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on Transition Economics |
| By: | Gustafsson, Björn (Göteborg University); Li, Shi (Beijing Normal University); Nivorozhkina, Ludmila (Rostov State Economic University) |
| Abstract: | Harmonised microdata show a Gini coefficient for per capita total income of 45.3 percent in China 2002 and 33.6 percent in Russia 2003. A much larger urban to rural income gap in combination with a much smaller proportion of people living in urban areas in China are important reasons for this cross-country difference in inequality. Wage is a more non-equalising income source in China than in Russia. While Russian public transfers reduce income inequality, Chinese public transfers increase income inequality. Cross-country differences in the process of transition are also found to be significant. A relatively large non-agriculture self-employment sector is non-equalising in rural China, but is also narrowing the urban to rural income gap. In contrast to the many cross-country differences revealed, we report income inequality among urban residents in China and in urban Russia to be very similar. |
| Keywords: | income distribution, inequality, China, Russia, public transfers |
| JEL: | D31 P25 P52 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5383&r=tra |
| By: | Oxana Babecka Kucharcukova; Jan Babecky; Martin Raiser |
| Abstract: | Since the beginning of market reforms in 1989, the countries of South-Eastern Europe (SEE) and the Commonwealth of Independent States (CIS) have been trading significantly less with the world economy than those Central and Eastern European (CEE) countries which later joined the EU. To explain why this is the case, a number of hypotheses have been proposed in the literature. The key novelty of our study consists in a simultaneous assessment of the contribution to trade of geographical, policy and institutional factors during the EU pre-accession period (1997–2004). An augmented gravity model is proposed and estimated for a reference group of 82 countries, employing the Poisson and Tobit estimation techniques. We find that low quality of economic institutions in the SEE and CIS countries accounted for a considerable proportion of their below-potential international trade. We perform policy simulations using institutional data up to 2008 to identify channels for increasing the international trade of the SEE and CIS countries. |
| Keywords: | Gravity model of trade, Poisson estimator, Tobit estimator, transition economies. |
| JEL: | F13 F15 P33 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2010/04&r=tra |
| By: | Nathaniel John Porter; Ashvin Ahuja; Lillian Cheung; Gaofeng Han; Wenlang Zhang |
| Abstract: | Sharp increase in house prices combined with the extraordinary Chinese lending growth during 2009 has led to concerns of an emerging real estate bubble. We find that, for China as a whole, the current levels of house prices do not seem significantly higher than would be justified by underlying fundamentals. However, there are signs of overvaluation in some cities’ mass-market and luxury segments. Unlike advanced economies before 2007-8, prices have tended to correct frequently in China.Given persistently low real interest rates, lack of alternative investment and mortgage-to-GDP trend, rapid property price growth in China has, and will continue to have,a structural driver. |
| Date: | 2010–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/274&r=tra |
| By: | Sai Ding; Alessandra Guariglia; John Knight |
| Abstract: | This paper attempts to address a puzzle in China’s investment pattern: despite high aggregate investment and remarkable economic growth, negative net investment is commonly found at the microeconomic level. Using a large firm-level dataset, we test three hypotheses to explain the existence and extent of negative investment in each ownership group: what we term the efficiency (or restructuring) hypothesis, the (lack of) financing hypothesis, and the (slow) growth hypothesis. Our panel data probit estimations shows that negative investment by state-owned firms can be explained mainly by inefficiency: owing to over-investment or mis-investment in the past, these firms have had to restructure and to get rid of obsolete capital in the face of increasing competition and hardening budgets. The financing explanation holds for private firms, which have had to divest in order to raise capital. However, rapid economic growth weighs against both effects in all types of firms, with a large impact for firms in the private and foreign sectors. A tobit model, estimated to examine the determinants of the amount of negative investment, yields similar conclusions. |
| Keywords: | Negative investment, divestment, industrial restructuring, financial constraints, economic transition, China |
| JEL: | G3 O16 O53 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:519&r=tra |
| By: | Papa M'B. P. N'Diaye |
| Abstract: | China is poised on the brink of a transition to a service-based economy. The Japanese experience of the 1980s provides several insights about the way to manage such a transition and the downsides to avoid. In particular Japan offers useful insights on (1) the limits to an export-oriented growth strategy; (2) the role of exchange rate, macroeconomic policies, and structural reforms in rebalancing the economy toward the nontradables sector; and (3) the risks associated with financial liberalization. The similarities between the Chinese economy today and the Japanese economy of the 1980s make these insights relevant for China. However, with the benefit of analyzing the Japanese experience and, given the important differences between the two economies, China should be able to successfully rebalance its growth pattern while avoiding the downsides encountered by Japan. |
| Keywords: | Bank supervision , China, People's Republic of , Cross country analysis , Current account surpluses , Demand , Economic growth , Exchange rate adjustments , Export markets , Financial systems , Japan , Private consumption , Savings , Services sector , |
| Date: | 2010–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/284&r=tra |
| By: | Pessarossi, Pierre (BOFIT); Godlewski, Christophe J. (BOFIT); Weill, Laurent (BOFIT) |
