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on Transition Economics |
| By: | Jutta Hebel (Institute of Rural Development, Georg August University Göttingen); Günter Schucher (GIGA Institute of Asian Affairs) |
| Abstract: | China’s transition to a market economy has been a process of basic institutional changes and institution building. The institutional change from a socialist labour regime (SLR) as one of the backbones upholding the traditional leninist system to a new ‘socialist’ market labour regime (SMLR) became particularly important for the success of economic and political reforms. This analysis is based on the analytical framework of regimes and makes use of the idea of path dependence. An ensemble of institutions, mutually interconnected and influencing each other, forms the regime and shapes its trajectory. Six institutions are identified to constitute the employment regime: (1) the system of social control, (2) the production system, (3) the system of industrial relations, (4) the welfare system, (5) the family order, and (6) the educational system. The SMLR is still characterised by its socialist past and differs from other varieties of transformation labour regimes and bears little resemblance to labour regimes in Western market economies. |
| Keywords: | China, institutional change, transition, labour market, employment regime, path dependence theory, ASEAN, Mercosur, CMA |
| JEL: | B52 J08 J40 P36 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:gig:wpaper:39&r=tra |
| By: | Theocharis N. Grigoriadis (The European Union Delegation to Russia); Benno Torgler (University of California) |
| Abstract: | This paper investigates the relative impact of regional energy production on the legislative choices of Russian Duma deputies on energy regulation between 1994 and 2003. We apply Poole’s optimal classification method of roll call votes using an ordered probit model to explain energy law reform in the first decade of Russia’s democratic transition. Our goal is to analyze the relative importance of home energy on deputies’ behavior, controlling for other factors such as party affiliation, electoral mandate, committee membership and socio-demographic parameters. We observe that energy resource factors have a considerable effect on deputies’ voting behavior. On the other hand, we concurrently find that regional economic preferences are constrained by the public policy priorities of the federal center that continue to set the tone in energy law reform in post-Soviet Russia. |
| Keywords: | Energy Regulation, Energy Roll Law Reform, Energy Resources, Roll Call Votes, Legislative Politics, State Duma, Russia |
| JEL: | Q40 D72 K23 P27 P37 P31 R11 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2006.146&r=tra |
| By: | Adam Geršl (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic; Czech National Bank, Prague, Czech Republic) |
| Abstract: | The paper compares the quality of the institutional framework of the Czech Republic with other new EU Member States and the EU 15 average using the World Bank data on Governance Indicators and argues that the pressure from the EU institutions during the accession negotiations period to reform the legal framework was not sufficient to improve significantly the business environment. Among factors that prevented the improvement of institutions the influence of strong interest groups, ineffective enforcement of legal rules and corruption are discussed and empirically illustrated using data on "state capture". |
| Keywords: | business environment; institutions; EU enlargement; corruption |
| JEL: | K20 K40 P30 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2006_04&r=tra |
| By: | ITO Keiko; FUKAO Kyoji |
| Abstract: | Does localization of procurements, sales, and management contribute to the profitability of overseas affiliates? This study examines this question by analyzing the performance of Japanese multinationals' manufacturing affiliates in China using a comprehensive affiliate-level dataset for the period from 1989 to 2002 collected by the Ministry of Economy, Trade and Industry (METI). We find that even though foreign multinationals often seem to enter China for the local market potential, affiliates with a higher local sales ratio tend to be less profitable - a pattern that is conspicuously different from that observed for Japanese affiliates in other regions such as the USA or the ASEAN-4, where local sales orientation has a positive impact on profitability. On the other hand, we find that Japanese affiliates' profitability was positively associated with their local procurement ratio. Using the coefficients of the profit function estimated from data on all Japanese manufacturing affiliates around the world, we can calculate the effect of localization (local sales and local procurements) on profitability by country, controlling for the level of GDP and per-capita GDP. In the case of China, the localization effects are positive following the country's accession to the WTO, suggesting that both local procurement and sales expansion contribute to higher profitability in China. |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:06037&r=tra |
| By: | Bernardo Bortolotti (University of Torino and Fondazione Eni Enrico Mattei); Andrea Beltratti (Bocconi University) |
| Abstract: | Nontradable shares (NTS) are an unparalleled feature of the ownership structure of Chinese listed companies and represented a major hurdle to domestic financial market development. After some failed attempts, in 2005 the Chinese authorities have launched a structural reform program aiming at eliminating NTS. In this paper, we evaluate the stock price effects of the actual implementation of this reform in 368 firms. The NTS reform generated a statistically significant 8 percent positive abnormal return over the event window, adjusting prices for the compensation requested by tradable shareholders. Results are consistent with the expectation of improved economic fundamentals such as better corporate governance and enhanced liquidity. |
