nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2016‒07‒23
eleven papers chosen by

  1. The China-Russia trade relationship and its impact on Europe By Alicia García-Herrero; Jianwei Xu
  2. Drivers of Growth in Russia By Markus Brueckner; Birgit Hansl
  3. On the Exposure of the BRIC Countries to Global Economic Shocks By Ansgar Belke; Christian Dreger; Irina Dubova
  4. Mobility across generations of the gender distribution of housework By J. Ignacio Giménez-Nadal; Lucia Mangiavacchi; Luca Piccoli
  5. A Methodology for Determining the Impact of the Political Environment on Marketing and Tourism By Neviana Krasteva
  6. Local self-government peculiarities and development prospects in Georgia By Eka Chokheli; Davit Narmania
  7. The impact of the competitive strategy on the success of wine companies (The Case of Georgia) By Eka Chokheli
  8. Vulnerability to Poverty: Tajikistan During and After the Global Financial Crisis By Ira Gang; Kseniia Gatskova; John Landon-Lane; Myeong-Su Yun
  9. Georgia’s Social Insurance System: Reality and Prospects By Nato Kakashvili
  10. The impact of labour tax costs on the company strategic decision making and internal action plan to control ta By Biruta Pule; Gunta Innuse
  11. Inequality, Privatization and Democratic Institutions in Developing Countries By Lidia Ceriani; Simona Scabrosetti; Francesco Scervini

  1. By: Alicia García-Herrero; Jianwei Xu
    Abstract: See also the event "China-Russia relations and their impact on Europe" held on 21 June 2016. EU countries are complementary to Russia on the Chinese market. However, Chinese exports are increasingly relevant substitutes for EU exports on the Russian market. This means that an increase in China-Russia economic cooperation should have a negative impact on European exports. The authors simulate a scenario in which trade tariffs between Russia and China are eliminated, which is found to reduce EU exports to Russia. Finally, a more granular approach to the question analyses which sectors in Europe will be more affected by the increasing economic links between China and Russia, and finds that electronic machinery, equipment and machinery, and nuclear reactors will be particularly affected. Such findings obviously show quickly China is moving up the ladder in terms of export structure and how strategically important it is for Europe to continue upgrading its industry to compete at the highest level of that ladder.
    Date: 2016–07
  2. By: Markus Brueckner; Birgit Hansl
    Abstract: Between the end of the 1990s and the first decade of the 2000s Russia experienced significant growth in GDP per capita that was driven by transitional convergence, structural reforms, and improvements in the terms of trade. Reforms to the structure of the economy boosted growth by over 2 percentage points per annum with improvements in telecommunication infrastructure, financial development, and a reduction in the GDP share of government consumption being the most important structural reforms. The paper discusses Russia's growth performance relative to comparator countries: countries in the European and Central Asia regions, advanced natural resource exporting countries and the BRICS countries. Economic growth was significantly lifted in advanced natural resource exporting countries due to the international commodity price boom, for example, in Russia improvements in the terms of trade lifted growth by over 1 percentage point per annum. In the group of advanced natural resource exporting countries and BRICS countries, Russia is at the forefront in terms of growth benefits arising from structural reforms.
    Date: 2016–07
  3. By: Ansgar Belke; Christian Dreger; Irina Dubova
    Abstract: The financial crisis led to a deep recession in many industrial countries. While large emerging countries recovered relatively quickly from the financial crisis, their performance deteriorated in the last years, despite the modest recovery in advanced economies. The higher divergence of business cycles is closely linked to the Chinese transformation. During the crisis, the Chinese fiscal stimulus prevented a decline in GDP growth not only in that country, but also in resource-rich economies. The Chinese shift to consumption-driven growth led to a decline in commodity demand, and the environment became more challenging for many emerging markets. This view is supported by Bayesian VARs specified for the BRIC (Brazil, Russia, India, and China) countries. The results reveal a strong impact of international variables on GDP growth. In contrast to the other countries, China plays a crucial role in determining global trade and oil prices. Hence, the change in the Chinese growth strategy puts additional reform pressure on countries with abundant natural resources.
