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on Transition Economics |
| By: | Yan-Leung Cheung; P. Raghavendra Rau; Aris Stouraitis |
| Abstract: | We analyze related party transactions between Chinese publicly listed firms and their stateowned enterprise (SOEs) shareholders to examine whether companies benefit from the presence of government shareholders and politically connected directors appointed by the government. We find that related party transactions between firms and their government shareholders seem to result in expropriation of the minority shareholders in firms controlled by local government SOEs or with a large proportion of local government affiliated directors on their board, and in provinces where local government bureaucrats are less likely to be prosecuted for misappropriation of state funds. On the other hand, firms controlled by the central government (or with a large proportion of central government affiliated directors) are benefited in their related party transactions with their central government SOEs. |
| Keywords: | Law and economics; Government ownership; China; State-Owned Enterprises (SOE); Related party transactions; Political connections |
| JEL: | G15 G34 K33 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2008-11&r=tra |
| By: | Joseph P.H. Fan; Jun Huang; Felix Oberholzer-Gee; Mengxin Zhao |
| Abstract: | We examine the diversification patterns of almost all publicly listed non-financial companies in China during the 2001 to 2005 period. More than 70 percent of the firms in our sample are diversified. We document that patterns of diversification strongly depend on firms’ political connections. Former local bureaucrats are more likely than other CEOs to enter multiple industries. This effect is particularly pronounced in state-owned enterprises (SOEs) that operate in weak institutional environments. These companies are particularly prone to entering low-growth, low-profitability, and unrelated industries. Consequently, the performance effects of diversification differ sharply across SOEs and private firms. While the latter earn a premium from diversifying their operations, SOEs do not. Our results are consistent with the view that provincial and local governments push Chinese SOEs into unattractive sectors of the economy and that politically connected CEOs use their relationships to build corporate empires. |
| Keywords: | Corporate Diversification; Institutions; China |
| JEL: | D23 G32 G38 K42 P26 P31 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2008-3&r=tra |
| By: | Özlem Onaran |
| Abstract: | This paper estimates a labor demand equation based on the panel data of manufacturing industry in the Central and Eastern European Countries (the Czech Republic, Hungary, Poland, Slovakia, Slovenia, Lithuania, Bulgaria, and Romania) in order to test the effect of domestic factors (wages and output) and international factors (exports, imports, and foreign direct investment) on employment during the era of post-transition recovery. The findings indicate that e<span>mployment does not respond to wages in more than half of the cases. The output elasticity of labor demand is mostly positive, but low, with a number of cases where employment is completely de-linked from output. An impressive speed of integration to the European economic sphere through FDI and international trade has not prevented job losses in the manufacturing industry. While there are very few cases of positive effects, insignificant effects of trade and FDI dominate the findings with some evidence of negative effects as well<span></span></span><p></p><b></b><div><div id="ftn1"><p class="MsoBodyText"><span> </span></p> <p class="MsoFootnoteText" style="line-height: 200%;"><span style="font-size: 12pt; line-height: 200%;"> </span></p> </div> </div> |
| Keywords: | Central and Eastern European Countries, employment, FDI, trade |
| JEL: | F16 F21 J23 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:uma:periwp:wp165&r=tra |
| By: | Jikun Huang; Yu Liu; Will Martin; Scott Rozelle |
| Abstract: | Tariffs on agricultural products fell sharply in China both prior to, and as a consequence of, China's accession to the WTO. The paper examines the nature of agricultural trade reform in China since 1981, and finds that protection was quite strongly negative for most commodities, and particularly for exported goods, at the beginning of the reforms. Since then, the taxation of agriculture has declined sharply, with the abolition of production quotas and procurement pricing, and reductions in trade distortions for both imported and exported goods. Rural well-being has improved partly because of these reforms, and also because of strengthening of markets, public investment in infrastructure, research and development, health and education, and reductions in barriers to mobility of labor out of agriculture. Many challenges remain in improving rural incomes and reducing rural poverty. |
| JEL: | F1 O1 Q17 Q18 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13958&r=tra |
| By: | Li, Lixing |
