nep-tra New Economics Papers
on Transition Economics
Issue of 2010‒08‒06
seventeen papers chosen by
J. David Brown
Heriot-Watt University

  1. Who Needs Credit and Who Gets Credit in Eastern Europe? By Brown, Martin; Ongena, Steven; Popov, Alexander; Yesin, Pinar
  2. Innovation and Economic Growth in China By Yanrui Wu
  3. Production Efficiency versus Ownership: The Case of China By Alice Shiu, Valentin Zelenyuk
  4. The International Effects of China's Growth, Trade and Ecucation Booms By Richard G. Harris; Peter E. Robertson; Jessica Y. Xu
  5. Modeling Institutions, Start-ups and Productivity during Transition By Zuzana Brixiova; Balázs Égert
  6. A Simultaneous Equation Model of Economic Growth, FDI and Government Policy in China By J L Ford; S Sen; Hongxu Wei
  7. The Impact of the 1999 Education Reform in Poland By OECD
  8. Catching-up and Inflation in Europe: Balassa-Samuelson, Engel’s Law and Other Culprits By Balázs Égert
  9. Youth Labour Markets in Europe and Central Asia By O'Higgins, Niall
  11. The Effects of Ownership Structure and Industry Characteristics On Export Performance By Dahai Fu; Yanrui Wu; Yihong Tang
  12. Financial stability challenges in EU candidate countries - Financial systems in the aftermath of the global crisis By Thierry Bracke; Éva Katalin Polgár; Kristel Buysse; Desislava Rusinova; Alexandre Francart; Jakob Ekholdt Christensen; Corinna Knobloch; Nikolaos Stavrianou; Pavel Diev; Emidio Cocozza; Jon Frost; Sándor Gardó; David Farelius
  13. Twin deficits and the Feldstein-Horioka puzzle: a comparison of the EU member states and candidate countries By Aristovnik, Aleksander; Djurić, Sandra
  14. "Croatian Wage Inequality and Wage Differentials, 1970-2008: Measurement and Determinants" By Ivo Bicanic; Saul D. Hoffman; Oriana Vukoja
  15. Enhancing Financial Stability Through Better Regulation in Hungary By Margit Molnar
  16. Measuring Competition in Slovenian Industries: Estimation of Mark-ups By Margit Molnar
  17. Preparing for Euro Adoption in Poland By Rafal Kierzenkowski

  1. By: Brown, Martin (Swiss National Bank); Ongena, Steven (Universiteit van Tilburg (Tilburg University)); Popov, Alexander (European Central Bank); Yesin, Pinar (Swiss National Bank)
    Abstract: Based on survey data covering 8,387 firms in 20 countries we compare credit demand and credit supply for firms in Eastern Europe to those for firms in selected Western European countries. We find that, while 30% of firms do not need credit in Eastern Europe, their need for credit is higher than in Western Europe. The firm-level determinants of credit needs in Eastern Europe are quite similar to that in Western Europe: Firms with alternative financings sources, i.e. government-owned, foreign-owned and internally financed firms, are less likely to need credit. Small firms are also less likely to demand credit than larger firms, suggesting that they may have limited investment opportunities. We find that a higher share of firms is discouraged from applying for a loan in Eastern Europe than in Western Europe. Firms in Eastern Europe seem particularly discouraged by high interest rates compared to firms in Western Europe, with collateral conditions and loan application procedures also more discouraging. The higher rate of discouraged firms in Eastern Europe is related to a stronger reluctance of small and financially opaque firms to apply for a loan compared to Western Europe. While many discouraged firms correctly anticipate that their loan applications would be rejected, a large majority of discouraged firms seem to be creditworthy. At the country-level we find that the higher rate of discouraged firms in Eastern Europe is driven more by the presence of foreign banks than by the macroeconomic environment or the lack of creditor protection. We find no evidence that foreign bank presence leads to stricter loan approval decisions. Our findings suggest to policy makers that the low incidence of bank credit among firms in Eastern Europe, compared to Western Europe, is not driven by less need for credit or banks’ reluctance to extend loans. The main driver seems to be that many (creditworthy) firms are discouraged from applying for a loan, due to high interest rates, collateral conditions and cumbersome lending procedures. As discouragement is particularly high among small and opaque firms, as well as in countries with a strong presence of foreign banks, it seems that firms perceive lending standards to have become more reliant on “hard information” with the entry of foreign banks. However, as loan rejection rates are not related to foreign bank presence, it seems that firms’ perceptions of the likely lending conditions may be too pessimistic. Thus more transparency about credit eligibility and conditions may improve credit access, particularly in countries with a high presence of foreign banks.
