nep-tra New Economics Papers
on Transition Economics
Issue of 2009‒01‒24
27 papers chosen by
J. David Brown
Heriot-Watt University

  1. Global and local sources of risk in Eastern European emerging stock markets By Fedorova , Elena; Vaihekoski, Mika
  2. What Lies behind Rising Earnings Inequality in Urban China? Regression-based Decompositions By Deng Quheng; Li Shi
  3. What beyond oil and gas? Russian trade specialisation in manufactures By Garanina, Olga
  4. Do better institutions improve bank efficiency? Evidence from a transitional economy By Hasan, Iftekhar; Wang, Haizhi; Zhou, Mingming
  5. The Contribution of Social Networks to Income Inequality in Rural China: A Regression-Based Decomposition and Cross-Regional Comparison By Ming Lu; Jianzhi Zhao
  6. Risk-taking by Russian banks: Do location, ownership and size matter? By Fungácová , Zuzana; Solanko, Laura
  7. Performance of business groups: Evidence from post-crisis Russia By Shumilov, Andrei
  8. Wage differentials across sectors in Europe: an east-west comparison By Iga Magda; François Rycx; Ilan Tojerow; Daphné Valsamis
  9. China's new labour contract law: No harm to employment? By Chen, Yu-Fu; Funke, Michael
  10. State-business relations and improvement of corporate governance in Russia By Yakovlev, Andrei
  11. The Impact of Foreign Macroeconomic News on Financial Markets in the Czech Republic, Hungary, and Poland By David Büttner; Bernd Hayo; Matthias Neuenkirch
  12. Business surveys and inflation forecasting in China By Kaaresvirta, Juuso; Mehrotra, Aaron
  13. Stuck Between Surplus and Shortage: Demand for Skills in the Russian Industry By Gimpelson, Vladimir; Kapeliushnikov, Rostislav; Lukiyanova, Anna
  14. Are optimistic expectations keeping the Chinese happy? By Paul Frijters; Amy Y.C. Liu; Xin Meng
  15. The prospects for Romania and state of the conduct ISPA Program By Duduiala-Popescu, Lorena
  16. Growth of Villages in China, 1990-2002 By Hiroshi Sato
  17. Happiness in the Dual Society of Urban China: Hukou Identity, Horizontal Inequality and Heterogeneous By Shiqing Jiang; Ming Lu; Hiroshi Sato
  18. The structural funds management in third-Central and Eastern European By Duduiala-Popescu, Lorena
  19. How vertically specialized is Chinese trade? By Dean, Judith; Fung , K.C.; Wang, Zhi
  20. Formal and Informal Sectors in China and India: An Accounting-Based Approach By Codrina Rada
  21. An Empirical Analysis of Income Inequality between a Minority and the Majority in Urban China: The Case of Ningxia Hui Autonomous Region By Li Shi; Ding Sai
  22. Are Public Sector Workers Underpaid in Russia? Estimating the Public-Private Wage Gap By Gimpelson, Vladimir; Lukiyanova, Anna
  23. The Determinants of Private Transfers in Rural Vietnam By Eozenou, Patrick
  24. Trust and Loss Aversion in Romanian Capital Market By Alexandru, Ciprian Antoniade
  25. Competencies Driving Innovative Performance of Slovenian and Croatian Manufacturing Firms By Janez Prašnikar; Tanja Rajkoviè; Maja Vehovec
  26. Economic convergence and the fundamental equilibrium exchange rate in Poland By Rubaszek, Michał
  27. ISO 14000 - Condition of Competition Romanian Firm on Foreign Market By Enea, Constanta

  1. By: Fedorova , Elena (BOFIT); Vaihekoski, Mika (BOFIT)
    Abstract: We study a pricing model for global and local sources of risk in six Eastern European emerging stock markets. Utilizing GMM estimation and an unconditional asset-pricing framework with and without time-varying betas, we perform estimations based on monthly data from 1996 to 2007 for Poland, Czech Republic, Hungary, Bulgaria, Slovenia and Russia. Most of these markets display considerable segmentation; the aggregate emerging market risk, as opposed to global market risk, is the significant driver for their stock market returns. It also appears that currency risk is priced into stock prices. The difference between local and global interest rates can be used to model the time-variation in the betas for both sources of risk.