| Abstract: | This paper considers whether information asymmetries affect the willingness of foreign banks to participate in syndicated loans to corporate borrowers in China. In line with theoretical literature, ownership concentration of the borrowing firm is assumed to influence information asymmetries in the relationship between the borrower and the lender. We analyze how ownership concentration influences the participation of foreign banks in a loan syndicate using a sample of syndicated loans granted to Chinese borrowers in the period 2004-2009 for which we have information on ownership concentration. We observe that greater ownership concentration of the borrowing firm does not positively influence participation of foreign banks in the loan syndicate. Additional estimations using alternative specifications provide similar results. As foreign banks do not react positively to ownership concentration, we conclude that information asymmetries are not exacerbated for foreign banks relative to local banks in China. Moreover, it appears that increased financial leverage discourages foreign bank participation, suggesting that domestic banks are less cautious in their risk management. |
| Keywords: | bank; foreign investors; information asymmetry; loan; syndication; China |
| JEL: | G21 P34 |
| Date: | 2010–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2010_020&r=tra |
| By: | Sai Ding; Alessandra Guariglia; John Knight |
| Abstract: | This paper addresses the hotly-debated question: do Chinese firms overinvest? A firm-level dataset of 100,000 firms over the period of 2000-07 is employed for this purpose. We initially calculate measures of investment efficiency, which is typically negatively associated with overinvestment. Despite wide disparities across various ownership groups, industries and regions, we find that corporate investment in China has become increasingly efficient over time. However, based on direct measures of overinvestment that we subsequently calculate, we find evidence of overinvestment for all types of firms, even in the most efficient and most profitable private sector. We find that the free cash flow hypothesis provides a good explanation for China’s overinvestment, especially for the private sector, while in the sector, overinvestment is attributable to the poor screening and monitoring of enterprises by banks. |
| Keywords: | Overinvestment, investment efficiency, free cash flow, debt, China |
| JEL: | G31 O16 O53 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:520&r=tra |
| By: | Ge, Suqin (Virginia Tech); Yang, Dennis (Chinese University of Hong Kong) |
| Abstract: | This paper assesses the applicability of two alternative theories in understanding labor market developments in China: the classical view featuring a Lewis turning point in wage growth versus a neoclassical framework emphasizing rational choices of individuals and equilibrating forces of the market. Empirical evidence based on multiple data sources fails to validate the arrival of the Lewis turning point in China, showing continuous and coordinated wage growth across rural and urban sectors instead. Consistent with the neoclassical view, we find that rural workers expanded off-farm work when mobility restrictions were lifted, interprovincial migration responded to expected earnings and local employment conditions, and returns to education converged gradually to the international standard. These findings suggest major progresses in the integration of labor markets in China. |
| Keywords: | labor markets, rural-urban migration, wage growth, schooling returns, Lewis turning point, China |
| JEL: | J31 J21 O11 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5377&r=tra |
| By: | Marcos Chamon; Kai Liu; Eswar Prasad |
| Abstract: | China’s household saving rate has increased markedly since the mid-1990s and the age-savings profile has become U-shaped. We find that rising income uncertainty and pension reforms help explain both of these phenomena. Using a panel of Chinese households covering the period 1989-2006, we document that strong average income growth has been accompanied by a substantial increase in income uncertainty. Interestingly, the permanent variance of household income remains stable while it is the transitory variance that rises sharply. A calibration of a buffer-stock savings model indicates that rising savings rates among younger households are consistent with rising income uncertainty and higher saving rates among older households are consistent with a decline in the pension replacement ratio for those retiring after 1997. We conclude that rising income uncertainty and pension reforms can account for over half of the increase in the urban household savings rate in China since the mid-1990s as well as the U-shaped age-profile of savings. |
| Keywords: | Aging , China, People's Republic of , Economic models , External shocks , Income distribution , Pension reforms , Private savings , Private sector , Wages , |
| Date: | 2010–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/289&r=tra |
| By: | Maria Csanadi (Institute of Economics Hungarian Academy of Sciences) |
| Abstract: | How do external and internal adaptation pressures influence the transformation of the party-state system in China? How susceptible is the Chinese systemtransformation to those impacts? This paper deals with the sensitivity of the transformation process on the short-term under different external conditions: both during the period of global economic growth and the period of global crisis. Our approach is institutional and systemic, in view of the postulates of the Interactive Party-State (IPS) model (Csan di, 2006). We shall conclude that the transformation process demonstrates sensitivity to short-term impacts that cause fluctuations in the direction and speed of the transformation process both during growth and decline. Moreover, we shall reveal that sensitivity to- and consequences of internal and external adaptation pressures show different spatial characteristics. |
| Keywords: | party-state model, short-term shocks, system transformation, global crisis, migration, economic policy reactions, prefectures |
| JEL: | F5 D78 R58 J08 E24 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:1031&r=tra |
| By: | Iancu, Aurel (Romanian Academy, National Institute of Economic Research) |