    Keywords: Banking; Credit; Transition economies
    JEL: G21 O16
    Date: 2010–03–01
  2. By: Yanrui Wu (UWA Business School, The University of Western Australia)
    Abstract: China has enjoyed high economic growth for three decades since the initiative of economic reform in 1978. This growth has however been driven mainly by labour-intensive, export-oriented manufacturing activities. Has innovation played a role in China’s economic growth? What are the determinants of innovation in the Chinese economy? These are some of the questions which are to be explored in this study. Answers to these questions have important policy implications for China’s economic development in the future as innovation is vital for the transformation of the country’s growth model.
    Keywords: Innovation, economic growth, Chinese economy
    Date: 2010
  3. By: Alice Shiu, Valentin Zelenyuk (Kyiv School of Economics, Kyiv Economics Institute)
    Abstract: In this study, we explore the pattern of efficiency among enterprises in China‘s 29 provinces across different ownership types in heavy and light industries and across different regions (coastal, central and western). We do so by performing a bootstrap-based analysis of group efficiencies (weighted and non-weighted), estimating and comparing densities of efficiency distributions, and conducting a bootstrapped truncated regression analysis. We find evidence of interesting differences in efficiency levels among various ownership groups, especially for foreign and local ownership, which have different patterns for light and heavy industries.
    Keywords: efficiency, data envelopment analysis, bootstrapping, ownership, China
    JEL: C13 C15 O11 O18
    Date: 2010–07
  4. By: Richard G. Harris (Simon Fraser University); Peter E. Robertson (UWA Business School, The University of Western Australia); Jessica Y. Xu (The University of New South Wales)
    Abstract: China’s international trade flows have increased by 500% since 1992, far outstripping GDP growth. Likewise tertiary education enrollments have increased by 300%. We simulate these changes using a multi-sector growth model of the Chinese and USA economies. A decade of trade biased growth in China is found to have a large effect on the USA economy – raising GDP approximately 3-4.5 percentage points. We also show that the trade bias in China’s growth accounts for more than half of the observed growth in tertiary enrolments in China. In contrast neutral growth has practically no effect on USA incomes or China’s stock of skilled labour. Finally the simulations reveal that China’s education boom per se has practically no long run impact on the USA economy. The results thus indicate that the pattern of productivity growth in exports sectors, as might be caused by falling trade costs, has been critical in transmitting benefits of Chinese growth to the world economy. They also point to an important link between falling trade costs and human capital formation.