    Keywords: market integration; segmentation; asset pricing; emerging markets; Eastern Europe country risk
    JEL: G12 G15 G32
    Date: 2009–01–13
  2. By: Deng Quheng; Li Shi
    Abstract: Coupled with advances in enterprise reform and changes in the wage structure, earnings inequality in urban China has been increasing, and this has contributed significantly to rising income inequality. Using urban household survey data from the 1988, 1995 and 2002 waves of the China Household Income Project, in this paper, we decompose earnings inequality in urban China by using the regression-based decomposition methods developed by Fields (1998), Morduch and Sicular (2002) and Shorrocks (1999). The decomposition results indicate that the effects of gender and membership of the Communist Party of China on earnings inequality have changed little. While work experience had a reduced effect on earnings inequality, the effects of education and occupation have increased. The contributions of ownership status and industry to earnings inequality have increased. Regional effects have been the largest recent contributor to earnings inequality.
    Keywords: earnings inequality, regression-based decompositions, urban China
    JEL: D31 J31 O53
    Date: 2009–01
  3. By: Garanina, Olga (BOFIT)
    Abstract: The objective of the paper is to study Russia's pattern of specialisation in the manufactures trade since 1998. Russia's global trade balance for manufactures is rapidly deteriorating. However, the trade pattern in manufactures should be differentiated according to Russia’s main trading partners: the European Union (EU), the Commonwealth of Independent States (CIS) and China. On the basis of trade indicator analysis (revealed comparative advantages and Grubel-Lloyd index of intra-industry trade), we show that Russia is globally disadvantaged in the manufactures trade vis-à-vis the EU and China, and advantaged in the trade with the within the CIS. Russia is managing to expand its manufactured exports to other CIS countries. However, it is gradually losing its role of main supplier of capital goods in the post-Soviet space.
    Keywords: international trade; trade specialisation; revealed comparative advantage; intra-industry trade; Russia
    JEL: F14
    Date: 2009–01–13
  4. By: Hasan, Iftekhar (BOFIT); Wang, Haizhi (BOFIT); Zhou, Mingming (BOFIT)
    Abstract: The pace of transition in China over the last two decades has led to great variation across the country in terms of institutional and financial development. In this paper, using a panel of Chinese provinces during the period 1993–2006, we empirically investigate the determinants of the efficiency of the banking sector from an institutional perspective. The most important institutional developments in China are the emergence and gradual dominance of the market economy, financial deepening, the growth of a private sector, the establishment of secure property rights, and rule of law. We find that institutional variables play an important role in affecting banking efficiencies, and that banks tend to operate more efficiently in those regions with a greater private sector presence and more property rights awareness, while the role of financial deepening and rule of law is less straightforward.
    Keywords: institutional development; bank efficiency; Chinese banks
    JEL: G21 O43
    Date: 2009–01–13
  5. By: Ming Lu; Jianzhi Zhao
    Abstract: This study aims to quantify the contribution of social networks, i.e., guanxi,to income inequality in rural households in China. One purpose is to understand how this influence varies across regions with different levels of marketization and economic development. Employing household survey data in rural China, we find that social networks contribute 12.1%-13.4% to income inequality among households in rural China, ranking fourth after village identifiers, nonfarm employment, and education. We also find that social networks exert a greater impact on income and a greater contribution to income inequality in Eastern China, compared with Middle-Western China where economic development is relatively slower. Our findings challenge the conventional understanding that social capital is the capital of the poor. In other words,the rich get richer in richer regions through social networks.
