nep-tra New Economics Papers
on Transition Economics
Issue of 2010‒05‒02
34 papers chosen by
J. David Brown
Heriot-Watt University

  1. Business Cycle Dynamic in the CEE Countries: A Political Economy Approach By Muge Adalet; Sumru Oz
  2. IS CHINA DIFFERENT? A META-ANALYSIS OF EXPORT-LED GROWTH By Gustavsson Tingvall, Patrik; Ljungwall, Christer
  3. Household Structure in the EU By Iacovou M; Skew A
  4. Russia's Output Collapse and Recovery: Evidence from the Post-Soviet Transition By Eteri Kvintradze
  5. Rational Cost Inefficiency in Chinese Banks By Kent Matthews; Zhiguo Xiao; Xu Zhang
  6. Price Competitiveness in Central and Eastern Europe - a case study for transition economies By Dominique Peters
  7. The Emergence and Evolution of Regional Convergence Clusters in China’s Energy Markets By Hengyun Ma; Les Oxley
  8. Economic Transition and Health Care Reform: The Experience of Europe and Central Asia By Adam Leive
  9. Market Structure, Welfare, and Banking Reform in China By Chun-Yu Ho
  10. The Evolution of Kаzakhstan's Position on Relations with Russia in 1991-2010 By Vinokurov, Evgeny
  11. The Nonlinear House Price Adjustment Process in Developed and Transition Countries By Petra Posedel; Maruska Vizek
  12. Return migrants : The rise of new entrepreneurs in rural China By Sylvie Demurger; Hui Xu
  13. Capital Flight: China's Experience By Yin-Wong Cheung; XingWang Qian
  14. Determinants of China's Private Consumption: An International Perspective By Kai Guo; Papa M'B. P. N'Diaye
  15. Interrelations between Education, Health, Income and Economic Development in Europe with Emphasis on New Members of European Union By Boboc, Cristina; Driouchi, Ahmed; Titan, Emilia
  16. The Determinants of Vertical Integration in Export Processing: Theory and Evidence from China By Ana Fernandes; Heiwai Tang
  17. Russia’s Chemical and Petrochemical Industries at the Eve of WTO-Accession By Oliver Budzinski; Elmira Schaimijeva; Gjusel Gumerova; Jörg Jasper
  18. Towards a better understanding of the political economy of regional integration in the GMS: Stakeholder coordination and consultation for subregional trade facilitation in China By Xiong Bin; Wen Shuhui
  19. Nonlinearities in Stock Returns for Some Recent Entrants to the EU By Barry Harrison; Winston Moore
  20. Beyond the Crisis: Revisiting Emerging Europe's Growth Model By Ruben Atoyan
  21. Brain Drain, Brain Gain and Economic Growth in China By Wei Ha; Junjian Yi; Junsen Zhang
  22. Decrease in the healthcare demand in rural China: A side effect of the industrialization process? By Carine Milcent; Feng Jim
  23. Is there (still) an East-West divide in the conception of citizenship in Europe? By edited by Rainer Bauböck and André Liebich
  24. Current Trends in Migration in the Common Wealth of Independent States By Rafis Abazov
  25. Returns to Education and Education-Occupation Mismatch within a Transition Economy. Empirical Analysis for the Russian Federation By Natalia Kyui
  26. Absorption Boom and Fiscal Stance: What Lies Ahead in Eastern Europe? By Jesmin Rahman
  27. The System of Indicators of Eurasian Integration By Vinokurov , Evgeny
  28. Changes in the Gender Wage Gap in Germany during a Period of Rising Wage Inequality 1999-2006: Was it Discrimination in the Returns to Human Capital? By Usamah Fayez Al-Farhan
  29. Equity Home Bias in the Czech Republic By Karel Báťa
  30. Job satisfaction in the Republic of Macedonia: The role of gender and education By Zeqiri , Izet; Aziri , Brikend
  31. Tax differences and foreign direct investment in the EU27 By Hansson , Åsa; Olofsdotter, Karin
  32. Initial Day Return and Underpricing Cost in Advance Payment Initial Public Offerings By Joseph K. W. Fung; Sanry Y. S. Che
  34. Using Financial Ratios to Identify Romanian Distressed Companies By Madalina Andreica; Mugurel Ionut Andreica; Marin Andreica

  1. By: Muge Adalet (Koc University); Sumru Oz (Koc University)
    Abstract: This paper uses a simple VAR analysis to examine 5 CEE countries (the Czech Republic, Hungary, Poland, Romania and Slovakia) in order to understand whether their business cycles are synchronized with each other and/or with the major economies that they are supposed to be linked with, namely the US, Germany and Russia. We find that there are differences across the CEE countries themselves and that there is no common CEE business cycle. Comparing the individual CEE business cycles with those of the dominant economies, we find that Hungary and Poland are related to the US business cycle, reflecting the fact that they are more integrated with the global economy, whereas Slovakia is closer to the Russian cycle. Finally, splitting the sample into the late 1990s and 2000s due to the transition nature of these economies in the former period shows that the influence of Russia on the CEE economies has declined over time. However, in contrast to the expectations that CEE countries are likely to be affected by Germany in the second half of the sample due to EU negotiations followed by full membership, among the CEE countries only the business cycle of Slovakia is synchronized with that of Germany. On the other hand the Czech Republic, Hungary and Poland are synchronized with the US business cycle, showing that globalization has decreased the importance of distance.