    Keywords: Economic Growth, China, Human Capital, Trade Costs
    Date: 2010
  5. By: Zuzana Brixiova; Balázs Égert
    Abstract: The transition paths from plan to market have varied markedly across countries. Central and Eastern European and the Baltic countries, which opted for a fast and profound transformation of their institutions, rapidly narrowed the productivity gap with advanced economies. In contrast, in countries of the Commonwealth of Independent States, which embarked on reforms later and contented with less depth, the productivity gap remains substantial. While the literature has focused mainly on empirical studies, this paper develops a dynamic search model of the firm start-ups that is consistent with the above trends. The model shows that an enabling institutional set up stimulates start-ups of highly productive firms at an earlier stage of transition, underscoring the importance of reforms. The role of the state sector as an employer during transition rises in countries where reforming institutions is particularly costly.<P>Institutions, start-ups et productivité au cours de la période de transition<BR>On a pu constater des passages bien différents d’un système planifié vers un système de marché dans l’ex-bloc soviétique. Les pays de l’Europe centrale et orientale et les pays Baltes ont opté pour une rapide et profonde transformation de leurs institutions et ont réussi à diminuer leur retard en termes de productivité par rapport aux pays industrialisés. En revanche, les réformes étaient mises en place plus lentement et étaient moins complètes dans les pays de la Communauté des États indépendants où les écart de productivité restent importants. La littérature existante étudie ce phénomène empiriquement. Cette étude présente un modèle de recherche dynamique qui est à même de répliquer la dynamique décrit ci-dessus. Le modèle démontre l’importance des institutions favorables à la création de nouvelles entreprises de productivité élevée au début de la transition, ce qui confirme l’importance des réformes. Le rôle du secteur public en tant qu’employeur devient plus important en période de transition dans les pays où la mise en place des réformes institutionnelles est particulièrement coûteuse.
    Keywords: productivity, transition, Start-ups, dynamic search model, business climate, productivité, transition, Start-ups, modèle de recherche dynamique, climat commercial
    JEL: C61 O14 O43 O57
    Date: 2010–05–20
  6. By: J L Ford; S Sen; Hongxu Wei
    Abstract: Empirical investigations aimed at determining what relationship, if any, exists between FDI and economic growth has drawn ambiguous results. This is also the case for China, where all empirical studies have used the VAR methodology. In this study we outline a dynamic simultaneous equations model. The model captures the interrelationships between, aggregate output, domestic capital, FDI, human capital, and the state of technological development. As well as broadening the formulation of the production function, the model is defined to include possible influences from government capital expenditure on the infrastructure. Structural equations are then developed to determine those variables, and further factors are introduced into the model thereby, such as saving and wealth, and other exogenuous policy variables. The latter embrace monetary, commerical and fiscal policy. Two of the potential influences on the system, and hence upon economic development, are financial liberalisation and the general opening-up of the Chinese economy, since 1979. The dynamic multipliers from the estimated model indicate, amongst other things, that the general set of economic reforms has beneficial impact on long-run economic growth, directly and indirectly by its enhancement of FDI.
    Keywords: Economic growth factors, FDI, spill-over effects of FDI, monetary policy, commercial policy, fiscal policy, "opening out" reforms, GMM estimates, multipliers
    JEL: O23 O24 F23
    Date: 2010–07
  7. By: OECD
    Abstract: Increasing the share of vocational secondary schooling has been a mainstay of development policy for decades, especially in formerly socialist countries. However, the transition to market economies led to significant restructuring of school systems and a decline in the number of vocational students. Exposing more students to a general curriculum could improve academic abilities. To test the hypothesis that delayed vocational streaming improves academic outcomes, this paper analyses Poland’s significant improvement in international achievement tests and the restructuring of the education system, which expanded general schooling. Using propensity-score matching and difference-in-differences estimates, the authors show that delaying vocational education had a positive and significant impact on student performance on the order of one standard deviation.<BR>L’expansion de l’enseignement secondaire professionnel a été un pilier de la politique de développement pendant plusieurs décennies, peut-être davantage dans les anciens pays socialistes que partout ailleurs. La transition a cependant conduit à une importante restructuration des systèmes scolaires, et notamment à une diminution de la proportion d’élèves en enseignement professionnel. L’augmentation de la proportion d’élèves inscrits en filières générales pourrait améliorer les aptitudes aux études supérieures. Cet article analyse la forte amélioration des scores obtenus par la Pologne aux tests internationaux et la restructuration du système éducatif qui a développé l’enseignement général afin de tester l’hypothèse de l’amélioration des résultats induite par une orientation plus tardive en classes de niveau. À partir d’estimations obtenues par appariement sur scores de propension et par différence de différences, les auteurs montrent que l’orientation plus tardive en filières professionnelles a eu un impact positif important, de l’ordre d’un écart-type, sur les résultats des élèves.
