nep-tra New Economics Papers
on Transition Economics
Issue of 2006‒09‒11
six papers chosen by
Tono Sanchez
Universitat de Valencia

  1. Framing China: Transformation and Institutional Change By Krug, B.; Hendrischke, H.
  2. Enterprise Ground Zero in China By Krug, B.
  3. THE ROLE OF SMALL FIRMS IN CHINA’S TECHNOLOGY DEVELOPMENT By Lundin, Nannan; Sjöholm, Fredrik; Qian , Jinchang
  4. Dimensions of urban poverty in the Europe and Central Asia region By Infrastructure Department, Europe and Central Asia Region
  5. Rational Entrepreneurship in Local China: Exit Plus Voice for Preferential Tax Treatments By Zhu, Z.; Hendrikse, G.W.J.; Krug, B.
  6. Forecasting Emerging Market Indicators: Brazil and Russia By Victor Bystrov

  1. By: Krug, B.; Hendrischke, H. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: The paper offers a frame for investigating the extent to which decentralisation, and subsequent locally chosen institutions shape private organisational and institutional innovation. To include the numerous locally based “economic regimes†matters as the resulting business system reflects political institution setting and private organisational innovation. Such a frame is a necessary first step for empirical studies attempting to explain the heterogeneity of China’s business systems, the emergence of hybrid organisations, and last but none the least, the different growth rates that can be observed across China.
    Keywords: Transition Economy;Institutional Change in China;Private Business Sector;
    Date: 2006–06–30
  2. By: Krug, B. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: The paper claims that the analysis of the private business sector needs to concentrate on entrepreneurship. Based on fieldwork the paper proceeds by describing how Chinese entrepreneurs perceive the (economic) problems whose solutions pre-determine the economic performance of new firms. Entrepreneurship takes the form of institution building by which the high transaction costs can be mitigated and the value of assets and contracts be protected. The empirical research identified corporate governance, incentive contracts, local autonomy and networking as the crucial “hybrids†for mobilising investment and limiting moral hazard.
    Keywords: Entrepreneurship;Chinese Business Sector;Local Autonomy;Networking;
    Date: 2006–06–30
  3. By: Lundin, Nannan (European Institute of Japanese Studies); Sjöholm, Fredrik (European Institute of Japanese Studies); Qian , Jinchang (National Bureau of Statistics of China)
    Abstract: Science & Technology (S&T) is high on the Chinese policy agenda but there are large uncertainties on the actual S&T development. For instance, previous studies tend to focus only on large and medium-sized enterprises (LMEs). The situation in Chinese small firms is far less explored. This paper aims to examine the role of S&T-based small firms. More precisely, we examine how much S&T that has been accounted for by small firms and how their S&T intensity differs across industries and ownership groups. We also analyze how various firm characteristics differ over size categories and S&T status. This study is based on newly processed micro level data provided by the National Bureau of Statistics with information on a large number of S&T indicators for small-, medium-, and large-sized manufacturing firms in China in 2000 and 2004. Our results suggest that small firms in Chinese S&T resemble their role in many other countries. They account for a comparably small share of total S&T and most small firms are not engaged in any S&T. However, those small firms that do engage in S&T tend to be more S&T intensive and have a higher output in terms of patents than larger Chinese S&T firms.
    Keywords: Technology; SMEs; China; S&T; R&D
    JEL: O30 O31 O53
    Date: 2006–08–15
  4. By: Infrastructure Department, Europe and Central Asia Region
    Abstract: The objective of this study is to contribute to a better understanding of the extent and nature of poverty in urban areas in transition countries in Eastern Europe and the former Soviet Union, providing particular attention to the disparities within urban areas between capital cities and secondary cities, and focusing on dimensions of poverty related to provision of network infrastructure and energy services in cities. Household surveys carried out in 1998-2003 in 20 countries provided the data for the study. The study found substantial differences in urban areas between the capital and secondary cities, with households in secondary cities being worse off. In addition, secondary cities often had poverty indicators equivalent to, or worse than, those of rural areas, including in terms of access and quality (reliability) of infrastructure. The study confirmed that many households, especially in secondary cities, are " infrastructure-poor " because of unreliable and deteriorated services and that these households are hidden in studies that do not examine actual quality. Finally, the study found that income and infrastructure inequality are generally higher in urban areas, although inequality in secondary cities often was greater than that in the capitals.
    Keywords: Population Policies,Rural Poverty Reduction,City Development Strategies,Urban Poverty,Transport Economics Policy & Planning
    Date: 2006–08–01
  5. By: Zhu, Z.; Hendrikse, G.W.J.; Krug, B. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Bearing the legacy from central-planned system, the tax system in local China still lacks transparency and, in many cases, the liabilities of firms, especially those with extensive influences, are subject to negotiation despite the new tax-reform 1994. Applying Hirschman’s Exit-Voice theory, we construct a game model of interplay between firm and local government, in terms of exit and voice for preferential tax treatments, thereby revealing dynamics of these two options under rational entrepreneurship of economizing transaction cost. Suggested by the model, exit not only induces firm to opt for voice, it also underpins firm’s voice that forces local government to compromise. Particularly, when holding private information of exit cost, firm is able to mimic behaviors of those with high mobility so as to boost the effectiveness of voice. The empirical cases fully illustrate such rational entrepreneurship of exit plus voice to profit from local preferential policy.
    Keywords: Exit;Voice;Preferential Tax Treatments;Tax Competition;China;
    Date: 2006–03–10
  6. By: Victor Bystrov
    Abstract: The adoption of inflation targeting in emerging market economies makesaccurate forecasting of inflation and output growth in these economies of primary importance. Since only short spans of data are available for such markets, autoregressive and small-scale vector autoregressive models can be suggested as forecasting tools. However,these models include only a few economic time series from the whole variety of data available to forecasters. Therefore dynamic factor models, extracting information from a large number of time series, can be suggested as a reasonable alternative. In this paper two approaches are evaluated on the basis of data available for Brazil and Russia. The results allow us to suggest that the forecasting performance of the models considered depends on the statistical properties of the series to be forecast, which are affected by structural changes and changes in operating regime. This interaction between the statistical properties of the series and the forecasting performance of models requires more detailed investigation.
    Keywords: forecasting, emerging markets, factor models
    JEL: C53 C32 E37
    Date: 2006

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