    Keywords: Business cycle synchronization, CEE countries, EMU
    JEL: E32 F15 F41
    Date: 2010–04
  2. By: Gustavsson Tingvall, Patrik (China Economic Research Center); Ljungwall, Christer (China Economic Research Center)
    Abstract: Whether China has benefited more from exports than other countries has produced intensive debate. We analyze this question by performing a meta-analysis on a sample of 68 country-specific studies analyzing the link between exports and economic growth. The results show that exports have been more significant for growth in China than in other countries, even when China is compared to other transition/emerging economies.
    Keywords: Meta-analysis; Exports; Economic growth; China
    JEL: F21 F43 O11 O53
    Date: 2010–04–01
  3. By: Iacovou M (Institute for Social and Economic Research); Skew A (Institute for Social and Economic Research)
    Abstract: This paper maps key indicators of household structure across all countries for all countries of the expanded European Union except Malta. As well as presenting statistics which take the entire household as the unit of analysis, we also focus on groups which are particularly interesting in terms of social policy, and for whom household composition may be particularly crucial in terms of their risk of poverty: children, young adults and elderly people. A main aim of the paper is to discuss the extent to which the new EU member states of Eastern Europe display differences and similarities with the other countries of the EU. We find that the Eastern European countries are rather heterogeneous. The Czech Republic and Hungary are not dissimilar to the countries of North-Western Europe; by contrast, households in Slovenia, Slovakia and Poland closely resemble Southern European households. Finally, it is the Baltic states – particularly Latvia – where household structure least resembles structures in any of the pre-enlargement EU countries.
    Date: 2010–04–20
  4. By: Eteri Kvintradze
    Abstract: The health of the Russian economy still depends heavily on natural resource revenues. The history of the economic collapse and recovery in 1970–2004 provides new evidence on the sources of Russian economic growth, while a survey of the economic literature suggests that the Russian economy could be viewed as a weighted combination of virtual and normal forces. If the Russian economy is considered to be dominated by normal market economy forces, higher energy export receipts provide an opportunity for structural reforms while compensating for social costs, making the economy less vulnerable to decline in world energy prices. However, the domination of virtual forces—value transfers from the energy sector to strategic enterprises—suggests that high world energy prices are masking an inefficient manufacturing sector, and that the Russian economy is highly vulnerable to energy price declines.
    Keywords: Economic growth , Economic models , Economic recovery , Industrial sector , Political economy , Production growth , Productivity , Russian Federation , Transition economies ,
    Date: 2010–04–05
  5. By: Kent Matthews (Cardiff University, Hong Kong Institute for Monetary Research); Zhiguo Xiao (Fudan University,); Xu Zhang (Citigroup (China), Cardiff University)
    Abstract: According to a frequently cited finding by Berger et al (1993), X-inefficiency contributes 20% to cost-inefficiency in western banks. Empirical studies of Chinese banks tend to place cost-inefficiency in the region of 50%. Such estimates would suggest that Chinese banks suffer from gross cost inefficiency. Using a non-parametric bootstrapping method, this study decomposes cost-inefficiency in Chinese banks into X-inefficiency and allocative-inefficiency. It argues that allocative inefficiency is the optimal outcome of input resource allocation subject to enforced employment constraints. The resulting analysis suggests that allowing for rational allocative inefficiency; Chinese banks are no better or worse than their western counterparts.
    Keywords: Bank Efficiency, China, X-inefficiency, DEA, Bootstrapping
    JEL: D23 G21 G28
    Date: 2009–09
  6. By: Dominique Peters
    Abstract: Newly industrialized countries and transition economies are often perceived as a threat to Western countries in public discussion, and concerns about economic 'competitiveness' arise. The present paper focuses on the specific macro-economic term 'price competitiveness'. It analyzes the underlying assumptions of the term, explains how the 'price competitiveness' indicator is composed, and what the restrictions are when applying it to transition economies. When calculating the 'price competitiveness' indicator for Central and Eastern European New Member States of the European Union in the last decade, all ten countries show values that are conventionally understood as a steady 'loss in price competitiveness'. Still, this has not led to lower export growth in the last decade in these countries. Instead, all ten assessed countries show above-average growth in Exports, in Manufacturing goods, and in Gross Domestic Product, compared to the rest of the world. The 'price competitiveness' indicator fails, due to inherent assumptions and technical implications, to explain the Export development in economies that are fastgrowing and going through a process of industrialization - so called 'catch-up economie' - what has been the case in the Central and Eastern European countries in the last decade. The 'price competitiveness' indicator should thus not be applied irrespectively of a country's economic situation.