    Date: 2010–07–26
  8. By: Balázs Égert
    Abstract: This study analyses the impact of economic catching-up on annual inflation rates in the European Union with a special focus on the new member countries of Central and Eastern Europe. Using an array of estimation methods, we show that the Balassa-Samuelson effect is not an important driver of inflation rates. By contrast, we find that the initial price level and regulated prices strongly affect inflation outcomes in a nonlinear manner and that the extension of Engel’s Law may hold during periods of very fast growth. We interpret these results as a sign that price level convergence comes from goods, market and non-market service prices. Furthermore, we find that the Phillips curve flattens with a decline in the inflation rate, that inflation persistence increases and that commodity prices have a stronger effect on inflation in a higher inflation environment.<P>Rattrapage économique et inflation en Europe : Balassa-Samuelson, la loi d’Engel et d’autres explications<BR>Ce papier étudie l’influence du rattrapage économique sur l’inflation annuelle dans l’Union européenne avec un accent particulier sur les nouveaux pays membres de l’Europe central et orientale. Les résultats indiquent que l’effet Balassa-Samuelson n’est pas à même d’expliquer les taux d’inflation différents observés dans les pays étudiés. Par contre, le niveau général des prix et les prix règlementés ont un impact significatif et non-linéaire sur l’inflation et la loi d’Engel peut être vérifiée durant des périodes de forte croissance économique. Ces résultats suggèrent que la convergence des niveaux de prix provient de la convergence des niveaux de prix des biens échangeables, des biens non-échangeables marchands et non-marchands. Nos résultats montrent aussi que la courbe de Phillips devient plate avec des taux d’inflation plus faible et que la persistance de l’inflation augmente et les prix des matières premières ont une influence plus forte sur l’inflation lorsque l’inflation est plus élevée.
    Keywords: European Union, catching-up, inflation, Balassa-Samuelson effect, Bayesian model averaging, nonlinearity, Engel’s law, real convergence, politique budgétaire, pays membre de l'OCDE, procyclique, contracyclique
    JEL: C22 C33 E21 E32 E43 E50 E52 E62 G21 H30 H60 O52
    Date: 2010–07–16
  9. By: O'Higgins, Niall (University of Salerno)
    Abstract: Transition to the market economy in ECA opened up a range of potential opportunities for young people. It has also raised a series of challenges. Youth unemployment and joblessness have emerged as serious problems with the potentially very high costs. Formal Education and Training systems have been slow to adapt to the changing requirements placed upon them by the rapidly changing industrial structure arising from transition. The damage arising from on the one hand rising expectations and on the other the failure of systems to accommodate these is likely to have long-term consequences. It is important then that countries in ECA support young people in fulfilling their potential. This paper looks at developments in and around the transition of young people from education to work in the ECA region in recent years. The purpose of the paper is to aid understanding of the current situation and to suggest areas where action is most needed and is likely to be most effective. The first section considers developments in the general economic context of relevance to young people. Section 2 goes onto consider the current situation of (and trends in) factors affecting young people’s entry into work. Section 3 assesses policies affecting youth employment and unemployment and section concludes identifying key issues and areas where action is needed and where it is likely to be effective.
    Keywords: youth labour markets, Europe and Central Asia, active labour market policies, vocational education and training, joblessness
    JEL: I28 J08 J13 J24
    Date: 2010–07
  10. By: Holst, Rainer; Yu, Xiaohua
    Abstract: Drawing on the method developed by Just and Pope (1978, 1979), this paper separately analyzes the marginal contributions of both regular input factors and climate factors to mean output and to production risk in Chinese inland aquaculture. Furthermore, the net change in output following a 1°C increase in annual average temperature will be determined. According to the results obtained, the impending changes in global climate will have both positive and negative impacts. While an increment in annual average temperatures will increase mean output and decrease production risk, an increase in temperature variability will reduce mean output and cause a higher level of production risk. The corresponding measures of precipitation however have no significant impact on mean output and production risk. Finally, a 1°C increase in annual average temperature is, ceteris paribus, likely to increase national mean output by 1.47 million tons.
