nep-tra New Economics Papers
on Transition Economics
Issue of 2007‒01‒28
four papers chosen by
J. David Brown
Heriot-Watt University

  1. Educational Inputs and Outcomes Before the Transition from Communism By Beirne, John; Campos, Nauro F
  2. Exchange rate sensitivity of China’s bilateral trade flows By Wang , Jiao; Ji, Andy G.
  3. Can Production Subsidies Foster Export Activity? Evidence from Chinese Firm Level Data By Girma, Sourafel; Gong, Yundan; Görg, Holger; Yu, Zhihong
  4. Survey of land and real estate transactions in the Russian Federation : statistical analysis of selected hypotheses By Kisunko, Gregory; Coolidge, Jacqueline

  1. By: Beirne, John; Campos, Nauro F
    Abstract: Conventional wisdom suggests that the stocks of human capital were one of the few positive legacies from communism. However, if factories under communism were so inefficient, why would the education system not have been? Using the education production function approach and new data on educational inputs and outcomes from 1960 to 1989, we find evidence suggesting that the official human capital stocks figures were 'over-estimated' during the communist period. In other words, we find that the official human capital stock numbers are significantly higher than those predicted not only in relation to countries at similar levels of development, but also on the basis of educational systems with comparable features and efficiency levels.
    Keywords: education; human capital; transition economies
    JEL: J24 O11 P27
    Date: 2007–01
  2. By: Wang , Jiao (BOFIT); Ji, Andy G. (BOFIT)
    Abstract: Traditional assessments of the impact of exchange rate depreciation or appreciation on trade have involved estimating the elasticity of trade volume to relative prices. Such studies relied heavily on aggregated trade data. More recent studies employ bilateral trade data and methodologies such as ECM and gravity models. This study uses a generalized gravity model with data panel analysis in assessing the impact of currency depreciation or appreciation on bilateral trade flows between China and its top trading partners. The empirical evidence suggests exchange rates (both real and nominal) do not exert a significant influence on the overall exports from China. Thus, a devaluation or revaluation of the yuan should be expected to have only limited impact on China’s trade balance. Moreover, previous studies provide limited evidence of a negative relation between exchange rate volatility and trade flows. Given the current revaluation expectations, we find China’s anticipated shift toward a more flexible exchange rate regime fails to address China’s trade surplus issues, and thus will merely lead to a revaluation of the nominal exchange rate and increased exchange rate volatility. It appears a major overhaul of the country’s heavily subsidized export regime must first occur for the exchange rate to assume a larger role in China’s international trade.
    Keywords: exchange rate; trade; China; competition; gravity model; panel
    JEL: C22 C22 F14 F31
    Date: 2007–01–18
  3. By: Girma, Sourafel; Gong, Yundan; Görg, Holger; Yu, Zhihong
    Abstract: Using a unique firm level data set from the Chinese manufacturing sector, this paper analyses the impact of production subsidies on firms’ export performance. It documents robust evidence that production subsidies stimulate export activity, although this effect is conditional on firm characteristics. In particular, the beneficial impact of subsidies is found to be more pronounced amongst profit-making firms, firms in capital intensive industries and those with previous exporting experience. Compared to firm characteristics, the extent of heterogeneity across ownership structure (SOEs, collectives and privately-owned firms) proves to be relatively less important.
    Keywords: China; endogenous tobit; exporting; subsidies
    JEL: F1 O2 P3
    Date: 2007–01
  4. By: Kisunko, Gregory; Coolidge, Jacqueline
    Abstract: This paper analyzes land transactions between municipalities and private businesses based on official data and business surveys in 15 regions of the Russian Federation. Since the Russian Federation passed the new Land Code in 2001, land privatization has been officially encouraged by the federal government and in particular, land under previously privatized buildings was supposed to be privatized to the owner at a nominal price. The paper shows that many subnational authorities (which own or control the vast majority of land of interest to businesses) appear to use a combination of high statutory land buy-out prices and administrative barriers to deter land privatization and to offer " long-term leases " (which are not fully marketable) instead. On the other hand, regions that have established low buy-out prices and taken steps to remove unnecessary administrative barriers to land privatization appear to have higher rates of land ownership by businesses, and to face lower levels of corruption in the privatization process. The paper concludes that further reductions in the statutory prices for privatization of land under buildings and elimination of unnecessary administrative barriers should help to encourage further land privatization and the development of a competitive, secondary market in commercial land.
    Keywords: Municipal Financial Management,Urban Housing,Common Property Resource Development,Municipal Housing and Land,Real Estate Development
    Date: 2007–01–01

This nep-tra issue is ©2007 by J. David Brown. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.