nep-tra New Economics Papers
on Transition Economics
Issue of 2011‒08‒15
seventeen papers chosen by
J. David Brown
Heriot-Watt University

  1. Convergence and Distortions: the Czech Republic, Hungary and Poland between 1996–2009 By István Kónya
  2. Exporting wage premium in the exporting sector: evidence from manufacturing firms in China By Fu, Dahai; Wu, Yanrui
  3. Evolution of the Industrial Wage Structure in China Since 1980 By Kwon, O Hyun; Fleisher, Belton M.; Deng, Quheng
  4. China’s new exchange rate regime, optimal basket currency and currency diversification By Zhang, Zhichao; Shi, Nan; Zhang, Xiaoli
  5. The Usual Suspect: European Union and Post Accession Reforms of Public Administration in Romania By Iancu, Diana - Camelia; Ungureanu, Mihai
  6. The Social Enterprise: A Literature Review By Matei, Lucica; Sandu, Cristina
  7. The Fundaments of Applying the Concept of Public Service Motivation in the South-Eastern European States By Fataciune (Badalan), Nicoleta; Matei, Lucica
  8. E-government in the Balkans. Comparative study By Matei, Ani; Savulescu, Carmen
  9. Impacts of EU Accession on Hungarian Primary and Processed Agricultural Trade By Jambor, Attila
  10. Ethnic patterns of returns to education in Bulgaria: Do minorities have an incentive to invest in education? By Claudia Trentini
  11. Civil Service Reform in the Republic of Moldova through the Prism of European Values By Saptefrati, Tatiana
  12. Marketing, Co-operatives and Price Heterogeneity: Evidence from the CIS Dairy Sector By Sauer, Johannes; Gorton, Matthew; White, John
  13. Impact of Off-farm Income on Farm Efficiency in Slovenia By Bojnec, Stefan; Ferto, Imre
  14. Emerging Administrations in South-East Europe By Berceanu, Bogdan; Matei, Ani
  15. Appropriateness of the Transfer of CSR Practices in the Balkan Area By Matei, Ani; Tuca, Mihaela Violeta
  16. Agri-environmental attitudes of Chinese farmers â The impact of social and cognitive determinants By Weber, Daniela
  17. Identification of credit supply shocks in a Bayesian SVAR model of the Hungarian economy By Bálint Tamási; Balázs Világi

  1. By: István Kónya (Magyar Nemzeti Bank (central bank of Hungary))
    Abstract: The paper interprets the growth and convergence experience of three Central-Eastern European economies (the Czech Republic, Hungary, and Poland) through the lens of the stochastic neoclassical growth model. It adapts the methodology of Business Cycle Accounting (Chari, Kehoe and McGrattan 2007) to economies on a transition path. The paper uses the method to uncover distortions (‘wedges’) on the labor and capital markets, and then presents various comparisons and counterfactuals based on them. Results show that (i) capital and labor market distortions vary across the three economies, but they are well within the range of advanced economies; (ii) the Polish and Hungarian labor wedges are high, and the Czech labor wedge increases; (iii) the evolution of Hungarian wedges followed a different path than the evolution of Polish and Czech wedges, and (iv) realistic reductions in the capital and labor wedges would lead to significant output gains for Hungary and Poland.
    Keywords: convergence, distortions, Central-Eastern Europe, business cycle accounting
    JEL: E13 O11 O47
    Date: 2011
  2. By: Fu, Dahai; Wu, Yanrui
    Abstract: This paper investigates whether exporting firms pay average higher wages than non-exporting firms by analyzing a large sample of Chinese manufacturing firms in 2004. Through rigorous exercises involving robust regressions, quantile regressions and nonparametric matching estimators, we find that the wage premium of exporting activities is not a prevailing phenomenon in China. It is unevenly distributed among firms with different ownerships, export-orientations and locations. Overall, exporters located in coastal regions but Guangdong province are more likely to pay higher average wages than nonexporters, while those producing in Guangdong offer a lower pay.