| Abstract: | This paper examines a distinctive mechanism of providing incentives to local governments – upgrading counties to "cities". In China, awarding city status to existing counties is the dominant way of creating new urban administrative units, during which the local government gets many benefits. Using a large panel data set covering all counties in China during 1993-2004, I investigate the determinants of upgrading. I find that the official minimum requirements for upgrading are not enforced in practice. Instead, economic growth rate plays a key role in obtaining city status. An empirical test is then conducted to distinguish between a principal-agent incentive mechanism and political bargaining. The findings are consistent with the hypothesis that the central government uses upgrading to reward local officials for high growth, as well as aligning local interests with those of the center. This paper highlights the importance of both fiscal and political incentives facing the local government. The comparison between incentive mechanism and bargaining sheds light on an important question about China’s politics of governance: where does power lie in China? |
| Keywords: | economic growth; incentive mechanism; bargaining; political centralization; fiscal decentralization; county-to-city upgrading; central-local relationship |
| JEL: | H77 H11 O40 R11 P26 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8594&r=tra |
| By: | Sigurdson , Jon (European Institute of Japanese Studies); Palonka, Krystyna (European Institute of Japanese Studies) |
| Abstract: | This working paper offers insights on science and technology in China with supporting official and interview data. The paper, as evidenced from the title, is indicating the future role of Chongqing and its evolution primarily focusing on the period of rapid development of the Municipality after Chongqing became a political entity on the same level as provinces of China. This has coincided with the planning, construction and completion of the Three Gorges Dam Project involving the resettlement of 1,000,000 people – most them coming to the rural areas Chongqing Municipality. Three major sub-themes are highlighted. First, the city played important role during more than 2000 years of its history (in 1981, for example it became first inland port in China open for foreign commerce). In the XX century Chongqing was national capital during the Second World War and the Japanese invasion (Nationalists government). Since then it enjoyed higher political status and economic independence than any other city of the same size in whole western China. Second, the municipality’s geographical position and demographic condition makes it quite unique in West China. It has a population of 31 million, an area of 82 square km, a population density of 379 persons per km2 and a location at the upper reaches of Chang (Yangtze) River. This makes it the gate of Southwest China. Third, Chongqing has a strong basic multi-faced economy in the region. Central investment since the 1950s has assisted the development of a relatively strong modern industrial base in the city. Despite the post-Mao reform era’s impact on social and economic disparities as between the coastal areas and the west, Chongqing remains one of the China’s strongest city economies. Its industrial output value ranked 11th among the 35 biggest city economies in China in 2000, though it ranked behind the top ten most industrialized coastal cities, all of which had attracted much greater foreign investment during the reform era. The campaign to Open up the West provides Chongqing with the opportunity to act as the growth pole for a number of less industrialized provincial-level units in north-west and south-west China. Fourth, the initiatives by central authorities and the extraordinary task of Three Gorges Dam project required among other great tasks also relocation of over 1,2 million people, the rebuilding of two cities, eleven county towns and one hundred sixteen townships from the site of Three Gorges Dam water reservoir. Until 2005 there were already almost one million residents resettled. Less than 20 per cent moved outside Chongqing municipality and the majority was to be accommodated within the region of Chongqing Municipality. |
| Keywords: | Regional development; clusters; Regional innovation System (RIS); Development block; competence block; technology system; High Technology Parks; Overview of Science and Technology; FDI |
| JEL: | I18 I23 L53 O31 O32 R58 |
| Date: | 2008–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:eijswp:0239&r=tra |
| By: | Céline Allard; Sònia Muñoz |
| Abstract: | This paper uses the Global Integrated Monetary and Fiscal Model (GIMF), a New Keynesian open-economy general equilibrium model suitable for an integrated evaluation of monetary and fiscal policies, to analyze monetary policy challenges facing the Czech Republic. In the context of the recent rising inflation pressures, we analyze how the authorities' fiscal reform package and the planned reduction in the inflation target in 2010 would weigh on the conduct of monetary policy. |
| Keywords: | Monetary policy , Czech Republic , Inflation targeting , Fiscal policy , |
| Date: | 2008–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:08/72&r=tra |
| By: | Jaan Masso; Priit Vahter |