| Abstract: | This volume comprises several studies and papers published in the last decades. They have been selected and ranged so that to provide a minimum of coherence concerning the phases which Romania has crossed in her way to the advanced socio-economic system of European type: transition to the market economy, accession to the EU, the economic convergence in the three fundamental domains: institutions, real economy, and nominal economy. The readers may find in this volume a description of debates, difficulties and solutions adopted for building-up the market economy by a state being in a profound transformation from weak transition institutions towards hard democratic institutions. Because the transition to the market economy and the association of Romania with the EU and then the integration presenting strategic political decisions, I have included in this work two studies devoted to the political forces – state and political parties – that elaborated and applied these strategic decisions underlining their structure, role and function and their transformation. Integration into the EU of a country like Romania, which emerged from a different system comparing with the West-European one, has proved to be difficult and lasting many years because of the structural transformations. In five chapters I am referring to the essential characteristics of the integration process, such as: market liberalization, competitiveness of the local (national) firms on the national and EU markets, institutional reforms so that the institutions of candidate countries have to become compatible with those of the EU and finally the perspective assessment to find out the real and nominal convergence. Putting into practice the EU competitivity and cohesion principles, Romania has good prospects to close, in a reasonable time, the economic gap and to be admitted into the Euro Zone. Although the real convergence of Romania with the EU requires higher growth rates for the former, a new approach is compulsory to take into consideration the environment quality, the natural resources and the equity between the present and the future generations as natural resource consumers. Just these problems have determined me to include in this volume the last two chapters which, on the one hand, try to prove the necessity of the economy growth harmonization with the environment evolution as well as the saving of the energy resources, and, on the other hand, to point out the main ways to be followed and instruments to be used. |
| Keywords: | transition, integration, convergence, cohesion, formal institutions, informal institutions, transaction cost, acquis, compliance, institutional capital, regression |
| JEL: | C21 E22 F36 F59 O41 O43 O47 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ror:wpince:101222&r=tra |
| By: | Willem THORBECKE |
| Abstract: | This paper discusses the appropriate policy mix for China in the post crisis period. As is well known, China has achieved a remarkable economic growth rate over the last 30 years using an export-led growth strategy. To implement this strategy, the Chinese authorities have pegged their currency to the US dollar and accorded favorable treatments to large corporations and wealthy individuals at the expense of ordinary workers and small and medium sized enterprises. However, this strategy is no longer appropriate. To continue developing, China should adopt a more flexible currency regime, use the excess profits of SOEs to invest in health care, pensions and educations, and liberalize the financial system. In the medium term, this policy mix will help to reduce global imbalances and to spread the fruits of the Chinese miracle to hundreds of millions of poor rural citizens and struggling urban migrants. |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:eti:polidp:10002&r=tra |
| By: | Konstantin Gluschenko |
| Abstract: | This paper seeks an answer to the question of whether the global crisis had a persistent effect on inter-regional income equality and spatial market integration in Russia. Results obtained suggest that the answer is generally negative. |
| Keywords: | Income inequality, market integration, Russian regions |
| JEL: | O15 P22 P25 R11 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:26910&r=tra |
| By: | Apostolov, Mico |
| Abstract: | The research in this paper is to be focused on examining governance and enterprise restructuring in Southeast Europe (Western Balkans) transition economies. International organizations classify the following countries in Southeast Europe (Western Balkans): Albania, Bosnia and Herzegovina, Croatia, Macedonia, Montenegro and Serbia. The European Bank for Reconstruction and Development (EBRD) has governance and enterprise restructuring as basic indicator of economic transition and defines it as effective corporate governance and corporate control exercised through domestic financial institutions and markets, fostering market-driven restructuring. The corporate governance is most often defined in terms of the roles, responsibilities, and interactions of top management and the board of directors. Using data of Southeast European economies, will be examined the interrelationships between governance and enterprise restructuring and set of policies that influence the governance patterns. |
| Keywords: | governance; enterprise restructuring; corporate governance; transition; Southeast Europe |
| JEL: | O11 L38 G38 G32 P31 G30 |
| Date: | 2010–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27634&r=tra |
| By: | Hui Tong; Tamim Bayoumi; Shang-Jin Wei |
| Abstract: | China’s high corporate savings rate is commonly claimed to be a key driver for the country’s large current account surplus. The mainstream explanation for high corporate savings is a combination of windfall profits in state-owned firms, especially in resource sectors, and mis-governance of state-owned firms represented by their low dividend payout. The paper casts doubt on these views by comparing the savings of 1557 Chinese listed firms with those of 29330 listed firms from 51 other countries over 2002-07. First, Chinese firms do not have a significantly higher savings rate (as a share of total assets) than the global average because corporations in most countries have a high savings rate. The rising corporate savings rate is also consistent with a global trend. Second, there is no significant difference in the savings behavior and dividend patterns between Chinese majority state-owned and private listed firms, contrary to the received wisdom. |
| Keywords: | China, People's Republic of , Corporate sector , Cross country analysis , Current account surpluses , Economic models , Investment , Private savings , Public enterprises , Savings , |
| Date: | 2010–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/275&r=tra |
| By: | Yoo-Duk Kang (Korea Institute for International Economic Policy) |
