nep-tra New Economics Papers
on Transition Economics
Issue of 2008‒05‒31
ten papers chosen by
J. David Brown
Heriot-Watt University

  1. Spatial econometric analysis of the determinants of location of manufacturing industry and market services sectors in Poland By Tomasz Brodzicki; Dorota Ciolek
  2. The Emerging Aversion to Inequality: Evidence from Poland 1992–2005 By Grosfeld, Irena; Senik, Claudia
  4. It is better to be the head of a chicken than the tail of a phoenix: a study of concern for relative standing in rural China By Carlsson, Fredrik; Qin, Ping
  5. A New Keynesian Model for Analysing Monetary Policy in Mainland China By Li-gang Liu; Wenlang Zhang
  6. Economic Growth, inequality and environment quality: An empirical analysis applied to developing and transition countries By Matthieu CLEMENT (GREThA UMR CNRS 5113); André MEUNIE (GREThA UMR CNRS 5113)
  7. Russian Energy Strategy and development of renewable power industry By Bazhanov, Andrei; Tyukhov, Igor
  8. On the Decomposition of Polarization Indices: Illustrations with Chinese and Nigerian Household Surveys By Abdelkrim Araar
  9. Determinants of self-employment : the case in Vietnam By Thi Quynh Trang Do; Gérard Duchêne
  10. Regulatory Institutions: A Blueprint for the Russian Federation By Donato de Rosa; Nick Malyshev

