nep-tra New Economics Papers
on Transition Economics
Issue of 2010‒04‒17
29 papers chosen by
J. David Brown
Heriot-Watt University

  1. "Mass Privatisation and the Post-Communist Mortality Crisis": Is There Really a Relationship? By John S. Earle; Scott Gehlbach
  2. Tough Love: Do Czech Suppliers Learn from Their Relationships with Multinationals? By Beata S. Javorcik; Mariana Spatareanu
  3. Are Transition Economy Workers Underpaid? By Vera A. Adamchik; Josef C. Brada; Arthur E. King
  4. How does economic integration influence employment and wages in border regions? The case of the EU-enlargement 2004 and Germany’s eastern border By Nils Braakmann; Alexander Vogel
  6. Economic and Productivity Growth Decomposition: An Application to Post-reform China By Kui-Wai Li; Tung Liu
  7. Temporary Labour Migration and Welfare at the New European Fringe : A Comparison of Five Eastern European Countries By Alexander M. Danzer; Barbara Dietz
  9. Export restraints on russian natural gas and raw timber : what are the economic impacts ? By Tarr, David G.
  10. On Convergence across Transition Economies’ Financial Markets: the Role of Creditor Rights By Simona Benedettini
  11. Intangible resources, agglomeration effect of FDI intensity, and firm performance: Evidence from Chinese semiconductor firms By Qin Yang; Crystal X. Jiang; Sali Li
  12. Inter-Industry Wage Differentials: An Increasingly Important Contributor to Urban China Income Inequality By Zhao Chen; Ming Lu; Guanghua Wan
  13. Explaining Rising Returns to Education in Urban China in the 1990s By Liu, Xuejun; Park, Albert; Zhao, Yaohui
  14. Mortgage finance in central and eastern Europe -- opportunity or burden ? By Beck, Thorsten; Kibuuka, Katie; Tiongson, Erwin
  15. Identity, Inequality, and Happiness: Evidence from Urban China By Shiqing Jiang; Ming Lu; Hiroshi Sato
  16. Weak-form market efficiency and calendar anomalies for Eastern Europe equity markets By Guidi, Francesco; Gupta, Rakesh; Maheshwari, Suneel
  17. Dual and common agency issues in international joint ventures: Evidence from China By Hein Roelfsema; Yi Zhang
  18. Female Employment and Fertility in Rural China By Hai Fang; Karen N. Eggleston; John A. Rizzo; Richard J. Zeckhauser
  19. Intraday Dynamics of Volatility and Duration: Evidence from the Chinese Stock Market By Chun Liu; John M Maheu
  20. Energy Security in the EU and Beyond By Richard Pomfret
  21. Surveying transitional experience and subjective well-being : Income, work, family By Ekaterina Selezneva
  22. The impact of the 1999 education reform in Poland By Jakubowski, Maciej; Patrinos, Harry Anthony; Porta, Emilio Ernesto; Wisniewski, Jerzy
  23. Unravelling Voters’ Perceptions of the Economy By Orla Doyle
  24. Macroeconomic announcements, communication and order flow on the Hungarian foreign exchange market By M. FRÖMMEL; N. KISS M; K. PINTÉR;
  25. Managing innovation systems in transition economies By Tomislav Baković
  26. Cynicism Starts Young: Age and Entrepreneurship over Transition By Joanna Tyrowicz; Joanna Nestorowicz
  27. Private Sector Industrialization in China: Evidence from Wenzhou By John Strauss; Dong Liu; Edward Y. Qian; Mehdi Majbouri; Minggao Shen; Qi Sun; Qianfan Ying; Yi Zhu
  28. Migration and Remittances in Macedonia : A Review By Barbara Dietz
  29. A preliminary analysis of the impact of a Ukraine-EU free trade agreement on agriculture By von Cramon-Taubadel, Stephan; Hess, Sebastian; Brummer, Bernhard

  1. By: John S. Earle (W.E. Upjohn Institute for Employment Research and Central European University); Scott Gehlbach (University of Wisconsin, Madison)
    Abstract: We reexamine the well-publicized claim that "rapid mass privatisation [of state-owned enterprises] . . . was a crucial determinant of differences in adult mortality trends in postcommunist countries" (Stuckler, King and McKee, 2009). Our analysis shows that the estimated correlation of privatization and mortality in country-level data is not robust to recomputing the mass-privatization measure, to assuming a short lag for economic policies to affect mortality, and to controlling for country-specific mortality trends. Further, in an analysis of the determinants of mortality in Russian regions, we find no evidence that privatization increased mortality during the early 1990s. Finally, we reanalyze the relationship between privatization and unemployment in postcommunist countries, showing that there is little support for the proposed mechanism by which privatization might have increased mortality.