| Abstract: | In this paper I examine the evolution of intra-industry trade (IIT) in intra-European trade in the period of accession of the Central and Eastern European countries (CEEC). In order to identify changes in IIT in intra-European trade, I calculate the Grubel and Lloyd index for the static dimension and Brülhart A index for the dynamic dimension. Based on Grubel and Lloyd index, I conduct gravity-type empirical tests to verify determinants of IIT at the intra-European level. I find that CEECs experienced considerable increase in IIT, particularly during transitional periods before their accession. However, the level of IIT between CEECs is still considerably low. Given that a trade-investment nexus exists to explain IIT in intra-European trade, IIT in CEECs can increase further, as they receive more FDI from their neighbors. |
| Keywords: | Intra-industry trade, foreign direct investment, EU enlargement, European integration |
| JEL: | F14 F15 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:2453&r=tra |
| By: | Gabor Kertesi (Institute of Economics of the Hungarian Academy of Sciences); Gabor Kezdi (Central European University, Institute of Economics of the Hungarian Academy of Sciences) |
| Abstract: | We analyze the magnitude and the causes of the low formal employment rate of the Roma in Hungary between 1993 and 2007. The employment rate of the Roma dropped dramatically around 1990. The ethnic employment gap has been 40 percentage points for both men and women and has stayed remarkably stable. Differences in education are the most important factor behind the gap, the number of children is important for female employment, and geographic differences play little role once education is controlled for. Conditional on employment, the gap in earnings is 0.3, and half of it is explained by educational differences. |
| Keywords: | Roma minority, employment, education, Hungary |
| JEL: | J15 J21 J70 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:has:bworkp:1009&r=tra |
| By: | Thomas Cargill (Department of Economics, University of Nevada, Reno); Elliott Parker (Department of Economics, University of Nevada, Reno) |
| Abstract: | This chapter assesses the potential for reform in North Korea, and considers the lessons learned from economic reform and transition in China, the Soviet Union, and Central Europe. We focus in particular on the importance of reforms in the financial regime, and argue that in the absence of a major change in North Korea?s environment, such as a crisis caused by reduced economic and/or political support from China, or increased access by the North Korean population to events in the rest of the world, the current situation is likely to continue for many years. North Korea will thus continue to alternate between declining, stagnant or mediocre economic growth. It will also continue to be a source of geo-political instability in the world in general and Asia in particular. |
| Keywords: | Economic Reform; North Korea; Price Liberalization |
| JEL: | P20 P52 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:unr:wpaper:10-008&r=tra |
| By: | Paul Conway; Richard Herd; Thomas Chalaux; Ping He; Jianxun Yu |
| Abstract: | The extent of competition in product markets is an important determinant of economic growth in both developed and developing countries. This paper uses the 2008 vintage of the OECD indicators of product market regulation to assess the extent to which China’s regulatory environment is supportive of competition in markets for goods and services. The results indicate that, although competition is increasingly robust across most markets, the overall level of product market regulation is still restrictive in international comparison. These impediments to competition are likely to constrain economic growth as the Chinese economy continues to develop and becomes more sophisticated. The paper goes on to review various aspects of China’s regulatory framework and suggests a number of policy initiatives that would improve the extent to which competitive market forces are able to operate. Breaking the traditional links between state-owned enterprises and government agencies is an ongoing challenge. Reducing administrative burdens, increasing private sector involvement in network sectors and lowering barriers to foreign direct investment in services would also increase competition and enhance productivity growth going forward. Some of the reforms introduced by the Chinese government over the past two years go in this direction and should therefore help foster growth. This paper relates to the 2010 OECD Economic Review of China (www.oecd.org/eco/surveys/china).<P>Règlementation du marché des produits et concurrence en Chine<BR>L’étendue de la concurrence sur le marché des produits est un déterminant important de la croissance économique dans les pays développés et en développement. Ce papier utilise la version 2008 des indicateurs de réglementation du marché des produits de l’OCDE pour évaluer dans quelle mesure l’environnement règlementaire en Chine favorise la concurrence sur les marchés de biens et services. Les résultats indiquent que, bien que la concurrence s’intensifie sur la plupart des marchés, le niveau général de la réglementation demeure restrictif au plan international. Ces entraves à la concurrence sont susceptibles de freiner la croissance à mesure que l’économie chinoise continue de se développer et devient plus sophistiquée. Ce papier examine ensuite différents aspects du cadre règlementaire chinois, et suggère différents types de mesures qui donneraient une plus grande latitude aux forces de marché. Briser les liens traditionnels entre entreprises publiques et agences gouvernementales reste un défi. Réduire les contraintes administratives, accroître la participation du secteur privé dans les secteurs de réseau et abaisser les barrières à l’investissement direct étranger dans les services stimuleraient aussi la concurrence et les progrès de productivité. Certaines des réformes introduites par le gouvernement chinois durant les deux dernières années vont dans ce sens et devraient donc encourager la croissance. Ce document se rapporte à l’Étude économique de la Chine de l’OCDE, 2010, (www.oecd.org/eco/etudes/chine). |
| Keywords: | productivity, macroeconomic policies, China, regulatory, productivité, politique macro-économique, régulation, Chine |
| Date: | 2010–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:823-en&r=tra |
| By: | Patel, Vasita; Selim, Sheikh (Cardiff Business School) |
