nep-tra New Economics Papers
on Transition Economics
Issue of 2008‒11‒25
33 papers chosen by
J. David Brown
Heriot-Watt University

  1. Similarity in export composition and catching-up By Luca De Benedictis; Lucia Tajoli
  2. Changes in the causes of earnings inequality in urban China from 1988 to 2002 By Asuyama, Yoko
  3. Problems of Strategic Management Formation in Russian Agrarian Sector By Bannikova, N.; Schuele, H.; Khachatryan, A.; Khachatryan, N.
  4. Young and Older Farmers€٠Perception and Assessment of Government Agricultural Agencies in Poland By Zawojska, Aldona
  5. Empirical analysis of agricultural trade between EU and China: Explanation behind China's growing agrifood imports By Huan-Niemi, E.; Niemi, J.
  6. Sustainable Rural Development in Environmentally Protected Areas of Hungary and Austria: The Role of CAP payments By Katona-Kovacs, J.; Dax, T.
  7. Agricultural and Economic Convergence in the EU Integration Process: Do Geographical Relationships Matter? By Sassi, M.; Pecci, F.
  8. DIRECT PAYMENTS AND THEIR IMPACT ON THE LAND MARKET IN POLAND By Dziemianowicz, Ryta Iwona; Przygodzka, Renata; Sadowski, Adam
  9. Competitive Advantages and Disadvantages in Romania€ٳ Agri-Food Trade -Trends and Challenges By Rusali, M.; Gavrilescu, C.
  11. China's Exports and the Oil Price By Joao Ricardo Faria; Andre Varella Mollick; Pedro H. Albuquerque; Miguel Leon-Ledesma
  12. Opportunities and Obstacles Facing Organic Farmers in the Czech Republic By Anders, Sven; Matejovsky, Lukas
  13. Institutional and General Economic Constraints to Economic Growth: Findings from the Industrial Enterprise Survey By Dashkeev, Vladimir; Freinkman, Lev
  14. Do Farm Credits Stimulate Development of Agriculture in Poland? By Tomasz, Siudek
  15. An assessment of the impact of possible CAP reform scenarios on Romanian agriculture By Alexandri, C.; Luca, L.
  16. Determinants of self-employment : the case in Vietnam. By Thi Quynh Trang Do; Gérard Duchêne
  17. Empirical Analysis of Potential Oligopsony Power and Production Technology in the Ukrainian Milk Processing Industry under Conditions of Economic Transition By Perekhozhuk, O.; Grings, M.; Glauben, T.
  18. Is Cross-listing Associated with Stronger Executive Incentives? Evidence from China By Chi, Wei; Zhang, Haiyan
  19. EU Enlargement Implications on the New Member States Agri-food Trade By Dasa, Bartosova; Lubica, Bartova; Jarko, Fidrmuc
  20. Change of asset efficiency in EU agriculture: challenges for new members By Takacs, I.
  21. Impact of public subsidies on farms€٠technical efficiency in New Member States before and after EU accession By Latruffe, L.; Bakucs, L.; Bojnec, S.; Ferto, I.; Fogarasi, J.; Gavrilescu, C.; Jelinek, L.; Luca, L.; Medonos, T.; Toma, C.
  23. Internal Finance and Growth: Microeconometric Evidence on Chinese Firms By Guariglia, Alessandra; Liu, Xiaoxuan; Song, Lina
  25. Conceptualisation of family farms€٠flexibility By Renner, S.; Pieniadz, A.
  26. Russia's emerging multinationals: trends and issues By Filippov, Sergey
  27. EU enlargement and consequences for FDI assisted industrial development By Narula, Rajneesh; Bellak, Christian
  28. The Determinants of Dairy Farming Competitiveness in Ukraine By Nivievskyi, O.; Von Cramon-Taubadel, S.
  29. Land and Happiness: Land Distribution and Subjective Well-Being in Moldova By Van Landeghem, Bert; Swinnen, Johan; Vranken, Liesbet
  30. Risk Governance in Bulgarian Dairy Farming By Bachev, H.; Nanseki, T.
  31. Measuring Support to Agriculture in a Transition Economy in the Southern Balkans: The case of FYR Macedonia By Ericson, T.; Pelling, E.; Surry, Y.