    Keywords: Social Network, Income Inequality, Marketization, Regression-Based Decomposition
    JEL: O15 Z13 P36
    Date: 2009–01
  6. By: Fungácová , Zuzana (BOFIT); Solanko, Laura (BOFIT)
    Abstract: The Russian banking sector has experienced enormous growth rates during the last 6-7 years. The rapid growth of assets has, however, contributed to a decrease in the capital adequacy ratio, thus influencing the ability of banks to cope with risk. Using quarterly data spanning from 1999 to 2007 on all Russian banks, we investigate the relationship between bank characteristics and risk-taking by Russian banks. The analysis of financial ratios reveals that, on average, the risk levels are still below those observed in Central and Eastern Europe. Combining the group-wise comparisons of financial ratios and the results of insolvency risk analysis based on fixed effects vector decomposition, three main conclusions emerge. First, controlling for bank characteristics, large banks have higher insolvency risk than small ones. Second, foreign-owned banks exhibit higher insolvency risk than domestic banks and large state-controlled banks are, unlike other state-controlled banks, more stable. Third, we find that the regional banks engage in significantly more risk-taking than their counterparts in Moscow.
    Keywords: bank risk-taking; banks in transition; Russia
    JEL: G21 G32 P34
    Date: 2009–01–13
  7. By: Shumilov, Andrei (BOFIT)
    Abstract: Transition economies like Russia lack properly functioning financial markets and institutions, which results in severe agency and information problems. Business groups in such markets have the potential to offer benefits to member firms, but they also may destroy value. Using a unique database on membership in Russian business groups, we analyze the relationship between group affiliation and firm performance on the basis of a large panel of manufacturing firms for the period 1999-2002. We find that group membership has a positive effect on productive efficiency, but gains from improved productivity in group affiliates do not adequately translate into higher profitability. This is consistent with the expropriation hypothesis, according to which controlling owners of groups extract private benefits by siphoning profits from their members. Among the different group categories delineated by type of controlling owner, the extent of profit dissipation is especially large in groups controlled by private domestic owners, who face a greater risk of possible future expropriation of property. Finally, we examine two potential sources of benefits of membership in business groups: mutual insurance among affiliated firms and preferential treatment from the state via subsidies and tolerated tax arrears. We find that, during the period studied, groups neither provided mutual insurance nor did they receive larger support from the state than unaffiliated firms. Together with findings from the previous literature indicating that, prior to the 1998 financial crisis, group firms benefited from more efficient allocation of capital within groups than in the rest of the economy but not after the crisis, our results suggest that the advantages of group membership recede as the economic and institutional environment gradually improves.
    Keywords: business groups; firm performance; transition economy; Russia
    JEL: G30 L20
    Date: 2009–01–13
  8. By: Iga Magda (The Polish Ministry of Labour and Social Policy); François Rycx (Centre Emile Bernheim, DULBEA, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels and IZA-Bonn.); Ilan Tojerow (DULBEA, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels and NBB and IZA-Bonn.); Daphné Valsamis (DULBEA, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels.)
    Abstract: This study compares the structure and determinants of inter-industry wage differentials in Eastern and Western European countries (namely Belgium, Italy, the Netherlands, Norway, Portugal and Spain compared with Latvia, Lithuania, the Czech Republic, Poland and Slovakia). To do so, we use a unique harmonised, linked employer–employee data set, the 2002 European Structure of Earnings Survey. Findings show substantial differences in earnings across sectors in all countries, even when controlling for a wide range of employee, job and employer characteristics. The hierarchy of sectors in terms of wages appears to be quite similar in Eastern and Western European countries. Among high-wage sectors, we find the energy (coke, petroleum, gas, electricity and nuclear power), chemical, financial and computer industries. In contrast, it is in the traditional sectors (wood and cork industry, textile, clothing and leather industry, hotels and restaurants, and retailing) that wages are lowest. Further results suggest that the dispersion of inter-industry wage differentials fluctuates considerably across countries. It is relatively small in Norway and Belgium, large in the Netherlands, Italy, Spain, Poland and the Czech Republic, and very large in Portugal, Latvia, Lithuania and Slovakia. Our findings support the hypothesis of a negative relationship between the dispersion of inter-industry wage differentials and a country’s degree of corporatism.
    Keywords: Inter-industry wage differentials, Collective bargaining, Europe, Matched employer-employee data.