| Abstract: | Following the rural reform in 1978 a series of agricultural reforms were introduced in China. The main aim of these reforms was to create incentives for the farmers to produce more. The nineties' price reform that was aimed at deregulating the agricultural market eventually resulted in a huge drop in agricultural production; this apparently motivated the government to take over the control of agricultural prices in 1998. In this paper we examine how and to what extent these reforms affected the productivity and welfare of wheat farmers in China for a dataset that covers all the major rural reforms undertaken in China. We find that the nineties' price reforms resulted in a high magnitude of effort-response from wheat farmers which led to a faster growth of the incentive component of productivity. Due to random weather shocks this response did not result in the expected level of profit and as a result the farmers suffered a huge decline in welfare. The regulations introduced in 1998 destroyed the incentive-induced growth in TFP. In general wheat farmers in China responded highly when markets were made more competitive, and their effort-response for flat subsidies (e.g. at the ones introduced in the eighties) was very marginal. |
| Keywords: | China; Incentives; TFP; Agriculture; Wheat Production |
| JEL: | N55 O13 O53 Q12 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2010/16&r=tra |
| By: | Yong HE (Centre d'Etudes et de Recherches sur le Développement International); Jacky MATHONNAT (Centre d'Etudes et de Recherches sur le Développement International); Martine AUDIBERT (Centre d'Etudes et de Recherches sur le Développement International) |
| Abstract: | 1989-2006 is a period of the start and the end of deregulation of Chinese health care sector and of disintegration of rural cooperative insurance system. During this period, the government health policy has turned healthcare providers all alike into profit seeking entities. Face to perverse effects, by 2003, Chinese government begun to restore rural cooperative insurance system. From CHNS data source, we constitute two samples: 89-93 and 04-06 with respectively 2117 and 2594 rural patients surveyed roughly in the same villages in 9 Chinese provinces to compare their health choice behaviors with the evolution of price, income, distance, insurance, age, and regional inequality. Using Mixed Multinomial Logit (MMNL) estimations, we have obtained three main results. First, even in both periods there is clear price effect, in 04-06 it tends to be weaker, and heterogeneity in price preference has increased. This corresponds well the fact that between the two periods price level has significantly increased and price variation reduced. Second, there is a stronger negative distance effect and heterogeneity in 2004-06, while in 89-93 this negative impact was lower and absent for providers farther than 10km. One interpretation is the existence of a substitution effect: when patients have less possibility to discriminate providers by price, they increase their preference in choice by distance. Third, while, wealth effect exists in some choices in 89-93, it becomes absent in 04-06. Explanations may be that one the one hand both supply side and demand side conditions on health care have been improved even, to less extent though, for the poor, and on the other hand, health care is necessary goods and is price inelastic. But meanwhile, we observed catastrophic effect for the poor: the poorer patients have their share of consumption in income more decreased after health care. |
| Keywords: | Empirical approach, health care demand, mixed logit model, insurance, China |
| JEL: | C25 I18 I11 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1222&r=tra |
| By: | James Giesecke; Mark Horridge; Katarzyna Zawalinska |
| Abstract: | On accession to the EU, Poland, one of the most agricultural countries in the region, became eligible for the Common Agricultural Policy (CAP), which it perceived as a chance to develop its rural economy. However, in constructing its 2007-2013 Rural Development Programme, Poland directed the largest funding share to Less Favoured Areas (LFA) -- a controversial measure accused of poor targeting and ineffectiveness. In this paper, we analyse the spatial economic consequences of LFA support for all 16 NUTS2 regions in Poland using a regional computable general equilibrium model called POLTERM. We show that LFA support did help to increase farmers' incomes, but harmed export-oriented sectors and hindered structural change in the Polish economy. |
| Keywords: | Common Agricultural Policy Reform, Rural development, Less Favoured Areas, Spatial Computable General Equilibrium Model, Poland |
| JEL: | C68 O18 O11 O21 Q18 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:cop:wpaper:g-211&r=tra |
| By: | Mirdala, Rajmund |
| Abstract: | International capital flows represents one of the key aspect of the globalisation process and refers to the continuous relieving the cross-border capital allocation barriers reflecting in huge increase in the common financial connections among the countries during the last decades. Flows of the capital among the countries stimulated by increased investment opportunities, expected profits and better risk diversification generated many positive, symmetric and multiplicative effects. On the other hand it also increases the exposure of the countries to many negative and asynchronous defects that led economists to revaluate the overall effects of financial liberalization and dynamic increase in the international capital flows. Rigorous assessment of general effects related to short-term capital inflows requires a consideration of a wide variety of country specific assumptions and determinants. Real conditions affecting overall effects of short-term capital inflows have to be also considered in the view of (dis)equilibrium trends in the balance of payments. In the paper we analyze selected monetary aspects of short-term capital inflows in the Central European countries (Czech republic, Hungary, Poland, Slovak republic) in the period 1999-2010 using VAR (vector autoregression) approach. In order to meet this objective we estimate a vector VAR model identified by the Cholesky decomposition of innovations that allows us to identify structural shocks hitting the model. Impulse-response functions are computed in order to estimate the impact of short-term capital inflows on exchange rate, money stock, price level and current account. Ordering of the endogenous variables in the model is also considered allowing us to check the robustness of the empirical results. |