    Keywords: Aquaculture, climate change, production risk, China, Environmental Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty, Q1, Q54,
    Date: 2010
  11. By: Dahai Fu (UWA Business School, The University of Western Australia); Yanrui Wu (UWA Business School, The University of Western Australia); Yihong Tang (School of International Trade and Economics, University of International Business and Economics Beijing)
    Abstract: Ownership structure and industry characteristics as internal and external factors respectively significantly impact the export performance of Chinese manufacturing firms. Three different yet related models, namely, logit, tobit and ordered probit models, that correspond to three different indicators of export performance are considered. It was found that the export performance of Chinese manufacturing firms is related not only to foreign capital involvement but also to the extent of foreign investors’ control. Foreign controlled enterprises are more likely to show better export performance than those controlled by domestic investors. Furthermore, the impact of industry concentration on export performance is unclear, while both industry export-orientation and industry capital intensity have a strong impact on the export performance of Chinese firms.
    Keywords: Export performance; Chinese firms; Ownership; Industry characteristics
    Date: 2010
  12. By: Thierry Bracke (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); Éva Katalin Polgár (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); Kristel Buysse (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); Desislava Rusinova (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); Alexandre Francart (Banque Nationale de Belgique, Boulevard de Berlaimont 14, B-1000 Brussels, Belgium.); Jakob Ekholdt Christensen (Danmarks Nationalbank, Havnegade 5, 1093 Copenhagen K, Danmark.); Corinna Knobloch (Deutsche Bundesbank, Wilhelm-Epstein-Str. 14, D-60431 Frankfurt am Main, Germany.); Nikolaos Stavrianou (Bank of Greece, 21, E. Venizelos Avenue, P. O. Box 3105, GR-10250 Athens, Greece.); Pavel Diev (Banque de France, 39, rue Croix-des-Petits-Champs, F-75049 Paris Cedex 01, France.); Emidio Cocozza (Banca d’Italia,Via Nazionale 91, I-00184 Rome, Italy.); Jon Frost (De Nederlandsche Bank, Postbus 98, 1000 AB Amsterdam, The Netherlands.); Sándor Gardó (Oesterreichische Nationalbank, Otto-Wagner-Platz 3, POB-61, A-1011 Vienna, Austria.); David Farelius (Sveriges Riksbank, 103 37, Stockholm, Sweden.)
    Abstract: This paper reviews financial stability challenges in the EU candidate countries: Croatia, the former Yugoslav Republic of Macedonia and Turkey. It follows a macro-prudential approach, emphasising systemic risks and the stability of financial systems as a whole. The paper recalls that the economies of all three countries experienced a recession in 2008-09 and shows how this slowed the rapid process of financial deepening that had been taking place since the beginning of the last decade. The deteriorating economic and financial conditions manifested themselves, first and foremost, through a marked deterioration in asset quality. These direct credit risks were compounded by the transformation of exchange and interest rate risks through a widespread use of foreign exchange-denominated or indexed loans and variable or adjustable interest rate loans. Moreover, funding and liquidity risks also materialised to some extent, although fully fledged bank runs were avoided, and none of the countries experienced a sharp reversal in external financing. Overall, the deterioration in asset quality has so far been managed well by the banking systems of the candidate countries, facilitated by large capital buffers, pro-active macro-prudential policies pursued by the authorities both before and during the crisis and the relative stability of exchange rates. Looking ahead, although uncertainties remain high regarding credit quality, the shock-absorbing capacities of the banking systems are fairly robust, as also evidenced by their relative resilience so far. Nevertheless, as the economic recovery sets in, the central banks should return to and possibly reinforce the implementation of measures to avoid a pro-cyclical build-up of credit (asset) boom-bust cycles. Furthermore, given the relevance of foreign-owned banks in two of the three countries, a continued strengthening of home-host cooperation in the supervisory area will be crucial to avoid any kind of regulatory arbitrage. JEL Classification: F32, F41, G21, G28
    Keywords: Europe, banking sector, vulnerability indicators, macro-prudential approach, emerging markets
    Date: 2010–07
  13. By: Aristovnik, Aleksander; Djurić, Sandra
    Abstract: The paper’s main objective is to investigate the empirical link between the fiscal balance and the current account (i.e. the twin deficits phenomenon). The paper focuses on the EU member states and candidate countries which are according to their different (e.g. historical, political, economical and geographical) characteristics divided into two major groups, i.e. old EU member states (EU15) and new EU member states and candidate countries (EU12+3) in the 1995-2008 period. Additionally, the importance of the so-called Feldstein-Horioka puzzle in the considered countries is examined in order to draw some conclusions about the regions’ integration with international capital markets. The empirical results suggest that budget deficits in the EU member states and candidate countries have generally signaled relatively high level of substitutability between private and public savings, implying a relatively low correlation between fiscal and external imbalances. Thus, the empirical results in general reject the validity of the twin deficit hypothesis. Finally, the paper provides evidence of a relatively higher level of capital mobility, especially in the EU12+3 region in the second sub-period (2004-2008).