  33. The contribution of supply and demand shifts to earnings inequality in urban China By Asuyama, Yoko

  1. By: Luca De Benedictis (Università di Macerata); Lucia Tajoli (Politecnico di Milano)
    Abstract: <div><div>In this paper we look at the role of export composition in the growth process, considering how increased similarity in trade structure among countries can induce catching-up in income levels. We apply our analysis to the Central and Eastern European Countries (CEECs) using the EU as a benchmark. We explicitly consider the sectoral export patterns of the CEECs by comparing them to those of the current members of the EU, focusing on countries' specialization as suppliers for the EU market.</div><div>Our main result is that similarity in export composition has a positive, significant and nonlinear impact on catching-up, and seems to be driven by the growth of the main export market more than by other factors. Results are robust to controlling for openness and country-size and for investment, schooling, and the quality of institutions.</div></div>
    Keywords: EU enlargement,CEECs,,growth,,export composition,
    JEL: O1 O11
    Date: 2005–10
  2. By: Asuyama, Yoko
    Abstract: This paper analyzes the causes of earnings inequality in urban China from 1988 to 2002. Earnings inequality in urban China continuously increased, even when adjusting for regional price differences. This paper reveals how the causes of earnings inequality changed between the periods 1988-1995 and 1995-2002 by reflecting labor-related institutional reform in China. Contrary to the situation from 1988 to 1995, between 1995 and 2002, employment status became the largest disequalizer, and the decline of inter-provincial inequality contributed to a reduction in entire earnings inequality. Individual ability, represented by education and occupation, received much greater rewards. Throughout the period from 1988 to 2002, a large part of the explained inequality increase was due to change in price (valuation of each individual's attributes) and not due to change in quantity (composition of individual attributes).
    Keywords: China, Income distribution, Labor market, Earnings inequality, Inequality decomposition
    JEL: D31 J31
    Date: 2008–10
  3. By: Bannikova, N.; Schuele, H.; Khachatryan, A.; Khachatryan, N.
    Abstract: The rapid changes in Russian agriculture during the last fifteen years require development of particular strategies for efficient farm management. The West-European approaches of strategic management and planning decisions are not directly applicable in the Russian agricultural economy; Russian large and medium-sized agricultural enterprises act on different organisational principles, due to the specific peculiarities of their business mentality. The objective of the research is to adopt modern strategic management concepts to the peculiarities of Russian agriculture and to work out proposals on formation of strategic planning system in agricultural production. To this end it is necessary to define the strategic planning features which take into account the nature of modern stage of the development of Russian economy and the specific character of agricultural production; to indicate the preconditions which promote the wide implementation of strategic planning into economic practice; to establish the features of the concept of strategic planning for agricultural enterprises and to elaborate a methodical set of instructions providing formalized character to strategic planning. Applying the methodologies of monographic research and expert interviews, we conducted the analysis of peculiarities and problems of Russian agricultural production, revealed and systematized the features of development of strategy for agricultural enterprises. Based on the results of our investigation we developed strategic development models for the agricultural enterprises of Stavropol region applying the approach of Strength /Neutral / Weakness (SNW) analysis of the methodology of comparative advantage. The usefulness and empirical value of the developed models have been approved on the example of €܌UCH€ݠagricultural enterprise, which is the first in the region according to effectiveness indicators and the fourth according to its relative size.
    Keywords: Farm Management,
    Date: 2008
  4. By: Zawojska, Aldona
    Abstract: This article attempts to determine significance of differences among young and older farmers€٠judgments on selected performance aspects of two EU paying agencies in Poland, namely Agency for Restructuring and Modernization of Agriculture (ARMA) and Agricultural Market Agency (AMA). The survey across Poland was conducted in late 2006 on a total of 194 respondents. The Likert-scale questionnaires were used to obtain data responses regarding the performance of the agencies. The sampling unit was the individual farm, the respondent being the person in charge of managing the farm and being customer of both agencies. The following hypotheses were set up for the study: 1. The young and older farmers€٠perceptions of the government agencies impact on economic situation of agricultural holding are not significantly different; 2. The perceptions of young and older farmers of the government agencies€٠role performance are not significantly different. These hypotheses have been empirically tested using the Z-test. Hypothesis no 2 was rejected for two agencies whereas Hypothesis no 1 was rejected for one agency (AMA). Study reveals that both young and older respondents are more familiar with ARMA (responsible, among others, for the direct payments to farmers) than with AMA (responsible for market measures). The overall results of the present study suggest that on average Polish young farmers are more knowledgeable about Government agencies and more critical of the agencies performance than older farmers. Consequently, policy makers, Government and its agencies should more carefully look into some problems facing young people in Polish farming.
    Keywords: Government agencies, farmers, Poland, Agricultural and Food Policy,
    Date: 2008
  5. By: Huan-Niemi, E.; Niemi, J.
    Abstract: This study attempts to identify and measure quantitatively the effects of changing economic environment and trade policies on China€ٳ agricultural imports from the EU as well as globally. The approach is to model behavioural relationships in the agricultural trade between China and the EU by using annual trade data from 1986 to 2005. The results indicate that Chinese agricultural imports are relatively inelastic to absolute price changes, but relative price changes significantly affect the market shares of EU exports due to price competition. Trade liberalisation in the form of tariff reductions is trivial in changing the quantity of China€ٳ agricultural imports from the EU. China€ٳ growing agrifood imports has been fuelled by rapid income growth of its population.