    Date: 2010
  7. By: Hengyun Ma; Les Oxley (University of Canterbury)
    Abstract: Employing the new regression tests for Convergence, Club Convergence and Clustering proposed by Phillips and Sul (2007), this paper models and analyzes the behavior of China‘s energy sectors. Energy market =convergence clusters‘ are identified using new price data and their regional spatial distributions are mapped for four major fuel types; coal, gasoline, diesel and electricity. It is found that: i) as yet, there are no fully integrated national energy markets in China as more than one convergence cluster is identified for all four fuels; ii) some regional energy markets can be regarded as =quite mature‘ as evidenced by the existence of some highly concentrated convergence clusters connected geographically; iii) some regional markets remain in a =state of transition‘ as witnessed by convergence clusters that are scattered geographically and growing in membership; vi) it seems that there is more regional-based integration for coal and electricity than for gasoline and diesel as more convergent clusters were identified for coal and electricity than for gasoline and diesel v) Overall, China still appears to be in the process of energy market integration as demonstrated by the number and evolution of convergence clusters over time.
    Keywords: China; Energy market; Convergence cluster
    JEL: C33 L83 O10 O40 O57
    Date: 2010–04–20
  8. By: Adam Leive
    Abstract: Economic Transition and Health Care Reform: The Experience of Europe and Central Asia
    Keywords: Central Asia , Cross country analysis , Economic models , Economic reforms , Europe , Government expenditures , Health care , Statistics , Transition economies ,
    Date: 2010–03–24
  9. By: Chun-Yu Ho (Georgia Institute of Technology, Hong Kong Institute for Monetary Research)
    Abstract: This paper examines the effects of market deregulation on consumers and state commercial banks in China, a large developing country. I jointly estimate a system of differentiated product demand and pricing equations under alternative market structures. While China's banking reforms overall have achieved mixed results, the consumer surplus of the deposit market has increased. The welfare effects from reforms are unevenly distributed, with losses skewed toward inland provinces and certain consumer groups. There is no clear evidence that the pricing of banking services has become more competitive after the reform, and such pricing remains subject to government intervention. Encouragingly, the price-cost margins of some state commercial banks have fallen over time.
    Keywords: Banking Reform, Banks in China, Demand Estimation, Market Structure
    JEL: G21 L11
    Date: 2009–09
  10. By: Vinokurov, Evgeny
    Abstract: The paper is focused on the official Kazakhstani position towards Russia and its development over 1991-2000, i.e. the two post-Soviet decades. We draw upon speeches by the representatives of the state, most importantly by Kazakhstan president Nursultan Nazarbayev, and the intergovernmental acts. The paper provides substantive analysis and structurisation of the evolution of the Kazakhstani official position towards relations with Russia. It also provides various aspects of interpretation of this process, as we set the rhetoric against the economic cycles and exogenous events.
    Keywords: Kazakhstan; Russia; CIS; foreign policy
    JEL: F15 F13 P20
    Date: 2010–03
  11. By: Petra Posedel (Graduate School of Economics and Business, Zagreb); Maruska Vizek (The Institute of Economics, Zagreb)
    Abstract: We use a nonlinear framework in order to explore house price determinants and their adjustment properties. We test for threshold cointegration using a sample of four developed countries (the United States, the United Kingdom, Spain, and Ireland) and four transition countries (Bulgaria, Croatia, the Czech Republic, and Estonia). All eight countries experienced an intensive increase in house prices during the 1990s and the first half of this decade. In addition to testing for nonlinearities, we focus on house price determinants in these four transition countries of Central and Eastern Europe. An asymmetric house price adjustment is present in all transition countries and the U.S., while no threshold effects are detected in developed European countries. In a threshold error correction framework, house prices are aligned with the fundamentals; but house price persistence coupled with a slow and asymmetric house price adjustment process might have facilitated the house price boom in transition countries and the U.S.