  1. By: Tomasz Brodzicki (Faculty of Economics, University of Gdansk); Dorota Ciolek (Faculty of Management, Department of Econometrics, University of Gdansk)
    Abstract: The paper comprises econometric analysis of location determinants of manufacturing industry and market services in Poland. A wide range of location determinants are analyzed taking into account exogenous and semi-endogenous region-specific aspects, sector-specific aspects (such as labor and capital intensity, economies of scale, intensity of forward and backward linkages, wage rates, knowledge intensity and technology level) as well as interactions between sector-specific and region-specific aspects. The analysis is carried out for an unbalanced data panel of manufacturing industry and market services sectors at the level of 3-digit NACE at the NUTS 2 level (16 voivodeships). The data cover the period from 1995 to 2006. We perform the estimation using Restricted Maximum Likelihood method (REML). The results point to positive spatial autocorrelation both for manufacturing industry and market services sectors. Sector-specific and region-specific effects as proxied by sectoral dummies are important.
    Keywords: location, industrial manufacturing, market services, Poland, spatial panel, Restricted Maximum Likelihood method
    JEL: R12 R15 C23 C31
    Date: 2008–05
  2. By: Grosfeld, Irena (PSE); Senik, Claudia (University of Paris IV Sorbonne, PSE)
    Abstract: This paper provides an illustration of the changing tolerance for inequality in a context of radical political and economic transformation and rapid economic growth. We focus on the Polish transition experience, and explore individuals' self-reported attitudes. Using unusually long and frequent (monthly) representative surveys of the population, carried out by the Polish poll institute (CBOS) from 1992 to 2005, we identify a structural break in the relationship between income inequality and subjective well-being. The downturn in the tolerance for inequality (1997) coincides with increasing distrust of political elites.
    Keywords: inequality, subjective satisfaction, breakpoint, transition
    JEL: C25 D31 I30 P20 P26
    Date: 2008–05
  3. By: Tingsong Jiang; Warwick McKibbin
    Abstract: A Free Trade Area of the Asia-Pacific (FTAAP) has been proposed as a long-term prospect by the Asia-Pacific Economic Cooperation (APEC). This paper examines the impact of the FTAAP on the national and regional economies in China using a suite of general equilibrium models: APG-Cubed, a dynamic global model; GTAP, a static global model; and CERD, a static China model with regional dimension. The impact on the Chinese economy of the APFTA is also compared with those of other forms of FTAs such as the ASEAN-China FTA (ACFTA) and the East Asia FTA (EAFTA). China benefits from all three FTAs, and the eastern region gains the most. It is also found that China's benefit increases along with the increase in coverage of the FTAs, that is, the APFTA has the biggest positive impact on the Chinese economy, among the three FTAs considered in this study. Sector-wise, textile, clothing and footwear sector gains the most from the FTAAP, while motor vehicle and parts sector loses the most.
    Date: 2008–05
  4. By: Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University); Qin, Ping (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: This paper examines the concern for relative standing among rural households in China. We use a survey-experimental method to measure to what extent poor Chinese farmers care about their relative income and find that the respondents care to a high degree. Compared to previous studies in developed countries, the concern for relative standing seems to be equally strong among rural households in China. This should be seen in the light of the rapid change China has undergone, with high growth, increased inequality, and the highest urban-rural income ratio in the world. Thus, the rural population, which is lagging behind, is suffering not only from the low absolute income but also from low relative income.<p>
    Keywords: Relative standing; China; Inequality
    JEL: C93 D63
    Date: 2008–05–22
  5. By: Li-gang Liu (Research Department, Hong Kong Monetary Authority); Wenlang Zhang (Research Department, Hong Kong Monetary Authority)
    Abstract: This paper adopts a three-equation New Keynesian model to evaluate the appropriateness of China's monetary policy framework. Our simulation results show that a hybrid rule that relies on both interest rate and quantity of money to conduct monetary policy appears to be more suitable than its alternatives at the current stage of economic and financial market development. Our simulation results also show that a sharp appreciation of the renminbi exchange rate would be disruptive to the inflation and output processes of the economy, despite its effectiveness in curbing inflation.
    Keywords: Monetary Policy Rule, New Keynesian Model, China
    JEL: E42 E52
    Date: 2007–11
  6. By: Matthieu CLEMENT (GREThA UMR CNRS 5113); André MEUNIE (GREThA UMR CNRS 5113)
    Abstract: This article aims at examining the relationship between social inequalities and pollution. On the one hand, it proposes a survey which shows that from a theoretical point of view, a decrease in inequality has an undetermined effect on environment. On the other hand, on the basis of these theoretical considerations, we propose an econometric analysis based on panel data for developing and transition countries during the period 1988-2003. More precisely, we examine the effect of income inequalities on the degree of local pollution (sulphur dioxide emissions and organic water pollution) by integrating Gini index in the formulation of environmental Kuznets curve. Then, two effects may be tested: (i) a direct effect of inequalities on pollution; (ii) an indirect effect by which the degree of inequality influence pollution by his negative impact on political freedoms.
    Keywords: pollution; inequality; environmental Kuznets curve; panel data
    JEL: C23 Q01 Q53 Q56
    Date: 2008
  7. By: Bazhanov, Andrei; Tyukhov, Igor
    Abstract: We consider two scenarios of the development of renewable power industry in Russia on an example of the Dasgupta-Heal-Solow-Stiglitz model. We assume that the resource rent is being invested into capital in the form of renewable power technologies according to the standard Hartwick saving rule. We use the modified Hotelling rule that reflects externalities implying, in particular, growing rates of oil extraction. We have shown that the growing extraction, prescribed by the Russian Energy Strategy (RES), implies growth of capital and the corresponding growth of per capita consumption in the short run (about 13 years). However, this growth is not sustainable and follows the decline in per capita consumption in the long run. An alternative hypothetical scenario of sustainable extraction implies always growing per capita consumption with the higher level in the long run in comparison with the RES-scenario.
    Keywords: renewable energy; sustainable growth; Russian Energy Strategy
    JEL: Q32 O13 Q01 P28
    Date: 2008–05–21
  8. By: Abdelkrim Araar
    Abstract: This paper explores the link between polarization and inequality and proposes some analytical methods to decompose the Duclos, Esteban, and Ray (2004) polarization index by population groups or income sources. In some cases, the decomposition methods were extend to the Esteban and Ray (1994) one. The main aim of these decomposition methods is to extend the interpretation derived from polarization indices to that of contribution components. Results drawn from Chinese data conclude that even if inequality has increased sharply during the last two decades, the pure polarization component was remained constant or even decreased on average. On the other hand, results from the 2004 Nigerian survey conclude that the population is spatially polarized, and this, based on geo-ecological zones. Furthermore, the two income sources, namely, Employment income and Non farm business income, significantly contribute to total polarization.
    Keywords: Polarization, Equity, Inequality, Decomposition
    JEL: D63 D64
    Date: 2008
  9. By: Thi Quynh Trang Do (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Gérard Duchêne (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: The determinants of self-employment are widely studied in the economic literature in recent twenty years. However, in the case of Vietnam where self-employed population takes an important proportion in workforce, it remains an under researched area. By using the data from the Vietnam Household Living Standard Survey 2004 (VHLSS2004), this paper aims to provide clearer insights into this area. We use the Heckman method to determine the level and identify the factors that affect the workers' choice between self-employment and wage employment in Vietnam. We emphasize the role of expected earnings differential in workers' decision making. Comparisons between female and male workers are made. Our empirical results show that there exist a number of determinants that permit to construct the pattern of self-employed as well a salary workers in Vietnam. Regardless of educational attainment, experiences and familial background, perspective of having higher earnings plays an important role in choice behavior of workers.
    Keywords: Occupational choice, earnings, self-employment, entrepreneurship, informal sector, Vietnam.
    Date: 2007–12
  10. By: Donato de Rosa; Nick Malyshev
    Abstract: The paper develops an architecture for regulatory institutions that could be feasible in the current Russian context. The paper examines two specific areas: first, establishing a regulatory oversight unit, located at the centre of government, responsible for the strategic co-ordination of regulatory reforms and oversight of regulatory quality; and second, redefining the mandates and strengthening the capacities of the competition authority and regulators of network industries. The paper draws on OECD experience and provides a number of lessons which could direct Russia’s future efforts in regulatory reform onto a track more similar to the one observed across the OECD.
    Date: 2008–05

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