    Keywords: EU, China, agricultural trade, International Relations/Trade,
    Date: 2008
  6. By: Katona-Kovacs, J.; Dax, T.
    Abstract: Although there are steps in the direction that the application of Common Agricultural Policy (CAP) instruments in different regions has to take account of the territorial dimension, these have to be further improved. This aspect attains particular relevance in ecologically sensitive areas. The aim of the paper is to examine the role of CAP instruments in two National Parks from the aspect of sustainable rural development. The two selected National Parks are both very famous protected areas in Hungary and Austria, situated in very different landscapes and representing different types of national parks. The territorial distribution of the CAP Pillar 1 and Pillar 2 payments are analysed against the specific local role and the regional and national contexts. The comparison addresses the different policy background of the two countries with their different history and experience within the CAP system. It particularly discusses the regional expenditure structure with regard to the placespecific role of agri-environmental payments.
    Keywords: National Parks, CAP, territorial dimension JEL Q20 Q01, Community/Rural/Urban Development,
    Date: 2008
  7. By: Sassi, M.; Pecci, F.
    Abstract: In the light of the reaffirmed importance of agricultural convergence within the integration process, the paper provides a preliminary investigation of the impact of the enlargement from the EU-15 to the EU-27 on agricultural real b-convergence and, with reference to the EU-27, of its relationship with economic catching-up process. The empirical analysis, based on a GWR approach, takes into account the regional spatial interdependences in estimating local parameters of convergence. The approach adopted allows to overcome the contradictory results from OLS estimations and parametric spatial econometric models pointed out by the literature and primarily connected to the existence of no unique convergence rate all over Europe. The analysis is based on a sample of 259 EU-27 regions at NUTS 2 level and is referred to the time period from 1991-2007.
    Keywords: Regional convergence, Spatial analysis, GWR approach, International Relations/Trade,
    Date: 2008
  8. By: Dziemianowicz, Ryta Iwona; Przygodzka, Renata; Sadowski, Adam
    Abstract: The article makes an attempt to answer the question: how direct payments affected the land market in Poland? The first part of the article explains the theoretical aspects of direct payments as an instrument of agricultural policy and their prospective effectiveness. Also the special character of the solutions adopted by Poland in relation with the use of this instrument was shown. The second part presents the main problems of the land market in Poland, taking into account both the supply and the demand factors of this market. The third part concentrates on searching for the cause-effect relations between the direct subsidies and the changes in the land market in Poland. They suggest, among others, that the forecasts regarding the retaining of land in households have been confirmed in practice.
    Keywords: Direct Payments, Land Market, Agriculture Policy, Structure of Agriculture, Agricultural and Food Policy, Q10, Q15, Q18.,
    Date: 2008–11–12
  9. By: Rusali, M.; Gavrilescu, C.
    Abstract: The paper is part of the studies concerning trade patterns and agri-food foreign trade policies in the EU enlargement context, aiming to assess the competitive trade advantages and disadvantages of the Romania€ٳ agri-food products in the foreign trade relations. The analysis focuses on the challenges of the trade liberalization and its influence on the intensification of the commercial exchanges, the supply diversification and on the trade balance equilibrium, faced by Romania€ٳ agri-food sector over the transition and pre-accession period. The structural reforms of the transition and EU accession preparations induced paramount changes in Romania€ٳ agri-food trade pattern, i.e. a fluctuating evolution of the agri-food foreign trade, either in correlation with the variations in the agricultural supply, the performance deficiencies of the agri-food sector that provoked disequilibria on the export market, or with the effect of political changes upon the trade flows. The recent integration in the Single Market recalls a special attention on the opportunities for the competitive producers to attract benefits offered by the enlarged access possibilities and the openness to third countries. In this context, an in-depth analysis of the bilateral trade relation between Romania and EU has been performed by using an alternative method of the comparative trade advantage index, based on the one developed by Vollrath [1]. The results emphasize the identification of either the competitive agri-food trade potential, or of the sensitive zones that could be affected by the external competition post-accession, as well as the needed improvements in the Romanian agri-food sector€ٳ competitiveness.
    Keywords: Agri-food trade, competitiveness, comparative trade advantage index., International Relations/Trade,
    Date: 2008
  10. By: Sojkova, Z.; Kropkova, Z.; Kovae, S.
    Abstract: This paper presents results of stochastic parametric approach used in estimation of farm technical efficiency. The estimation of output oriented technical efficiency was based on Stochastic Frontier analysis with Cobb-Douglas production function. Model specification for empirical application were employed Battese and Coelli 1995 model specification, where technical inefficiency effects are explicitly expressed as a function of a vector of firm-specific variables and random error and integrated in the stochastic frontier model. Model also included dummy variable which expressed production conditions in which Slovak farms are operating. We divided farms into two groups of production conditions: productive regions (PR) and less favorable area (LFA) regions. Data set included 79 Slovak farms operating in different regions in 2003-2005 time periods. Following input variables are included in the model: capital, material, labour and agricultural land according to LPIS system. Total product was used as output variable. Our analyses show that farms operated in 2004 achieved significantly highest level of technical efficiency in comparison with year 2003 in both groups of production condition, due to good weather condition in this year and due to increasing subsidy system. From the achieved results we can conclude that the significant statistical differences in average technical efficiency, was detected only in year 2005 between the farms of mentioned production conditions. Higher level of variability, in technical efficiency was detected in farms operating in productive regions compared to technical efficiency of farms in LFA regions.