    JEL: J31 J51
    Date: 2009–01
  9. By: Chen, Yu-Fu (BOFIT); Funke, Michael (BOFIT)
    Abstract: In January 2008, China adopted a new labour contract law. This new law represents the most significant reform to the legislation on employment relations in mainland China in more than a decade. The paper provides a theoretical framework on the inter-linkages between labour market regulation, option value and the choice and timing of employment. All in all, the paper demonstrates that the Labour Contract Law in its own right will have only small impacts upon employment in the fast-growing Chinese economy. Rather, induced increasing unit labour costs represent the real issue and may reduce employment.
    Keywords: China; labour contract law; real options; employment
    JEL: C61 D81 D92 J23
    Date: 2009–01–13
  10. By: Yakovlev, Andrei (BOFIT)
    Abstract: In this paper, we analyze the influence of the state on the improvement of corporate governance in Russia of the early 2000s. Taking into account the low quality of market institutions in the 1990s (i.e., the market failure phenomenon), we assume that state intervention as the “second best” institution had a positive impact in this case. Using a dataset of 822 joint-stock companies, we tested this hypothesis in two types of corporate models – state-owned or mixed firms and “politically connected” firms. The first model confirmed a strong positive influence of state ownership on the corporate governance in Russia in 2001-2004. The estimation results of this model are statistically robust in different specifications. We connect this result with attempts of the Russian government to use standard mechanisms and procedures of corporate governance to defend its property rights in its relations with state-owned and mixed enterprises.
    Keywords: corporate governance; market institutions; state-owned companies; Russia
    JEL: G34
    Date: 2009–01–13
  11. By: David Büttner (Faculty of Business Administration and Economics, Philipps Universitaet Marburg); Bernd Hayo (Faculty of Business Administration and Economics, Philipps Universitaet Marburg); Matthias Neuenkirch (Faculty of Business Administration and Economics, Philipps Universitaet Marburg)
    Abstract: In this paper, we study the effects of euro area and US macroeconomic news on financial markets in the Czech Republic, Hungary, and Poland (CEEC-3) from 1999 to 2006. Using a GARCH model, we examine the impact on daily returns of three-month interest rates, stock market indices, exchange rates versus the euro, and the US dollar. First, foreign macroeconomic news has a significant impact on CEEC-3 financial markets. Second, neither US nor European news has a stronger effect over the whole observation period. Third, the process of European integration is accompanied by an increasing importance of euro area news relative to US news. Fourth, there are country-specific differences: the Czech markets become more affected by foreign news after the Copenhagen Summit than the other countries. Finally, testing the persistence of news over a business week confirms our main results.
    Keywords: Financial Markets, Czech Republic, Hungary, Poland, Macroeconomic News, European Monetary Union
    JEL: G12 G15 F30
    Date: 2009
  12. By: Kaaresvirta, Juuso (BOFIT); Mehrotra, Aaron (BOFIT)
    Abstract: We use business survey data collected by the People’s Bank of China for inflation forecasting. Some survey indicators lead to enhanced forecasting performance relative to the univariate benchmark model, especially for a period of moderate inflation. However, the estimated models do not do a good job of tracking the recent pickup in Chinese inflation, due to increases in food prices.
    Keywords: inflation forecasting; business surveys; China
    JEL: C53 E31
    Date: 2009–01–13
  13. By: Gimpelson, Vladimir (CLMS, Moscow Higher School of Economics); Kapeliushnikov, Rostislav (CLMS, Moscow Higher School of Economics); Lukiyanova, Anna (CLMS, Moscow Higher School of Economics)
    Abstract: In order to remain competitive, firms need to keep the quantity and composition of jobs close to the optimal for their given output. Since the beginning of the transition period, Russian industrial firms have been widely reporting that the quantity and composition of hired labor is far from being close to optimal. This paper discusses what kinds of firms in the Russian manufacturing sector are not able to optimize their employment and why. Do they suffer from a labor shortage induced by rapid growth, or are they still struggling with employment overhang? What are the occupations and skills in which there is a supposed surplus or shortage? What factors affect the probability that a firm will report non-optimal employment and be unable to solve this difficulty? Where is the labor excess/shortage concentrated and what makes it persistent? Finally, we discuss the costs of non-optimal employment. The analysis presented in this article is based on the data from a large-scale survey of Russian manufacturing firms.
