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on Transition Economics |
| By: | Olena Havrylchyk; Emilia Jurzyk |
| Abstract: | Using data for 265 banks in Central and Eastern European Countries for the period of 1995-2003, this paper analyses the differences in profitability between domestic and foreign banks. We show that foreign banks, especially greenfield institutions, earn higher profits than domestic banks. However, this effect is acquired, rather than inherited, since there is evidence that foreign banks tend to take over less profitable institutions. Profits of foreign banks in the CEEC also exceed profits of their parent banks, explaining the reasons for their entry. Further, we study benefits and costs of foreign ownership by analyzing determinants of profitability for domestic, takeover, and greenfield banks. Profits of foreign banks are less affected by macroeconomic conditions in their host countries. However, greenfield banks are sensitive to the situation at their parent banks. Only domestic banks enjoy higher profits in more concentrated banking markets, whereas takeover bans suffer from diseconomies of scale due to the fact that they acquired large institutions. |
| Keywords: | Banking system; competition; FDI; financial markets; transition economies |
| JEL: | G15 G21 F36 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2005-21&r=tra |
| By: | Krug, B.; Hendrischke, H. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | We advance a conceptual frame for explaining economic transformation in China that combines a dynamic and a comparative perspective by taking the analysis of Fiscal Federalism one step further. Using insights from the comparative business systems literature we show that devolution of power at the beginning of the reform process introduced local autonomy, which stimulated a diversity of local regulatory regimes. As the central political leadership is no longer the sole supplier of institutional change, local governments become equal contributors to the formation of local business systems. Yet, local governments only partially define emerging local business systems. Local governance at the enterprise level is defined by the interaction between political and economic entrepreneurship, or, phrased in institutional terms, local business systems emerge from the interplay between the formal architecture of local autonomy and the informal institution of networking. In a comparative perspective this interaction, and its underlying driving forces for co-operation, namely: procedural uncertainty, relational risk and institutional change, will lead to diversity in outcomes. In a dynamic perspective both market competition and networking will ensure further competition between business systems, while political unification, imitation or scale economies will ask for convergence of local business systems beyond the local nexus. |
| Keywords: | Institution Building;Institutional Change;Transition Economy;China; |
| Date: | 2006–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:30008039&r=tra |
| By: | Michel Fok (UPR10 - Systèmes cotonniers en petits paysannats - http://www.cirad.fr/fr/pg_recherche/ur.php?id=36 - CIRAD); Weili Liang (HEBAU-DA - Department of Agronomy of HEBAU - Hebei Agricultural University); Guiyan Wang (HEBAU-DA - Department of Agronomy of HEBAU - Hebei Agricultural University); Yuhong Wu (HEBAU-DA - Department of Agronomy of HEBAU - Hebei Agricultural University) |
| Abstract: | China is a big country in terms of biotech achievements. It is also a rare country demonstrating crop-differentiated policies in the dissemination of the GMOs. While the release of GMOs is authorized notably for cotton in 1998, it is still prohibited for food crops. In spite of the positive outcomes on cotton, at least in the short run, and of the persisting decrease of the cereal production, the hesitation to release GMO on food crops should keep on prevailing. This seems to be founded when the qualitative dimension of the food production is taken into consideration. |
| Keywords: | China; GMO; food security; cotton; foodcrops; productivity; biotechnology |
| Date: | 2006–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00008939_v1&r=tra |
| By: | Konstandina Natalia |
| Abstract: | A question of explaining bank failures constitutes perhaps one of the greatest interest to banks' clients, policy-makers and regulators. Not surprisingly, for a long time, this question has been a challenge for theoretical and empirical economists. In this paper we investigate which factors affect soundness of a bank, taking into consideration micro level data, as well as macro level component. We also employ efficiency estimate, obtained with the help of DEA, to account for the quality of management. Then we use logit model and proportional hazard model with efficiency component. We find that efficiency element, together with size and regional belonging, are highly significant in all specifications, while macro variables did not seem to influence failures significantly. |
| Keywords: | Russia, Russian banking, failures, efficiency |
| JEL: | G21 G33 L25 |
| Date: | 2006–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:eer:wpalle:06-01e&r=tra |
| By: | Hongliang Yang |
| Abstract: | In China, many ongoing problems in the electricity sector can be traced back to the old ‘centrally planned’ economy. Since the start of liberalization in the 1980s, the clash between a liberalized economy (excluding a few so-called strategic industries) and a centrally controlled electricity industry has gradually become more and more apparent. The Chinese electricity industry is in need of constructive restructuring. In the absence of a universal agreement on optimal industry design, the Chinese government should have a firm and clear understanding of the implications of electricity restructuring for long-term social welfare. Otherwise the electricity industry might, again, be locked into an inferior industry design which would be very costly to change. |
| Keywords: | Chinese electricity industry, reform, electricity policy |