    Keywords: house prices, threshold cointegration, asymmetric adjustment, transition
    JEL: C22 R21 R31
    Date: 2010–03
  12. By: Sylvie Demurger (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines); Hui Xu (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines)
    Abstract: This paper analyzes return migrants' occupational choice upon their return to their home village, by using an original rural household survey conducted in Wuwei county (Anhui province, China) in 2008. We apply two complementary approaches : a horizontal comparative analysis of occupational choice between non-migrants and return migrants, and a vertical investigation of the impact of migration experience on returnees only. Two main findings are drawn up from the estimation of probit models which account for potential selection bias and endogeneity. First, return migrants are more likely to be self-employed and to opt for higher ability jobs than non-migrants. Second, both return savings and the frequency of job changes during migration increase the likelihood for return migrants to become self-employed. These findings suggest that (a) working experience during migration enhances individual's human capital and entrepreneurial ability, and (b) repatriated migration experience is a key stimulating factor in promoting rural entrepreneur activity.
    Keywords: Return migrants ; occupational change ; entrepreneurship ; Asia ; China
    Date: 2010
  13. By: Yin-Wong Cheung (University of California, Santa Cruz ,Hong Kong Institute for Monetary Research); XingWang Qian (SUNY, Buffalo State College)
    Abstract: We study the empirical determinants of China's capital flight. In addition to the covered interest differential, our empirical exercise includes a rather exhaustive list of macroeconomic variables and a few institutional factors. Overall, our regression exercise shows that China's capital flight is quite well explained by its own history and covered interest differentials. The other possible determinants offer relatively small additional explanatory power. It is also found that China's capital flight responds differently to the components of covered interest differentials and to the positive and negative components of these variables. The response pattern, however, depends on the choice of data frequency. The general impression is that the monthly results are more intuitive than the quarterly ones.
    Keywords: Covered Interest Differential, Forward Premium, Expected Depreciation, Asymmetric Response, Macro Determinants
    JEL: F3 F32 G15
    Date: 2010–03
  14. By: Kai Guo; Papa M'B. P. N'Diaye
    Abstract: This paper gauges the key determinants of China's private consumption in relation to GDP using data on the Chinese economy and evidence from other countries' experiences. The results suggest there is nothing "special" about consumption in China. Rather, the challenge is to explain why the conditioning variables-notably a low level of service sector employment, the level of financial sector development, and low real interest rates-are so different in China relative to other countries' historical experience. The results suggest, in particular, that efforts to further raise household income and the share of employment in the services sector, as well as to develop capital markets, including liberalizing interest rates and creating alternative savings instruments are likely to have the biggest impact on consumption. Other mechanisms to raise household income and mitigate household-specific risk (such as by improving the healthcare and pension systems) also have a role to play.
    Keywords: China, People's Republic of , Cross country analysis , Economic models , Employment policy , Income distribution , Private consumption , Private savings , Private sector , Services sector ,
    Date: 2010–04–07
  15. By: Boboc, Cristina; Driouchi, Ahmed; Titan, Emilia
    Abstract: This study looks at how health, education, and economic development are inter-related in the case of Europe. Factorial analyses besides econometric models, implemented on a panel data from EUROSTAT show that the included variables are interrelated. The new members of the European Union are found to be investing in education, research and development and health care. Furthermore, they have high economic growth and high improvements in education and health state indicators. However, the instability and economic risks that have appeared during the transition process do affect the level of social protection. The existing social protection system increases poverty rates and slows the convergence towards developed economies. Two main directions for enhancing human development in EU new member economies are identified. They include the strengthening of the social protection system to target the vulnerable members affected by the transition process besides increasing expenditure on research and development.
    Keywords: Interdependencies; Health; Education; Economic Development
    JEL: D31
    Date: 2010–01–19
  16. By: Ana Fernandes (University of Sussex); Heiwai Tang (Tufts University ,Centro Studi Luca d'Agliano ,Hong Kong Institute for Monetary Research)
    Abstract: This paper uses detailed product-level export data for China and proposes an extension of the Antrˆjs and Helpman (2004) framework that includes investments in component search to investigate the determinants of foreign direct investment (FDI) versus foreign outsourcing. We exploit the coexistence of two regulatory trade regimes for export-processing in China, pure-assembly and import-and-assembly. We find that if Chinese plants import materials and assemble them, the share of exports from vertically integrated plants is increasing in the intensity of headquarter inputs across sectors, and is decreasing in the contractibility of inputs. These results are consistent with existing theories. However, if Chinese plants engage in pure-assembly, under which regime ownership over the materials shipped to China remains with the foreign firm, we find little support for the existing theories on FDI and outsourcing that focus on contract incompleteness and the relative importance of relationship-specific investments. We also find that more dispersed firm productivity in a sector is associated with a larger export share of integrated plants under pure-assembly but not under import-and-assembly. These results are consistent with the predictions of our model, which focuses on ownership of imported components as an alternative to asset ownership for alleviating the hold-up problem by the export-processing plant.