    Keywords: labour shortage, skills, training, transition economies, Russia
    JEL: J23 J24
    Date: 2009–01
  14. By: Paul Frijters (QUT); Amy Y.C. Liu (ANU); Xin Meng (ANU)
    Abstract: In this paper we study the e¤ect of optimistic income expectations on life satisfaction amongst the Chinese population. Using a large scale household survey conducted in 2002 we find that the level of optimism about the future is particularly strong in the countryside and amongst rural-to-urban migrants. The importance of these expectations for life satisfaction is particularly pronounced in the urban areas, though also highly significant for the rural area. If expectations were to reverse from positive to negative, we calculate that this would have doubled the proportion of unhappy people and reduced proportion of very happy people by 48%. We perform several robustness checks to see if the results are driven by variations in precautionary savings or reverse causality.
    Keywords: Expectations; Happiness; Consumption and Savings; China; Political Economy
    JEL: C35 D63 D91 P2
    Date: 2008–11–24
  15. By: Duduiala-Popescu, Lorena
    Abstract: European Union countries recorded growth rates differ. Therefore, the European policy of regional development aimed at ensuring heterogeneously and achieve the objective of convergence at European level must take into account the steps taken by each country, especially in if new countries joined. The paper presents the implementation in 2000-2006 ISPA program and also conducted an analysis of how to attract European funds and how meeting the targets envisaged in the Accession Partnership between the European Union and Romania to meet national modernization of transport infrastructure and environment. Analysis shows serious dysfunction in ISPA funds absorption compared with funds allocated although, in terms of allocation of funds by the European Commission, Romania is in second place after Poland.
    Keywords: structural funds; regional development; convergence; strategy; Operational Program; the European Union
    JEL: F43 E60 F42 F15 H11 G38 H76 F41 E61
    Date: 2009–01–06
  16. By: Hiroshi Sato
    Abstract: This paper examines the economic and noneconomic determinants of growth disparity among Chinese villages between 1990 and 2002. By estimating a growth equation, first, we confirm a significant positive effect of the initial level of human capital, as well as the initial condition of physical infrastructure. Second, social capital measured by the degree of stable social relations at the village level is also a significant growth-promoting factor. The policy implications of our findings are that public policy promoting social stability in rural areas should be strengthened, as well as increasing financial support for rural education and infrastructure construction, especially in lower income regions.
    Keywords: regional disparity, growth regression, social capital, rural China
    JEL: D31 O18 R11
    Date: 2009–01
  17. By: Shiqing Jiang; Ming Lu; Hiroshi Sato
    Abstract: This paper studies the impact of income inequality on the subjective well-being of different social groups in urban China. We classify urban social groups according to their hukou status: rural migrants, gbornh urban residents, and gacquiredh urban residents who once changed their hukou identity from rural to urban. We focus on how the horizontal inequality-income disparity between migrants and urban residents-affects individual happiness. The main results are as follows. First, migrants suffer from unhappiness when the horizontal inequality increases, but urban residents show a much smaller aversion to the horizontal inequality. Second, migrants will not be happier if their relative incomes within their migrant group increase, while urban residents do become happier when their incomes increase within their groupfs income distribution. Third, gacquiredh urban residents have traits of both migrants and gbornh urban residents. They have an aversion to the horizontal inequality like migrants, and they also favor higher relative income among urban residents. Fourth, gbornh urban residents have lower happiness scores when they are old. People who are Communist Party members strongly dislike the horizontal inequality. Our findings suggest that migrants, gacquiredh urban residents, elderly people and Party members from gbornh urban residents are the potential proponents of social integration policies in urban China.