    Keywords: twin deficits; Feldstein-Horioka puzzle; capital mobility; EU member states; candidate countries; panel data analysis
    JEL: F15 F32 F41 C33 O52
    Date: 2010–07–29
  14. By: Ivo Bicanic (Department of Economics,University of Zagreb); Saul D. Hoffman (Department of Economics,University of Delaware); Oriana Vukoja (Department of Economics,University of Zagreb)
    Abstract: We use newly-available data on income by educational and vocational attainment and grouped income-interval data to examine wage inequality and wage differentials in Croatia between 1970 and 2008. This is a time period during which Croatia experienced enormous institutional and structural change, including the fall of socialism, hyperinflation, the Homeland war and the creation of sovereign Croatia. We construct both Gini and Theil measures of inequality, using grouped data. We find a general compression of earnings differences by educational and vocational attainment, but with a slight increase in the capitalist period post-1990. The income interval data shows a clearer pattern of a secular increase in inequality that is sharper in the capitalist period. We also examine within-industry inequality to see whether industries that experienced stronger structural changes also experienced a greater increase in inequality. Our evidence on this is mixed.
    Keywords: Croatia, Transition Economy Labor Markets, Inequality, Gini coefficient, Theil Index
    JEL: J3 P2 P23
    Date: 2010
  15. By: Margit Molnar
    Abstract: The global crisis exposed weaknesses in the Hungarian financial system that pose risks to financial stability. Excessive risk-taking by banks and households had been masked by relatively stable exchange rates, the expected early adoption of the euro and unusually lax credit conditions in international markets. With credit becoming scarcer and dearer, the domestic economy was hit through multiple channels. The steep depreciation of the forint boosted households’ debt burden, while banks were hit by the drying up of liquidity, including in swap markets for Swiss francs. A major lesson learnt from the crisis is that the approach to household lending needs to change: a stronger protection for borrowers should be combined with a tighter regulation of lenders. Enhancing competition in the banking market would also impose discipline on lending behaviour. Financial supervision should be strengthened by enhancing the powers of the financial supervisor to avoid abusive practices and excessive risk taking. A better early-warning system needs to be created for the monitoring and assessment of systemic risks, in which a more formal Financial Stability Council should play a prominent role. This Working Paper relates to the 2010 OECD Economic Survey of Hungary (<P>Renforcer la stabilité financière en améliorant la réglementation en Hongrie<BR>La crise mondiale a révélé des faiblesses du système financier hongrois qui mettent en péril la stabilité financière. Les risques excessifs pris par les banques et les ménages avaient été masqués par la relative stabilité du taux de change, les anticipations d'adoption rapide de l'euro, et la détente inhabituelle des conditions de crédit sur les marchés internationaux. Quand le crédit est devenu plus rare et plus cher, l'économie hongroise a été touchée de multiples façons. La forte dépréciation du forint a beaucoup alourdi l'endettement des ménages, tandis que les banques ont souffert de l'assèchement de la liquidité, notamment sur le marché des contrats d'échange de forints contre francs suisses. Une des principales leçons de la crise est qu'il est nécessaire de modifier les modalités des prêts aux ménages : il faut conjuguer une plus grande protection des emprunteurs et l'application d'une réglementation plus rigoureuse aux prêteurs. Un renforcement de la concurrence sur le marché bancaire disciplinerait aussi le comportement des prêteurs. Il convient de renforcer la surveillance financière en donnant davantage de pouvoirs à l'autorité de régulation financière pour empêcher les pratiques abusives et la prise de risques excessifs. Il faut aussi créer un meilleur système d'alerte précoce pour le suivi et l'évaluation des risques systémiques, dans le cadre duquel un Conseil de stabilité financière ayant un caractère plus formel devrait jouer un rôle prédominant. Ce document de travail est lié à l'Étude économique de l'OCDE sur la Hongrie de 2010 (
