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on Transition Economics |
| By: | Bernardo Bortolotti (University of Turin and Fondazione Eni Enrico Mattei) |
| Abstract: | This report provides an overview of the causes and consequences of the Italian State-owned Enterprises (SOE) reform process. Particularly, it analyzes the symbiotic link between share issue privatization (SIP), i.e. privatization in public equity markets, and financial market development, and shows how the sustained policy of sales has jumpstarted the Italian domestic stock market. Based on the Italian and international experience, the report provides some possible guidelines and policy recommendations in order to achieve the same goal in the People’s Republic of China (PRC). |
| Keywords: | State-owned enterprises, Share issue privatization, Financial development, Italy, China |
| JEL: | L33 L30 O16 G14 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.118&r=tra |
| By: | Nauro F. Campos (Brunel University, CEPR, WDI and IZA Bonn); Francesco Giovannoni (CMPO, University of Bristol) |
| Abstract: | During the transition from plan to market, managers and politicians succeeded in maintaining control of large parts of the stock of socialist physical capital. Despite the obvious importance of this phenomenon, there have been no efforts to model, measure and investigate this process empirically. This paper tries to fill this gap by putting forward theory and econometric evidence. We argue that asset stripping is driven by the interplay between the firm’s potential profitability and its ability to influence law enforcement. Our econometric results, for about 950 firms in five transition economies, provide support for this argument. |
| Keywords: | asset stripping, law enforcement, corruption, transition |
| JEL: | H82 K42 O17 P26 P31 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1867&r=tra |
| By: | Florence UNICEF ICDC; UNICEF Innocenti Research Centre |
| Abstract: | This new Innocenti Insight looks at how children with disabilities and their families fare in the rapidly changing environment of this wide region, since transition in the early 1980’s. It builds upon the significant body of research and policy reflections accrued at the UNICEF Innocenti Research Centre (IRC) with the support of national statistical offices in the 27 countries of the region. UNICEF IRC has tracked and explored the impact on children and their families of economic and social changes in the region since transition began. This report draws upon three new pieces of research that include data, a qualitative survey and first-person interviews. The results highlight the legacies of the past, the momentum for change and areas where action is further needed. Institutionalisation, segregation and discrimination are still prominent features of the environment in which children with disabilities live across the region. |
| Keywords: | Russia; |
| JEL: | I12 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ucf:innins:innins05/22&r=tra |
| By: | Carmen Raluca Stoian; Roger Vickerman |
| Abstract: | A bi-directional relationship between FDI and economic reforms in ten Central European countries is tested, along with the role of the EU in breaking a potential vicious circle of insecurity, little investment, slow reforms, low prospects of EU membership and hence high insecurity. Using panel data regressions and a system of simultaneous equations, we find evidence that the prospect of EU membership has enhanced FDI in the less reformist candidates and that trade integration and increased EU financial assistance have improved FDI in the CEECs. |
| Keywords: | foreign direct investment determinants; economic transition; economic reforms; Central and Eastern Europe |
| JEL: | F2 C2 C3 P26 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:0509&r=tra |
| By: | Hubert Gabrisch; Herbert Buscher |
| Abstract: | Does the disappointingly high unemployment in Central and East European countries reflect non-completed adjustment to institutional shocks from transition to a market economy, or is it the result of high labour market rigidities, or rather a syndrome of too weak aggregate demand and output? In the case of transitional causes, unemployment is expected to decline over time. Otherwise, it would pose a challenge to the European Union, particular in case of accession countries, for it jeopardizes the ambitious integration plans of, and may trigger excessive migration to the Union. In order to find out which hypothesis holds 15 years after transition has started, we analyze the unemploymentgrowth dynamics in the eight new member countries from Central-Eastern Europe. The study is based on country and panel regressions with instrument variables (TSLS). The results suggest to declare the transition of labour markets as completed; unemployment responds to output and not to a changing institutional environment for job creation. The regression coefficients report a high trend rate of productivity and a high unemployment intensity of output growth since 1998. The conclusion is that labour market rigidities do not to play an important role in explaining high unemployment rates. Rather, GDP growth is dominated by productivity progress, while the employment relevant component of aggregate demand is too low to reduce substantially the high level of unemployment. |