    Keywords: Horizontal inequality, Happiness, Hukou identity, Migration, Social integration
    JEL: I31 O15 R23
    Date: 2009–01
  18. By: Duduiala-Popescu, Lorena
    Abstract: Based on reviewing the literature in the field, the article shows the importance accorded to issues of structural funds absorption. The subject is central to assessing how the administrative capacity to absorb EU candidate countries in terms of structural funds. It will describe the methodology on absorption capacity of the countries of central and eastern Europe. This article provides preliminary expressions of capacity to absorb in a given Member State and bring additional information on the capacity of all states in the programming period 2006-2013. Thus, the work is an ex-ante evaluation of administrative capacity to absorb very useful for the next programming period.
    Keywords: structural funds; member states; cohesion policy; coordination
    JEL: F59 F42 F15 G38 G18 F02 F21 H76 G28 I28
    Date: 2009–01–10
  19. By: Dean, Judith (BOFIT); Fung , K.C. (BOFIT); Wang, Zhi (BOFIT)
    Abstract: Two recent phenomena have transformed the nature of world trade: the explosive growth of Chinese trade, and the growth of vertically specialized trade due to international production fragmentation. While vertical specialization may explain much of the growth and unique features of Chinese trade, few papers have quantitatively assessed these two phenomena together. In part, this is because it is difficult to measure just how vertically specialized Chinese trade is. The unique features of China's extensive processing trade cause both the identification of imported intermediate goods, and their allocation across sectors, to depend upon the Chinese trade regime. In this paper, we estimate the vertical specialization of Chinese exports, addressing these two challenges. Using two Chinese benchmark input-output tables, and a detailed Chinese trade dataset which distinguishes processing trade from other forms of trade, we develop a new method of identifying intermediate goods imported into China. Vertical specialization is then estimated using two methods. The first method uses the Hummels, Ishii and Yi (2001) measure, the official benchmark IO tables, and incorporates our identification correction. The second method follows the first, but also incorporates the Koopman, Wang and Wei (2008) method of splitting the benchmark IO tables into separate tables for processing and normal exports, in order to address the allocation problem. Results show strong evidence of an Asian network of intermediate suppliers to China, and the two methods provide a range of estimates for the foreign content of Chinese exports. In 2002 aggregate exports ranges between 25% and 46%, with some individual sectors are as high as 52%-95%. Across destinations, under both methods, the vertical specialization of Chinese exports declines with the level of development of the trading partner.
    Keywords: China; fragmentation; vertical specialization; trade growth
    JEL: F10 F14
    Date: 2009–01–13
  20. By: Codrina Rada
    Abstract: This paper discusses the estimation of a social accounting matrix that distinguishes between formal and informal activities for China and India for 2000 and 1998-99 respectively. Wage shares for the formal/informal employment for China and net domestic product shares for the formal/informal sectors for India are being applied as weights to the input-output tables and flow of funds tables provided by official statistics. While some estimation techniques used in this paper remain vulnerable to criticism, the proposed methodology is a first step towards an integrated approach to account for the dualism of many economies in the developing world. The results are important data input for any policy-driven CGE model for developing countries.
    Keywords: informal sector, social accounting matrix, comparative economic systems, China, India
    JEL: E01 E26 P44
    Date: 2009–02
  21. By: Li Shi; Ding Sai
    Abstract: Based on the urban survey data of Ningxia Hui Autonomous Region in 2006, this paper studies the impact of ethnic characteristics on the income determination mechanism in the same economic region. Using the decomposition methods of Blinder and Oaxaca, Fields, and Morduch and Sicular, we analyze income gap between employed Hui and Han as well as income inequality within the two ethnic groups. The main conclusions are, first, that there is almost no income gap between Han and Hui in Ningxia. But different ethnic characteristics have effects on the income determination mechanism. Ethnic factors such as religion and social capital have no obvious effect on the income determination.
    Keywords: Minority, Majority, Income Inequality
    JEL: D33 J15
    Date: 2009–01
  22. By: Gimpelson, Vladimir (CLMS, Moscow Higher School of Economics); Lukiyanova, Anna (CLMS, Moscow Higher School of Economics)
    Abstract: The paper starts with discussing institutional framework for public sector wage setting in Russia. Given that individual choice of the sector is endogenous to wages, the authors recommend alternative econometric techniques for the public-private wage gap estimation. Applying switching regression that allows correcting for non-random sector selection, the paper provides wage gap estimates for various demographic, occupational, and territorial population subgroups. As it is shown, there is significant cross-group variation in the wage gap. The paper concludes that to eliminate the negative gap wages in the public sector should be linked to the private sector wages at the regional level.
