-funding on labour productivity remains insignificant throughout the whole period of analysis.

This paper examines the impact of agricultural subsidies on rental rates for grassland. In theory, the capitalization of subsidies into grassland rents has become increasingly important as a result of the decoupling of direct payments from production in 2005. The focus is on the pass-through of both coupled and decoupled direct payments on grassland rentals in Western Germany. The empirical investigation is based upon farm-level data of grassland rental rates from the six farm census surveys carried out between 2001 and 2013. The results of spatial econometric models show that landlords of grassland have benefited strongly from the decoupling of direct payments. For the period prior to the decoupling of direct payments, the estimates point to low capitalisation of the livestock payments into grassland rentals. For the period after decoupling, the estimations reveal a significant pass-through of direct payments to landowners, with the marginal capitalisation increasing over time. At the end of the observation period, after regional standardisation of the payments, the estimates show marginal capitalisation rates of 87–94 cents per additional premium euro, suggesting almost complete capitalisation of the funding into the rental price for grassland.

This paper uses information on more than 160 million export and import transactions by German firms from 2009 to 2012 to document the decisive role of multi-market traders that are active on many foreign markets, where a market is defined as a combination of a good traded and a country traded with. Using merged information from trade transactions and from surveys conducted by the statistical offices it is shown that, controlling for detailed industry affiliation, the number of foreign markets a firm from manufacturing industries is active on as an exporter or importer is higher in firms that are larger, older and foreign owned and that have higher labor productivity, human capital intensity and R&D intensity. With the exception of labor productivity these results are valid ceteris paribus, too. All these results from a descriptive empirical investigation are in line with hypotheses that are derived from the literature on the links between firm characteristics and the extensive margins of foreign trade.