nep-tra New Economics Papers
on Transition Economics
Issue of 2006‒03‒11
seven papers chosen by
Tono Sanchez
Universitat de Valencia

  1. Do special economic areas matter in attracting FDI? Evidence from Poland, Hungary and Czech Republic By Claudia Guagliano; Stefano Riela
  2. Hot money inflows in China : How the people's bank of China took up the challenge. By Vincent Bouvatier
  3. Constitution, cohesion: conflicting views from the Czech Republic By Jiøí BLAŽEK
  4. How do spouses share their full income ? Identification of the sharing rule using self-reported income. By Ekaterina Kalugina; Natalia Radtchenko; Catherine Sofer
  5. R&D of Multinationals in China: Structure, Motivations and Regional Difference By Kazuyuki Motohashi
  6. Evolving Dairy Markets in Asia: Recent Findings and Implications By Beghin, John C.
  7. Recent Chinese Buyout Activity and the Implications for Global Architecture By Agata Antkiewicz; John Whalley

  1. By: Claudia Guagliano; Stefano Riela (ISLA, Universita' Bocconi, Milano)
    Abstract: Among the instruments aimed to attract internationally mobile investors, “special economic areas” can be considered as well-defined zones where usually offering low rates of taxation, and infrastructures and services accessible on preferential basis. Are those instruments effective in attracting FDI? The first empirical evidence based on Poland, Hungary and Czech Republic suggests a positive answer. However, according to a survey on research and development intensity in special economic areas in our sample countries, it is not possible to confirm clearly that scientific and technology parks were capable in attracting high-tech FDIs, even though due to global competition, international agreements and EU membership, fiscal incentives are nowadays not enough while technology and an “innovation-friendly” environment are emerging as competitive advantages.
    Keywords: foreign direct investment, location choice, transition countries
    JEL: F23 R38
    Date: 2005–11
  2. By: Vincent Bouvatier (CES-TEAM)
    Abstract: This paper investigates hot money inflows in China. The financial liberalization comes into effect and the effectiveness of capital controls tends to diminish over time. As a result, China is fuelled by hot money inflows. The US interest rate cut since 2001 and expectations of exchange rate adjustments are the main factors explaining these capital inflows. This study use the Bernanke and Blinder (1988) model extended to an open economy to examine implications of hot money inflows for the Chinese economy. A Vector Error Correction Model (VECM) on monthly data from March 1995 to March 2005 is estimated to investigate the recent upsurge in foreign reserves and shows that the interaction between domestic credit and foreign reserves was stable and consistent with monetary stability. Granger causality tests are implemented to show how the People's Bank of China (PBC) achieved this result.
    Keywords: Hot money inflows, domestic credit, VECM, Granger causality.
    JEL: C32 E5 F32 F33
    Date: 2006–02
  3. By: Jiøí BLAŽEK
    Abstract: The aim of the paper is firstly provision of an analysis of the p erception of the EU a year after the accession. It is shown that the population of the Czech Republic is shortly after accession r ather sceptic about the EU integration. This serves as a context for a discussion the European Constitutional Treaty which proceed ed both among public and politicians until French and Dutch “NO” in late Spring 2005. Finally, some observations are made on rela tion between Constitution and cohesion.
    Keywords: EU Constitution, Cohesion policy, Czech Republic
  4. By: Ekaterina Kalugina (CES-TEAM et HCE Moscow); Natalia Radtchenko (CES-TEAM); Catherine Sofer (CES-TEAM)
    Abstract: The paper applies the collective model to the analysis of intra-household inequality using self-reported income scales. Starting from a collective model including household production, our key assumption is that the income level that household members report corresponds to their true income sharing. Using Russian data (Rounds V to VIII of the Russian Longitudinal Monitoring Survey), we apply the results for couples who report the same level of income to identify the sharing rule for the whole sample. This method allows us to obtain not only the derivatives, but also the sharing rule itself. From simulations for an average couple with one child living in the Urals, we find that a full income share of 45% is allocated to the wife.
    Keywords: Collective model, within-household income comparisons, subjective data, Russia, sharing rule.
    JEL: D1 J22 C3
    Date: 2006–02
  5. By: Kazuyuki Motohashi
    Abstract: In this paper, the motivations of R&D by multinationals are investigated by using a large firm level dataset from Chinese official statistics on science and technology activities. Growing intensity of R&D activities is found both for foreign owned and domestic firms. But, it is also found that the R&D intensity at foreign owned firms is relatively smaller. This may be due to the fact that foreign owned firms are operating by relying of technological capabilities at home. Statistical analysis confirms that the major motivation of foreign R&D in China is "market driven" instead of "technological driven" or "human resource driven". However, there is a great variation of foreign R&D strategy across regions. Market driven R&D is found mainly in Guangdong, which is called a world IT factory, and does not have strong universities or PRIs. In contrast, R&D strategy in Beijing is oriented toward technology driven approach, because we can find a cluster of scientific institutions there. Shanghai, with both a large industrial base as well as strong science sector, is in-between.
    Date: 2006–02
  6. By: Beghin, John C.
    Abstract: This paper is an overview of important findings regarding the ongoing evolution of Asian dairy markets based on a series of new economic investigations. These investigations provide systematic empirical foundations for assessing Asian dairy markets with their new consumption patterns, changing industries, and trade prospects under different domestic and trade policy regimes. The findings are drawn from four case studies (China, India, Japan, and Korea), as well as a prospective analysis of future regional patterns of consumption and a policy analysis of trade liberalization of Asian dairy markets. The overview distills the findings of these new investigations and integrates them in the earlier economic literature; it draws policy implications and identifies lessons for countries outside of Asia, especially for emerging exporters in Latin America.
    Keywords: Asia, China, dairy, India, Japan, Korea, liberalization, trade integration.
    JEL: F1
    Date: 2006–03–03
  7. By: Agata Antkiewicz; John Whalley
    Abstract: We discuss recent cases of Chinese buyout activity in the OECD (especially in the US and the EU) in resource and manufacturing sectors. While most of the buyout attempts have been unsuccessful, they can serve as a catalyst for a wider discussion on the implications for global arrangements over cross border acquisitions. Three specific issues are discussed. The first is the subsidization of purchase raised in the OECD in response to the advancing of low- or no-interest loans by the Chinese Central Bank to companies investing abroad. The second is the transparency of entities involved in the buyout attempt. Most Chinese companies have close ties to the multiple levels of government and are not subject to the standard reporting requirements as required of OECD companies. The third involves national security concerns in the OECD and the possibility of acquiring sensitive technology by Chinese companies when they purchase companies abroad. These issues have not been addressed in the existing OECD/WTO investment policy initiatives and have yet to be discussed in the global fora.
    JEL: F02 F20 F21 O24
    Date: 2006–03

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