| Abstract: | There is growing interest in modelling the relationship between innovation and productivity in developing and transition econo¬mies due to their attempts to establish knowledge-based economies and to increase business R&D. Our paper investigates whether there is a signi¬ficant relationship between technological innovation and pro¬ductivity in the manufacturing sector of Estonia. We use firm-level data for the analysis from two waves of Community Innovation Surveys (CIS3 and CIS4) from 1998–2000 and 2002–2004, which is then combined with financial data about firms from the Estonian Business Register in order to study the effect of innovation at higher leads. We apply a structural model that in¬volves a system of equations on innovation expenditure, inno¬vation outcome and productivity. Our results show that during 1998–2000 only product innovation increased productivity, while in 2002–2004 only process innovation had a positive effect on productivity. This can probably be explained by the different macroeconomic conditions in the two periods. |
| Keywords: | productivity; innovation; Estonia |
| JEL: | O31 O33 C31 O10 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:mtk:febawb:61&r=tra |
| By: | Moga, Liliana Mihaela; Virlanuta, Florina Oana; Buhociu, Florin Marian; Moga, George |
| Abstract: | In an ever-developing society, a strong, viable economy is vital for any country that seeks to survive on the global market and to provide upwardly decent living standards for its citizens. Recognizing the above mentioned points as mandatory, but also prompted in its actions by the European community of which it recently became a member, Romania is taking steps to develop its electronic commerce to meet 21st century global standards. Some of the more important legal measures that have aided the development of e-commerce in Romania include the liberalization of telecommunications, the validation of electronic documents, the creation of customer protection services and regulations and the facilitation of electronic fund transfer through debit/credit cards. The obstacles encountered in the implementation of e-commercial transactions are manifold. The small number of users that can access the Internet from home and the people’s mistrust and lack of familiarity with e commercial transactions are only a few of the hindrances setting back their development in Romania. Emanating from the present study are numerous solutions for the improvement and popularization of Romanian e-commerce which would raise awareness about the advantages of electronic commerce on the Romanian business scene. |
| Keywords: | e-commerce; e-banking; usage; factors |
| JEL: | F11 C88 G21 |
| Date: | 2007–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8562&r=tra |
| By: | Mait Raava (Department of Management, Estonian Business School) |
| Abstract: | To create a sustainable competitive advantage, the firm must adapt its strategy in accordance with changes in industry. The purpose of this survey is to reveal how top managers see major changes in strategic management over the next five years. Companies from the Tallinn OMX Market were chosen as a sample of leading companies. Structured interviews were conducted with thirteen top managers. This revealed highly plausible changes in strategic management over the next five years as predicted by top managers of Estonian public companies – these were in the areas of the value chain, corporate structure, planning and control systems, motivation schemes and external opportunities. The major challenges for top managers in the near future are to successfully align the organizational structure with the value chain in accordance with emerging opportunities in foreign markets and define and invest enough in distinctive competencies to achieve sustainable profitable growth. This result is in accordance with the reflections of top mangers that their main priorities in strategic research and development are to facilitate the strategy development process, implement management tools, and research into and share knowledge and experience of doing business in foreign markets. These results suggest specific challenges for academics and consultants for achieving better collaboration in strategic management and development. |
| Keywords: | competitive advantage, strategic management, future challenges, research and development, collaboration |
| JEL: | M12 L32 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ttu:wpaper:176&r=tra |
| By: | Holtemöller, Oliver |
| Abstract: | New EU member countries are supposed to adopt the Euro as soon as economic convergence is achieved. This paper analyzes the effects of joining a monetary union on output and inflation variability in small acceding countries. An asymmetric macroeconomic two-country model is specified and combined with two different monetary policy regimes: (i) national monetary policy, (ii) monetary union. The performance of the two regimes is analyzed in terms of inflation and output variability for a broad range of structural parameter specifications. |
| Keywords: | European monetary union; open economy macroeconomic models; optimal monetary policy |
| JEL: | F42 E52 F41 |
| Date: | 2007–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8633&r=tra |