    Keywords: Intrafirm Trade, Vertical Integration, Export Processing, Outsourcing
    JEL: F14 F23 L14 L33
    Date: 2010–03
  17. By: Oliver Budzinski (Department of Environmental and Business Economics, University of Southern Denmark); Elmira Schaimijeva (TOU WPO The Institute for Economics, Management and Law); Gjusel Gumerova (GOU WPO The Academy of National Economy under the Government of the Russian Federation, Moscow); Jörg Jasper (EnBW Berlin)
    Abstract: Although Russia’s WTO-accession is foreseeable, there are still deficits in the literature on its concrete effects on the sectoral and regional levels. In this paper we analyse effects on Russia’s chemical and petrochemical sectors (CPS), which are, unlike for example its oil and mineral gas industry, rarely in the focus of public attention. On the basis of an extensive examination of these sectors’ current condition, we expect serious problems for them to emerge in the nearer future, the perhaps most serious and most puzzling problem being under-investment. Our analysis is based on data provided by GOSKOM-STAT/ROSSTAT, Russia’s official statistics institute. The authors like to thank Henning P. Jørgensen for valuable comments on an ear-lier version of the paper.
    Keywords: Russia, chemical and petrochemical industries, WTO
    JEL: F21 O24 R11
    Date: 2010–03
  18. By: Xiong Bin; Wen Shuhui (Kunming University of Science and Technology, Yunnan province, China)
    Abstract: The main contribution of this paper is the identification of obstacles at the different levels of coordination, and constructive recommendations for (a) improving the effectiveness of existing coordination and (b) forging linkages where necessary between the various stakeholders i.e., central and provincial governments, state-owned enterprises, the private sector – including industrial associations, and small and medium-sized enterprises (SMEs) – border communities, donors and development partners, and civil organizations are the main stakeholders.
    Keywords: Political economy, GMS, Trade Facilitation, China
    JEL: F1
    Date: 2009–09
  19. By: Barry Harrison; Winston Moore
    Abstract: In this paper we use nonlinear tests to investigate the mean reverting properties of stock returns in a group of CEE markets. We also test whether returns in our target group of countries demonstrate characteristics of persistence and cross sectional dependence. Our results indicate that all series’ are stationary, but we find some ambiguity in the results of our tests for cross sectional dependence.
    Keywords: nonlinearities, stock markets, Central and Eastern European Countries
    JEL: C32
    Date: 2010–04
  20. By: Ruben Atoyan
    Abstract: Focusing on the nexus between economic growth and buildup of external vulnerabilities, this paper provides a systematic account of different growth strategies followed in Central and Eastern Europe in 2000-08 and then uses this growth diagnostics to derive implications for the post-crisis recovery. The main findings point to three policy lessons for improving growth sustainability. First, greater reliance on tradable sectors should be the cornerstone of the future growth model. Second, enhancing domestic sources of bank credit funding would contribute to mitigation of external vulnerabilities and make domestic financial system more resilient to global financial shocks. Third, prudential and macroeconomic policies will have to be more proactive in managing capital inflows, including funneling these inflows into investment in the export-oriented industries.
    Keywords: Bank credit , Capital controls , Capital inflows , Central and Eastern Europe , Economic growth , Economic models , Emerging markets , Fiscal policy , Monetary policy ,
    Date: 2010–04–06
  21. By: Wei Ha (Policy Specialist at the Human Development Report Office, UNDP); Junjian Yi (Economics Department of the Chinese University of Hong Kong); Junsen Zhang (Economics Department of the Chinese University of Hong Kong)
    Abstract: This paper examines the effects of both permanent and temporary emigration on human capital formation and economic growth of the source regions. To achieve this end, this paper explores the Chinese provincial panel data from 1980 to 2005. First, the fixed effects model is employed to estimate the effect of emigration on school enrollment rates in the source regions. Relative to this aspect, we find that the magnitude (scale) of permanent emigrants (measured by the permanent emigration ratio) is conducive to the improvement of both middle and high schools enrollments. In contrast, the magnitude of temporary emigrants has a significantly positive effect on middle school enrollment but does not have a significant effect on high school enrollment. More interestingly, different educational attainments of temporary emigrants have different effects on school enrollment. Specifically, the share of temporary emigrants with high school education positively affects middle school enrollment, while the share of temporary emigrants with middle school education negatively affects high school enrollment. Second, the instrumental variable method is applied to estimate the effect of emigration on economic growth within the framework of system Generalized Method of Moments (GMM). The estimation results suggest that both permanent and temporary emigrations have a detrimental effect on the economic growth of the source regions. Our empirical tests provide some new evidence to the "brain drain" debate, which has recently received increasing attention.