    Keywords: Business cycle divergence, Chinese transformation, Bayesian VARs
    JEL: F44 E32 C32
    Date: 2016
  4. By: J. Ignacio Giménez-Nadal (University of Zaragoza, CTUR and BIFI, Spain); Lucia Mangiavacchi (University of the Balearic Islands, Spain); Luca Piccoli (University of the Balearic Islands, Spain)
    Abstract: This paper analyses the relationship between the gender division of housework time of parents, with children living in the parental home, and that of the same children when they become adults and form their own families. Using the Russia Longitudinal Monitoring Survey (RLMS), we exploit its panel structure jointly with detailed information on children and parent’s time use, to analyse the time devoted by parents during their children’s adolescence (between 1994 and 1999) and that of the same children about ten years later (from 2006 to 2009). The results suggest that a greater involvement of fathers in the domestic activities traditionally done by mothers is related to a reduction in gender inequality in their children’s future families: father’s involvement in domestic activities has a significant impact on their sons’ time spent in the same activities. These findings shed light on the persistence of parental behaviour across generations.
    Keywords: Time Use, Housework, Gender Roles, Attitudes, Intergenerational Transmission, Russia.
    JEL: D13 J16 J22 P13
    Date: 2016–05
  5. By: Neviana Krasteva (International Business School, Botevgrad)
    Abstract: A method for the quantitative measurement of the political environment is developed, allowing for a reasonably accurate evaluation of the risk factors and their impact on the competitiveness of the companies in view. The quantitative part of the analysis is based on expert evaluations. The model is an adaptation of the foundation laid by Michael Porter – which is a classification of the factors of international competitiveness; for the purposes of the analysis the determinants of national competitiveness are decomposed into separate components-turned-variables (as per Shafael).From the derived results, a reasonably clear picture can be drawn about the true condition of the political factors and their impact. On that basis, conclusions can be drawn about the intensity of impact of each outside factor for the period of analysis. Revealed are those factors and determinants of the political environment which are conducive to business and competitiveness, and those who are not. Comparison between different companies in tourism becomes possible.A case study which is offered is the impact of the recent international events in and around Russia on the Spanish tourism market.
    Keywords: political environment, risk factors
    JEL: M31
  6. By: Eka Chokheli (Ivane Javakhishvili Tbilisi state University); Davit Narmania (Ivane Javakhishvili Tbilisi State University)
    Abstract: Local self-government a sign of the country's democratic development, one of the basic principles of people’s government. For real decentralization implementation it’s necessary to improve legislation in this field. Countries Economic growth, sustainable economic development and solving of social problems is achievable with suitable local self-government system. Local self-government is in the process of formation in Georgia.The goal of the study is to evaluate the role of self-government, reveal its the problems in Georgia and identify its developmental perspectives. The practical study is based on the qualitative study of the self-government of Georgia. The study used questionnaires and interviews, as well as graphical, grouping and comparison methods.The research outcomes show the peculiarities of establishment and trends of development of self-government in Georgia. The novelty of the research is the opportunity to evaluate the existing state of self-government and prospects for its development and work out the recommendations to improve the efficiency of the self-government in the country.
    Keywords: self-government, decentralization, democracy, local development, independence
    JEL: A19 R58 R50
  7. By: Eka Chokheli (Ivane Javakhishvili Tbilisi State University)
    Abstract: In the global environment, the success of any company largely depends on how swiftly and fast a company can react to the external challenges. Wine industry is one of the priority branches in Georgia. The competition is very tough in this field and the market is almost totally saturated. Therefore, the wine companies have to do their utmost efforts to establish themselves on the local market and think of further growth. Successful are the companies permanently trying to create competitive advantage and develop relevant competitive strategies. The goal of the study is to estimate the importance of the strategy based on the competitive advantage for the companies, to study the degree of using such competitive strategies by wine companies in Georgia and to develop relevant recommendations. The theoretical study is based on the works in management by the world scientists, while the practical study is based on the qualitative study of the business companies of Georgia. The study used questionnaires and interviews, as well as graphical, grouping and comparison methods.The results of the study will reveal the problems of using competitive strategies at wine companies operating in Georgia and will help them to focus on the strategies based on competitive advantage. The novelty of the study lies in the identification of trends of using the competitive strategies in wine industry and development of the recommendations to improve the degree of using them.