| Keywords: | Unemployment, Okun’s law, Transition |
| JEL: | E24 J23 P23 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:iwh:dispap:5-05&r=tra |
| By: | Puga, Diego; Trefler, Daniel |
| Abstract: | Increasingly, a small number of low-wage countries such as China and India are involved in innovation - not the `big ideas', but the constant incremental innovations needed to stay ahead in business. We provide some evidence of this and develop a model in which there is a transition from old-style product-cycle trade to trade involving incremental innovation in low-wage countries. We explain why levels of involvement in innovation vary across low-wage countries and even across firms in each low-wage country. We then draw out the implications of this for the location of production, trade, capital flows, earnings and living standards. |
| Keywords: | international trade; low-wage country innovation |
| JEL: | F1 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5286&r=tra |
| By: | Wing-Keung Wong (Department of Economics, National University of Singapore); Jun Du (Department of Economics, National University of Singapore); Terence Tai-Leung Chong (Department of Economics, The Chinese University of Hong Kong, Hong Kong) |
| Abstract: | This paper studies the profitability of applying technical analysis that signals the entry and exit from the stock market in three Chinese stock markets - the Shanghai, Hong Kong and Taiwan Stock Exchanges. The Simple Moving Average (MA) and its extensions, Exponential MA, Dual MA, Triple MA, MACD and TRIX for both long and short strategies are examined. Applying the trading signals generated by the MA family to the Greater China markets, significantly positive returns are generated, which outperform the buy-and-hold strategy. The cumulative wealth obtained also surpasses that of the buy-and-hold strategy regardless of transaction costs. In addition, we study the performance of the MA family before and after the 1997 Asian Financial Crisis and find that the MA family works well in both sub-periods and in different market conditions of bull runs, bear markets and mixed markets. That technical analysis can forecast the directions of these markets implies that the three China stock markets are not efficient. |
| Keywords: | Technical analysis, Moving Average, buy-and-hold strategy |
| JEL: | G1 C0 |
| URL: | http://d.repec.org/n?u=RePEc:sca:scaewp:0512&r=tra |
| By: | Cai Fang (CASS-IPLE); Wang Dewen (CASS-IPLE) |
| JEL: | J |
| Date: | 2005–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0512001&r=tra |
| By: | Schotman, Peter C; Zalewska, Anna |
| Abstract: | The paper contributes to the literature on integration of stock markets by addressing the issue of non-synchronous trading. We argue that controlling for time differences in trading hours of stock markets is important and show that time-adjustment improves estimates of market integration. We also show that using weekly frequency does not sidestep the consequences of the time-match problem but leads to significant loss of information. We show that the nature of integration of stock exchanges operating in the Czech Republic, Hungary, and Poland with the stock markets of Germany, UK and US in the period 1994-2004 is very dynamic. Finally, the study shows that the autocorrelation of returns on the main market indexes of the emerging markets have declined over time. |
| Keywords: | emerging markets; Kalman filter; market efficiency; market integration; non-synchronous trading |
| JEL: | G14 G15 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5352&r=tra |
| By: | Maciej Bukowski (Warsaw School of Economics, Institute for Structural Research); Piotr Lewandowski (Warsaw School of Economics, Institute for Structural Research); Iga Magda (Ministry of Economy); Malgorzata Sarzalska (Ministry of Economy); Julian Zawistowski (Ministry of Economy, Institute for Structural Research) |
| Abstract: | This publication is a non-technical report prepared for Polish Ministry of Economy and Labor. The main goal is to present a comprehensive statistical and econometric analysis of employment, unemployment and participation in Poland in the period 1998-2004 and confront Polish experiences with international empirical and theoretical studies in labor economics. Also the qualitative survey of institutional background of labor market in Poland is conducted. We complement our research with some policy prescriptions. At the moment Poland exhibits the highest unemployment rate in OECD and one of the lowest employment and participation rates. We begin with a detailed analysis of the reasons of the rapid decrease of employment and increase of unemployment in 1998- 1999 and its later persistence. We find that the supply-side characteristics and sectoral structure of the economy significantly influenced the strength and the durability of the effects of the Russian crisis of 1998 and of the adverse supply shock that affected Polish economy in 2001-2002. We scrutinize the ability of various groups of workers (by age and education level attained) to cope with both shocks and constantly undertaken restructuring. We also focus on structural mismatch between labour demand and labour