Andreas Freytag

Entrepreneurship and its determinants in a cross-country setting

The relative stability of differences in entrepreneurial activity across countries suggests that other than economic factors are at play. The present paper offers some new thoughts about the determinants of entrepreneurial attitudes and activities by testing the relationship between institutional variables and cross-country differences in the preferences for self-employment as well as in actual selfemployment. Data of the 25 member states of the European Union as well as the US are used. The results show that country specific (cultural) variables seem to explain the preference for entrepreneurship but not the actual entrepreneurship. The present paper also introduces the remaining four papers of the special issue of the Journal of Evolutionary Economics around the theme Entrepreneurship and Culture.

“Biodiversity and International Tourism: A Story of Comparative Advantage”#

We analyze whether biodiversity is increasing the receipts of tourism and thus is beneficial for developing countries (DCs). The underlying assumption is that a rich biodiversity provides a comparative advantage for most DCs. We use a simple trade theory framework. The model is supported by an empirical analysis. The main findings are that first DCs, being abundant of biodiversity, seem to have a comparative advantage in (sustainable) tourism, that second inci- dence of birds as the probably best explored taxonomic group has a positive impact on inbound tourism receipts per cap- ita, and that third the rate of endangered to total birds is negatively influencing tourism receipts. We draw some cautious policy conclusions.

Telecommunications and WTO discipline. An assessment of the WTO agreement on telecommunication services

The paper analyses the results of the WTO agreement on basic telecommunication services. Starting with a discussion of the economic consequences of the internationalisation of the markets for telecommunication services, we argue that various requirements have to be met by an international framework agreement on telecommunications. By allowing foreign firms to enter domestic markets, the WTO accord is a major step in the direction of liberalising national telecommunication markets. However, its main shortcoming is that member countries are not obliged to apply most-favoured-nation treatment to all other members, and that commitments on national regulatory policies are rather vague. They are not detailed enough to make competitive market access become a reality.

Can nature promote development? The role of sustainable tourism for economic growth

In this paper, we analyse whether biodiversity can enhance the developmental process in developing countries (DCs) by increasing tourism receipts in a trade-based endogenous growth framework. The model is based on the underlying assumption that a rich biodiversity provides a comparative advantage in sustainable tourism services. The empirical evidence shows that biodiversity while being significantly and positively correlated with inbound tourism receipts has no significant effect on tourist arrivals (mass tourism). This suggests that the biodiversity endowment of a very country is an important precondition for sustainable tourism. Moreover, we empirically show that specialising in sustainable tourism promotes economic growth. Therefore, a promising development strategy can rests on the investment into biodiversity which attracts high-budget tourists.

Einige Anmerkungen zur Wahl der Reservewährung eines Currency Boards

Abstract Currency Boards generally are likely to help with introducing credibility and stability if they are organised in a manner to minimise risks. One important aspect is the choice of an appropriate reserve currency. There are two conditions for a currency to be an adequate reserve medium: it should be a hard currency and it should shelter the pegged country from real shocks inside and outside the currency area. A shelter from real shocks can be provided for, if three criteria are met: first, other countries which firms compete with firms from the country that introduces the board should also be pegged to the reserve currency. Second, the structure of production should differ significantly from the reserve country. Third, a high share of foreign trade should take place with the reserve country. Empirical evidence of two countries that recently introduced currency boards, namely Estonia and Lithuania, indicates the relevance of this analysis for the choice of a reserve currency.

IBSA: Fading out or forging a common vision?

The India, Brazil and South Africa Dialogue Forum (IBSA) established in 2003 brings together three like-minded, democratic, market economies of multi-cultural and multi-ethnic character, sharing a broadly similar economic, political and development situation. At the time of its formation IBSA was widely regarded as representing a novel form of South-South cooperation, transcending older models rooted in the logic of North-South confrontation in the post-colonial, Cold War world. However, now, as the respective countries prepare for their tenth anniversary summit in India, the forum seems to face a growing sense of irrelevance, perhaps even an existential crisis. There has been a proliferation of other forums—notably BRICS and the G20—which means that IBSA needs to differentiate itself if it is to endure. This paper suggests a common vision for IBSA, based on the concept of international liberalism, implying an open international market, well-regulated capital markets and tailored domestic policies such as social policy, health policy and education policy, may well increase the weight IBSA can gain in different international forums.