    Keywords: privatization, mortality, health, shock therapy, unemployment, Eastern Europe, Former Soviet Union, Lancet
    JEL: I18 L33 P2 P31 O57
    Date: 2010–02
  2. By: Beata S. Javorcik; Mariana Spatareanu
    Abstract: Many countries strive to attract foreign direct investment (FDI) hoping that knowledge brought by multinationals will spill over to domestic industries and increase their productivity. While the empirical studies have cast doubt on the existence of horizontal spillovers from FDI in developing countries, several recent papers have confirmed the presence of vertical spillovers, which take place through contacts between foreign affiliates and their local suppliers. However, the existing studies rely on industry-level proxies for vertical spillovers rather than information on actual relationships between local companies and multinationals. This study goes one step further by employing a unique dataset from the Czech Republic, which allows us to identify local firms supplying multinationals operating in the country. The data suggest that suppliers are different from other firms. They are larger, have a higher capital-labor ratio, pay higher wages and exhibit a higher productivity level. The evidence is suggestive of both high productivity firms having a higher probability of supplying multinationals as well as suppliers learning from their relationships with multinationals.
    Keywords: foreign direct investment, technological spillovers, suppliers
    JEL: F21 F23
    Date: 2009–09
  3. By: Vera A. Adamchik (University of Houston-Victoria); Josef C. Brada (Arizona State University and Macedonian Academy of Sciences and Arts); Arthur E. King (Lehigh University)
    Abstract: We examine the extent to which workers in transition and developed market economies are able to obtain wages that fully reflect their skills and labor force characteristics. We find that workers in two transition economies, the Czech Republic and Poland, are able to better attain the maximum wage available than are workers in a sample of developed market economies. This greater wage-setting efficiency in the transition economies appears to be more the result of social and demographic characteristics of the labor force than of the mechanisms for setting wages or of labor market policies.
    Keywords: labor markets, wage inefficiency, job search, stochastic frontier, economic transition
    JEL: J31 P23
    Date: 2009–12
  4. By: Nils Braakmann (Institute of Economics, Leuphana University of Lüneburg, Germany); Alexander Vogel (Institute of Economics, Leuphana University of Lüneburg, Germany)
    Abstract: This paper considers the (short run) employment and wage effects of the 2004 EUenlargement on firms located close to Germany’s Eastern border. We use a 50% sample of Germans plants and apply difference-in-differences-estimators combined with a matching approach. We evaluate changes in total employment, the employment shares of low-skilled and Eastern European workers and the wages for low-skilled, skilled and high-skilled workers in various sectors. Our results suggest negative (short-run) effects of the EU-enlargement on employment in construction and the business services sector, where we also find negative wage effects. Wages and employment in manufacturing, wholesale and retail trade, hotels and restaurants and social and personal service activities seem to have been relatively less affected.