    Keywords: less favorable area (LFA), subsidy, stochastic production frontier, panel data, output €Ӡoriented technical efficiency, Cobb-Douglas production function, Production Economics, Research Methods/ Statistical Methods,
    Date: 2008
  11. By: Joao Ricardo Faria; Andre Varella Mollick; Pedro H. Albuquerque; Miguel Leon-Ledesma
    Abstract: The increase in oil prices in recent years has occurred concurrently with a rapid expansion of Chinese exports in the world markets, despite China being an oil importing country. In this paper we develop a theoretical model that explains the positive correlation between Chinese exports and the oil price. The model shows that Chinese growth can lead to an increase in oil prices that has a stronger impact on its export competitors. This is due to the large labor force surplus of China. We then examine this hypothesis by estimating a reduced form equation for Chinese exports using Rodrik (2006)’s measure of export competitiveness, together with the oil price, productivity, real exchange rate, and foreign industrial production over the monthly 1992-2005 period. The results suggest a stable relationship and yields slightly positive values for the price of oil and elastic coefficients for export competitiveness, along with the expected negative elasticity for the real exchange rate.
    Keywords: China; Oil prices; Competitiveness; Exports; Productivity
    JEL: F14 F43
    Date: 2008–11
  12. By: Anders, Sven; Matejovsky, Lukas
    Keywords: Farm Management,
    Date: 2008
  13. By: Dashkeev, Vladimir; Freinkman, Lev
    Abstract: In December 2007, the Institute for the Economy in Transition (IET) carried out a survey of Russian industrial enterprises to identify their perceived constraints to successful economic development. Senior managers of enterprises were asked to answer 2 groups of questions and to assess: 1) government interference in decision making of enterprises, and 2) changes in various factors that may constrain further output growth. Findings of the survey suggest a conclusion that the structure of constraints to industrial growth, at least for medium and large businesses, considerably changed in the last 2-3 years. At present, the most critical barriers include constraints relatively new for firms and different from those experienced in the previous decade -- constraints related to energy, labor , and transportation. According to the abovementioned BEEPS, these areas were problematic in less than 15% of all cases, i.e. actually they were not considered as problems back in 2002 and 2005. However, according to this survey, the situation changed drastically by the end of 2007. Enterprises face very serious “physical” constraints to further growth, and it is very hard for them to solve such problems in a traditional way by “settling a problem with officials”.
    Keywords: Regulatory constraints for growth; Russia; industrial growth; enterprise survey
    JEL: O43 P27 P31 L50
    Date: 2008–03
  14. By: Tomasz, Siudek
    Abstract: In Poland, farmers rely primarily on cooperative banks for agricultural credit. Therefore, the paper attempt is to examine the impact of agricultural credits disbursed by the cooperative banks on regional development of agricultural sector in Poland over 1997- 2006. Sources of data include financial statements of the banks (1373 observations) providing credit-related information and sectoral background data for agriculture from Central Statistical Office of Poland. The levels of agricultural development were assessed using a nation-level and regional-level composite indicators constructed by the author by the use of factor analysis. Additionally, one-factor ANOVA, Pearson correlations and linear regression were applied. There was found, that the most prosperous agricultural regions include wielkopolskie, zachodniopomorskie and warminsko-mazurskie, the least prosperous malopolskie, podkarpackie, slaskie and swietokrzyskie voivodships. Results of econometric analysis suggest also that region of bank€ٳ activity has statistically significant impact both on agricultural credit and agricultural development levels. In Poland as a whole, farm credits provided by cooperative banks stimulate development of agriculture but only in two of sixteen regions (voivodships) their impact was positive and statistically significant. The average farm size and agricultural employment were found to be strongest in influencing agricultural development.
    Keywords: cooperative banks, agriculture, regional development, Agricultural Finance,
    Date: 2008
  15. By: Alexandri, C.; Luca, L.
    Abstract: Using a simplified model, with key-variable the prices of two different possible scenarios of CAP reform after 2013 (moderate and radical), this paper present a comparison between the price effects of implementation of each reform scenario at 2015 horizon on Romanian agriculture. This short analysis shows that, under the presented hypotheses, the net welfare effect, due to the price changes, for the selected products, is positive in both reform scenarios, yet greater in the case of the radical reform. Integrated in the large context of Romanian development, it seems that the influence of CAP reform upon agriculture and rural areas will be most likely a gradual one: an interpenetration between the two scenarios is foreseeable, starting with the moderate reform that will dominate the period around 2013, the reform measures acquiring a more radical character afterwards.