| Keywords: | capital inflows; exchange rate; balance of payments; money stock; VAR; Cholesky decomposition; impulse-response function |
| JEL: | C32 F15 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27649&r=tra |
| By: | Juan Yang (School of Economics and Business Administration, Beijing Normal University, 19, Xinjiekouwai Dajie, Beijing 100875, China); Sylvie Démurger (Université de Lyon, Lyon, F-69003, France; CNRS, GATE Lyon St Etienne, UMR 5824, 93, chemin des Mouilles, Ecully, F-69130, France; ENS-LSH, Lyon, France ; CNRS, CEFC, USR 3331 Asie Orientale, Hong Kong); Shi Li (School of Economics and Business Administration, Beijing Normal University, 19, Xinjiekouwai Dajie, Beijing 100875, China) |
| Abstract: | This paper analyzes the changes in public-private sector earnings differentials for local residents in urban China between 2002 and 2007. We find that earnings gaps across ownership have been reducing during this period and that the convergence trend has been in favor of the private and semi-public sectors as opposed to the public sector. This is in sharp contrast to what occurred at the turn of the century, when employees of public administration and enterprises were found to enjoy a very much privileged situation. On the one hand, differences in endowments are found to play a growing role in explaining earnings differentials. On the other hand, although starting to become less an issue, segmentation across ownership remains important, especially for high-wage earners. |
| Keywords: | labor market, earnings differentials, segmentation, enterprise ownership, China |
| JEL: | J31 J42 P23 O53 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1032&r=tra |
| By: | Paul Conway; Richard Herd; Thomas Chalaux |
| Abstract: | As a result of reforms and financial sector development, the People’s Bank of China (PBoC) now exerts significant control over money market interest rates. With money market conditions increasingly influencing effective commercial lending rates, the PBoC is also able to affect the cost of credit without recourse to its benchmark commercial bank rates. Furthermore, interest rates are an important determinant of investment spending in China, via the user cost of capital, and aggregate economic activity influences inflation. Hence, greater use of interest rates in implementing monetary policy would enhance macroeconomic stabilisation while avoiding a number of drawbacks of the current quantity-based approach. In addition, increased flexibility in the exchange rate would enhance its role in offsetting macroeconomic shocks and allow the PBoC more scope to tailor monetary policy to domestic macroeconomic conditions. Concurrently, changes in the PBoC’s policy stance should be predicated on informed judgments based on the monitoring of a set of indicators in conjunction with a flexible inflation objective as the nominal anchor. This paper relates to the 2010 OECD Economic Review of China (www.oecd.org/eco/surveys/china).<P>Poursuivre la réforme de la politique monétaire pour accomplir les objectifs domestiques<BR>Suite à diverses réformes et au développement du secteur financier, la Banque Populaire de Chine (BPdC) contrôle désormais de façon significative les taux d’intérêt du marché monétaire. Les conditions du marché monétaire influençant de plus en plus les taux effectifs des prêts commerciaux, la BPdC est également en mesure d’influencer le coût du crédit sans recourir à ses taux d’intérêt commerciaux de référence. De plus, les taux d’intérêt sont un déterminant important de l’investissement en Chine, via le coût du capital, et l’activité exerce une influence sur l’inflation. Par conséquent, une utilisation plus active des taux d’intérêt dans la conduite de la politique monétaire contribuerait à la stabilisation macroéconomique tout en évitant certains des inconvénients de l’approche actuelle par les quantités. En outre, une plus grande flexibilité du taux de change renforcerait son rôle dans l’amortissement des chocs macroéconomiques et donnerait une plus grande latitude à la BPdC pour ajuster la politique monétaire en fonction des conditions macroéconomiques internes. Dans le même temps, les changements de politique monétaire devraient résulter d’une évaluation empirique basée sur le suivi d’une série d’indicateurs dans le cadre d’un ancrage nominal sous la forme d’un objectif d’inflation flexible. Ce document se rapporte à l’Étude économique de la Chine de l’OCDE, 2009, (www.oecd.org/eco/etudes/chine). |
| Keywords: | regulation, macroeconomic policies, China, Money, réglementation, politique macro-économique, Chine, Monnaie |
| JEL: | E4 E5 E6 K2 L5 |
| Date: | 2010–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:822-en&r=tra |
| By: | Ketenci, Natalya; Uz, Idil |
| Abstract: | This paper considers the major determinants of the current account in the new members of the EU. It examines the long-run and short-run impact of real exchange rate, investment, private and public savings on current account. The bounds testing autoregressive distributed lag (ARDL) approach to cointegration is used and the results indicate that twin deficit exists; in another words, government budget deficit shocks have led to deficit in current accounts in Czech Republic, Latvia, Lithuania, Slovenia and Slovakia for the considered period. At the same time, empirical evidence was found that private savings, investment and real exchange rate are key variables as well, causing changes in the current account in the long-run as well as in the short-run. Finally, stability tests were applied to the model indicating no evidence of any structural instability in the model of these countries. |
| Keywords: | Twin deficit; current account balance; budget deficit; EU. |
| JEL: | F40 F32 F31 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27466&r=tra |
| By: | Sai Ding; Alessandra Guariglia; John Knight |
| Abstract: | We use a panel of over 120,000 Chinese firms of different ownership types over the period 2000-2007 to analyze the linkages between investment in fixed and working capital and financing constraints. We find that those firms characterized by high working capital display high sensitivities of investment in working capital to cash flow (WKS) and low sensitivities of investment in fixed capital to cash flow (FKS). We then construct and analyze firm-level FKS and WKS measures and find that, despite severe external financing constraints, those firms with low FKS and high WKS exhibit the highest fixed investment rates. This suggests that good working capital management may help firms to alleviate the effects of financing constraints on fixed investment. |
