Tài liệu The Significance of German Savings Banks in regional Structural and Cohesion Policy: Can

The Significance of German Savings Banks in regional

Structural and Cohesion Policy:

Can they avoid regional downward Spirals?

Stefan Gärtner

Institute for Work and Technology

Munscheidstr. 14, 45886 Gelsenkirchen, Germany

email: gaertner@iat.eu

1

Abstract: This paper deals with savings banks in Germany (Sparkassen) in the context

of regional structural and cohesion policy, as well from a theoretical as an empirical

point of view. What benefits the savings banks provides will be discussed, on the one

hand in terms of growth agenda, and on the other hand in terms of cohesion policy.

While making research on this topic, the question arises if the regionally-limited sav￾ings banks are able to be as economically successful in poorer regions as in prosperous

ones. This leads to the question if savings banks can outrun ‘downward spirals’ in less

developed regions?

Content

1 Introduction ............................................................................................................... 2

2 Regional Structural Policy between growth agenda and cohesion ?.................... 4

3 The Theoretical Relevance of savings banks .......................................................... 7

3.1 The Function of Banks: does space matter?...................................................... 10

3.2 Banks and Capital Mobility and their Effects on Regional Development ........ 13

4 Regional Banks and Lock-In Effect: Is there any weakness of strong ties? 15

4.1 Methodical approach and research design ........................................................ 17

4.2 Empirical Results.............................................................................................. 19

5 Regions and their Savings Banks: A qualitative comparison ............................. 25

6 Some Final Remarks............................................................................................... 28

2

1 INTRODUCTION

Traditionally the objective of European as well as German cohesion and regional struc￾tural policy, is to develop structurally weak regions in order to reduce regional dispari￾ties. Therefore huge amounts of public money have been invested in poorer regions in

the past, for instance by subsidising inward investment. Lasting weak rates of growth,

persisting high unemployment rates, a shrinking population, and windfall gains, as

well as only short-term results of company recruitment pose the question if such a pol￾icy is still reasonable.

Therefore in recent years a variety of different concepts and ideas for regional devel￾opment have been worked out which emphasize the regional or local potentials, in￾stead of promoting company recruitment into poorer regions. These new approaches

are well accepted by regional economic scientists, and also increasingly by regional,

national and European policy-makers. The concept even found its way into cohesion

policy in order to support disadvantaged regions by strengthening or promoting ‘clus￾ters’ – which are mostly not located in the structurally weaker regions. In consequence,

public money does not always go to the poorest regions any longer.

However, trying to develop underdeveloped regions through subsidising inward in￾vestment - which seems to be less successful in the long-run - is just as inappropriate

as a regional policy only orientated towards growth.

Therefore a structural and cohesion policy with an orientation to growth and regional

balance is needed: on the one hand, growth potentials should be promoted where they

exist; on the other hand, structurally weak regions should receive special help in order

to enable the participation in, and the fostering of, economic development. For both,