nep-tra New Economics Papers
on Transition Economics
Issue of 2006‒06‒17
eleven papers chosen by
Tono Sanchez
Universitat de Valencia

  1. Nonstandard Forms and Measures of Employment and Unemployment in Transition: A Comparative Study of Estonia, Romania, and Russia By J. David Brown; John S. Earle; Vladimir Gimpelson; Rostislav Kapeliushnikov; Hartmut Lehmann; Almos Telegdy; Irina Vantu; Ruxandra Visan; Alexandru Voicu
  2. Exchange rates and transition economies` export prices: is there evidence for pricing-to-market behaviour? By Emilia Penkova
  3. The effect of FDI and foreign trade on wages in the Central and Eastern European Countries in the post-transition era: A sectoral analysis By Özlem Onaran; Engelbert Stockhammer
  4. The China's Rise as an International Trading Power By Christopher Edmonds; Sumner J. La Croix; Yao Li
  5. China - Understanding a New Global Economic Player By Horst Siebert
  6. China’s Lesser Known Migrants By Deng Quheng; Bjorn Gustafsson
  7. Home Production and the Macro Economy-Some Lessons from Pollak and Wachter and from Transition Russia By Reuben Gronau
  8. Social Capital and Cooperation in Central and Eastern Europe - A Theoretical Perspective Abstract By Catherine Murray
  9. Analysing Agricultural Land Markets as Organisations - An Empirical Study in Poland By Annette Hurrelmann
  10. Effects of Foreign Presence in a Transition Economy : Regional and Industry-Wide Investments and Firm-Level Exports in Ukrainian Manufacturing By Stefan Lutz; Oleksandr Talavera; Sang-Min Park
  11. Mass Migration and Seasonality Evidence on Moldova\'s Labour Exodus By Dennis Görlich; Christoph Trebesch

  1. By: J. David Brown (Heriot-Watt University, CEU Labor Project, IZA); John S. Earle (W.E. Upjohn Institute for Employment Research and CEU Labor Project); Vladimir Gimpelson (Author-Workplace-Name:); Rostislav Kapeliushnikov (CLMS, Higher School of Economics); Hartmut Lehmann (University of Bologna; Heriot-Watt University, Labor Group EROC,Kiev School of Economics, IZA); Almos Telegdy (CEU Labor Project, Institute of Economics of the Hungarian Academy of Sciences); Irina Vantu (CEU Labor Project); Ruxandra Visan (CEU Labor Project); Alexandru Voicu (City University of New York, Staten Island College, IZA)
    Abstract: This paper looks behind the standard, publicly available labor force statistics relied upon in most studies of transition economy labor markets. We analyze microdata on detailed labor force survey responses in Russia, Romania, and Estonia to measure nonstandard, boundary forms and alternative definitions of employment and unemployment. Our calculations show that measured rates are quite sensitive to definition, particularly in the treatment of household production (subsistence agriculture), unpaid family helpers, and discouraged workers, while the categories of part-time work and other forms of marginal attachment are still relatively unimportant. We find that tweaking the official definitions in apparently minor ways can produce alternative employment rates that are sharply higher in Russia but much lower in Romania and slightly lower in Estonia, and alternative unemployment rates that are sharply higher in Romania and moderately higher in Estonia and Russia.
    Keywords: nonstandard, work, data, unemployment, Estonia, Russia, Romania
    JEL: J21
    Date: 2006–06
  2. By: Emilia Penkova
    Abstract: The paper tests for potential pricing-to-market for a wide range of export industries in selected transition economies, namely Poland, Hungary and Bulgaria, at the four-digit level over the period 1990-1998. Panel estimation is undertaken and a fixed-effects linear model is estimated. The empirical evidence reported here offers new evidence for transition economies that have not been investigated before. Given the industries sampled, more price discrimination across destination is observed in Bulgaria than in Poland and Hungary. There is no evidence showing pricing-to-market in relation to common industries across source countries.