    Keywords: EU-enlargement, economic integration, employment, wages
    JEL: F15 L80
    Date: 2009–09
  5. By: Andres Kuusk; Tiiu Paas
    Abstract: The paper offers new insights on the subject of financial contagion using a meta-analysis methodology and paying particular attention to the transition economies of Central and Eastern Europe (CEE). The results show that on average, asset market correlations have increased during turbulent periods, but the increase is rather moderate. When correlation coefficients are adjusted for the presence of heteroscedasticity, the increase is considerably smaller, but still statistically significant. The crises have been more and less contagious, but the level of development of the chosen afflicted country seems not to have played a significant role in determining whether crises spread there or not. Transition economies in CEE have on average been somewhat less susceptible to financial contagion than the sample as a whole, but the increase in the asset prices correlation during times of crisis is statistically insignificant. Interestingly, the financial contagion ‘snowball’ seems to have affected the CEE transition economies most after crises in the US rather than one in Russia or the Czech Republic.
    Keywords: financial contagion; meta-analysis
    Date: 2010
  6. By: Kui-Wai Li (City University of Hong Kong, Hong Kong SAR); Tung Liu (Department of Economics, Ball State University)
    Abstract: This paper examines and applies the theoretical foundation of the decomposition of economic and productivity growth to the thirty provinces in China’s post-reform economy. The four attributes of economic growth are input growth, adjusted scale effect, technical progress, and efficiency growth. A stochastic frontier model with a translog production and incorporated with human capital is used to estimate the growth attributes in China. The empirical results show that input growth is the major contributor to economic growth and human capital is inadequate even though it has a positive and significant effect on growth. Technical progress is the main contributor to productivity growth and the scale effect has become important in recent years. The impact of technical inefficiency is statistical insignificant in the sample period. The relevant policy implication for a sustainable post-reform China economy is the need to promote human capital accumulation and improvement in technical efficiency.
    Keywords: technical progress, technical efficiency, economies of scale, human capital, China economy
    JEL: C2 D24 O4 O53
    Date: 2009–09
  7. By: Alexander M. Danzer (Royal Holloway, University of London, UK); Barbara Dietz (Osteuropa-Institut, Regensburg (Institut for East European Studies))
    Abstract: This paper investigates patterns and determinants of temporary labour migration in Armenia, Belarus, Georgia, Moldova and Ukraine after EU enlargement in 2004. Migration incidence, destination choices and migration determinants differ between poorer and better-off countries. Although broadly in line with general results from the migration literature, we observe some peculiarities like the high share of older migrants and a modest role of family obligations in the migration decision process. We find no indication of a brain drain related to temporary migration in sending regions as the educational background of migrants is rather low. Migration is used as household insurance against unemployment and is associated with lower incidence of poverty. This finding remains robust when attempting to reduce the potential omitted variable bias with an instrumental variable approach.
    Keywords: Temporary migration, welfare, Eastern Europe, cross-country study
    JEL: F22 J61 I31 P23
    Date: 2009–05
  8. By: Kerly Krillo; Jaan Masso
    Abstract: Unlike Western countries, there are no studies focusing on the fulltime/part-time wage gap in Central and Eastern Europe despite high wage inequalities observable in many of these countries. The focus of this paper is the incidence and reasons for the part-time wage gap in Estonia, a small Eastern European catch up economy. We use Estonian Labour Force Survey data for 1997–2007, and the part-time wage gap is decomposed using the Heckman selection model and Oaxaca-Blinder wage decompositions. The results for females indicate that the part-time premium observable is unexplained with the controls used. For males, the full-time raw premium exists, but it is to a large extent captured by explanatory variables. For both genders, the labour market situation is remarkably better for voluntary part-timers. The probable explanations for this are the generally low wage levels, the cyclical behaviour of wage gaps, black income and unobserved heterogeneity of employees and firms.