    Keywords: Competitive advantage, Strategy, Wine industry
    JEL: M19
  8. By: Ira Gang (Rutgers University); Kseniia Gatskova (OS–Regensburg); John Landon-Lane (Rutgers University); Myeong-Su Yun (Inha University)
    Abstract: We examine vulnerability to poverty in Tajikistan during the global financial crisis, focusing on the roles played by international migration and remittances, using a formal, practical, and easily decomposable vulnerability measure. Our strategy is to estimate a Markov transition probability matrix with the aim of identifying the vulnerability of households to poverty. Importantly, by introducing the index of vulnerability as the weighted probability of a household falling into poverty over a given time horizon, we can use the estimated dynamics to assess the short, medium and long-run vulnerability. We find that during the “recession transition†almost all households were vulnerable to poverty while almost none were during the “recovery period†. Overall, urban households, more educated households and households receiving remittances from international labor migrants were less vulnerable to poverty. While households with a current or very recent migrant did not have a significantly lower measured vulnerabilit to poverty, those households receiving remittances from migrants had a lower vulnerability to poverty. Our findings stress that the international labor migration from Tajikistan may not be considered as a reliable means of welfare security for the households because external economic shocks and internal political decisions may negatively affect Russian economy and lead to a reduction of remittances flow to Tajikistan.
    Keywords: mobility measurement, vulnerability, poverty, inequality, measurement, Tajikistan
    JEL: J60 D63 I32
    Date: 2016–07
  9. By: Nato Kakashvili (Ivane Javakhishvili Tbilisi State University)
    Abstract: Actuality. Organization of social security system serves the aim – Living and quality standards of population should be ensured by redistribution of national income, by realization of social solidarity principle for disabled and low income population. Deepening the problems of social security, usage different forms of protection system has made the issue about improving social security system as a central part of economic research. Usage of social insurance for compensation of losses received from social risks has not been fully formed in Georgia. Social insurance is an important element of the financial system, social security system of population and insurance industry, which brings together the interests of the citizens of any country. Its qualitative and quantitative characteristics create idea about social, economic, legal and cultural level of society. The object of the research is the social insurance system of Georgia, economically strong, democratic and legal state building perspective greatly depends on effective functioning of above mentioned system.The aim of the research. The aim of the research is studying of existing problems in social insurance system and ways of improvement. Research Methods. During the research, due to practical importance and complexity of the problem, it has been used systemic, historical and logical generalization methods. Also it has been used scientific abstraction, methods of analysis and synthesis.Conclusion. The findings and results from the survey will help to eliminate existing problems in social insurance system of Georgia and will raise efficiency.
    Keywords: insurance, insurer, social insurance, universal insurance.
  10. By: Biruta Pule (BA School of Business and Finance); Gunta Innuse (BA School of Business and Finance)
    Abstract: The company sustainable development is closely linked with the control of expenses and the ways how to reduce its impact on company cash flow. In Baltic countries business environment is becoming less attractive as a result of tax burden. It encourages tax payers to seek alternative solutions for the reduction of tax burden, especially in relation to labour tax costs and its impact on company cash flow. The article focuses on the assumption that the impact of labour tax costs on business environment in Lithuania and Estonia is much more favourable than in Latvia. Having evaluated labour costs and taking into consideration that they occur under the same production conditions in each of the Baltic countries, we can draw the conclusion that such assumption is false. It cannot be applied in strategic decision making and internal action plan design. When developing tax planning strategy in companies by considering which taxes create the heaviest tax burden, as well as by looking at the ways how it affects investment and company expenses, the calculations have been carried out that lead to the conclusion that tax policy in all Baltic countries and its impact on business environment is similar. Therefore, strategic decision to move business from one territory of the country to another country could turn out to be inefficient. Such decision does not refer to internal action plan of controlling tax payment administration in the company. The analysis indicates significant differences in administration of national taxation.
    Keywords: tax burden, labour costs and taxes, management of tax payment
  11. By: Lidia Ceriani (The World Bank); Simona Scabrosetti (Università di Pavia e DONDENA); Francesco Scervini (School of Advanced Studies IUSS Pavia)
    Abstract: We study the distributional impact of privatization in the light of the democrati- zation process in developing countries which have recently experienced economic and political transitions. Using an unbalanced panel of 80 countries in the period 1988-2008, we find that privatization is negatively and significantly correlated with inequality when democratic institutions are well consolidated, and positively when they are not. Our evidence suggests an interesting policy implication for developing countries: only after having established mature representative political institutions, privatization appears to be related to a reduction in income inequality.
    Keywords: Inequality, Democracy, Privatization, Developing countries
    JEL: D30 O15 P5

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