  3. By: Özlem Onaran; Engelbert Stockhammer (Department of Economics, Vienna University of Economics & B.A.)
    Abstract: The aim of this paper is to estimate the effect of FDI and trade openness on wages in the CEECs in the post-transition era. We utilize a cross-country sector-specific eceonometric analysis based on one-digit level panel data for manufacturing industry in the Czech Republic, Hungary, Poland, Slovakia, Slovenia, for the period of 2000-2004. The results suggest that the increases in productivity are reflected in wages only to a modest extent, even in the long-term, leading to a steady decline in the share of labor in manufacturing industry in almost all sub-sectors in all countries. Meanwhile, the high significant and negative effect of unemployment on wages shows that the labor market is flexible in terms of wage flexibility. FDI has a positive effect on wages only in the capital and skill intensive sectors. The results also show that the increase in trade with EU did not lead to positive prospects for wages in manufacturing industry, contrary to the expectations of pro-market policies and traditional trade theory. The long-term net effect of exports and imports is negative, suggesting that integration of CEECs to EU via trade liberalization have worked at the expense of labor.
    JEL: F16 F21 J31
    Date: 2006–06
  4. By: Christopher Edmonds (East-West Center and Department of Economics at the University of Hawaii at Manoa); Sumner J. La Croix (Department of Economics, University of Hawaii at Manoa); Yao Li (East-West Center)
    Abstract: This paper undertakes a detailed review of the policies that have shaped China's explosion of a global supply of exports, and examines long trend statistics on the evolution of China's trading partners and the goods it trades in the post-reform period. This review notes common characteristics in China's trade experience with those of earlier successful export-based economies of East Asia, such as South Korea and Japan. The survey finds that China's pattern of trade and trading partners are similar to those of more market-based Asian economies, but that the Chinese economy's orientation toward foreign trade is considerably greater than expected for an economy of its size and level of development. The authors argue that China still has a long way to go in terms of its export boom, especially if compared to the experiences of South Korea, Japan, and Taiwan. This suggests that China is on track to become one of the world's most formidable trading powers and its export policies and export performance will exert increasing influence on how the global trade regime evolves in the future.
  5. By: Horst Siebert
    Abstract: This paper analyzes China's economic performance in the last 25 years and discusses its prospect for growth in the future. China has enjoyed high annual GDP growth rates of about ten percent in the last 25 years. Exports and investment were the two driving forces of the growth process. FDI plays an important role. However, property rights, a crucial element in transforming a communist society, are far from being clearly developed. Structural issues such as the state-owned firms and the loss-making of the banking industry have to be solved. Monetary policy is complicated by the accumulation of reserves. Major policy issues in the future include the institutional deficit, especially with respect to the rule of law and the lack of democracy.
    Keywords: Growth process, FDI, developing countries, transformation, exchange rate policy, property rights, future scenarios
    JEL: E2 E4 F10 F43 K
    Date: 2006–06
  6. By: Deng Quheng (Chinese Academy of Social Sciences); Bjorn Gustafsson (University of Göteborg and IZA Bonn)
    Abstract: In China hukou (the household registration system) imposes barriers on permanent migration from rural to urban areas. Using large surveys for 2002, we find that permanent migrants number about 100 million persons and constitute approximately 20 percent of all urban residents. Receiving a long education, being a cadre or becoming an officer in the People’s Liberation Army are important career paths towards urbanisation and permanent migrants are much better-off then their counterparts left behind in rural China. The probability of becoming a permanent migrant is positively related to parental education, belonging to the ethnic majority and the parent’s membership in the Communist Party. At the destination, most permanent migrants are economically well-integrated. They have a higher probability to be working than their urban-born counterparts and those who receive a hukou before age 25 typically earn at least as much as their urban-born counterparts. The exceptions for this are those permanent migrants who receive a hukou after age 25 and people who received their hukou through informal routes.
    Keywords: China, hukou, rural-to-urban migration
    JEL: J61 O15 P36
    Date: 2006–05
  7. By: Reuben Gronau
    Abstract: Recent years witnessed a flourishing of literature on the implication of shifts from home- production to market production on the macro economy, and in particular, the real business cycle. This literature employs calibration techniques to emulate the fluctuations in market output, labor and capital inputs and productivity over the business cycle, assuming a representative consumer and using stylized parameters of the substitution elasticity between home and market goods, and of the home production function. This paper argues that the parameters used in this literature cannot be verified empirically because of econometric identification problems. Furthermore, using data from the late 90s from transition Russia, it is argued that one cannot capture the fluctuation between the home and the market by using a representative consumer, since there is a distinct difference between males and females in their reaction to loss of employment: men shift most of the time released from market work to leisure while women divide it almost equally between work at home and leisure. Finally it is shown that the switch from a controlled economy to a market economy resulted in significant increase in home productivity and an increase in the free time enjoyed by both Russian men and women.
