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Further publications: Klaus Friesenbichler (43 hits)

Intereconomics, 2024, 59, (1), pp.28-34
Study by: Austrian Institute of Economic Research – Supply Chain Intelligence Institute Austria
The EU Directive on Corporate Sustainable Due Diligence has sparked fierce debate about the regulation of supply chains. The directive’s objectives are aligned with European values. However, it raises concerns that the compliance costs of social and environmental regulations may be privatised in complex supply networks, particularly in third countries with weak enforcement mechanisms. This paper suggests options to make the directive more effective and efficient. It suggests excluding countries with sufficient regulatory systems and focusing only on supplier-buyer relationships instead of the entire network. Public agencies should set harmonised regulatory standards, interpret the regulations and organise a private certification scheme in which certification companies assume liabilities. The proposed system resembles the market for financial auditors.
Supported by: Anniversary Fund of the Oesterreichische Nationalbank
Austria is a small open economy that in the last decades underwent two different waves of increasing trade integration: one with Eastern Europe and one with China. Drawing on trade theory, this paper studies the effects of increases in trade with China and Eastern Europe on labour market dynamics in Austrian NUTS-4 regions for two ten-year periods between 1995 and 2015. Given the limited data available, the current analysis could not identify significant effects on aggregate labour dynamics neither for rising imports from Eastern Europe or China, nor for rising exports to Eastern Europe. However, there is weak evidence that exports to China have facilitated employment growth, especially in high quality segments. Overall, these results add a cautious perspective to the discussion of import competition.
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 würde.
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 production networks.
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.
Peter Klimek, Elma Dervic, Klaus Friesenbichler, Markus Gerschberger, Liuhuaying Yang
Why does the world seem to suddenly be fighting over antibiotics? For one thing, production is increasingly concentrated in two countries China and India. For another, an entire industry seems surprised by the rapid increase in demand for drugs after the decline during the COVID-19 pandemic. Our results suggest three broad policy recommendations. First, health policies should invest into improvements of the demand tracking, planning, and forecasting infrastructure. Health policies should focus on shortages of drugs for which substitutes are also unavailable. Second, the health system seeks to guarantee the sufficient provision of drugs at low prices. The international division of labour that has emerged seems to provide price efficiency, but supply security risks have become increasingly evident. This implies a refocusing of policies towards greater supply resilience. Third, the market structure should not only mitigate supply risks, but the market design should ideally internalise supply security risks, thereby rendering ad-hoc policy interventions obsolete.
Journal of Industrial and Business Economics, 2023, 50, (1), pp.25-47
This paper studies the interplay of integration into EU value chains and industrial development measured by labour productivity. We focus on the mediating role of domestic institutions compared to technological determinants for the distribution of the economic value generated along the European and global value chains. Our integration indicator measures value chain trade within the Single Market relative to global value chain networks. Using a simultaneous equation model, we find an overall positive effect of integration on labour productivity, which is driven by upstream integration. While the effect of productivity on integration is positive, it decreases with increasing productivity levels. Highly productive industries rather seek global value chain trade than regional integration. Better domestic institutions facilitate EU integration, although they favour industries with less complex product portfolios and lower levels of knowledge cumulativeness. This creates politically unwanted specialisation effects leading to an unequal distribution of the economic value generated.
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