    Keywords: Hungary, government policy and regulation, bank, financial crisis, financial markets and the macroeconomy, Hongrie, banque, crise financière, marchés de capitaux et macroéconomie, réglementation et politiques publiques
    JEL: E44 G18 G21
    Date: 2010–06–17
  16. By: Margit Molnar
    Abstract: Product market regulation on average is Slovenia does not appear particularly stringent, but heavy state involvement and high market concentration in several industries call for the gauging of competitive pressures in Slovenian industries. Owing to such characteristics, more sophisticated measures than the simple comparison of relative price levels is needed. Mark-ups can provide valuable information on competitive pressures in various sectors of the economy, reflecting pressures stemming from rules of conduct imposed by regulators as well as those arising from such factors as trade and FDI or increasing consumer demands in terms of price and quality. Conversely, the lack of competitive pressure may stem from heavy state involvement in the manufacturing and service sectors. This study is a first attempt to estimate mark-ups for manufacturing and service industries in Slovenia and in addition, its novelty is that it i) estimates mark-ups at a detailed level of sectoral disaggregation and ii) allows for non-constant returns to scale. The estimation is done for the period 1993-2006 and uses firm level data of the Amadeus database. In general, the estimated mark-ups are higher for services than manufacturing industries, but some manufacturing industries have high mark-ups in international comparison. This Working Paper relates to the 2009 OECD Economic Survey of Slovenia (<P>Mesurer la concurrence dans les branches d'activité slovènes : estimation des marges<BR>En moyenne, la réglementation des marchés de produits en Slovénie ne semble pas particulièrement restrictive, mais l'ampleur de l'intervention de l'État et la forte concentration du marché dans plusieurs secteurs requièrent une évaluation des pressions concurrentielles dans les branches d'activité slovènes. Compte tenu de ces caractéristiques, des mesures plus élaborées que la simple comparaison des niveaux de prix relatifs s'imposent. Les taux de marge peuvent être riches d'enseignements sur les pressions concurrentielles qui s'exercent dans divers secteurs de l'économie, reflétant les pressions qui résultent des règles de conduite imposées par les autorités de régulation, ainsi que celles qui découlent de facteurs tels les échanges et l'investissement direct étranger (IDE) ou l'augmentation des exigences des consommateurs en termes de prix et de qualité. Inversement, le manque de pressions concurrentielles peut avoir pour origine l'ampleur de l'intervention de l'État dans les industries manufacturières et les services. Cette étude est une première tentative d'estimer les marges dans les industries manufacturières et les services en Slovénie ; en outre, elle se caractérise par deux nouveautés : i) les marges y sont estimées à un niveau de ventilation sectorielle très poussé et ii) l'étude tient compte de rendements d'échelle non constants. Cette estimation est effectuée pour la période 1993-2006, à partir de données par entreprise tirées de la base de données Amadeus. En général, les marges estimées sont plus élevées pour les services que pour les industries manufacturières, mais ces dernières affichent dans certains cas des taux de marge élevés en termes de comparaison internationale. Ce document de travail se rapporte à l'Étude économique de l'OCDE sur la Slovénie de 2009 (
    Keywords: competition, imperfect competition, monopoly, Slovenia, market behaviour, firm production, concurrence, monopole, Slovénie, concurrence imparfaite, comportement sur le marché, production des entreprises