    Keywords: Brain drain, human capital, emigration, economic growth
    JEL: J22 J24 O12 O15 F22
    Date: 2009–08
  22. By: Carine Milcent; Feng Jim
    Abstract: In China, with the economic reforms leading to the raise in agricultural productivity, the rural healthcare organisation has been weakened. In a 1991-2006 database, a decrease in the healthcare demand is observed. If many papers study the effect of the insurance system (NCMS) on the healthcare demand, other factors explaining the healthcare demand have not received much research attention yet. We use a matching and difference in difference model to correct for the selection bias on insurance effect. If the income level and insurance enrollment plays a major role on the healthcare demand, we shed light on the peer effect of the industrialization process and the changes affecting healthcare facilities. In a context of healthcare price widely increasing, the change in villagers working activity leads to an increase in the inequality of healthcare access (due to inequality of wage, mobility, and private insurance). The result is a reduction and sometimes worse, an exclusion from the healthcare access for the poorest. A public policy has to be conducted to support farmers, in particular in areas where a significant part of the village inhabitants have an industrial activity.
    Date: 2010
  23. By: edited by Rainer Bauböck and André Liebich
    Abstract: It is common in the literature on nationalism and citizenship to distinguish between civic conceptions of the political community that are seen to prevail in Western Europe and North America and ethnic ones that are said to be characteristics of Central and Eastern Europe. EUDO CITIZENSHIP has invited scholars to answer the question whether this contrast is merely a Western stereotype or can be traced in national citizenship laws and policies. ..In his opening article, Andrè Liebich highlights several important historical conditions shared by the former communist accession states to the European Union. Among these are not only long periods of authoritarian rule, but also the comparatively recent formation as independent states and a lack of recent experience with and recognition for ethno-linguistic diversity. Liebich observes a dramatic difference between Western and Eastern European states specifically with regard to birthright acquisition by ius soli or ius sanguinis and predicts that the new member states will find it hard to adapt their citizenship regimes to the fact that they, too, are now becoming countries of immigration.. .Five authors respond to André Liebich's analysis, partly pointing to empirical evidence of strongly ethnic conceptions of citizenship in some of the "old" EU member states, and partly challenging the attempt to fit countries with quite different histories into geographical blocks that are then contrasted with each other. The debate concludes with a rejoinder by André Liebich in which he replies to his critics. .
    Date: 2010–03–15
  24. By: Rafis Abazov (Harriman Institute/SIPA at Columbia University)
    Abstract: This paper assesses recent migration trends in the Commonwealth of Independent States (CIS). Within the last decade (1999-2009) the Russian Federation became the world’s second largest recipient of migrants after the United States, while the Ukraine became the fourth largest and Kazakhstan became the ninth largest. Such large-scale population movement, which includes a significant number of labour migrants from resource-poor to resource-rich states in the region, has had an inevitable impact on the social, economic and human development in both source and host countries. By 2007-2009 Moldova, Tajikistan and Kyrgyzstan have develop a high dependency on international money transfers from their labour migrants, having the world’s highest ratio of remittances to their GDP. During last few years numerous studies focused on migration issues within the CIS region, yet there are a number of problems to be still explored: What are the “push” and “pull” factors that motivate this large-scale migration? What are the current trends in the labour migration in the CIS? What are the short-term and long-term implications of the current migration trends for migrants and their families? What is the impact of the migration on human development in the region, including poverty reduction, social and gender equality, education and health? The paper addresses these and other questions. First, it evaluates the historical, political and social background and demographic context of the population movement in the region, which has become one of the most important determinants of migration during the recent times. Second, it overviews the most important push and pull factors that have affected migration during recent years and different types of migration responses to the social and economic pressures in sending and receiving countries. Third, it reviews the major impacts of the population movement on human development in the CIS region. In conclusion the paper summarizes the major findings and provides policy recommendations.
    Keywords: labour migration, regional labour market, human development, poverty, migration policy, remittances, rural-urban migration, urbanization, CIS, Kazakhstan, and Russia
    JEL: O1 O15 J0 F22
    Date: 2009–08
  25. By: Natalia Kyui (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: This paper makes a thorough analysis of the returns to tertiary education and education-occupation matches within a transition economy and compares these returns to similar returns in a developed economy. This study shows through the example of the Russian Federation that the increase in the returns to education which happened in previous years does not indicate that the labor market is becoming closer to that of developed countries. The standard estimation of the returns to education is deconstructed in three parts characterizing the labor market : education-occupation match, payment for occupations and payment for productivity within occupations. First, I compare the non-parametric estimation of wage distributions by educational and occupational groups within the Russian labor market and a developed country's labor market (I take France as an example). Second, I estimate a joint reduced-form model of the educational choice, labor market participation, placement of employees among occupational categories and wage formation. This joint model allows us to take into account correlations between unobservable factors that simultaneously influence the educational choice, occupational choice and final wage. A wide range of explanatory variables is used, characterizing not only individuals, but also their households, job, industries of work and regions. This allows us to analyze the influence of the family's network on the placements among occupational categories and wage formation. I take into account the observed heterogeneity of returns to education among the analyzed population. The results show the advantages of the proposed approach for the analysis of transition labor markets when compared with the standard approaches to transition economies.
