Study by: Austrian Institute of Economic Research – Graz University of Technology
We analyse the (techno- and macro-)economic and distributive effects of a transformation to a renewable electricity system
in Austria by 2030, as stipulated by the Austrian government. For the analysis, the macroeconomic model DYNK and ATLANTIS,
a partial model of the electricity market, were expanded and linked. Four transformation scenarios conforming with the 100
percent renewable electricity target in Austria on a national balance are examined, integrated into a consistent scenario
for the development of the European electricity system. Additionally, sensitivity analyses with respect to the gas price are
performed. Although all scenarios achieve 100 percent renewable electricity on a national balance, the analysis shows that
electricity from gas-fired power plants will still be needed in 2030 to balance variable renewable generation, to avoid grid
congestion, and for heat generation from combined heat and power plants in winter months. Another main conclusion from the
simulations is that the transition towards a renewable electricity sector is almost neutral from a socio-economic perspective.
It does neither reveal harmful impacts nor lead to high multiplier effects from additional investment. With high natural gas
prices in the sensitivity scenarios a decrease in GDP and household income, which might motivate redistributive policies,
can be observed.
ASCII schlägt eine Überarbeitung der EU-Richtlinie zur Lieferkettensorgfaltspflicht vor, der EU Corporate Sustainable Due
Diligence Directive. Die Richtlinie basiert auf europäischen Werten und ist zu begrüßen. Um eine kosteneffiziente Umsetzung
zu ermöglichen, sollte sie sich auf die Überwachung von Zulieferern konzentrieren, anstatt auf bilaterale Beziehungen zwischen
Käufern und Verkäufern. Negativ- und Positivlisten von Ländern und Zulieferern sollten eingeführt werden. Solche Listen enthalten
ausländische Zulieferer, denen die Teilnahme an EU-Lieferketten verboten (Negativlisten) oder erlaubt (Positivlisten) ist.
Mit Unternehmen auf Negativlisten dürfen keine Geschäfte getätigt werden. Bei Verträgen mit Unternehmen, die auf Positivlisten
stehen, müssen EU-Importeure keine Sorgfaltsprüfung der Unternehmen durchführen. Dies senkt die Gesamtkosten der Verordnung
für EU-Importeure, verringert die Wahrscheinlichkeit unerwünschter Nebenwirkungen und macht das Instrument wirksamer. Die
Nichteinhaltung durch einen ausländischen Zulieferer kann zur Streichung von der Liste führen, was einem EU-weiten Exportverbot
gleichkommt und somit die Marktmacht des EU-Binnenmarktes nutzt. Die Wirksamkeit würde auch dadurch erhöht, dass die Rechtsunsicherheit
für Unternehmen verringert und der Geltungsbereich der Verordnung über in der EU ansässige Produktionsnetzwerke hinaus ausgedehnt
ASCII proposes a revision of the EU directive on supply chain due diligence, the EU Corporate Sustainable Due Diligence Directive.
The directive is based on European values and is to be welcomed. ASCII suggests that the Directive should focus, where possible,
on direct monitoring of suppliers rather than on bilateral relationships between buyers and sellers. The directive should
be amended to allow the use of negative and positive lists of countries and suppliers. Such lists contain foreign suppliers
that are prohibited (negative lists) or authorised (positive lists) to participate in EU supply chains. When contracting with
companies on positive lists, EU importers do not have to carry out due diligence on the companies. They are prohibited from
doing business with companies on negative lists. The Directive will continue to apply to non-listed companies. This reduces
the overall cost of the regulation for EU importers, reduces the likelihood of unwanted side-effects and makes the instrument
more effective, as non-compliance by a foreign supplier leads to delisting throughout the EU, not just with a single buyer.
It would also increase effectiveness by reducing legal uncertainty and extending the scope of the regulation beyond EU-based
This article examines the impact of membership in the European Union (EU) on foreign direct investments (FDI). In contrast
to previous studies, the overall effect of EU membership is disaggregated by countries that joined the EU before 2004 (EU
15) and those that joined after 2004 (Central and Eastern European – CEE). This disaggregation is motivated by differences
between the two groups in terms of their historical background, GDP levels and motives for FDI. Furthermore, the effects of
EU membership are estimated at the country level. Using a structural FDI gravity model and applying recent advances in the
gravity estimation literature, it is shown that membership of the EU has a substantial positive impact on both inward and
outward FDI stocks. In particular, there is considerable heterogeneity in the impact of EU membership, with EU 15 countries
experiencing mainly an increase in inward FDI, while CEE countries experience a surge in outward FDI.