    Keywords: part-time work, wage gap, Central and Eastern Europe
    JEL: C13 J22 J31
    Date: 2010
  9. By: Tarr, David G.
    Abstract: Export restraints by the Russian Federation on natural gas and timber have been the source of major controversy between the European Union and the Russian Federation. The analysis of this paper suggests that the export restraints in natural gas very substantially benefit Russia. On the other hand, in raw timber the analysis suggests that a substantial reduction of Russian export taxes would increase Russian welfare. The paper explains that Gazprom has failed to invest adequately, resulting in little development of new gas supplies. The result has been progressively increasing use by Gazprom of Central Asian gas supplies, at progressively higher prices for Russia. The increased prices of gas for Russian consumers have shown that it is crucial for Russia to allow new entrants and to introduce competition in the Russian domestic market. Without export restraints, however, competition among multiple gas suppliers from Russia would erode or eliminate the monopoly profits of the Russian Federation on gas exports. Thus, with a more competitive domestic market, the Russian government would be expected to grant exclusive exporting rights to a single entity (as it presently does with Gazprom) or impose export taxes. Thus, Europe should not expect to achieve cheaper Russian gas as a result of structural reforms within the Russian gas market. A more promising avenue for European energy diversification is new pipeline construction to open up new sources of supply independent of Russia (especially the Nabucco pipeline), and liquefied natural gas purchases.
    Keywords: Markets and Market Access,Transport Economics Policy&Planning,Energy Production and Transportation,Economic Theory&Research,Oil Refining&Gas Industry
    Date: 2010–01–01
  10. By: Simona Benedettini
    Abstract: Although twenty years have elapsed since the beginning of transition, Eastern European and Central Asian countries are still characterized by remarkably heterogeneous levels of economic development. In the light of the established causal relationship between finance and growth, we perform an absolute and conditional convergence analysis with reference to credit markets’ development to understand whether the lack of convergence in economic performances may also be a side - effect of persistently diversified financial architectures in these transition economies. Our investigation highlights: (i) the occurrence of absolute and conditional convergence; (ii) the existence of appreciable intra - distribution dynamics in the convergence process; and that, when conditioning for cross - country measures of the legal protection of creditors’ rights, (iii) the bankruptcy laws and their enforcement strongly boost credit markets’ average period growth rates.
    Keywords: convergence, financial market development, investor protection, rule of law.
    JEL: G15 K22 O16 O47 P51
    Date: 2009–11
  11. By: Qin Yang (Robert Morris University); Crystal X. Jiang (Bryant University); Sali Li (University of Wisconsin, Milwaukee)
    Abstract: This study analyzes the impact of intangible resources on firm performance in an emerging economy context. Intangible resources are considered essential to firms? competitive advantage; however, we argue that firms? intangible resources can be negatively related with performance in emerging economies, due to their weak intellectual property rights protection. Furthermore, we incorporate the resource-based view and geographical agglomeration perspective to propose that geographical locations with dense foreign direct investment can affect the appropriability of intangible resources, thereby moderating the relationship between intangible resources and firm performance. We find empirical evidence to support our argument by examining 70 semiconductor firms in China from 1999 to 2006 period.
    Keywords: intangible resources, intellectual property, agglomeration, foreign direct investment, emerging economy
    JEL: M0 M1 M2
    Date: 2010–03–04
  12. By: Zhao Chen; Ming Lu; Guanghua Wan
    Abstract: How significantly inter-industry wage differentials contribute to rising income inequality is an essential policy issue for transitional economies. Using regression-based inequality decomposition, this paper finds that inter-industrial wage differentials contributed increasingly to income inequality in urban China through 1988, 1995, and 2002, mainly due to rapid income growth in monopolistic industries. Factors such as region, education, ownership, occupation, and holding a second job also contribute increasingly to income inequality, while being employed the whole year and age have decreasing contributions. If China seeks to reduce urban income inequality, removing entry barriers in the labor market and breaking monopoly power in the goods market are essential policy prescriptions.
    Keywords: Inter-industry wage differntials, Income ineqality, Regression-based decomposition
    Date: 2010–03
  13. By: Liu, Xuejun (Beijing Normal University); Park, Albert (University of Oxford); Zhao, Yaohui (Peking University)
    Abstract: Although theory predicts that international trade will decrease the relative demand for skilled workers in relatively skill-deficit countries, in recent decades many developing countries have experienced rising wage premiums for skilled workers. We examines this puzzle by quantifying the relative importance of different supply and demand factors in explaining the rapid increase in the returns to education experienced by China during the 1990s. Analyzing Chinese urban household survey and census data for six provinces, we find that although changes in the structure of demand did reduce the demand for skilled workers, consistent with trade theory, the magnitude of the effect was modest and more than offset by institutional reforms and technological changes that increased the relative demand for skill.