supply in Poland. We find that the employment gap between Poland and UE15 is mostly due to low participation/employment of older workers in Poland, although individuals aged 15-24 also contribute to this gap. However, we show that low participation of young is mostly connected to lengthening of average education spells whereas older workers take advantage of the social security benefits subsidizing leisure. We complement our analysis with multinomial logit of transitions on Polish labor market. Then we turn to the role played educational system in the accumulation of the human capital by young people, and we evaluate the life-long learning in Poland. We find that schooling system is rather inefficient in shaping creativity and solving problems exceeding schematic procedures and algorithms. Then we focus on the influence exerted in Poland by standard labor market institutions, like social security system, taxes, minumum wages, trade unions, employment protection legislation, active labor market policy. In each case we begin with description of the shape of these institutions in Poland and then we empirically assess their relative importance for labour market performance. |
| Keywords: | Poland, unemployment, employment, participation, labor market institutions, social security, human capital in transition countries |
| JEL: | E24 H31 H55 J20 J21 J22 J68 P23 |
| Date: | 2005–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0512003&r=tra |
| By: | Kwon, Goohoon; Spilimbergo, Antonio |
| Abstract: | Russia's regions are heavily exposed to regional income shocks because of an uneven distribution of natural resources and a Soviet legacy of heavily skewed regional specialization. Also, Russia has a limited mobility of labour and lacks fiscal instruments to deal with regional shocks. We assess how these features influence the magnitude and persistence of regional income shocks, through a panel vector auto-regression, drawing on extensive and unique regional data covering the last decade. We find that labour mobility associated with regional shocks is far lower than in the US yet higher than in the EU-15, and that regional expenditures tend to expand in booms and contract in recessions. We discuss institutional factors behind these outcomes and policy implications. |
| Keywords: | fiscal policy; labour mobility; panel VAR; Russia |
| JEL: | C33 E62 H77 J61 P52 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5265&r=tra |
| By: | Felix Hammermann; Rainer Schweickert |
| Abstract: | Institutional development in new and potential member countries determines the success of both the catching-up of developing European countries and the deepening of the European integration process. This paper argues that the timing of future enlargement should depend on institutional convergence between the EU and potential accession candidates. Therefore, the paper looks at institutional quality in the EU, in the EU’s neighboring Balkan and Black Sea regions, and especially in Bulgaria, Romania, Croatia, Turkey, and Ukraine, i.e. the next countries in the queue for entry or likely to lobby for entry into the EU. Three dimensions of institutional quality—legislative, administrative, and judicative institutions—are analyzed on the basis of the World Bank Governance Indicators using institutional quality in EU member states as a benchmark in order to reveal institutional deficits. |
| Keywords: | Institutions, Transitional Economies, EU Enlargement, Regional Integration, Economic Development |
| JEL: | P20 F15 O10 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1261&r=tra |
| By: | Lorentowicz, Andzelika; Marin, Dalia; Raubold, Alexander |
| Abstract: | Feenstra and Hanson (1997) have argued in the context of the North American Free Trade Agreement that US outsourcing to Mexico leads to an increase in the skill premium in both the US and Mexico. In this paper we show on the example of Austria and Poland that with the new international division of labour emerging in Europe Austria, the high income country, is specializing in the low skill intensive part of the value chain and Poland, the low income country, is specializing in the high skill part. As a result, skilled workers in Austria are losing from outsourcing, while gaining in Poland. In Austria, relative wages for human capital declined by 2 percent during 1995-2002 and increased by 41 percent during 1994-2002 in Poland. In both countries outsourcing contributes roughly 35 percent to these changes in the relative wages for skilled worker. Furthermore, we show that Austria's R&D policy has contributed to an increase in the skill premium there. |
| Keywords: | foreign direct investment; transition economics; wage inequality |
| JEL: | F21 F23 J31 P45 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5344&r=tra |
| By: | Piotr Wdowinski |
| Abstract: | In this paper we present simulations of economic performance of the Polish economy based on a quarterly econometric model. The model consists of 22 stochastic equations, which link the financial market with the real economy. The purpose of the research is to present effects of changes to domestic and foreign interest rates and the EUR/USD exchange rate on economic growth in Poland over the period Q2, 1993 - Q2, 2003. |