    Keywords: CAP reform, Romania, welfare effects, Agricultural and Food Policy,
    Date: 2008
  16. By: Thi Quynh Trang Do (Centre d'Economie de la Sorbonne); Gérard Duchêne (Centre d'Economie de la Sorbonne)
    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: GARCH, Generalized Hyperbolic Distribution, pricing, risk neutral distribution.
    JEL: D21 J24 M13 O17
    Date: 2008–09
  17. By: Perekhozhuk, O.; Grings, M.; Glauben, T.
    Abstract: The objective of this study is to provide an empirical analysis of potential market power of the Ukrainian milk processing industry in the market for raw milk. The article is based on the New Empirical Industrial Organization (NEIO) approach and pays special attention to the production technology of the sector. In NEIO studies of market power in the food processing industry the production technology is typically assumed to be of a neoclassical type with simple properties like, e.g., constant returns to scale. Properties of this kind, however, are likely not to prevail in most transition countries of Eastern Europe because of serious distortions in factor usage mainly due to institutional deficiencies. Therefore, the analysis of this study is based on the more general representation of the production technology by a translog production function. The econometric model used to measure the degree of oligopsony power of the Ukrainian milk processing industry is estimated on the basis of monthly data. The model did not produce any evidence suggesting the exercise of market power by the milkprocessing industry in the estimation period from January 1996 to December 2003. This empirical result is consistent with the low operating rate of the Ukrainian milk processing industry and relatively small concentration ratio at the national level. However, it may be appropriate to conduct similar analyses on a regional level, since the concentration of milk processing plants and the structure of agricultural farms in the regions of Ukraine are quite different.
    Keywords: milk processing industry, new empirical industrial organization (NEIO), oligopsony power, production technology, transition economy, Ukraine, Industrial Organization, Livestock Production/Industries,
    Date: 2008
  18. By: Chi, Wei; Zhang, Haiyan
    Abstract: This study examines whether firms incorporated in mainland China benefit from cross-listing in Hong Kong, China. The Hong Kong Stock Market has more stringent governance rules and a better investor protection than the mainland market. Hong Kong companies generally provide strong incentives to executives via equity-based compensation. Have cross-listed companies learned from Hong Kong local firms in adopting strong executive incentives? The evidence from this study suggests that top executive compensation of cross-listed firms is more sensitive to sales growth than mainland firms without cross-listing. However, compared to that of Hong Kong firms, executive pay of cross-listed firms are less sensitive to stock returns. Further study shows that it is necessary to differentiate state and non-state companies among the cross-listed firms, as they exhibit different patterns of executive incentives.
    Keywords: Cross-listing;Executive Compensation;Corporate Governance
    JEL: J33 M52
    Date: 2008–07
  19. By: Dasa, Bartosova; Lubica, Bartova; Jarko, Fidrmuc
    Abstract: In the paper dynamic gravity models are estimated for the agricultural trade of six new EU Member States (the Czech Republic, Latvia, Lithuania, Romania, Slovakia, and Slovenia) with selected countries and trade groupings between 1996 and 2005. In general, we find low income elasticities and high price elasticities of import demand for agricultural commodities. The lagged values for trade were highly significant. The accession to the EU increased the new Member States€٠exports, but had less impact on their imports. The new Member States have gained significantly from liberalized access to the EU agri-food market.
    Keywords: Agricultural trade, EU enlargement, dynamic panel data models, International Relations/Trade,
    Date: 2008
  20. By: Takacs, I.
    Abstract: Efficiency of farm assets is a very important factor of competitive production. It is in strong correlation with profitability of economic activities. One of the most important factor of the farm assets is the fixed assets, especially machinery. As it could be observed during the 1980s and 1990s on the farms of developed countries, the technical development was a considerable factor of farming. During that period the technical supply of farms increased significantly, at the same time the farm labour decreased, so the labour productivity rose considerably. This paper, based on the data of FADN, focuses on the investigation of some figures of the European Union for asset and labour efficiency between 1989 and 2005, and analyses what happened after 2004 when 10 new member countries accessed to the EU. The most important results of the research are that the farms of the new member countries are equipped at a considerably lower level in general and at the same time they use farm assets less efficiently than farms of the former member countries, and the result is that the competitiveness of the farms of new members is significantly lower. On the other hand, in the new member countries the agricultural policy focused on developing arable farming, so the gaps in the labour productivity are narrower in the field crop farms than in horticulture or animal husbandry. The gap in the labour productivity is the widest at the largescale farms, which can be explained not only with less assets but with lower capital efficiency as well.