    Keywords: education, earnings, inequality, China
    JEL: F16 J24 J31 P23
    Date: 2010–04
  14. By: Beck, Thorsten; Kibuuka, Katie; Tiongson, Erwin
    Abstract: Household credit, especially for mortgages, has doubled over the past years in the new European Union member countries, raising concerns about the economic and social consequences of household indebtedness in the event of a macroeconomic crisis. Using household survey data for 2005, 2006, and 2007 for both old and new European Union members, this paper assesses the determinants of access to mortgage finance. It also examines whether mortgage holders were more likely to suffer financial distress compared with non-mortgage holders in the period before the global financial crisis. The analysis does not find any systematic evidence that mortgage holders are financially more vulnerable than renters or outright owners; in fact, the incidence of financial vulnerability generally fell between 2005 and 2007, possibly reflecting the strong income growth experienced by these countries over this period. In addition, although tenure status is more difficult to explain in the new European Union member countries, the analysis finds that many of the same drivers of tenure status in the older member countries generally drive tenure status in the newer member countries as well. Finally, there is no evidence that access to mortgage credit is based on expected income in the old or in the new European Union member countries.
    Keywords: Access to Finance,Debt Markets,Bankruptcy and Resolution of Financial Distress,Emerging Markets,Housing Finance
    Date: 2010–02–01
  15. By: Shiqing Jiang; Ming Lu; Hiroshi Sato
    Abstract: This paper presents the impact of income inequality on the subjective wellbeing of three 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 had changed their hukou identity from rural to urban. We focus on how the income disparity between migrants and urban residents affects individual happiness. The main results are as follows. People feel unhappy if inequality is related to their hukou identity, irrespective of whether they are urban residents with or without hukou. However, when identity-related inequality and other individual- and city-level characteristics are controlled, inequality measured by city-level Gini increases happiness. We also find that among urban residents who own hukou, mostly the gacquiredh urban residents are unhappy with hukou-related inequality. This implies that identity is formed by both policy and personal experience. gBornh urban residents have lower happiness scores when they are old. Communist Party members strongly dislike the identity-related inequality.
    Keywords: Inequality, Hukou identity, Happiness, Migration, Social integration
    JEL: I31 O15 R23
    Date: 2010–03
  16. By: Guidi, Francesco; Gupta, Rakesh; Maheshwari, Suneel
    Abstract: In this paper we test the weak form of the efficient market hypothesis for Central and Eastern Europe (CEE) equity markets for the period 1999-2009. To test weak form efficiency in the markets this study uses, autocorrelation analysis, runs test, and variance ratio test. We find that stock markets of the Central and Eastern Europe do not follow a random walk process. This is an important finding for the CEE markets as an informed investor can identify mispriced assets in the markets by studying the past prices in these markets. We also test the presence of daily anomalies for the same group of stock markets using a basic model and a more advanced Generalized Autoregressive Conditional Heteroskedasticity in Mean (GARCH-M) model. Results indicate that day-of-the-week effect is not evident in most markets except for some. Overall results indicate that some of these markets are not weak form efficient and an informed investor can make abnormal profits by studying the past prices of the assets in these markets.
    Keywords: Emerging stock markets; day-of-the-week effect ; market efficiency; variance ratio test; GARCH-M.