| Keywords: | Chinese Equity Market, Financial Market Development, Split-Share Structure |
| JEL: | G14 G28 G32 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2006.131&r=tra |
| By: | Andrej Susjan (Faculty of Economics, University of Ljubljana, Slovenia); Tjasa Redek (Faculty of Economics, University of Ljubljana, Slovenia) |
| Abstract: | The paper investigates the relationship between fundamental uncertainty, a recurrent theme in post-Keynesian economic literature, and economic performance in transition economies. Uncertainty in the transitional economic environment is enhanced by factors such as institutional transformation, political and social instability, and legacies of the past. To capture the changes in the levels of uncertainty, the authors have designed the uncertainty index, based on a weighted selection of Heritage Foundation and Freedom House data. The correlation between the uncertainty index and growth is strong and clearly negative. Panel data analysis based on a growth model, supplemented by variables to simulate transitional cycle, and performed on a sample of transition economies for the period 1995-2002, confirms that uncertainty has a negative impact on economic growth. |
| Keywords: | uncertainty, economic transition, institutions, economic growth, foreign direct investment |
| JEL: | B52 O57 P27 P30 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:sti:wpaper:2007/01&r=tra |
| By: | Roman Horváth (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic; Czech National Bank, Prague, Czech Republic) |
| Abstract: | This paper examines policy neutral rate in real time for the Czech Republic in 2001:1-2006:09 estimating various specifications of simple Taylor-type monetary policy rules. First, we estimate it using GMM. Second, we apply a structural timevarying parameter model with endogenous regressors to evaluate the fluctuations of policy neutral rate over time. The results suggest that there is substantial interest rate smoothing and central bank primarily responds to inflation (forecast) developments. The estimated parameters seem to sustain the equilibrium determinacy. We find that the policy neutral rate gradually decreased over sample period to the levels comparable to those of in the euro area reflecting capital accumulation, smaller risk premium, equilibrium exchange rate appreciation as well as successful disinflation in the Czech economy. |
| Keywords: | policy neutral rate; Taylor rule; time-varying parameter model with endogenous regressors |
| JEL: | E43 E52 E58 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2007_01&r=tra |
| By: | Kamil Dybczak; Vladislav Flek; Dana Hajkova; Jaromir Hurnik |
| Abstract: | In this paper, we apply the aggregate production function to approximate the path of potential output. We use a time-varying NAIRU to derive the amount of potential labour and a newly developed measure of capital services to account for the productive impact of capital. In addition, trend total factor productivity is estimated. Production functions for the key sectors (Agriculture, Industry, etc.) are also calculated, exploring the growth accounting approach and decomposition of total factor productivity growth. During 1995ů2005, the growth in potential output was constrained by a gradual increase in the NAIRU, a temporary drop in investment activity and, most importantly, by only a modest rise in total factor productivity. In this period, the Czech economy also suffered from a structural burden, i.e. all growth in total factor productivity was exclusively due to better utilisation of resources, given their initial allocation, with an even negative contribution of resource reallocation. Just from 2001 onwards, we observe substantial improvements in supply-side performance, except for the functioning of the labour market. |
| Keywords: | . Capital services, factor allocation and utilisation, growth accounting, NAIRU, potential output, production function, structural changes, total factor productivity. |
| JEL: | E23 O11 O12 O47 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2006/4&r=tra |
| By: | Vit Barta |
| Abstract: | The purpose of this paper is twofold: firstly, to identify and quantify the potential costs to the Czech economy should fulfilment of the Maastricht inflation criterion (MIC) require disinflation; and secondly, to discuss and suggest policies geared towards minimising the costs related to meeting the MIC. We assume that the real appreciation of the koruna will be about 1.5% during the reference period. Three disinflation simulations are derived from this assumption. The results show that a decline in inflation by 0.5 p.p., 1 p.p. and 1.5 p.p. leads to a cumulative loss of output reaching about 0.5%, 1% and 1.6% respectively of annual potential GDP over a period of four years. The time restriction imposed on the simulations implies that the shorter the time to reach a given lower level of inflation, the higher the initial increase in the interest rate and the more aggressive the policy rule needed. The simulation results and the likely application of the monetary convergence criteria are relevant to the discussion of policy options. We argue that due to the asymmetry of the Maastricht exchange rate criterion (MERC), allowing for nominal appreciation rather than depreciation, fulfilment of the MIC should be superior. Also, we suggest that the main task for the CNB will be to focus on reaching a level of inflation consistent with the presumed level of the MIC sufficiently early before the reference period. This may require a downward adjustment of the CNB’s inflation point target and an extension of the current policy horizon. |
| Keywords: | Disinflation, EMU entry, euro adoption, Maastricht inflation criterion, policy options, real exchange rate appreciation, output loss. |
| JEL: | E31 E32 E47 E52 E58 E63 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:rpnrpn:2005/04&r=tra |