    Keywords: productivity, labour, FADN, Productivity Analysis,
    Date: 2008
  21. By: Latruffe, L.; Bakucs, L.; Bojnec, S.; Ferto, I.; Fogarasi, J.; Gavrilescu, C.; Jelinek, L.; Luca, L.; Medonos, T.; Toma, C.
    Abstract: This paper presents some results of a twoyear (2006-2007) research project supported by the French Ministry of Research€ٳ funding program ECONET. One of the project€ٳ objectives was to investigate the determinants of farm technical efficiency in New Member States before and after accession to the European Union, and in particular the role of public subsidies on this performance variable. Four countries were considered: Hungary, the Czech Republic and Slovenia, who acceded to the EU in 2004, and Romania, whose accession was in 2007. The study found that subsidies had a negative impact on farm technical efficiency in Hungary over the period 2001-2005, in the Czech dairy corporate sector over the period 2000-2004, in Slovenia over the period 1994-2003, and in the Romanian crop sector in 2005.
    Keywords: technical efficiency, farms, subsidies, Hungary, Czech Republic, Slovenia, Romania, Farm Management,
    Date: 2008
  22. By: Ciaian, Pavel; Swinnen, Johan F.M.
    Abstract: This article analyses how credit market imperfections affect the impacts of subsidies by analyzing the effects of agricultural subsidies in the new Eastern Member States of the European Union with a partial equilibrium model which integrates credit and land market imperfections. We show that credit constraints have important implications for the distribution of policy rents. Credit market imperfections may induce very different effects of direct payments and lump-sum transfers.
    Keywords: agricultural policy, imperfect credit markets, land market, policy rents, Agricultural and Food Policy, Agricultural Finance, Land Economics/Use,
    Date: 2008
  23. By: Guariglia, Alessandra (University of Nottingham); Liu, Xiaoxuan (Chinese Academy of Social Sciences); Song, Lina (University of Nottingham)
    Abstract: Does the availability of internal finance constrain firm growth? Or does it foster it? To answer these questions, we use a panel of 407,096 Chinese firms over the period 2000−2005. We estimate dynamic assets growth equations augmented with cash flow, and find that the growth of state owned enterprises is not affected by cash flow, while that of privately owned firms is most affected. Considering that they represent 62% of the observations in our sample and that, in spite of being typically discriminated against by financial institutions, private firms have experienced sensational growth rates, our results suggest that internal finance has fostered rather than constrained their growth.
    Keywords: assets growth, cash flow, financial constraints
    JEL: D92
    Date: 2008–10
  24. By: Davidova, Sophia
    Abstract: The 2003 reform represents a significant shift in the EU policy, particularly in its movement to decoupled support. The potential impact of the reform depends on a range of factors including the modalities of its implementation and the structure of farming sectors in different countries. The then acceding countries had the flexibility to choose to implement the Single Payment Scheme (SPS) or to opt for the simplified Single Area Payment Scheme (SAPS). This paper attempts to provide a comparative overview of the level and distributional aspects of direct payments across seven New Member States (NMS) covering different sub-regions, the Baltics, Central and Eastern Europe, and the two most recent Member States from the Balkans €ӠBulgaria and Romania. Although the choice of 10 out of 12 NMS was similar €Ӡto implement SAPS €Ӡthe preaccession policies, the structure of agricultural output and the distribution of farm sizes have created substantial differences in the distribution of support and the choices between decoupled and coupled Complementary National Direct Payments (CNDP) or €شop-ups€ٮ As expected, due to the phasing-in process there has been a tendency of increased payments per hectare over time; however this increase has not been uniformly manifested. The differences in the output structure and labour intensity, as well as the large differences in farm structures and farm size distribution have brought about substantial differences in amounts of direct payments per beneficiary and AWU. One of the countries with the most concentrated land use in large farms, some of them corporate farms (companies or co-operatives), are the Czech Republic and Slovakia. Hungary and Bulgaria occupy the middle ground, whilst the Baltic States, Poland and Romania are characterised by small size farms almost across the board. This variety across the NMS has substantial implications for several aspects of SAPS implementation and its beneficiaries, including the amount of direct payments per beneficiary, the average size of beneficiary and the share of holdings benefitting from the scheme. The share of beneficiaries varies from a small segment of the holdings covered by the Farm Structure Survey (FSS), as for example in Bulgaria and Slovakia, to covering almost all holdings included in FSS (Lithuania). One of the positive signals is that in some NMS the concentration of SAP on a small segment has been decreasing (although slowly) in parallel with the increasing farmers and administration experiences. All these structural and distributional differences mean that setting payments limitations or including (eventually) the NMS in a system of progressive modulation may have widely different effects on different NMS and thus may generate substantially different political positions. Analytical survey results are presented concerning the change (or the lack of) of farmers strategic plans as a result of the implementation of SAPS in two of the above NMS with contrasting farm structures and payment distribution. The results indicate that as the implementation of SAPS means more predictable and increasing payments in comparison to the pre-accession policy the main change in the strategic farmers€٠plans is their increased willingness to stay longer in farming and increase the farm area operated. The expected response to 2003 CAP reform, namely lower incentives to produce and increased drive to diversification to non-farm activities was not detected in this early survey in NMS. However, it is difficult to disentangle the changes induced by SAPS from the general expectations due to accession to the EU.
