We argue that competition in higher education improves efficiency only if a number of restrictive conditions are fulfilled. We expose their restrictiveness, and we argue that such conditions are unlikely to be fulfilled in Germany or elsewhere in mainland Europe. We believe that claims that German educational policies are moving towards an efficiency-enhancing model of competition cannot be taken seriously.
sbr 2000, page 214

R&D Spillovers, Technological Proximity, and Productivity Growth - Evidence from German Panel Data
Dietmar Harhoff

This paper studies the effect of R&D spillovers on R&D spending and productivity in a sample of German manufacturing firms. Using panel estimation techniques, the results suggest that spillovers affect industries in a heterogeneous manner. In terms of R&D investment, firms in high-technology sectors appear to react positively and more strongly to spillovers than firms in other industries. Experiments with alternative spillover definitions suggest that the effect is not due to racing phenomena. Moreover, in high-technology industries spillovers have a productivity-enhancing effect in addition to encouraging R&D investment. The effect is conditioned by the firm's own R&D activity. Consistent with the hypothesis of absorptive capacity, high R&D capital stocks appear to enable firms to profit from external R&D.
sbr 2000, page 238

Consumption-Based Tax Systems and Investment Neutrality: Does the Corporation Income Tax Depreciation Method Impact Investment Capital Value?
Michael Heinhold/Silke Hüsing/Helmut Pasch

In this paper we investigate the neutrality of tax allowances by considering the Croatian and the German profit taxes. Our mathematical analysis shows that in the Croatian system, neutrality cannot be attained by the allowance for corporate equity if the tax free rate of interest does not equal the individual discount rate. The sensitivity analysis shows that in the Croatian system, the profitability of early tax reductions by tax write-offs falls below the profitability in the German system by a maximum of only 2.5 percentage points. In the system that provides an allowance for corporate equity, the profitability of an early tax reduction is high enough to influence investment decisions.
sbr 2000, page 261

Credit and Information in Universal Banking
Hans-Peter Burghof

The internal aspects of bank lending, information production, and interaction between debtor and bank lending officers are still a black box to banking theory. To achieve some empirical insight into these aspects of financial intermediation, I analyze the credit files of six lending relationships between a German universal bank and medium sized firms. If no crisis occurs in these lending relationships, bank monitoring uses mainly cheap, retrospective, internal data. Most of the data the bank uses is not publicly available. This finding supports the concept of banks as delegated monitors that have an informational advantage over capital markets. I also observe signalling and monitoring behavior of the debtor, which indicates that the bank also acts as delegated contractors. Bank lending officers seem to receive information about their debtors not only from monitoring, but also from the debtors' behavior. Although my results are obtained from a clinical, non-representative study, they nevertheless provide some empirical evidence on the potential relevance of theoretical concepts of bank lending.
sbr 2000, page 282

Book Review
C. Schneeweiß, Hierarchies in Distributed Decision Making
Friedrich Hannsmann