Table Of ContentAmerican and European Economic and Political Studies
Series Editors
David B. Audretsch
Institute for Development Strategies,
Indiana University
Jackson Janes
American Institute for Contemporary German Studies (AICGS),
The Johns Hopkins University
Paul J. J. Welfens
European Institute for International Economic Relations (EIIW),
University of Potsdam
Springer-Verlag Berlin Heidelberg GmbH
David B. Audretsch · Paul J. J. Welfens
Editors
The New Economy
and Economic Growth
in Europe
and the US
With 28 Figures
and 59 Tables
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'Springer * *
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EIIW
Professor David B. Audretsch
Indiana University
School of Public and Environmental Affairs
1315 East 10th Street, Room 20
Bloomington, Indiana 47405-1701, USA
Professor Dr. Paul J. J. Welfens
University of Potsdam
European Institute for International European Relations (EIIW)
August-Bebel-StraBe 89
14482 Potsdam, Germany
e-mail: welfens@rz. uni-potsdam.de
ISBN 978-3-642-07736-4 ISBN 978-3-540-24826-2 (eBook)
DOI 10.1007/978-3-540-24826-2
Library of Congress Cataloging-in-Publication Data applied for
Die Deutsche Bibliothek-CIP-Einheitsaufnahme
The New Economy and Economic Growth in Europe and the US I
Ed.: Paul J. J. Welfens; David B. Audretsch.-Berlin; Heidelberg; New York;
Barcelona; Hong Kong; London; Milan; Paris; Tokyo: Springer, 2002
(American and European Economic and Political Studies)
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TABLE OF CONTENTS
Introduction 1
A. Structural Changes and New Economy in the EU and the US 7
Werner Roger
1. Introduction 7
2. Empirical Evidence on ICT in Europe and the US 8
2.1 ICT Investment and Growth 8
2.2 Technical Progress in the Production of ICT Goods and
Services 12
3. Implications for Growth and Employment 18
3.1 Simulation Experiments 19
3.2 TFP Shock in the US and EU ICT Sector 21
4. Concluding Remarks 23
B. Information & Communication Technology and Growth: Some
Neglected Dynamic Aspects in Open Digital Economies 29
Paul J.J. Welfens
1. Introduction 29
2. The Basic Analytics of ICT 31
2.1 Spillover Effects from Computers Used in Households 37
2.2 Endogenous Growth in an Open Economy 41
2.3 Network Effects and the Macroeconomic Production
Function 44
2.4 Impact of the Internet in a Model with Human Capital and
Unemployment 46
3. Conclusions and Policy Implications 49
VI The New Economy and Economic Growth in Europe and the US
C. The New Economy in Spain: Situation and Prospects 53
Manuel Balmaseda, Carmen Hemansanz, Angel Melguizo and Miguel Sebastian
1. Introduction 53
2. The New Economy: Macroeconomic Fundamentals 53
2.1 Impact on Production, Employment and Prices 55
2.2 Other Macroeconomic Impacts 57
2.3 Summary of Impacts and Boosting Factors 58
3. The New Economy in Spain: Potential Macroeconomic Gains
2000-2010 60
3.1 Impact on Producer and Consumer Prices: a Static Analysis 61
3.1.1 Aggregate Impacts 62
3.1.2 Analysis of the Gains by Sector 64
3.2 Macroeconomic Impact in the Next Decade: a Dynamic
Analysis 66
3.2.1 Impact of Higher Productivity 67
3.2.2 Greater Impact in Spain than in the United States 73
3.3 Conclusions: Spain and the "Virtuous Circle" of the New
Economy 73
4. Microeconomic Implications of the New Economy 74
4.1 Dissemination is a Key Requirement: "Network
Externalities" 74
4.2 Lower Transaction Costs and More Horizontal Structures 75
4.3 More Competitive Markets 76
5. The New Economy in Spain: the Starting Point 77
5.1 Strong Growth in Internet Access, but Penetration is Still
Insufficient 77
5.2 E-commerce as Yet in its Infancy 79
5.3 Spain Lagging in Adaptation to the New Economy 79
5.4 How to Advance Towards the New Economy? 80
Table of Contents VII
5.4.1 Low Internet Access Prices 81
5.4.2 A More Flexible Economy 81
5 .4.3 Development of Venture Capital 82
