nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2016‒04‒16
nine papers chosen by

  1. Testing for Purchasing Power Parity for Selected CIS Countries Using the Sieve Bootstrap By Mehmet Fatih TraÅŸ; Esra Ballı; Çiler Sigeze
  2. Анализ условий внешней торговли России By Drobot, Elena; Kristina, Ilyasova
  3. Rally-Around-The-Flag and the Media: Case of Economic Sanctions in Russia By Anastasia Kazun
  4. Key Determinants of Demand, Credit Underwriting, and Performance on Government-Insured Mortgage Loans in Russia By Lozinskaia Agata; Ozhegov Evgeniy
  5. Risks of insolvency of households by regions By Yuri Danilov
  6. Factors influencing Pension Privatization in former communist countries in Eastern Europe and Central Asia By Claudiu Barbu
  7. Unilateral tariff cuts: a theory By Sokolovska, Olena
  8. Dimensions of the COO Effect Referring to Services and Products – Polish-Lithuanian Comparisons By Monika Boguszewicz-Kreft; Ewa Magier-Šakomy; Katrzyna Sokołowska; Brigita Janiunaite
  9. Ukrainian Export Diversification: Macro Level Analysis By Zubritskiy, Artur

  1. By: Mehmet Fatih TraÅŸ (Çukurova University); Esra Ballı (Çukurova University); Çiler Sigeze (Çukurova University)
    Abstract: Purchasing power parity (PPP) is widely discussed theory to explain the determination of exchange rates. PPP implies a long-run relationship between the nominal exchange rate and the relative price levels. PPP holds in the long run once the real exchange rate is a stationary process. This study examines the validity of PPP for Commonwealth of Independent States (CIS) namely Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Russia and Ukraine for the period 1995M1-2015M11. In this study we perform stationary test on three bases. In the first place, we initiate conventional unit root tests such as ADF and KPSS. Secondly, we utilize unit root tests allowing for structural break. Last but not least, we use a sieve bootstrap unit root test to avoid possible discrepancies between the actual and nominal rejection probabilities in hypothesis testing of unit root. In conclusion unit root test results performed show that there is a large disagreement on the validity of PPP in CIS countries. Given the span and characteristics of the period which involves a significant break such as 1998 Russian economic crisis, we conclude that PPP holds for Armenia, Belarus, Kazakhstan and Kyrgyzstan, while it does not hold for Azerbaijan, Russia and Ukraine.
    Keywords: Purchasing Power Parity; Real Exchange Rate; Transition Economies
    JEL: C12 C15 F31
  2. By: Drobot, Elena; Kristina, Ilyasova
    Abstract: This paper work is devoted to the problems of Russian foreign trade conditions analysis, as well as identification of the key factors exerting impact on a foreign trade turnover of the country. The authors give an assessment to the level of openness of Russian economy, allocating three main indicators of openness (an export quota, an import quota and the foreign trade quota). On the basis of the carried-out analysis the authors draw a conclusion about necessity of diversification of Russian economy, and also about the importance of transition from export of raw materials to finished goods, as well as stimulation of import substitution.
    Keywords: foreign trade turnover, customs tariffs, import, import substitution, sanctions, export
    JEL: F10 F13 F15 F17
    Date: 2016–04–05
  3. By: Anastasia Kazun (National Research University Higher School of Economics)
    Abstract: This article analyzes a paradoxical situation: against the background of a large-scale economic and political crisis in Russia, Vladimir Putin's support is increasing. In explanation, we propose the rally-around-the-flag effect. This effect reflects how and why a national leader’s approval rating substantially increases during tragedies and international conflicts. However, the circumstances in Russia differ significantly from those described in the literature. For example, the rally effect in Russia is substantially more stable than in other countries. Because the rally-around-the-flag effect is closely linked with debates that are presented in the media, we search for explanations in this area. We assume that the use of deproblematization strategies in the media discussion on economic sanctions proves to people that the effects of the sanctions are not severe and generates images of Russia’s external enemies and Vladimir Putin as a strong leader who resists these enemies. Such strategies and practices can contribute to the rally effect. The article analyzes the key strategies used to deproblematize the economic sanctions (and the Russian food embargo) that were used in four Russian newspapers from March 2014 to December 2014.
    Keywords: rally-around-the-flag, approval ratings, president’s popularity, economic sanctions, food embargo, media, Putin
    JEL: Z
    Date: 2016
  4. By: Lozinskaia Agata; Ozhegov Evgeniy
    Abstract: This research analyses the process of lending from Russian state-owned mortgage provider. Two-level lending and insurance of mortgage system lead to substantially higher default rates for insured loans. This means that underwriting incentives for regional operators of government mortgage loans perform poorly. We use loan-level data of issued mortgage by one regional government mortgage provided in order to understand the interdependence between underwriting, choice of contract terms including loan insurance by borrower and loan performance. We found an evidence of a difference in credit risk measures for insured and uninsured loans and interest income.
    JEL: C36 D12 R20
    Date: 2016–03–24
  5. By: Yuri Danilov (Department of Economics, Lomonosov Moscow State University)