Introducing entrepreneurship and culture

The study of the role of entrepreneurship in the modern economy is rooted in economics but has a distinctly eclectic flavor. See Thurik et al. (2002), Wennekers et al. (2002), Audretsch and Thurik (2004) but above all Parker (2004), for many references. It attempts to introduce the variable ‘entrepreneurship’ – whatever it may be – in subfields of economics like labor economics, economics of growth and economic development, industrial organization, enterprise policy, applied micro, and business economics, among others. It has the vivid and pervasive interest of policy makers because entrepreneurship is assumed to enhance economic growth (Carree and Thurik 2003; Acs et al. 2004; Audretsch and Keilbach 2004; van Praag and Versloot 2007). One is inclined to think that such interest – coupled with enormous efforts of entrepreneurship policy making which are more and more similar across countries – would lead to a convergence in entrepreneurship levels across countries. This is not the case because, despite this interest, there remain persistent differences of the level of entrepreneurship across countries (Audretsch et al. 2007).

Was ist wirklich neu an der “New Economy”?

Abstract This economic policy forum is assigned to the question “What is really new about the New Economy”? Michael Wither argues that the truly novel element of the New economy is the close interaction of three aspects: structural change, innovation and economic policy. This new facet adds to the increasing improvement of economic performance, accompanied by levelled inflation rates. The current process can be observed especially in the US. The author demonstrates that the revolution of information technology is a necessary explanation for the phenomenon “New Economy”, which however does not deal with all the relevant aspects. Furthermore, Hüther refers to the coherences between technological change and reduced volatility of macro-economic indicators in the US. He then states that an appropriate economic policy, in particular a monetary policy, is needed to describe the outstanding economic performance associated with the New Economy. Norbert Szyperski shows in his article that the New Economy is basically the consequence of the revolution of information technology. The main effect of the latter is the infrastructural change taking place in three areas: transport, finance and information. According to the author, this new infrastructure is accessible for everyone and induces new products and services. Due to this change, the IT revolution also affects competition. Hence, the author concludes that there really is a new aspect to the New Economy. In his contribution, Andreas Freytag starts by discussing the elements of the New Economy. In particular, the Information Technology (IT) sector is new and possesses the potential of having positive effects on economic growth. However the author argues that there is more to the New Economy than merely the IT sector. To concentrate economic policy on fostering IT could inflict the danger of creating structural problems for the future. Thus, the New Economy seems to be a macro-economic phenomenon: the economy is growing rapidly with small fluctuation and low inflation. Furthermore, Freytag demonstrates that although the elements of the New Economy are novel, the policy implications are not. To be able to implement it in Germany, old policies, as e.g. deregulation, opening markets, etc. are called for - the exact measures which ensured the prosperity of the Old Economy.

The case for a more binding WTO agreement on regulatory principles in telecommunication markets

On February 5, 1998, the WTO agreement on basic telecommunications services entered into force. Although the WTO agreement is a step into the right direction its impact might be rather modest. This is because apart from the many exemptions, which are likely to undermine market access and national treatment commitments, the regulatory provisions laid down in the WTO agreement are neither specific nor comprehensive enough to ensure open market access. Because there is in most cases a lack of clear definition as to the terms and conditions of regulatory provisions, there is a great danger that governments might nullify the commitments by abusing the regulatory requirements.

The European Market for Protectionism: New Competitors and New Products

The 1990s show the danger of emerging protectionism all around the world. The most important trading nations are imposing new trade barriers or at least threatening to do so. The US Government has already reimposed Super 301 of the 1988 Omnibus Trade Act. Even the completion of the Uruguay Round on December 15, 1993 was not judged unequivocally. Whereas some observers talk about the most successful round ever completed, others are unsatisfied because the results are not stated very precisely and several goals have been missed.