    Keywords: Single Area Payment Scheme, new member states., Agricultural and Food Policy, Political Economy, Q1, Q18,
    Date: 2008–11–14
  25. By: Renner, S.; Pieniadz, A.
    Abstract: Agricultural enterprises in transition countries face dynamic changes in the prevailing economic, legal and political conditions. The success of an enterprise depends on its ability to adjust its farming system in response to these changing conditions. To meet this challenge, flexible and adaptable production technology is required. Thus, the farm€ٳ choice of technology is an important decision which determines its future performance. Although the concept of a firm€ٳ flexibility is widely analysed in microeconomics literature, there is no comprehensive framework to facilitate the analysis of family farms€٠flexibility, especially considering market imperfections and other obstacles associated with the transition process. In this paper we formulate the theoretical framework for flexibility analysis in order to investigate the impact of farm-specific characteristics on optimal flexibility design and to explain the differences between farms using different production technologies. In a simplified formal model, a competitive risk-averse firm producing one product is assumed to face fluctuating demand under uncertainty. By choosing the level of flexibility, the decision-maker determines the technology of the firm, expressed by the cost function. The optimal level of flexibility will be found by backward induction in the two-stage decision-making process, including ex ante technology decision and ex post output level decision. Using comparative statics and existing theoretical literature, some hypothesis about the relationship between flexibility and other firm characteristics will be formalised. Some possible model extensions that account for specific characteristics of the family farm business in transition countries, as well as future empirical analysis are discussed.
    Keywords: flexibility, output price risk, family farms, Farm Management,
    Date: 2008
  26. By: Filippov, Sergey (UNU-MERIT)
    Abstract: The paper focuses on the emergence of Russia's multinational companies. It aims to analyse their motives to internationalise as well as the approaches to internationalisation. While relevance of the theoretical perspectives is highlighted, the intention of the paper is to contribute to the understanding of the present-day phenomenon of emerging Russian multinationals; a phenomenon that has been largely overshadowed by the remarkable rise of Chinese and Indian companies. A special attention is devoted to the R&D activities of Russian multinational companies, and access to foreign technology as a driver of corporate restructuring. A discussion of the challenges and opportunities for host countries and policy implications is provided.
    Keywords: Russia, multinational companies, emerging economies, foreign investment, technology transfer, MNEs
    JEL: F21 F23 L21 O32
    Date: 2008
  27. By: Narula, Rajneesh (Henley Business School, University of Reading); Bellak, Christian (University of Economics Vienna)
    Abstract: Many of the new member states as well as candidate and accession countries of the EU are confident that membership will result in substantially increased inward foreign direct investment (FDI) in manufacturing. This paper discusses the policy issues and challenges that cohesion and accession countries face, applying lessons that by now have become mainstream in the parallel discussion of FDI-assisted development in the developing economies. We argue that globalisation has attenuated the benefits that accrue from EU membership for latecomers, and they must now compete for FDI not just with other European countries but also with non-EU emerging economies. We posit that they should not base their industrial development strategy on mere passive reliance of FDI flows without considering how to concatenate their industrial development and the nature of the MNE activities they attract.
    Keywords: FDI, European Union, MNEs, multinationals, absorptive capacity, globalization, industrial development, EU enlargement, foreign investment, direct investment
    JEL: F02 F23 O14 O19
    Date: 2008
  28. By: Nivievskyi, O.; Von Cramon-Taubadel, S.
    Abstract: WTO accession and the expected free trade agreement with the EU pose significant challenges for Ukrainian agriculture, implying structural changes for the sector as well as adaptations at the farm level to improve efficiency and competitiveness. However, a recent study by von Cramon-Taubadel and Nivievskyi [2] demonstrates a clear lack of competitiveness. This directs attention to the forces that drive competitiveness in Ukrainian agriculture. Dairy farming deserves particular attention in this regard, since it is one of the main income generating sources for the rural population, and of raw material supply for the fast growing dairy processing. In this paper at first we analyze the profile of competitiveness of dairy farming in Ukraine, demonstrating that only about 20% of dairy farms produce at competitive level. Then using a fixed-effect panel regression we analyze the determinants of competitiveness in Ukrainian dairy farming. The size of the farm, productivity and labor intensity have a strong positive effect on competitiveness, while arable land per head has negative effect. Finally, total subsidies received by farms are found to have a negative impact on competitiveness, and this impact does not differ significantly between farms with different herd size.