| Keywords: | Cash flow, financing constraints, working capital |
| JEL: | D92 E22 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:521&r=tra |
| By: | Zhang, Yu |
| Abstract: | This paper addresses the issue of institutional barriers to the Yangtze River Delta integration and the resulting slow development. It analyzes the problems including the coordination of local interests and regional interests, market segmentation during the regional integration, competition for the local government‘s investment on the public goods, labor movement within the delta. The paper argues that to reduce the negative impacts of these barriers and to promote the further integration of the Yangtze Delta region, the central government should strengthen the coordination between local governments, regulate their disorderly competition and reform the official evaluation system. |
| Keywords: | Yangtze River Delta, Institutional barriers, Coordinated development, Community development, Regional integration, China |
| JEL: | H77 O20 O25 R58 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper264&r=tra |
| By: | Borek Vasicek (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona) |
| Abstract: | Estimated Taylor rules became popular as a description of monetary policy conduct. There are numerous reasons why real monetary policy can be asymmetric and estimated Taylor rule nonlinear. This paper tests whether monetary policy can be described as asymmetric in three new European Union (EU) members (the Czech Republic, Hungary and Poland), which apply an inflation targeting regime. Two different empirical frameworks are used: (i) a Generalized Method of Moments (GMM) estimation of models that allow discrimination between the sources of potential policy asymmetry but are conditioned by specific underlying relations (Dolado et al., 2004, 2005; Surico, 2007a,b); and (ii) a flexible framework of sample splitting where nonlinearity enters via a threshold variable and monetary policy is allowed to switch between regimes (Hansen, 2000; Caner and Hansen, 2004). We find generally little evidence for asymmetric policy driven by nonlinearities in economic systems, some evidence for asymmetric preferences and some interesting evidence on policy switches driven by the intensity of financial distress in the economy. |
| Keywords: | monetary policy, inflation targeting, nonlinear Taylor rules, threshold estimation |
| JEL: | C32 E52 E58 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:uab:wprdea:wpdea1010&r=tra |
| By: | Johan F.M.Swinnen; Kristine Van Herck |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:26810&r=tra |
| By: | Olteanu, Dan (Academia Romana, Institutul National de Cercetari Economice) |
| Abstract: | The most important channels through which one may achieve technological transfer are the the foreign direct investments, the import of capital goods, parts and components, the licensing contracts, the alliances and collaborations between firms. In this study we try to analyse the importance of these channels for the eastern and western european countries, in the last 10 years. We find that the dynamics of these channels of knowledge diffusion is higher in western european countries which will lead to the maintaining of the technological gap between the above mentioned groups of countries, the more so as we can find these differencies in the amplitude of national RD&I activities. |
| Keywords: | Technological transfer, Economic convergence |
| JEL: | O33 O57 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ror:seince:101220&r=tra |
| By: | Andreea Mitrut (Department of Economics - Université d'Uppsala et Gothenburg); François-Charles Wolff (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272, INED - Institut National d'Etudes Démographiques Paris - INED) |
| Abstract: | This paper uses Romanian survey data to investigate the determinants of individual life and financial satisfaction, with an emphasis on the role of public and private transfers received. A possible concern is that these transfers are unlikely to be exogenous to satisfaction. We use recursive simultaneous equations models to account both for this potential problem and for the fact that public transfers are themselves endogenous in the private transfer equation. We find that public transfers received have a positive influence on both life and financial satisfaction, while private transfers do not matter. People receive private transfers irrespective of their economic and demographic characteristics in Romania, which could be explained by some social norm motives. |
| Keywords: | Happiness; Financial satisfaction; Private transferts: Public transferts: Romania |
| Date: | 2010–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00546280_v1&r=tra |
| By: | Michał Kempa (Ministry of Finance in Poland) |
| Abstract: | Funded defined contribution (FDC) scheme (Open Pension Funds) was created in Poland in 1999. 37.4% of the pension contribution is redirected to FDC, while the rest remains in the public notional defined contribution (NDC) system. The FDC share of the contribution is relatively high compared to other countries with similar systems, especially given the currently high structural deficit of the NDC system. In 2010 roughly 1.6% of GDP will be transferred to FDC bringing the total value of transfers (including the cost of financing) to 16.5% of GDP. This cost was fully covered by the state budget. The magnitude of transfers begs the question on its limit and time framework. The transition period, during which the accumulation of the assets in FDC takes place, is still far from over. Only those born after 1968 were obliged to join FDC, which implies that the disbursements from the new system will remain insignificant until 2030s-2040s. To estimate the impact of the FDC on the public fund balance one needs to take into account both the loss of the pension contribution and lower future pension paid from the public NDC. In this article this was accomplished by comparing the simulated balance of the public pension fund in two scenarios: one based on current legislation and an alternative one, where the whole contribution remains in the public NDC system. The difference between the pension fund balance in those two scenarios constitutes the cost of introduction of the FDC. The results show that the FDC will incur cost (albeit very small) even at the end of analysis horizon (year 2060). Including the cost of finance, by 2060 the accumulated cost of transfers to FDC will have reached 94% of GDP. |