    Keywords: Exporters; Wage premium; Manufacturing; China
    JEL: F16 J31 L6
    Date: 2011–06–06
  3. By: Kwon, O Hyun (Peking University); Fleisher, Belton M. (Ohio State University); Deng, Quheng (Chinese Academy of Social Sciences)
    Abstract: Industry mean wages in China have exhibited sharply increased dispersion since the early 1990s. The upward trend in differences of average wages among major industry groups parallels increases in wage and income inequality not only between rural and urban sectors but within the urban economy as well. Research on the trend has focused on (1) how market forces have led to a better match between worker pay and worker skills; on (2a) how the growing share of employment in the private sector has “caused” growing wage inequality; and (2b) how residual government control in a few industrial sectors has contributed to wage inequality due monopoly rent sharing. We show that the industrial wage dispersion in China has evolved to match long-recognized international patterns of industrial wage dispersion and that an increasing proportion of industrial wage dispersion can be explained as returns to observed worker characteristics.
    Keywords: industry-wage structure, inequality, China
    JEL: J31 D33 L16 O53
    Date: 2011–07
  4. By: Zhang, Zhichao; Shi, Nan; Zhang, Xiaoli
    Abstract: We build an optimising framework to analyse a class of economies that adopt an ECU-type basket currency while in transition to increased flexibility of the exchange rate regime. Instead of conventional basket pegging, such an economy uses an ECU-type currency index as a benchmark for monitoring and assessing exchange rate movements. This provides an anchoring device for the nation’s exchange rate regime and allows the home currency’s exchange rate to fluctuate. Under the assumption that the central bank is chiefly interested in maintaining stability, the optimal structure of the basket currency is based on its contribution to minimizing the volatility of the country’s external account. A currency invariance index is applied to capture the effect of the country’s exit from exclusive linkage with the US dollar. The approach is illustrated by Chinese exchange rate policy. We find it advisable and viable for China to form a basket currency with a diversified portfolio of currencies. While the portfolio’s weighting scheme could favour the dollar, euro and Japanese yen, we show that the composition of the basket is open to a wide range of possibilities. Moreover, contrary to general fears, there is considerable potential for China to engage in currency diversification, which will not necessarily affect the dollar’s position.
    Keywords: Exchange rate regime; Basket currency; Currency diversification
    JEL: E58 P45 F31
    Date: 2011–08–05
  5. By: Iancu, Diana - Camelia; Ungureanu, Mihai
    Abstract: This paper analyzes the issue of continuation of public administration reform in Romania after the EU accession in 2007. More precisely, the authors take into consideration the civil service framework legislation and assess the degree in which it changed once the deadline for accession was achieved. The main assumption of the paper is that the European Union pressured politicians in Romania towards changing the civil service up to the point where legal politicization was hardly visible. After the accession, Romanian politicians re-established the basis for creating a politicized civil service. To prove this assumption, the authors investigate the Civil Service Statute and related acts between 1990 and 2010, and consider the years 1993 and 2007 as important yardsticks in the European Union's relation with Romania. Furthermore, they make use of the Reports issued by the European Commission during the accession period as well as after it (under the Cooperation and Verification Mechanism), in order to receive a comprehensive image of the Union's assessments of reforms of de-politicization.
    Keywords: de-politicization; Europeanization; civil service reform
    Date: 2011
  6. By: Matei, Lucica; Sandu, Cristina
    Abstract: The transformations occurring in the last years in the international area have strongly affected the European administrative space. The national administrations are facing multiple problems concerning the financial, human, technological, etc. resources, and in this context, the public services must continue applying the principles of continuity and adaptability to meet the needs of citizens. Concepts such as social entrepreneurship, social business, social enterprise, public -private partnership become increasingly more important, models of good practice being more visible in Western Europe comparing with Central-Eastern Europe or South-Eastern Europe. The aim of this paper is to offer a literature perspective on the concept of social enterprise, which will lead to a comprehensive approach on the topic. The study will use an exploratory research method and data collection, reflecting the differences between Western, Central-Eastern, South-Eastern Europe literature, based on documentation in international data base and journal article reviews. Finally, the study will be able to underline the key points of social enterprise theories, thus proving the applicability of the concept in practice and the role of social enterprise in the development of European administrative space, with special focus on the Balkan area.