| JEL: | L22 L52 Q48 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:0617&r=tra |
| By: | Pobochy Serguey; Yudashkina Galina |
| Abstract: | This paper estimates regional features of the electricity sector regulation in Russia. We use panel data for 77 Russian regions during 1998–2003. Our analysis is based on the interest-group theory of regulation. The objective of the project is to estimate the influence of regional energy company, consumers, and governor on regulation policy in the region. Empirical analysis shows that governors' elections are accompanied by tariffs' decrease. We found that during 1999–2001 there was a gap between federal and regional regulation, and that energy-intensive enterprises choose the strategy to buy electricity from federal wholesale market, but not to bargain with regional regulator about low tariffs. Based on our analysis we conclude that it is necessary to separate social and economic parameters of regulation. Economic requirements call for the change of pricing method to "rate of return" approach that will stimulate monopolist to increase efficiency. Social requirements should incorporate in regulation mechanisms of taking into account the poverty level in a given region. |
| Keywords: | Russia, Russian regions, electricity sector, regulation, interest-group theory, regional governors, panel data analysis |
| JEL: | L94 L51 |
| Date: | 2006–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:eer:wpalle:05-15e&r=tra |
| By: | Lamo, Ana; Messina, Julian; Wasmer, Etienne |
| Abstract: | Countries react differently to large labour reallocation shocks. Some minimize the costs by adapting rapidly, while others suffer long periods of costly adjustment, typically high and persistent unemployment and temporary output losses. We argue that the existence of large amounts of specific human capital slows down the transitions and makes them costly. We illustrate this point by building a theoretical framework in which young agents' careers are heavily determined by the type of initial education, and analyze the transition to a new steady-state after a sectoral demand shift. In the absence of mobility, it can take as much as a generation for the economy to absorb the shock. An interesting case study is the European Union enlargement, which led to a modernization of many sectors in Eastern countries and to a fast decline of traditional industries and agriculture. Using labour force data from a large economy with rigid labour markets, Poland, and a small open economy with increased flexibility, Estonia, we document our main claim, namely that specialized education reduces workers' mobility and hence their ability to cope with economic changes. We find that holding a vocational degree is associated with much longer unemployment duration spells, relatively large wage penalties when changing jobs and higher likelihood of leaving activity for elder workers. Quantitative exercises suggest that the over-specialization of the labour force in Poland led to much higher and persistent unemployment compared to Estonia during the period of EU enlargement. Traditional labour market institutions (wage rigidity and employment protection) increased, but to a much lesser extent, the unemployment gap. |
| Keywords: | enlargement; labour reallocation; matching; specific skills; unemployment; vocational education |
| JEL: | J30 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5503&r=tra |
| By: | Mikkel Barslund (Department of Economics, University of Copenhagen); Finn Tarp (Department of Economics, University of Auckland) |
| Abstract: | This paper uses a survey of 932 rural households to uncover how the rural credit market operates in four provinces of Vietnam. Households obtain credit through formal and informal lenders, but formal loans are almost entirely for production and asset accumulation. Interest rates fell from 1997 to 2002, reflecting increased market integration; but the determinants of formal and informal credit demand are distinct. Credit rationing depends on education and credit history, but we find no evidence of a bias against women. Regional differences are striking, and a ‘one size fits all’ approach to credit policy is clearly inappropriate. |
| Keywords: | rural credit; household survey; Vietnam |
| JEL: | O12 O16 O17 O1 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:0603&r=tra |
| By: | Mwangi S. Kimenyi (University of Connecticut) |
| Abstract: | The paper discusses the meaning and measurement of pro-poor growth and also reviews evidence of pro-poor growth (or the lack of it) in a large cross-section of countries and time periods. The emerging story is that many episodes of growth are not pro-poor and also that although economic reforms have had positive effects in those countries that have been steadfast in implementing market reforms, the overall impact on growth has been small for many countries and in most cases not pro-poor. I present a general theory of pro-poor growth that includes ten principles that should be incorporated in all economic reforms that seek to generate pro-poor growth. These principles highlight the importance of understanding the poor, their economic activities, capabilities, constraints that impede their participation in markets and also an appreciation of linkages within sectors and regions. It is argued that pro-poor reforms cannot have the intended impact unless there are significant changes in the institutions of governance. Finally, the principles presented underscore the fact that pro-poor growth policies cannot be sustained without workable partnerships between markets and states in the ever changing and complex processes of social and economic development. |
| Keywords: | Economic Reform, Pro-Poor Growth, Developing Countries, Economies in Transition, Africa, Poverty Reduction. |
| JEL: | O10 O21 I30 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2006-02&r=tra |
| By: | Tomomi Tanaka; Colin F Camerer; Quang Nguyen |
| Date: | 2006–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levrem:122247000000001099&r=tra |