Globalisation has had undesirable effects on the labour standards embedded in the products we consume. This paper proposes
an ex-ante evaluation of supply chain due diligence regulations, such as the EU Corporate Sustainable Due Diligence Directive
(CSDDD). We construct a full-scale network model derived from structural business statistics of 30 million EU firms to quantify
the likelihood of links to firms potentially involved in human rights abuses in the European supply chain. The 900 million
supply links of these firms are modelled in a way that is consistent with multiregional input-output data, EU import data,
and stylized facts of firm-level production networks. We find that this network exhibits a small world effect with three degrees
of separation, meaning that most firms are no more than three steps away from each other in the network. Consequently, we
find that about 8.5 percent of EU companies are at risk of having child or forced labour in the first tier of their supply
chains, about 82.4 percent are likely to have such offenders at the second tier and more than 99.1 percent have such offenders
at the third tier. We also profile companies by country, sector, and size for the likelihood of having human rights violations
or child and forced labour violations at a given tier in their supply chain, revealing considerable heterogeneity across EU
companies. Our results show that supply chain due diligence regulations that focus on monitoring individual buyer-supplier
links, as currently proposed in the CSDDD, are likely to be ineffective due to a high degree of redundancy and the fact that
individual company value chains cannot be properly isolated from the global supply network. Rather, to maximise cost-effectiveness
without compromising due diligence coverage, we suggest that regulations should focus on monitoring individual suppliers.
This paper advances a dynamic rationale for competitiveness policy that focuses on an economy's ability to evolve in order
to achieve high real incomes along with desired qualitative changes in the socio-economic system. It highlights that the ubiquitous
"rationalities of failure", either of markets, governments, or systems, are rooted in a peculiar habit of accepting hypothetical
perfect states as normative benchmarks. In contrast, competitiveness policy starts from the objectives that the system wants
to achieve. By combining the structuralist ontology of the micro, meso and macro levels of development with the basic system
functions of evolutionary change, a general typology is developed that differentiates, organizes, and integrates various economic
policies according to their respective contributions to the evolvability of the system. Among other advantages, the proposed
concept of competitiveness policy allows (i) to replace the negative "logic of failure" with the active pursuit of dynamic
development goals, (ii) to break the ideologically afflicted dichotomy between "vertical" and "horizontal" policies and (iii)
to better align the theoretical rationale with the actual perception of the societal purpose of public interventions by most
In cross-section gravity models the two-way cluster-robust standard errors of the Poisson pseudo maximum likelihood (PPML)
estimates tend to be considerably downward biased. However, two-way clustering can be avoided if intra-cluster correlation
is induced by country-specific trade shocks with uniform pass through (equi-correlation) and the gravity model includes exporter
and importer country fixed effects. In this case the pseudo-within-transformation of the PPML estimator projects out the corresponding
components of the disturbances. In Monte Carlo simulations the Pustejovsky and Tipton (2018) bias correction for independent
disturbances (i.e., ignoring clustering) reveals just a small downward bias of the estimated standard errors and confidence
intervals with nearly correct coverage rates. Under deviations from equicorrelation the bias is somewhat larger, but still
comparable to the bias of the cluster-robust standard errors with Pustejovsky and Tipton (2018) bias correction.
This paper studies the direct and indirect trade volume and trade cost effects of uncertainty on international trade and economic
welfare using a structural gravity framework for a panel of 97 developed and developing countries from 2000 to 2018. We find
that the sign and magnitude of the effect depend on whether uncertainty originates from the importing or exporting country.
Moreover, applying a cross-sectional gravity model, we show that an uncertainty shock directly reduces cross-border trade
flows. The paper illustrates the suitability of the proposed modelling approach by means of two counterfactual scenario analyses
in which we calculate the general equilibrium trade and welfare effects of uncertainty induced by the unexpected outcome of
the Brexit referendum in 2016 and the outbreak of the COVID-19 pandemic in 2020.