    JEL: G14 G12
    Date: 2010
  17. By: Hein Roelfsema; Yi Zhang
    Abstract: With the help of a theoretical model we analyze the relation between equity sharing in an international joint venture (EJV) and local public goods provision in a setting where the local government faces a commitment problem to provide public services ex post to the set-up of the firm. We show that to overcome such a dual agency problem, the multinational leaves more local rents to the local partner than in the first-best, so as to provide stronger incentives for the government to supply public goods. Applying dynamic panel data estimation, we test the trade-off between local public goods and ownership shares across 31 Chinese provinces to find support for our mechanism
    Keywords: Equity sharing, foreign investment, local public goods, China
    JEL: F23 L14 L22 L23 O14
    Date: 2010–03
  18. By: Hai Fang; Karen N. Eggleston; John A. Rizzo; Richard J. Zeckhauser
    Abstract: Data on 2,288 married women from the 2006 China Health and Nutrition Survey are deployed to study how off-farm female employment affects fertility. Such employment reduces a married woman’s actual number of children by 0.64, her preferred number by 0.48, and her probability of having more than one child by 54.8 percent. Causality flows in both directions; hence, we use well validated instrumental variables to estimate employment status. China has deep concerns with both female employment and population size. Moreover, female employment is growing quickly. Hence, its implications for fertility must be understood. Ramifications for China’s one-child policy are discussed.
    JEL: J13 J18 O15
    Date: 2010–04
  19. By: Chun Liu; John M Maheu
    Abstract: We propose a new joint model of intraday returns and durations to study the dynamics of several Chinese stocks. We include IBM from the U.S. market for comparison purposes. Flexible innovation distributions are used for durations and returns, and the total variance of returns is decomposed into different volatility components associated with different transaction horizons. Our new model strongly dominates existing specifications in the literature. The conditional hazard functions are non-monotonic and there is strong evidence for different volatility components. Although diurnal patterns, volatility components, and market microstructure implications are similar across the markets, there are interesting differences. Durations for lightly traded Chinese stocks tend to carry more information than heavily traded stocks. Chinese investors usually have longer investment horizons, which may be explained by the specific trading rules in China.
    Keywords: market microstructure, transaction horizon, high-frequency data, ACD, GARCH
    JEL: C22 C11 G10
    Date: 2010–04–06
  20. By: Richard Pomfret
    Abstract: Past episodes of energy insecurity have been fleeting and the fears have been assuaged by market forces or technical change. This paper analyses the nature of the EU's current energy security problems, emphasising the increased importance of natural gas and high level of dependence on Russian supplies through a small number of pipelines. Building alternative pipeline routes is expensive and with finite reserves in any gas field pipelines may be mutually exclusive; especially since China has entered the market for Central Asian gas, new non-Russian pipelines to the EU may not be economically feasible. However, global gas reserves are large, and high energy prices in the 2000s encouraged investment in alternative delivery modes, notable liquefied natural gas (LNG). As a spot market for LNG emerges EU energy-importing countries may face volatile prices, but will not be exposed to insecurity of supply.
    Keywords: natural gas, pipelines, energy security
    JEL: Q34 L71 N74
    Date: 2010–01
  21. By: Ekaterina Selezneva (Osteuropa-Institut, Regensburg (Institut for East European Studies))
    Abstract: Subjective well-being patterns found for developed economies do not always valid for the economies in transition. This paper overviews happiness and satisfaction studies on income, work and family life domains with a particular attention to those on transitional countries. While there is a range of similarities in conclusions for two types of economies, the main differences seems to be a result of uncertainty and fast changing conditions in transitional settings. The terms ‘happiness’ and ‘life satisfaction’ should be distinguished, when evaluating the successfulness of transformational period and socio-economic policies. A short summary for 76 studies involving subjective indicators on data from the economies in transition is included.
    Keywords: life satisfaction, happiness, transition economies
    JEL: P29 J12 J28
    Date: 2010–02
  22. By: Jakubowski, Maciej; Patrinos, Harry Anthony; Porta, Emilio Ernesto; Wisniewski, Jerzy
    Abstract: Increasing the share of vocational secondary schooling has been a mainstay of development policy for decades, perhaps nowhere more so than in formerly socialist countries. The transition, however, led to significant restructuring of school systems, including a declining share of vocational students. Exposing more students to a general curriculum could improve academic abilities. This paper analyzes Poland’s significant improvement in international achievement tests and the restructuring of the education system that expanded general schooling to test the hypothesis that delayed vocational streaming improves outcomes. Using propensity score matching and differences-in-differences estimates, the authors show that delayed vocationalization had a positive and significant impact on student performance on the order of one standard deviation.
