nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2011‒01‒03
two papers chosen by
Koen Schoors
Ghent University

  1. Why Are Household Incomes More Unequally Distributed in China than in Russia? By Gustafsson, Björn; Li, Shi; Nivorozhkina, Ludmila
  2. A Gravity Approach to Modelling International Trade in South-Eastern Europe and the Commonwealth of Independent States: The Role of Geography, Policy and Institutions By Oxana Babecka Kucharcukova; Jan Babecky; Martin Raiser

  1. By: Gustafsson, Björn (Göteborg University); Li, Shi (Beijing Normal University); Nivorozhkina, Ludmila (Rostov State Economic University)
    Abstract: Harmonised microdata show a Gini coefficient for per capita total income of 45.3 percent in China 2002 and 33.6 percent in Russia 2003. A much larger urban to rural income gap in combination with a much smaller proportion of people living in urban areas in China are important reasons for this cross-country difference in inequality. Wage is a more non-equalising income source in China than in Russia. While Russian public transfers reduce income inequality, Chinese public transfers increase income inequality. Cross-country differences in the process of transition are also found to be significant. A relatively large non-agriculture self-employment sector is non-equalising in rural China, but is also narrowing the urban to rural income gap. In contrast to the many cross-country differences revealed, we report income inequality among urban residents in China and in urban Russia to be very similar.
    Keywords: income distribution, inequality, China, Russia, public transfers
    JEL: D31 P25 P52
    Date: 2010–12
  2. By: Oxana Babecka Kucharcukova; Jan Babecky; Martin Raiser
    Abstract: Since the beginning of market reforms in 1989, the countries of South-Eastern Europe (SEE) and the Commonwealth of Independent States (CIS) have been trading significantly less with the world economy than those Central and Eastern European (CEE) countries which later joined the EU. To explain why this is the case, a number of hypotheses have been proposed in the literature. The key novelty of our study consists in a simultaneous assessment of the contribution to trade of geographical, policy and institutional factors during the EU pre-accession period (1997–2004). An augmented gravity model is proposed and estimated for a reference group of 82 countries, employing the Poisson and Tobit estimation techniques. We find that low quality of economic institutions in the SEE and CIS countries accounted for a considerable proportion of their below-potential international trade. We perform policy simulations using institutional data up to 2008 to identify channels for increasing the international trade of the SEE and CIS countries.
    Keywords: Gravity model of trade, Poisson estimator, Tobit estimator, transition economies.
    JEL: F13 F15 P33
    Date: 2010–11

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