|
on Transition Economics |
| By: | De Fraja, Gianni; Roberts, Barbara M |
| Abstract: | This paper uses the sequencing of privatisation to infer the objective pursued by the Polish government in the privatisation of its large manufacturing firms in the second half of the 1990's. We construct a model of mixed oligopoly, and use it to evaluate the privatisation process; our analysis is based on the assumption that firms which furthered the government's objective function the most would be chosen to be privatised first. Our empirical analysis identifies the features of the firms that were chosen for early privatisation, and suggests that the welfare maximisation was more important than the desire to maximise the revenues from privatisation and the government's budget, or to minimise employment losses. |
| Keywords: | Eastern Europe; mixed oligopoly; Poland; privatisation |
| JEL: | D63 I28 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6114&r=tra |
| By: | Ronald Bachmann; Michael C. Burda |
| Abstract: | The secular rise of European unemployment since the 1960s is hard to explain without reference to structural change. This is especially true in Germany, where industrial employment has declined by more than 30% and service sector employment has more than doubled over the past three decades. Using individual transition data on West German workers, we document a marked increase in structural change and turbulence, in particular since 1990. Net employment changes resulted partly from an increase in gross flows, but also from an increase in the net transition "yield" at any given gross worker turnover. In growing sectors, net structural change was driven by accessions from nonparticipation rather than unemployment; contracting sectors reduced their net employment primarily via lower accessions from nonparticipation. While gross turnover is cyclically sensitive and strongly procyclical, net reallocation is countercyclical, meaning that recessions are associated with increased intensity of sectoral reallocation. Beyond this cyclical component, German reunification and Eastern enlargement appear to have contributed significantly to this accelerated pace of structural change. |
| Keywords: | Gross worker flows, sectoral and occupational mobility, turbulence. |
| JEL: | J63 J64 J62 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2007-008&r=tra |
| By: | Oxelheim, Lars (Research Institute of Industrial Economics); Forssbæck , Jens (Lund University) |
| Abstract: | We discuss the prospects for Chinese money market development and transition to market-based monetary policy operations based on a comparative historical analysis of the present Chinese situation and the development in 11 European countries from 1979 up to the launch of European Economic and Monetary Union (EMU). Central banks in the latter group typically had an incentive to encourage the formation of efficient benchmark segments in the domestic money markets for the conduct of open market operations as traditional quantity-oriented instruments became increasingly ineffective. China is displaying many of the same symptoms as the European countries in the 1970s and 1980s, including poor monetary transmission due to excess liquidity and conflicts of interest due to unclear priority among multiple policy goals. We conclude that the current Chinese multiple-target monetary policy is counter-productive to efforts to develop an efficient money market that can serve as arena for an effective market-based monetary policy. |
| Keywords: | Monetary Policy Operations; Money Market; China; European Union; Deregulation |
| JEL: | E42 E52 F41 |
| Date: | 2007–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0696&r=tra |
| By: | Lundin, Nannan (Örebro University); Sjöholm, Fredrik (Research Institute of Industrial Economics); Ping, He (National Bureau of Statistics of China); Qian, Jinchang (National Bureau of Statistics of China) |
| Abstract: | This paper examines how Science and Technology (S&T) contribute to job creation in the Chinese manufacturing sector. The ambition of transforming China into an innovation-oriented nation and the emphasis on indigenous innovation capacity building have placed Science and Technology (S&T) high on the Chinese policy agenda. At the same time, the need for job creation is pressing, both to absorb the huge supply of underemployed people, and to enable the annual 20 million new labor market entrants to find employment. We examine the relationship between S&T and job growth in the Chinese industrial sector. S&T can be expected to have both positive and negative effects on employment. For instance, new technology might increase competitiveness and enable Chinese firms to expand their labor force. On the other hand, new technology might be labor-saving, thereby enabling Chinese firms to produce more output with fewer employees. Based on a large sample of manufacturing firms in China between 1998 and 2004, we analyze how S&T affect employment growth. Our results suggest that S&T activities have no effect on job creation. |
| Keywords: | China; Science and Technology; Job-Creation |
| JEL: | J21 O14 O33 |
| Date: | 2007–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0697&r=tra |
| By: | Lundin, Nannan (Örebro University); Sjöholm, Fredrik (Research Institute of Industrial Economics); Ping, He (National Bureau of Statistics of China); 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: | 2007–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0695&r=tra |
| By: | Sanjay G. Reddy (Dept. of Economics, Barnard College, Columbia University); Camelia Minoiu (Dept. of Economics and Institute for Social and Economic Research and Policy, Columbia University) |