| Keywords: | Pension economics, pension finance, public finance |
| JEL: | H55 J26 G23 |
| Date: | 2010–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:fpo:wpaper:7&r=tra |
| By: | Sakellariou, Chris; Fang, Zheng |
| Abstract: | The Vietnam ―renovation‖ reforms were implemented during the 1990s, but their full effect was only felt many years later. We present evidence on the developments in real wage growth and inequality in Vietnam from 1998 to 2008. For men, wage growth was underpinned by both increases in endowments of productive characteristics (mainly education) as well as changes in the wage structure (mainly associated with experience) and residual changes. For women, the wage structure effect was the main contributor to wage growth and the most important determinant was the change in the pattern of the returns to experience: younger, less experienced workers enjoyed a premium compared to more experience workers, reversing the previous, opposite pattern. Conventional measures of inequality as well as background analysis show that wage inequality decreased sharply through the 1990s until 2006, but increased subsequently. Over the entire 10-year period, wage inequality increased slightly and more so for women. |
| Keywords: | Wage inequality; counterfactual decompositions; Asia; Vietnam |
| JEL: | D31 J31 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27518&r=tra |
| By: | Doan, Tinh; Gibson, John; Holmes, Mark |
| Abstract: | This paper uses a novel dataset collected by the first author from peri-urban areas of Ho Chi Minh City, Vietnam in 2008 to examine how the poor use their loans, and factors affecting their credit participation and credit constraints. The paper finds the presence of many commercial banks in the areas does not help the poor, but the poor rely heavily on informal credit. Loans in the peri-urban areas are mainly used for non-productive purposes, which stresses the importance of consumption smoothing motives. Further, households in more rural wards have a higher probability of borrowing than more urban households, thanks to better community relationships and higher interpersonal trust. Competition by borrowing neighbours adversely affects the opportunity for borrowing in urban wards where the poor households’ borrowings rely much more on subsidized credit funds. A closer look at specified microcredit sources reveals that household behaviours differ in each market segment. Furthermore, the poor are highly credit-constrained. Wealthier households, in terms of asset holdings and phone possession, among the poor group appear less credit-constrained. However, except in the most rural part of the study area, the likelihood of credit constraints increases with distance to the nearest banks, which suggests that supply-side intervention could help in overcoming credit constraints. Overall, the poor in urban wards are more credit-constrained because of exclusion by commercial banks and weak interpersonal trust. |
| Keywords: | Credit participation; credit constraints; the poor; peri-urban; Vietnam |
| JEL: | R22 C24 H81 C25 |
| Date: | 2010–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27509&r=tra |
| By: | Jacek Zaucha (Institute for Development, Sopot, Poland) |
| Abstract: | At the regional (subnational) level spatial planning has remained firm mainly in its land use aspects. Despite of pretty advanced legislation in Poland requiring each self-government region to prepare spatial planning outlines based on regional-socio economic strategies (both of indicative nature) the regional governments have gradually moved (in terms of human resources, interest of regional politicians) from think-tank (strategy making) position to bodies managing structural funds for given territories. More efficient communication of spatial planning messages, making spatial planning concepts better understood by those who shape the space by their routine decisions is only the first step towards combating the so-called stalemate of spatial planning. Despite of being very interdisciplinary spatial planning must become more opened to the co-operation and use the results from different fields of science. |
| Keywords: | regional policy, spatial development, Poland |
| JEL: | R10 R58 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:iro:wpaper:1002&r=tra |
| By: | Jacek Szlachta (Institute for Development, Sopot, Poland); Jacek Zaucha (Institute for Development, Sopot, Poland) |
| Abstract: | New factors inspiring spatial and regional policies in Poland have come out in the recent years. They complement the traditional, hardly spatial, paradigm of the socio-economic development with the concept of place-based economics. The paradigm shift was possible largely thanks to the contributions and inspiration from World Bank as well as the OECD. Additionally, new economic geography has contributed to that. New economic geography underlines the importance of space and its management for the enhancement of growth and development as well as for the formation of economic profiles of the regions or countries. In the EU member states the process has been facilitated by the entering into force of the Reformed Treaty (known as the Lisbon Treaty) which complements the social and economic cohesion with a new dimension of the territorial cohesion. A better understanding of the condition and tendencies of spatial development of Europe has been also possible thanks to the ESPON efforts. They continuously contribute to the ongoing debate on modification of the Cohesion Policy in the next programming period starting in 2014. Important milestones in these discussions are given by the EU Territorial Agenda of 2007 and the Barca Report of 2009. The work on the update of the Territorial Agenda has just been started. Based on this the authors of the paper present the benchmarks of the National Spatial Development Concept of Poland till 2030 (currently under preparation), allowing evaluation of the extent to which it belongs to the new generation of strategic documents in line with the emerging contemporary paradigm of the socio-economic development. |
| Keywords: | regional policy, structural policy, spatial development |
| JEL: | R10 R50 R58 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:iro:wpaper:1001&r=tra |