    Keywords: Tertiary Education,Secondary Education,Education For All,Primary Education,Teaching and Learning
    Date: 2010–04–01
  23. By: Orla Doyle (Geary Institute, University College Dublin)
    Abstract: Individual perceptions of the economy are a key factor influencing voting decisions, yet they often deviate from movements in the real economy. This study investigates the formation of economic perceptions during a period of economic and political instability in the Czech Republic using a series of Economic Expectations and Attitude (EEA) surveys and yearly regional economic indicators. It measures the extent to which retrospective and prospective perceptions are related to objective measures of the economy and subjective heterogeneity at an individual level. The study finds that objective economic indicators are inadequate determinants of economic perceptions and that such perceptions can be distorted by ideological beliefs, socioeconomic characteristics and personal experiences despite turbulent economic shocks, a highly politicized economic reform process and weak party identification.
    Keywords: Economic perceptions, regional economic indicators, transition democracies, ideological beliefs
    Date: 2010–01–29
    Abstract: We investigate the relation between the intradaily HUF/EUR exchange rate on the one hand and news announcements and order flow on the other hand. We extend the existing literature on foreign exchange market microstructure by considering a small open transition economy. We find that the intradaily exchange rate depends on both, news announcements and order flow. We conclude that news on the HUF/EUR market are transmitted directly via immediate reactions to news announcements as well as indirectly via order flow. We decompose the news’ total effect on exchange rate and find that order flow accounts for approximately three quarters, compared to one quarter for direct news impact. Although the HUF is pegged to the EUR, the exchange rate shows similar characteristics as reported in the literature for major currencies. It does, however, differ in quantitative terms: the importance of indirect news transmission is remarkably higher on the HUF/EUR market. Furthermore, we extend the commonly used set of news by communication of central bankers and significantly improve the explanatory power of the estimates. Thus, central bank communication can be regarded as an important determinant for the HUF/EUR rate.
    Keywords: microstructure, order flow, exchange rate, macroeconomic news, central bank communication, Hungary
    JEL: F31 G14 G15
    Date: 2009–12
  25. By: Tomislav Baković (Faculty of Economics and Business, University of Zagreb)
    Abstract: Successfully managing innovations has become the basic precondition for the development of both companies and national economies. At the national level governments are forming innovation systems whose primary goal is to create conditions at which science and technology can flourish and then transfer their findings trough private sector into new revolutionary products and services. Unfortunately not all countries have the same preconditions for creating such systems and transition economies due to many of their characteristics face serious difficulties. The aim of this paper is to first describe the role of innovations and innovation systems in economic development and then describe many problems transition countries face regarding this issue. After describing the main problems some of the measures that could be used to improve the current innovation output in transition economies are presented.
    Keywords: national innovation system, economic development, transition economies
    JEL: O30
    Date: 2010–03–17
  26. By: Joanna Tyrowicz (Faculty of Economic Sciences, University of Warsaw; National Bank of Poland; Rimini Center for Economic Analysis); Joanna Nestorowicz (Faculty of Economic Sciences, University of Warsaw)
    Abstract: Studies of self-employment determinants in developed market economies comprise the effects of business cycle, changing social structures or legal framework, industrial organization regulations and government policies. This paper contributes to the literature by analysing the cyclical patterns of self-employment determinants taking into account both the trends associated with the transition and the variability induced by economic and labour market fluctuations. We construct a consistent panel of entrepreneurship choice models based on consecutive quarterly labour force surveys for Poland - a country with nearly highest self-employment rates in CEECs and the EU - across the time span 1995q1-2008q4 and trace changes in the marginal effects estimators. We find that the notion of self-employment as survival strategy emphasised previously in the literature exhibits stronger in the periods of the labour market contraction. We also demonstrate that young university graduates prefer wage employment to entrepreneurship.