| Abstract: | This Working Paper investigates how estimates of the extent and trend of consumption poverty in China between 1990 and 2001 vary as a result of alternative plausible assumptions concerning the poverty line and estimated levels of consumption. The exercise is motivated by the existence of considerable uncertainty about the appropriate poverty lines to apply and the level and distribution of resources in China. Our methodology focuses on the following sources of variation: alternative purchasing power parity conversion factors (used to convert an international poverty line), alternative estimates of the level and distribution of private incomes, alternative estimates of the propensity to consume of lower income groups, and alternative consumer price indices. It is widely believed that substantial poverty reduction took place in China in the 1990s, and we find this conclusion to be robust to the choice of assumptions. Moreover, there is no evidence that the rate of poverty reduction declined over time. China’s record of reducing consumption poverty has been dramatic. However, estimates of the extent of Chinese poverty in any year are greatly influenced by the assumptions made. The choice among these estimates is likely to have large implications for the perceived extent and trend of world poverty. |
| Keywords: | Consumption poverty, China, Sensitivity analysis |
| JEL: | I32 D31 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:0025&r=tra |
| By: | John Whalley; Li Wang |
| Abstract: | Currently proposals are actively circulating in China to move to a unified enterprise tax structure with similar tax treatment of state-owned enterprises (SOEs), other private enterprises (OPE) and foreign investment enterprises (FIEs). FIEs presently receive significant tax preferences through a sharply lower tax rate, tax holidays and other provisions. Here we use analytical representations of SOE behavior, which differ from that of the competitive firm, to argue that a unified tax structure may not be a desirable tax change and that typically a higher tax rate on SOEs is called for on efficiency grounds. Using a worker control model with endogenously determined shirking, taxes on SOEs reduce shirking and a reduced SOE tax rate under a unified tax relaxes discipline on SOEs and losses result. Our results indicate a 0.26% of GDP welfare loss using 2004 data from a unified tax, and larger loss relative to an optimal tax scheme. Alternatively, if we use a managerial control model variant, we find a 0.19% welfare loss from a unified tax, and larger losses relative to initial higher SOE tax rates. |
| JEL: | H2 P3 P35 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12899&r=tra |
| By: | d'Hombres, Beatrice; Rocco, Lorenzo; Suhrcke, Marc; McKee, Martin |
| Abstract: | This paper starts from an empirical assessment of different dimensions of social capital in the transition countries of Central and Eastern Europe (CEE) and the Commonwealth of Independent States (CIS). The level of social capital is lower in CEE-CIS countries compared to other countries in Europe and beyond. We then use a unique data source to carefully investigate the impact of social capital on individual self-reported health for eight countries from the Commonwealth of Independent States (Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Ukraine). We rely on three indicators for social capital – individual degree of trust, participation in local organisations, social isolation – and employ alternative procedures to consistently estimate the impact of social capital on health. We attempt to circumvent the endogeneity problems by using instrumental variable estimates. Our results show that, in the overall sample comprising all eight countries, the individual degree of trust is positively and significantly correlated with health, either in pooling estimation or when we rely on IV estimators with community fixed effects. Similarly, social isolation is negatively and significantly associated with health, irrespective of the procedure of estimation. On the other hand, the effect of being member of a Putnamesque organisation is more ambiguous and usually not significantly related to health. Finally, country-estimates suggest that the impact of social capital on health varies across the eight countries. We argue that the positive effect of membership on health is conditional on the quality of the political institutions and civil liberties, while trust and social isolation seem to influence health independently of those institutional factors. |
| Keywords: | Health; social capital; instrumental variables; transition countries |
| JEL: | P20 I12 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:1862&r=tra |
| By: | Peresetsky, A.A. (BOFIT); Karminsky, A.M. (BOFIT); Golovan, S.V. (BOFIT) |
| Abstract: | This paper examines the extent to which the observed diversity of private deposit interest rates in Russia is explained by bank financial indicators. We also test for whether the introduction of the bank deposit insurance scheme in 2005 affected deposit interest rates. Our results suggest market discipline in the Russian banking system involves Russian depositors demanding higher deposit interest rates from banks with risky financial policies. This discipline seems stronger than in developed countries. Our study suggests also that the risks taken by banks increased after introducing the deposit insurance. |
| Keywords: | banking; deposit interest rates; moral hazard; deposit insurance; Russia |
| JEL: | D43 E53 G21 P34 |
| Date: | 2007–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2007_002&r=tra |
| By: | Xing, Yuqing (BOFIT) |
| Abstract: | This paper analyzes dynamic changes of China's intra-industry trade with its major trading partners, Japan and the US, from 1980 to 2004. It also investigates to what extent foreign direct investment promoted intra-industry trade. The empirical results show that, while shares of China's intra-industry trade with both Japan and U.S rose substantially, its intra-industry trade with Japan has reached 35 per cent of the overall trade, considerably larger than 10 per cent with the US. Sino-Japan intra-industry trade concentrated in the electrical and machinery sectors accounted for 52 per cent and 46 per cent of overall trade respectively. On the other hand, it is in the chemical and food sectors where intra-industry trade represented a relatively large proportion of Sino-US trade, 50 per cent and 30 per cent accordingly in each sector. In addition, the analysis indicates that Japanese direct investment in China performed a significant role in enhancing intra-industry trade between Japan and China. However, it found no evidence that the US direct investment in China contributed to the growth of the bilateral intra-industry trade between the two countries. |
| Keywords: | intra-industry trade; FDI; China |
| JEL: | F14 F23 |
| Date: | 2007–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2007_001&r=tra |