5.4.4 Fostering Innovation 83
6. Conclusions 84
D. Telecommunication Dynamics and Internet Expansion 87
Robert F. Pelzel
1. Introduction 87
2. Market Dynamics and Perspectives 88
3. Germany as an Internet Latecomer Country 90
4. Commercial Conditions of Internet Access 95
5. Conclusions and Implications 95
E. Telecommunications, Innovation and the Long-term Production
Function: Theoretical Aspects and a Cointegration Analysis for
West Germany 1960-1990 99
Andre Jungmittag and Paul 1.1. Welfens
1. Introduction 99
2. Telecommunications, Services and Productivity 102
3. Production Function, Technological Innovation and
Telecommunication 106
4. Non-stationarity of Time Series and Cointegration 110
5. Empirical Results 114
6. Conclusions 122
F. Regional Policy in the New Economy 129
David B. Audretsch and Charles F. Bonser
1. Introduction 129
VIII The New Economy and Economic Growth in Europe and the US
2. Innovation as the Source of Competitiveness 129
2.1 The New Technology and its Impact on Business Operations 130
2.2 Globalization and International Trade 133
2.3 The Death of Distance, Restructuring, and Seamless
Production 135
3. The Regional Response 137
3.1 The Clustering Impact of Knowledge Spillovers 140
3.2 The American Midwest: Decline and Rebirth 142
4. Policy Conclusions 150
G. Organizational Change, New Information and Communication
Technologies and the Demand for Labor in Services 161
Martin Falk
1. Introduction 161
2. Empirical Labor Demand Model at the Firm Level 163
2.1 Determinants of Actual Employment Growth 163
2.2 Determinants of Expected Heterogeneous Employment
Growth 165
2.2.1 Ordered Probit Model 165
2.2.2 Multivariate Probit Model with Endogenous
Organizational Change 166
2.3 Hypotheses 168
3. Data and Descriptive Statistics 169
3.1 Definition of Organizational Change and New ICT 170
3.2 Construction of the Estimation Sample and Item Non-
response 172
3.3 Descriptive Statistics 174
4. Empirical Results 180
4.1 Impact of OC on Actual Employment Growth 180
4.2 Impact of OC on Employment Expectations 183
Table of Contents IX
4.2.1 Ordered Probit Results 183
4.2.2 Results from the Multivariate Probit Model 186
5. Conclusions 189
H. The Effect of Restructuring the Organization of Production on
Economic Growth 193
Martin A. Carree
1. Introduction 193
2. The Extent of Restructuring 196
3. Model and Hypotheses 200
4. Empirical Results 203
5. Comparing Industrial Structure in Germany and the United States 206
6. Summary 210
I. Financing New Economy Firms 217
Matthias Bank
1. Introduction 217
2. How to Finance New Economy Firms 217
3. Some Facts about Financing New Economy Firms in Germany 221
4. Conclusion 222
J, Technology and Financial Markets 225
Michael Heise
K. Electronic Banking and Prudential Supervision 229
Magdalene Heid
1. Introduction: A Bank Supervisor's View on E-banking 229
2. Trends in European E-banking 231
X The New Economy and Economic Growth in Europe and the US
3. Risks Associated withE-banking and Their Supervisory
Implications 236
3.1 Strategic Risk 237
3.2 Operational Risk 238
3.3 Legal Risk 240
3.4 Reputational Risk 241
3.5 Systemic Implications of E-banking 242
4. E-banking in Germany: Prudential Supervisory Framework and
Prospects 244
5. International Initiatives to Address the Supervisory Challenges of
E-banking 246
6. Conclusions 248
L. Integrating Electronic Commerce Into the World Trading System:
Issues and Challenges 253
Harald Sander
1. Introduction 253
2. The Potential of E-Commerce 254
3. Issues in Integrating E-Commerce Into the WTO 257
3.1 GATT versus GATS 257
3.2 Integrating E-Commerce Into GATS: Which Mode of
Supply? 260
3.3 E-Commerce and Intellectual Property Rights 265
4. E-Commerce and the World Trade System 266
M. Governing the Cyber Space 271
Jam Kleinert and Daniel Piazolo
1. Introduction 271
2. Establishing Minimum Standards for the Cyber Space 272