    Keywords: Returns to education, occupational choice, transition economy.
    Date: 2010–03
  26. By: Jesmin Rahman
    Abstract: This paper estimates revenue and expenditure pro-cyclicality with respect to output and domestic absorption in new member states of the European Union and Croatia to assess whether these countries used the boom years of 2003-07 to create sufficient fiscal space. The current crisis has found many countries short of fiscal space. As these countries enter a different phase of capital inflows, some with large vulnerabilities and inflexible monetary policy options, the role of fiscal policy becomes more important. This paper also looks at these issues to see how fiscal policy can play a more effective role in demand management in these countries.
    Date: 2010–04–15
  27. By: Vinokurov , Evgeny
    Abstract: The System of Indicators of Eurasian Integration (SIEI)under the auspices of the Eurasian Development Bank consists of nine general and two consolidated indices that are aimed at assessing integration in the post-Soviet region, and cover various aspects of the regional integration process. The SIEI is built around several sets of indicators, including the integration of trade and labour markets, and co-operation in key functional areas (agriculture, education, and energy); convergence of the main characteristics of the post-Soviet economies; and qualitative performance parameters of the CIS integration groupings developed based on an expert poll. The data given in this first version of the SIEI show the dynamics of integration processes in the decade 1999-2008. The SIEI consists of three sets of indices which correspond to the three main aspects of regional co-operation: (a) analysis of regional integration as the integration of markets. In this case, the integration of countries is assessed from the point of view of mutual flows of commodities, services and production factors; (b) analysis of regional integration as the convergence of economic systems.In this case, the subject of evaluation is the convergence of the countries’ main quantitative development characteristics in four key areas: macroeconomics (growth dynamics), financial policy, fiscal policy, and monetary policy; and (c) analysis of institutional co-operation. In this case, the subject of evaluation is the countries’ performance in formal integration projects within the post-Soviet space, taking into account the broad range of goals of the respective structures.
    Keywords: regional integration; economic integration; post-Soviet space; former Soviet union
    JEL: F15
    Date: 2010–03
  28. By: Usamah Fayez Al-Farhan
    Abstract: In this article I analyze the changes in the gender wage gap in the western region, eastern region and in reunified Germany during the period 1999 – 2006. I use data from the German Socio-Economic Panel and implement two alternative decomposition methodologies; the Juhn, Murphy and Pierce (1991) decomposition, and a methodology that totally differences the Oaxaca-Blinder (1973) decomposition, found in Smith and Welch (1989). I conclude that most of the increase in the gender wage gap occurred during a period of remarkably rising wage inequality and argue that both trends are caused simultaneously by the same set of factors. Furthermore, German women were, on average, treated favorably in the returns to their educational attainment, potential experience and tenure compared men, and that the increasing gender wage gap was mainly due to changes in the gender differentials in human capital endowments, particularly worker’s potential experience, changes in the gender distribution across industries, company sizes and occupational positions and to changes in discrimination in the returns to job-specific training.
    Keywords: Wages, gaps, discrimination, decomposition, characteristics effect, coefficient effect
    JEL: D30 J31
    Date: 2010
  29. By: Karel Báťa (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)
    Abstract: Investors reveal a tendency to prefer domestic over foreign equities despite the financial losses. From institutional perspective the factors that cause home biasness are the barriers to entry the foreign markets, transaction costs, illiquidity, asymmetric information and information costs, corporate governance and inflation and exchange rate risks. Behavioral finance argues that irrationality of investors cause the home biasness. Investors tend to be under the influence of psychological biases: optimism, overconfidence, social identity, narrow framing and loss aversion. In this paper we introduce a model of optimal portfolio of Czech investors with three utility functions: Markowitz, exponential and CRRA. The prediction of the model without short selling suggests that Czech investors should have more than 60 % (between 72 - 83 % for feasible levels of risk aversion) in domestic equities. The OECD data claims that they hold around 87 % in domestic equities.
