Austrian Institute of Economic Research

In light of the widespread use of digital platforms, this paper addresses the question of whether and how firms derive benefit from their use and aims to estimate the contributing factors. Using data from a newly implemented enterprise survey in Austria, we evaluate both individual survey results and a combined measure of the effects on revenues, costs and selling prices. Logistic regressions reveal significant differences in the impact of digital platforms on firms depending on the firm characteristics and the business domains, like for sales, in which the platforms are used. Their application also has effects for the business partners of the firms. Empirical results find a predominantly positive impact of platform use on the firms’ customers, consisting of firms (B2B) and consumers (B2C), with respect to quality and product variety.

The automotive industry is undergoing a profound transformation, driven by the electrification of powertrains, the rise of software-defined vehicles, and the adoption of circular economy concepts. These trends are increasingly blurring the boundaries between the automotive sector and other industries. The pace of adaptation to electrification varies considerably between regions and firms. Unlike internal combustion engine (ICE) production, where mechanical capabilities dominated, competitiveness in electric vehicle (EV) production increasingly depends on expertise in electronics, batteries, and software. This study investigates whether and how firms’ ability to leverage cross-industry diversification contributes to their competitive advantage in this evolving landscape. We develop a country-level product space covering all industries, and an industry-specific product space covering over 900 automotive components. This allows us to identify clusters of parts which are exported together, revealing shared manufacturing capabilities. Closeness centrality in the country-level product space, rather than simple proximity, is a strong predictor of where new comparative advantages are likely to emerge. First, we examine this relationship across all industrial sectors to establish general patterns of path dependency, diversification and capability formation. Then, we focus specifically on the electric vehicle (EV) transition. It is argued that new strengths in vehicles and aluminium products in the EU will generate 5 and 4.6 times more EV-specific strengths, respectively, than other EV-relevant sectors over the next decade. In contrast, these sectors are expected to generate only 1.6 and 4.5 new strengths, respectively, in already diversified China. However, a different pattern emerges when these country-level results are compared to the firm-level product space. Countries such as South Korea, China, the US and Canada show the greatest potential for diversification into EV-related products. Established producers in the EU are likely to come under pressure. These findings suggest that the success of the automotive transformation will depend on the ability of regions to mobilize existing industrial capabilities, particularly in related sectors such as machinery and electronic equipment.

ABSTRACT This paper investigates the relationship between EU agricultural subsidies and labor productivity growth in agriculture, using data from 1007 NUTS‐3 regions over the period 2007–2020. The fine spatial resolution improves comparability across regions and allows a more detailed assessment than previous aggregate studies. A novel contribution of this work is the adjustment of subsidy amounts for national co‐financing, ensuring consistency across Member States. We disaggregate CAP payments into their main components and test robustness to spatial dependence. The results show that decoupled Pillar I payments significantly enhance labor productivity. Among Pillar II measures, human capital and forestry support display positive effects, whereas early retirement and less‐favored area payments are negative, and organic farming support shows transitional short‐term declines that fade over longer horizons. Population density is consistently negatively related to labor productivity growth.

In Europe, water security is increasingly becoming both a supply chain issue and a local resource concern. We map blue-water use embodied in trade across 303 regions linked to EU demand by combining a NUTS-2 environmentally extended input-output framework with WaterGAP consumption estimates and Aqueduct water stress indicators. Approximately 90% of the water embodied in EU consumption originates outside the consuming region, and about half crosses NUTS-2 borders within Europe. Supply is highly concentrated: 12 regions account for roughly half of intra-EU virtual-water exports, with irrigated agriculture driving most flows. Overlaying export intensity with regional stress reveals 25 bottleneck regions, concentrated in Mediterranean Europe, that are both major suppliers and highly water stressed. These dependencies expose consumers across the Single Market to drought-sensitive production shocks. Current EU water, agricultural and market governance does not systematically manage this concentration-stress overlap.

As populations age, the sustainability of long-term care systems increasingly depends on the availability of informal care, particularly from partners. This paper addresses the question of how much care we may expect partners to provide in the future by projecting demand for long-term care (LTC), the care supply mix based on current patterns, and the resulting care gaps up to 2070. Using a comparative dynamic microsimulation model, we contrast the results for Austria and Italy, two countries at very different stages in the ageing process and with pronounced institutional differences. Our results suggest that delayed widowhood due to improvements in mortality is a mitigating factor for the increased need for formal care in ageing societies, although it can only offset this increase to a limited extent. Even under optimistic assumptions, potential care gaps substantially increase in both countries, primarily due to demographic change. The size of these gaps is influenced by institutional settings, partnership patterns and gains in longevity, but no scenario reverses the overall upward trend. These findings emphasize the need for comprehensive LTC reforms that extend beyond merely promoting informal care and highlight the necessity for substantial investment in formal care infrastructure.