    Keywords: public sector
    JEL: J31 J45
    Date: 2009–01
  23. By: Eozenou, Patrick
    Abstract: We use the Vietnam Living Standard Survey conducted in 1993 and in 1998 to analyze the determinants of private transfers among rural farmers. Private transfers are widespread and important relative to pre-transfer income levels of recipients in both years. Conducting parametric and semiparametric analysis of single-index models for transfer status, we find that private transfers help smoothing income across the life cycle and across states of nature. Pre-transfer income is positively related to the net donor status and negatively associated with the net recipients status, especially for low levels of income. These results suggest that crowding-out of public redistributive policies targeted to the rural poor might be an issue to take into account in Vietnam.
    Keywords: Private Transfers; Single-Index Model; Probit; Semiparametric Estimation; Vietnam
    JEL: D63 O10 I3 D64
    Date: 2008–09
  24. By: Alexandru, Ciprian Antoniade
    Abstract: In this paper we are preoccupied by a study of trust and loss aversion on Romanian capital market. In global financial depreciation of stocks the emergent markets are much more affected that the lack of money and investors aversion. Based on efficient market theory we study the evolution of portfolio structure in balanced funds. We are interesting to make an evaluation of present sentiment of investing money in capital markets and especially in stocks. Also, is necessary to determine which are the most important problems in this situation and seek an adequate stimulus for future development of direct investment.
    Keywords: portfolio structure; balanced funds; loss aversion
    JEL: G14 G12 G11
    Date: 2008–12–05
  25. By: Janez Prašnikar (Faculty of Economics, University of Ljubljana); Tanja Rajkoviè (Faculty of Economics, University of Ljubljana); Maja Vehovec (The Institute of Economics, Zagreb)
    Abstract: The paper discusses the innovative performance of firms and underlying competencies, namely technological, marketing and complementary. Competencies as a broader concept are regarded as networks of capabilities and other firm assets, and can be used for cross-industry comparisons. The study is based on a survey carried out among 86 established Slovenian and Croatian manufacturing companies addressing competencies which they employ in their 105 distinct product lines. Three distinct segments of firms are established based on innovative performance indicators. We used the techniques of multivariate statistics, including cluster analysis and the analysis of variance. The results imply that the most innovative firms simultaneously develop technological, marketing and complementary competencies. They operate in industries in which new technologies offer considerable new opportunities. Weaker technological competencies can be to some extent compensated by strong marketing and complementary competencies. The findings also support the notion of Slovenia and Croatia being technology follower economies, primarily relying on imitation as a source of innovation.
    Keywords: competencies, innovative performance, technology followers, technology leaders
    Date: 2008–12
  26. By: Rubaszek, Michał
    Abstract: The paper presents an extended version of the fundamental equilibrium exchange rate model (FFER). By introducing potential output into the specification of the foreign trade equations of the partial equilibrium FEER model we show that, under some plausible assumptions, the calculated level of the equilibrium exchange rate is consistent with the estimates of the behavioral equilibrium exchange (BEER). Moreover, we indicate that including the terms of trade as an explanatory variable in a reduced-form BEER equation for the real exchange rate might lead to the indeterminacy of the parameter estimates. The proposed model is applied to analyze fluctuations of the Polish zloty. We show that the real appreciation of the zloty is to a largely an equilibrium phenomenon.
    Keywords: Fundamental equilibrium exchange rate; current account; foreign trade
    JEL: C32 F12 F31
    Date: 2008–10
  27. By: Enea, Constanta
    Abstract: Every organization determined to embrace ISO 14000 should have a supporting policy manual, procedures, data collection forms, etc. ISO 14000 is actually a series of international standards on environmental management. It provides a framework for the development of both the system and the supporting audit program.
    Keywords: Environmental Management System; system procedures
    JEL: E00 A10
    Date: 2008–11–23

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