    Keywords: Equity home bias, optimal investment portfolio, behavioral finance
    JEL: G11
    Date: 2010–04
  30. By: Zeqiri , Izet; Aziri , Brikend
    Abstract: Recently there has been an increase on interest in the analysis of job satisfaction variables. Job satisfaction is correlated with certain types of employee behavior such as productivity, quits and absenteeism. In this paper four different measures of job satisfaction are related to two personal characteristics. The data used are from a survey conducted with 3.000 employees from different types of companies from the Republic of Macedonia. Four measures of job satisfaction that have been used are considered: satisfaction with amount of pay, satisfaction with possibilities for advancement, satisfaction with relations with supervisors and satisfaction with relations with coworkers. Also the connection of gender and level of education with job satisfaction are considered.
    Keywords: Job satisfaction; motivation; education; gender
    JEL: J01 J24 J16 J2 J08 J28 J21 J00 J0 J23
    Date: 2010–04–09
  31. By: Hansson , Åsa (Department of Economics, Lund University); Olofsdotter, Karin (Department of Economics, Lund University)
    Abstract: Abstract: We empirically analyze the impact of corporate tax rates and agglomeration economies on FDI using panel data on bilateral FDI flows and stocks in the enlarged European Union. The novelty of the paper is that it explicitly deals with agglomeration forces and how these may explain differences in tax policies between new and old member countries. The empirical analysis closely follows the implicit underlying model where the foreign direct investment decision is seen as a two-step procedure that entails: 1) whether or not to invest; and 2) the amount of FDI to invest. Using recent data on corporate tax rates for all 27 EU member countries from 1995-2006, we find that there are large differences in the determinants of FDI going to the EU15 and new member countries. While tax differentials mainly seem to influence FDI flows to new members, agglomeration economies appear to play a somewhat more important role for the amount of investment made within the EU15. In addition, significant differences are found between the determinants of the extensive and intensive margins of the FDI decision.
    Keywords: Corporate taxes; agglomeration economies; foreign direct investment
    JEL: F12 F15 F21 H71
    Date: 2010–03–15
  32. By: Joseph K. W. Fung (Hong Kong Baptist University ,Hong Kong Institute for Monetary Research); Sanry Y. S. Che (Hong Kong Baptist University)
    Abstract: Hong Kong represents the second largest of the initial public offering (IPO) markets that adopt an advance payment subscription procedure. The lengthy process creates substantial financing costs to investors but interest earnings to issuers. Data from a sample of 386 IPOs listed between 2000 and 2007 reveals that interest cost can reduce the return to public subscribers by 44%; while the HIBOR-based interest earnings to issuers are estimated at 0.59% of funds raised, and at 6.27% of forecast earnings. Consistent with Agarwal, Liu, and Rhee (2008), the realized subscription rate strongly influences returns but the link weakens at higher interest rates. Interest earnings and underpricing are highly correlated, a finding in support of Chowdhry and Sherman¡¦s (1996) proposition. However, the proposition is deemed irrefutable as both underpricing and interest earnings are highly related to the subscription rate. Moreover, regression results show that the relationship between the subscription rate and offer price of H-shares and red-chips are indistinguishable from other issues. These results cast doubt on the common conjecture that the management of China-related enterprises are more likely to underprice their offerings than the managers of other enterprises. The higher returns to H-shares and red-chips can be attributable to the higher public demand for large issues.
    Date: 2009–12
  33. By: Priit Vahter
    Abstract: Does FDI affect innovation, productivity growth, and knowledge sourcing activities of domestic firms? This study employs detailed firm-level panel-data from Estonia’s manufacturing sector to investigate different channels through which FDI can affect domestic firms. Instrumental variables approach is used to identify the effects. There is no evidence of an effect of FDI entry on local incumbents’ TFP and labour productivity growth in the short term.. However, there are positive spillovers on process innovation. These effects do not depend on the local firms’ distance to the productivity frontier. The results show significant positive correlation between the entry of FDI in a sector and the more direct measures of spillovers in subsequent periods. This is consistent with the view that FDI inflow to a sector intensifies knowledge flows to domestic firms.
    Keywords: foreign direct investment, productivity, innovation, learning
    JEL: F21 F23 O31 O33
    Date: 2010
  34. By: Madalina Andreica (Department of Economic Cybernetics - The Bucharest Academy of Economic Studies); Mugurel Ionut Andreica (Parallel and Distributed Systems Laboratory [Bucarest] - University Politehnica of Bucarest); Marin Andreica (Faculty of Management - Bucharest Academy of Economic Studies)
    Abstract: In the context of the current financial crisis, when more companies are facing bankruptcy or insolvency, the paper aims to find methods to identify distressed firms by using financial ratios. The study will focus on identifying a group of Romanian listed companies, for which financial data for the year 2008 were available. For each company a set of 14 financial indicators was calculated and then used in a principal component analysis, followed by a cluster analysis, a logit model, and a CHAID classification tree.
    Keywords: distressed company; financial ratio; cluster; CHAID; logit model
    Date: 2009–06–15

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