    Keywords: self-employment, transition, cyclicality, selection models
    JEL: L26 J24 P51
    Date: 2010
  27. By: John Strauss; Dong Liu; Edward Y. Qian; Mehdi Majbouri; Minggao Shen; Qi Sun; Qianfan Ying; Yi Zhu
    Abstract: The purpose of this study to help shed light on the entrepreneurship, entrepreneurs and enterprise growth in Wenzhou. The study is done by relying on a probabilistic firm survey that we carried out in Wenzhou in early 2006 for three industries: shoes, eyeglasses and general equipment. Not a field-based formal survey, but also informal questions which helps us to enrich the story. The survey was focused on getting detailed firm histories to learn about how the firms started and grew. The study was done by focusing on the origins of the firms, including prior firms that may have been antecedents. Information was collected on whom the founders were, how many, their relationships with each other, and their background in terms of experience and other human capital. Detailed information was collected on how they financed their start, and how they financed their expansion. Detailed information on the sources of technology into the firms, particularly whether it was Chinese or imported and whether the firms were getting technical instructions from foreign firms they may have been exporting to. Detailed information on markets, especially how markets and how export markets were found. Information was also collected about explicit assistance that came from governments, local and/or central. Workers at each firm: managers, skilled workers such as designers, and production workers were interviewed.
    Keywords: industrialization, workers, technology, firms, local resources, pro-capitalist, infrastructure,industrialization, entrepreneurship, entrepreneurs, growth, Wenzhou, china, firm survey, survey, china,
    Date: 2010
  28. By: Barbara Dietz (Osteuropa-Institut, Regensburg (Institut for East European Studies))
    Abstract: This paper explores migration movements and remittances patterns in Macedonia since independence and studies the migration policy challenges Macedonia will be likely to face after its entry into the EU. Concerning recent migration movements, considerable outflows from Macedonia are found as well as indications for a serious brain drain. Remittances to Macedonia–which are quite big–seem to constitute a relevant support for a number of households and can be expected to diminish the incidence of poverty. In the light of the EU accession process, the Macedonian government will have to introduce policies which enhance the opportunities of migration and remittances and reduce their risks.
    Keywords: Macedonia, migration, remittances
    JEL: F22 F24
    Date: 2010–02
  29. By: von Cramon-Taubadel, Stephan; Hess, Sebastian; Brummer, Bernhard
    Abstract: Agriculture including food products is of particular interest for Ukraine. However, in free trade agreements involving the European Union, agriculture is always given special treatment and subject to less and slower liberalization than other sectors. This paper employs the standard Global Trade Analysis Project model in order to assess how World Trade Organization accession affects agriculture in Ukraine, and how potential bilateral tariff cuts may interact with potential productivity gains within Ukrainian agriculture. The results indicate that, due to trade liberalization, Ukraine can expect gains from a more efficient allocation of its resources in line with comparative advantage, leading to an increase of production and exports of wheat, other grains, and oilseeds, but also of several processed food products that benefit from less expensive intermediate inputs. However, Ukraine's exports are concentrated on a small number of destinations, especially Russia and some other Former Soviet Union countries because they fail to meet quality standards elsewhere. When Ukrainian production of these products increases due to increased allocative efficiency, exports to Russia increase further and prices there fall, generating negative terms of trade effects that largely offset the allocative gains. Ukrainian imports of agricultural products increase as well, partly because Ukrainian consumers switch to higher quality imported goods even though domestic production increases. Regarding free trade agreement negotiations with the European Union, these results highlight for Ukraine the fact that improved agricultural productivity will help to get most out of improved market access. However, the results also highlight for Ukraine the great importance of adopting internationally accepted quality standards in order to diversify its export structure.
    Keywords: Free Trade,Economic Theory&Research,Trade Policy,Trade Law,Emerging Markets
    Date: 2010–04–01

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