| Keywords: | financial market, economic growth, econometric model, simulation, Poland |
| JEL: | C30 C50 E60 F10 G10 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1557&r=tra |
| By: | Cai Fang (CASS-IPLE); Du Yang (CASS-IPLE) |
| JEL: | O P |
| Date: | 2005–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0512001&r=tra |
| By: | Oskar Kowalewski (Leon Kozminski Academy of Entrepreneurship & Managment); Krzysztof Jackowicz (Leon Kozminski Academy of Entrepreneurship & Managment) |
| Abstract: | In recent years the number of going private transactions has sharply increased in emerging markets. The purpose of this study is to establish the financial characteristics of companies that have gone private using a dataset comprising of Polish companies. We use a probit model to distinguish the difference between firms that went private and companies that did not. We find that the probability of going private grew with a rise in the concentration of foreign ownership, an increase in the relative level of free cash flows, a decrease in the level of long term debt, and a decrease in the liquidity of share trading. The results obtained are important both for investors wishing to identify entities characterized by a high likelihood of going private and for governmental authorities evaluating the methods and rationality of privatization mature state- owned enterprises. |
| Keywords: | Going Private, free cash flow, information asymmetry, ownership structure, emerging markets |
| JEL: | G32 G34 |
| Date: | 2005–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpfi:0511013&r=tra |
| By: | Tokgoz, Simla |
| Abstract: | The European Union (EU) accomplished its biggest enlargement process in 2004 in terms of the number of countries, area, and population. This study focuses on the impact of enlargement, the resulting technology transfer on the grain sectors of the New Member States (NMS), and the consequent welfare implications. The study finds that EU enlargement has important implications for the EU and the NMS, but its impact on the world grain markets is minimal. The results show that producers in the NMS gain from accession because of higher prices, whereas consumers in most NMS face a welfare loss. Incorporating technology transfer into the accession increases the welfare gain of producers despite falling prices because of the larger supply shift. The loss of welfare for consumers in most NMS is lower in this case because of the decline in grain prices. |
| Keywords: | EU enlargement, technology transfer, welfare. |
| Date: | 2005–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12478&r=tra |
| By: | Zoltan Acs; Colm O'Gorman; Laszlo Szerb; Siri Terjesen |
| Abstract: | In today's global knowledge economy, foreign direct investment (FDI) plays a major role in the economic development of emerging economies. Knowledge spillovers from multinational enterprises create entrepreneurial opportunities. These knowledge spillovers could have a positive effect on entrepreneurial activity and move a country from a knowledge-using to a knowledge-creating economy. Using case studies and data from Global Entrepreneurship Monitor (GEM), we explore how inward FDI impacts indigenous entrepreneurial activity in two countries, Ireland and Hungary. We find significant differences in entrepreneurial activity between Ireland and Hungary and suggest that enterprise development policies should focus on enhancing knowledge spillovers from FDI, increasing human capital and promote occupational choice, and enable the commercialization of new technology. |
| Keywords: | Entrepreneurial Activity, Economic Development, Entrepreneurs, Foreign Direct Investment, Knowledge Spillovers, Ireland, Hungary |
| JEL: | M13 F23 O10 O30 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:esi:egpdis:2005-33&r=tra |
| By: | Kristina Toderich (Samarkand Academy of Sciences, Uzbekistan); Munimjon Abbdusamatov (State Control on Water Use and Preservation of Water Resources, Ministry of Nature Protection of the Republic of Tajikistan); Tsuneo Tsukatani (Institute of Economic Research, Kyoto University) |
| Abstract: | This paper provides a description of current state of water resources assessment in Tajikistan, their use for the agriculture development and maintenance of irrigation infrastructures. The Vakhsh and Pyandzh River Basins and its tributaries in Tajikistan were directly surveyed during an expedition within the framework of a Joint Research Project: Investigation of natural resources of Central Asia and reconstruction of agriculture in Afghanistan, that is supported by the Ministry of Education and Culture of Japan Grant in Aid for Scientific Joint Research, 2003, No. 15252002), that is represented by professor Dr. Tsuneo Tsukatani, Department of Natural Resources and the Environment, Kyoto Institute of Economics, Kyoto University, Japan. The field expedition was carried out in September 2003 according to the Joint Project Research Program to study the natural resources and contemporary state of irrigation in Pyandzh River basin. |
| Keywords: | water resources, cropping system, irrigation infrastructure, Tajikistan, Subsurface drip irrigation, SDI, Pyandzh, AmuDarya, Kumsangir, Vakhsh |
| Date: | 2004–03 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:585&r=tra |