    Abstract: The article presents the results of applied economic research to assess the current level of risk of insolvency of households. Were selected indicators that can be calculated at the regional level in order to identify the most problematic regions of Russian Federation in terms of the level of risk of insolvency of households, conducted clarifying the methods of calculation of these indicators. The results are meaningful commented. Identified areas with the highest risk of insolvency of households. It is concluded that in the coming years overdue household debt indicators can reach dangerous level, in terms of social and political stability. Calculation results for each region of Russian Federation are listed in an application.
    Keywords: insolvency of households; the risk of insolvency; bankruptcy of persons; insolvency indicators; credit debt; arrears; gross regional product; economic security
    JEL: R19 R20 G21
    Date: 2016–04
  6. By: Claudiu Barbu (Faculty of Sociology and Social Work, Babes-Bolyai University, Cluj-Napoca, Romania)
    Abstract: From 1990 onwards, a significant number of former communist countries from Eastern Europe and Central Asia decided to reform their public pension system by creating a mandatory private pillar. Other ex-communist countries from the same two regions only made some parametric changes to their public pension system. There are concurrent theories trying to explain why certain countries implemented a paradigmatic reform on the pension systems while others did not. All these theories are focusing on what factors determine the decision makers to reform the public pension system: the coercion of international financial institution, demographic and economic pressures, political support, the relative strength of government and unions or the proportion of peer countries that have adopted similar measures. This study tests the influence of all the factors mentioned above on the decision to adopt the pension privatization in former communist countries from Eastern Europe and Central Asia. Using event history analysis with time-varying covariates of data from 24 states between 1990 and 2013 the study shows that the probability to reform the public pension system in one country increases as the proportion of neighbor countries who adopted the same measure rises. The conclusions of this research can be compared with those taken from the interviews with the decision makers from countries of interest. Also, the research can be used as a starting point for studying the steps backwards made on this path by Hungary, Poland and Argentina. These countries had reversed the pension privatization by transferring savings under management by private pension funds back to the public sector.
    Keywords: pension reform, ex-communist countries, mandatory private pillar, coercion of international financial institution, demographic and economic pressures, diffusion wave
    JEL: A14 G23 P29
  7. By: Sokolovska, Olena
    Abstract: In order to analyze the Ukraine-EU trade arrangement in the context of modern theory of non-reciprocal trade agreements we provide brief examination of some theoretical approaches and practical implications of unilateral tariff preference schemes and examine current situation with tariff regulation in Ukraine-EU commodity trade. We found that unilateral tariff reduction or elimination under these schemes could lead either to trade creation or trade diversion, depending firstly form the presence of market power of beneficiary country. The obtained results could be used for further estimation of impact of non-reciprocal reduction of tariffs by EU governments on Ukrainian export flows
    Keywords: tariff preferences, trade policy, unilateral trade liberalization
    JEL: F13 H20 H3 H30
    Date: 2016–03
  8. By: Monika Boguszewicz-Kreft (WSB University in Gdańsk); Ewa Magier-Šakomy (WSB University in Gdańsk); Katrzyna Sokołowska (WSB University in Gdańsk); Brigita Janiunaite (Kaunas University of Technology)
    Abstract: The COO effect is defined as an influence of an image of a particular country on the assessment of products and services coming from a given country with ensuing consumer attitudes and behavior. The article presents further adaptation of the models discussed in the literature in order to find universal attributes which would be adequate to the deeper analysis of the COO. The analyzed model of COO effect consists of the following dimensions: innovativeness, diversity, prestige quality. The following hypotheses were verified. (1)The COO dimensions influence the assessment of offers (products and services), (2) consumer’s country of origin influences the assessment in respect of the particular COO dimensions. To analyze a data collected in Poland and Lithuania the analysis of regression has been applied. Results show that country of consumer origin has got a stronger impact on assessment of offer comparing to COO’s dimensions. However it has been indicated that the assessment of products and services is differentiated, depending on the assumed COO dimensions. And some additional results indirectly show the multi-dimensional nature of the COO.
    Keywords: country-of-origin (COO) effect, the dimensions of the COO effect, consumers’ behavior, services marketing
    JEL: A10
  9. By: Zubritskiy, Artur
    Abstract: Complex microanalysis of Ukrainian goods exporting diversification on extensive and intensive basis was made. The national export structure deviations from the world one were formulated. Product codes groups characterized by the highest export concentration were detected
    Keywords: Export, export diversification, export sector, export structure
    JEL: F14
    Date: 2014–12–20

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