    JEL: D13 E32 J22 P36
    Date: 2006–06
  8. By: Catherine Murray (Humboldt University Berlin, Department of Agricultural Economics and Social Sciences, Chair of Resource Economics, Luisenstr. 56, 10099 Berlin)
    Abstract: The transition process in central and eastern Europe (CEE) had a profound effect on how individuals interact. Economic and social institutions have changed, requiring an adaptation process by individuals in the move toward a market economy. How each individual accesses, manipulates and uses their networks will determine the use of their social capital. Within CEE, there is a presumption of low levels of social capital. This paper was written as a conceptual framework for a research project entitled ?Integrated Development of Agricultural and Rural Institutions? (IDARI) in CEE countries. One element of the IDARI project is to understand the emergence and maintenance of cooperative behaviour in light of rural restructuring and institutional change in CEE. A link exists between social capital formation and cooperation amongst individuals, as both concepts imply social interaction and the formation of trust. This paper questions the rationale of applying the contested "western" concept of social capital to CEE countries. It argues that although the concept was developed to understand processes within established democratic systems, it nevertheless is instrumental for analysing how trust is formed, and for understanding cooperation amongst individuals. As such, this framework reconciles literature from sociological and economic disciplines. Social networks and use of those networks (social capital) is becoming more important in light of accession to the EU, particularly when opportunities within and access to rural and regional development programmes are dependent on existing networks. Social capital is seen as a dynamic entity, a form of institutional change, which leads to innovation in the existing governance structures. Thus social capital provides a powerful explanatory tool for processes of institutional change.
    Date: 2005–06
  9. By: Annette Hurrelmann (Department of Agricultural Economics and Social Sciences, Humboldt-Universität zu Berlin, Luisenstr. 56, D-10099 Berlin)
    Abstract: In this paper agricultural land markets are regarded as organisations, which allows to take the effect of the social embeddedness of exchange into account. The markets-as-organisations approach suggests that markets are governed by an internal "constitution" containing rules on dissemination of information, control procedures and sanctioning mechanisms that provide advantages to members. The design of the market constitution is believed to be strongly influenced by the constellation of actors and their characteristics. In order to investigate the validity of this assumption the study chooses a comparative approach that analyses the content of land market rules in settings with different actor constellations and tries to find out why they have been established in this way. Both qualitative and quantitative data collected in three village case studies and a survey in two structurally different regions of Poland is used. The results underline that the internal constitution of the organisation "land market" is designed to serve members' interests by decreasing transaction costs and protecting community welfare and also support the expectation that the rules differ according to actor constellations.
    Date: 2004–11
  10. By: Stefan Lutz; Oleksandr Talavera; Sang-Min Park
    Abstract: We investigate the effects of regional and industry-wide foreign presence and foreign direct investment (FDI) on export volumes of Ukrainian manufacturing firms using unpublished panel data from 1996-2000. Foreign presence through FDI may have negative competition effects on domestic firms' performance while, at the same time, domestic firms' productivity may be increased by technology transfer or through training and demonstration effects. From a Cournot competition model including negative competition and positive technology-spillover effects, we derive the hypotheses that foreign presence and foreign investment might positively affect domestic firms' output and exports. Our estimation results support these hy-potheses and suggest in particular that large firms and durable-goods producers benefit most from foreign presence and investments.
    Keywords: transition, foreign direct investment, spillovers, firm performance.
    JEL: F14 F23 L60
    Date: 2006
  11. By: Dennis Görlich; Christoph Trebesch
    Abstract: This paper identifies the determinants and patterns of mass migration in Moldova – a country in which migration has become the dominant socioeconomic phenomenon in a period of less than 8 years. Special emphasis is placed on seasonal migration, which has become increasingly popular in many Eastern European countries. Our findings indicate that poverty is a main push factor of migration decisions. Additionally, network effects and migration experience appear to be crucial for Moldovan migration flows. Concerning the choice of seasonal vs. permanent migration, we find that neither young dependents in the household nor marital status seem to influence the migrant’s decision of whether to leave seasonally or permanently. The main group of seasonal migrants are less educated men from rural areas.
    Keywords: Migration decision, Seasonal migration, Poverty, CIS, Moldova
    JEL: F22 J61 O15 R23
    Date: 2006–06–03

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