nep-tra New Economics Papers
on Transition Economics
Issue of 2005‒04‒30
seven papers chosen by
Tono Sanchez
Universitat de Valencia

  1. Reforms and Productivity Dynamics in Chinese State-Owned Enterprises By Peter McGoldrick; Patrick Paul Walsh
  2. Dynamics of Bond Market Integration between Existing And Accession EU Countries By Brian M Lucey; Suk-Joong Kim; Eliza Wu
  3. Individual Farming in the New EU Member States: The Case of Hungary By Marian Rizov;
  4. Does Does Individualisation Help Productivity of Transition Agriculture By Marian Rizov;
  5. Linkages and relationships between Emerging European and Developed Stock Markets before and after the Russian Crisis of 1997-1998 By Brian Lucey; Svitlana Voronkova
  6. The Behavioral Equilibrium Exchange Rate of the Czech Koruna By Martin Melecky; Lubos Komarek
  7. Estimating the Economic Impact of HIV/AIDs on the countries of the Former Soviet Union By Martin Wall

  1. By: Peter McGoldrick; Patrick Paul Walsh
    Abstract: Institutional change has taken place incrementally since 1978 for State-Owned Enterprises (SOEs) in the Industrial Sector of China. We will provide evidence for the notion that this is largely due to increased domestic competitive pressures and the opportunities arising from the integration of international markets. In this paper we estimate the effect of deep reform (the right to hire and fire labour, buy and sell capital and operate on international markets) on the productivity dynamics of entreprises. Using a unique balanced panel of681 SOEs for the period 1980 to 1994, we find consistent production function estimatesusing an algorithm put forward in Olley and Pakes (1996), which estimates using an simultaneity bias. Futhermore, we allow selection bias by formulating an entry that exposure to deep reform hav lead to higher productivity realisations while remaining under state ownership.
    Date: 2004–05–01
  2. By: Brian M Lucey; Suk-Joong Kim; Eliza Wu
    Abstract: In this paper, we use a set of complementary techniques to examine the time-varying level of integration of European government bond markets. We consider daily bond returns and prices over the 1998-2003 period. Strong contemporaneous and dynamic linkages are found between individual European Union (EU) markets and the German market. However, there is no such evidence for the three accession markets of the Czech Republic, Hungary and Poland. The UK’s market is also considered. In general, the degree of integration for the accession markets is weak and stable, with little evidence of further deepening despite the increased political integration.
    Keywords: Bond Indices, Cointegration, GARCH Models, Integration, Kalman Filter
    Date: 2005–01–28
  3. By: Marian Rizov;
    Abstract: This paper is motivated by the fact that (part-time) individual farming is commonly observed among rural households in a number of transition economies but it is not clear prima facie if such resource allocation is optimal. A conceptual model of household labor allocation between individual farming and off-farm wage employment is developed. The model explicitly accounts for the role of household endowments in labor allocation as the analysis is conditioned on the status of factor markets. The hypotheses are empirically tested using 1998 data from a country-representative survey of rural households in Hungary, an advanced transition country, which only recently became EU member state. Results provide evidence that capital market imperfections still remain. Implications for the policies related to agricultural sector restructuring, employment and rural development are discussed. Classification-
    Keywords: households, individual farming, labor allocation, diversification, transition economies, international integration
    Date: 2005–04–20
  4. By: Marian Rizov;
    Abstract: There are large differences across transition countries with respect to agricultural-sector performance and corresponding scope of farm restructuring and shift to individual farming. In this paper we analyze the impact of individualization on productivity growth within an augmented neo-classical growth model framework. This approach allows us to circumvent criticisms on the grounds of lack of theoretical and objective criteria for inclusion of explanatory variables. Furthermore, in the empirical analysis using a panel data covering 15 transition countries over the period 1990-2001 and applying a GMM-IV estimator we are able to control for the impact of various factors and the potential endogeneity of variables. Our estimation results are robust and support the view that the shift to individual farming, as well as the overall economic reforms, have positively contributed to the productivity growth in agriculture during the first decade of transition. Classification-
    Keywords: agriculture, individual farming, productivity, economic transition, international integration
    Date: 2005–04–20
  5. By: Brian Lucey; Svitlana Voronkova
    Abstract: This paper examines the linkages between the Russian stock market and those of its largest neighbors in Central and Eastern Europe, and the world stock markets over the 10 year period 1995-2004. What we find is that there was a major change in the nature of these relationships after the so called Russian Crisis of 1997-1998. The nature of this change is such that we can no longer rely on the the traditional methods used to examine linkages between equity markets. Using a more appropriate set of tools we find that the major influences on the Russian stock market have become the equity markets of the European Union and the USA. There is very little evidence of influence from (or to) regional markets such as Poland or Hungary. Classification-
    Keywords: Stock Market Integration, CEE Stock markets, Russian Stock Market, Cointegration
    Date: 2005–04–20
  6. By: Martin Melecky (School of Economics, University of New South Wales); Lubos Komarek (Czech National Bank)
    Abstract: The behavioural equilibrium exchange rate (BEER) model of the Czech koruna is derived in this paper and estimated by three methods suitable for non-stationary time series. The considered potential determinants of the real equilibrium exchange rate are the productivity differential, the interest rate differential, the terms of trade, net foreign direct investment, net foreign assets, government consumption and the degree of openness. We find that the Czech koruna was on average undervalued over the period 1994 to 2004 by about 7 percent with respect to the estimated BEER. The significant determinants of the equilibrium exchange rate of the Czech koruna appear to be the productivity differential, the real interest rate differential, the terms of trade and the net foreign direct investment.
    Keywords: Equilibrium Exchange Rate Modelling, Time-Series Analysis, Exchange Rate Misalignments, Czech Republic, ERMII
    JEL: C52 C53 E58 E61 F31
    Date: 2005–04–28
  7. By: Martin Wall
    Abstract: This report assesses the evidence on the extent and prospects of an HIV/AIDS epidemic in the countries of the former Soviet Union and the impact this will have on the economies of those countries. The main focus of the report is the Russian Federation. The economic and demographic context against which the epidemic is developing is first discussed. All of the states of the FSU have suffered unprecedented falls in employment and output and a collapse in many of the state institutions that might determine or implement public health policy. Russia in particular is suffering from falling life expectancy and general declines in health that are untypical for countries with high HIV prevalence. The epidemic is still largely confined to high-risk groups such as Intravenous Drug users (IDUs) in Russia and the Ukraine. Infectivity is high in such groups and concentration of HIV among IDUs is one of the reasons the disease is spreading so rapidly. There is evidence of high recruitment and casual drug use suggesting the lines between IDUs, Commercial Sex Workers (CSWs) and the general population are more blurred than in a western country. The epidemics in the other former Soviet republics are less developed than in Russia but they exhibit many of the same risk factors and the trade and migratory links between them and Russia suggest they will suffer epidemics of similar magnitude.
    Keywords: HIV/AIDS, former Soviet Union (FSU), Russian Federation
    Date: 2003–11

This nep-tra issue is ©2005 by Tono Sanchez. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.