    JEL: D21 D4 L12
    Date: 2010–06–17
  17. By: Rafal Kierzenkowski
    Abstract: The objective of joining the euro area has become an important priority in the policy agenda of the current government. The paper focuses on the major structural reforms necessary to prepare for euro adoption that should allow a sustainable fulfilment of the Maastricht criteria and maximisation of the ensuing various benefits. These reforms are desirable independent of the effective date of adoption, given the necessity to restore fiscal discipline, maintain price stability and ensure a balanced growth going forward. However, they are even more essential in the run up to euro adoption as the process of real and nominal convergence remains largely incomplete, which requires a substantial strengthening of alternative adjustment mechanisms to domestic interest- and exchange-rate changes. The reforms should aim to create strong institutions to ensure fiscal sustainability and an efficient counter-cyclical rules-based fiscal policy supported by an independent fiscal council; promote flexibility in labour and product markets; and head off the risk of a boom-bust cycle triggered by much lower real interest rates, too rapid credit expansion and overblown perceived permanent income gains. The timing of euro adoption should therefore be determined by the speed of the implementation of reforms; otherwise the outcome of early membership without appropriate preparation may turn out to be difficult and risky. Yet, provided that adequate reforms are implemented, euro adoption should speed up the convergence process. This Working Paper relates to the 2010 OECD Economic Survey of Poland (<P>Préparer l’adoption de l’euro en Pologne<BR>L'objectif que constitue l'entrée dans la zone euro est devenu un objectif important du gouvernement actuel. Cet article est consacré aux principales réformes structurelles nécessaires à la préparation de l'adoption de la monnaie unique, qui devraient permettre à la Pologne de satisfaire durablement aux critères de Maastricht et de maximiser les différents avantages qu'elle en retirera. Ces réformes sont souhaitables indépendamment de la date effective d'entrée dans la zone euro, compte tenu de la nécessité de restaurer la discipline budgétaire, de maintenir la stabilité des prix et de garantir une croissance équilibrée dans l'avenir. Néanmoins, elles sont d'autant plus cruciales à l'approche de l'adoption de la monnaie unique que le processus de convergence réelle et nominale reste dans une large mesure inachevé, ce qui exige un renforcement sensible d'autres mécanismes d'ajustement que les taux d'intérêt et le taux de change domestiques. Ces réformes devraient viser à : mettre en place des institutions fortes garantissant la soutenabilité des finances publiques, ainsi qu'une politique budgétaire anticyclique efficace fondée sur des règles et étayée par un conseil indépendant de politique budgétaire ; à promouvoir la flexibilité du marché du travail et des marchés de produits ; et à neutraliser le risque d'un cycle de forte expansion et de récession déclenchée par des taux d'intérêt réels nettement plus bas, une croissance trop rapide du crédit, et l'impression injustifiée de gains de revenu durables. Le moment d'adoption de l'euro devrait donc être déterminé par le rythme de mise en oeuvre des réformes. Faute de quoi, une entrée prématurée dans la zone euro sans préparation adéquate pourrait se révéler difficile et risquée. Néanmoins, si des réformes adaptées sont instituées, l'adoption de la monnaie unique devrait accélérer le processus de convergence. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la Pologne 2010 (
    Keywords: OECD, Poland, fiscal rules, convergence, euro area, Maastricht criteria, labour market flexibility, boom-bust cycle, OCDE, Pologne, règles budgétaires, convergence, zone Euro, critère de Maastricht, flexibilité du marché du travail, cycle d’expansion et de récession
    JEL: E42 E58 E61 E62 P20
    Date: 2010–07–15

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