    Keywords: Dairy, Ukraine, Competitiveness, Livestock Production/Industries,
    Date: 2008
  29. By: Van Landeghem, Bert; Swinnen, Johan; Vranken, Liesbet
    Abstract: The distribution of land rights is a very important economic and political issue, and it played a central role in the transition processes in Europe and Asia. This paper analyzes the impact of the distribution of land on household welfare by using subjective well-being (SWB) data from a rural household survey in Moldova, the poorest country in Europe. The recent land reform in Moldova provides a natural experiment on the impact of land ownership distribution on SWB. We find that household land holdings have a positive effect on SWB but neighbours€٠average land holdings have a negative effect on SWB. People, regardless of the land distribution and even given the relatively low living standards of these households, rate their welfare by looking at how much other people possess. The findings of the paper have more general implications as it is one of the first attempts to measure the impact of wealth, rather than income, on SWB.
    Keywords: Land Economics/Use,
    Date: 2008
  30. By: Bachev, H.; Nanseki, T.
    Abstract: This paper identifies and assesses the efficiency of major modes for risk governance in Bulgarian dairy farming. Firstly, New Institutional Economics is incorporated and framework for analyzing governance of natural, market, private, and social (institutional) risks presented. Next, major types of risks faced by the dairy farms are specified and dominant market, private, public and hybrid modes of risk governance assessed. Finally, principal forms of risks caused by the dairy farms are identified, and efficiency of governing structure assessed. The development of Bulgarian dairy farming has been associated with quite specific risk structures facing by and causing from this sector. The huge market and institutional instability and uncertainty, and the high transaction costs, blocked evolution of effective market and collective modes for risk protection. A variety of private modes (internal organization, vertical integration, interlinking) emerged to deal with the significant natural, market, private, and social risks faced by the dairy farms and the other affected agents. Nevertheless, diverse risks associated with the dairy farming have not been effectively governed and persist during transition now. That is a consequence of ineffective public (Government, international assistance) intervention to correct market and private sector failures in the risk governance. The later have had considerable negative impacts on the evolution of farms, development of markets, structure of production and consumption, state of environment etc. Certain risks related to the dairy sector €ܤisappeared€ݠdue to the lack of effective risk governance and the declining dairy farming. That would lead to further deformation in development of the dairy and related sectors unless effective public measures are taken to mitigate existing problems and risks.
    Keywords: risk management, dairy, Bulgaria, Livestock Production/Industries, Risk and Uncertainty,
    Date: 2008
  31. By: Ericson, T.; Pelling, E.; Surry, Y.
    Abstract: As a candidate country to the EU and a member of the WTO there is a need for a comprehensive, transparent and internationally comparable assessment of the support to agriculture in Macedonia. OECD that has been measuring support to agriculture on a yearly basis, in its member countries as well as some other countries since the mid-1980s, offers a good tool for such a task. The method is known for its most important indicator, the Producer Support Estimate (PSE). Using this method, data on Macedonian agricultural policy measures, in place €Ӡpartly or entirely - for the period 1999 to 2004, have been gathered and categorized in order to arrive at an estimate of the level of support.
    Keywords: Producer support estimate (PSE), FYR Macedonia, trade protection, Agricultural and Food Policy,
    Date: 2008
  32. By: Cionga, Cristina; Luca, Lucian; Hubbard, Carmen
    Abstract: Using the most recent available data, this paper assesses who is likely to benefit, in the short-term, from the implementation of the CAP in Romania. Particularly, it focuses on the distributional impacts of the new form of agricultural subsidies under the CAP, i.e. SAPS and CNDP, identifying the main gainers and losers. Preliminary results reveal a highly uneven distribution of subsidies across farms, with the very large-scale ones, particularly those specialised in so-called €ܥnergy€ݠcrops, benefiting most from the flat rate direct aid. As a result, the existing gap between Romanian low-income and high-income farms will become larger, with those most vulnerable hardly benefiting from the introduction of (national and EU) direct payments.
    Keywords: CAP, Single Area Payment Scheme, farm structure, Romania, Agricultural and Food Policy, Q18,
    Date: 2008–11–14
  33. By: Asuyama, Yoko
    Abstract: This paper examines the degree to which supply and demand shift across skill groups contributed to the earnings inequality increase in urban China from 1988 to 2002. Product demand shift contributed to an equalizing of earnings distribution in urban China from 1988 to 1995 by increasing the relative product demand for the low educated. However, it contributed to enlarging inequality from 1995 to 2002 by increasing the relative product demand for the highly educated. Relative product demand was continuously higher for workers in the coastal region and contributed to a raising of interregional inequality. Supply shift contributed essentially nothing or contributed only slightly to a reduction in inequality. Remaining factors, the largest disequalizer, may contain skill-biased technological and institutional changes, and unobserved supply shift effects due to increasing numbers of migrant workers.
    Keywords: China, Income distribution, Labor market, Urban societies, Earnings inequality, Inequality decomposition
    JEL: D31 J31
    Date: 2008–10

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