    Keywords: the Balkans; literature review; social enterprise
    Date: 2011–08–06
  7. By: Fataciune (Badalan), Nicoleta; Matei, Lucica
    Abstract: Public Service Motivation (PSM) is a relatively recent concept, defined for the first time in the 1990s in the United States by Perry and Wise as being the general predisposition of an individual to respond to motives, values which are to be encountered only in public institutions. These values, which represent the basis for the construction of PSM are not institutionalized in the same degree and in the same manner everywhere, which creates differences according to the specificity of the region, the state or the organizational environment. European studies regarding PSM have mainly focused on Western Europe: France, The Netherlands, Belgium. For this reason, in this article we aim to analyze the concept of PSM and set the basis for a thorough research in order to make it operational in the countries of South-Eastern Europe: Romania and Bulgaria. Thus, we wish to bring our own contribution to the development of a theoretical and methodological framework for PSM in Romania and in South-Eastern European countries. The objectives of the article focus on: formulating an exhaustive definition of the concept, analysing Perry's measurement scale based on 24 items and the relevance of these items in the above-mentioned countries, adapting/adjusting the measurement scale according to the national/regional specificities of the public service values.
    Keywords: regional differences; public values; PSM; Public Service Motivation
    Date: 2011–08–06
  8. By: Matei, Ani; Savulescu, Carmen
    Abstract: In Europe, e-government is considered as one of the main goals for the future. Lately, we have witnessed the revolution in the provision of e-government services for citizens. Citizens benefit of e-government services, better access to information, improved interaction with government, especially due to the increase of using ICT. The paper analyses the current state of the art of e-government in the Balkan countries: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Macedonia, Montenegro, Romania, Serbia, Slovenia, Turkey. The paper achieves a comparative analysis on e-government development in the Balkan countries, based on data provided by UN e-government Surveys. At the same time, we make a comparative analysis concerning ICT development in the Balkan countries, using data provided by ICT Development Index - Measuring the Information Society 2010. The methodology of research comprises bibliographic studies, analysis of specialised reports achieved by relevant international organisations, statistic analyses and evaluations, interpolation.
    Keywords: comparative analysis; ICT development; e-government
    Date: 2011–08–06
  9. By: Jambor, Attila
    Abstract: In 2004, Hungary joined the European Union (EU) along with nine other Central and Eastern European Countries, causing several changes in the field of agriculture. One of the major changes was the transformation of national agri-food trade. The aim of the paper is to analyse the effects of EU accession on the Hungarian primary and processed agri-food trade, especially considering revealed comparative advantages, by using recent data. Results suggest that EU accession raised the intensity of trade contacts but had a negative impact on trade balance. Nominal values of both exports and imports increased after 2004, however, Hungarian agriculture is increasingly based on raw material export and processed food import. It also turned out that revealed comparative advantages of Hungarian primary agri-food products in EU15 remained almost constant after accession, while comparative advantages of processed agri-food products has been gradually increasing by time and even reached the satisfactory level in some cases. From the policy perspective, it is apparent that there is a need for deeper structural reforms of the Hungarian agricultural and food sector is the future.
    Keywords: EU accession, agri-food trade, primary and processed products, Agribusiness, Q17, Q18,
    Date: 2011–04
  10. By: Claudia Trentini (United Nations Economic Commission for Europe)
    Abstract: It is widely accepted that disparities in education contribute to the poor labor market outcomes experienced by ethnic minority groups and consequently to their poverty. However, incentives to invest in education are significantly diminished if individuals are discriminated in the labor market and precluded from access to employment. In this paper we analyze differential educational benefits in Bulgaria and compare Roma returns to education with the majority population and the Turkish minority. We show that both ethnic minority groups have lower educational levels and employment rates than the majority population and that they also have lower returns to education. However, the gap in returns to education is much wider for the Roma with respect to both employment and labour-market earnings. The evidence suggests that this group is more vulnerable to discrimination, with a high percentage of the employment gap unexplained by differences in observable skills or characteristics.
    Keywords: minorities, Roma, discrimination, returns to education, transition
    JEL: J15 J7 P36
    Date: 2011–07
  11. By: Saptefrati, Tatiana
    Abstract: The declaration of European integration as a national priority in Moldova involves the assumption of responsibility by society and the state. The public administration reform in this context must be an essential one, so the administration is presenting a double position - as object of Europeanization and as a promoter of Europeanization in relation to other areas of social life and the state. Efficiency and professionalism in public administration will ensure the implementation of the policies of European integration. In this regard, the public service in the Republic of Moldova is changing and is characterized by evolution and transformation. The adaptation of the legal framework for public service in accordance with the acquis communautaire is a priority in establishing a professional quality civil service in Moldova. Thus, a set of laws and regulations were developed and approved, including: Law on Civil Service and Civil Servant's Status, Law on Transparency in Decision Making, Law on the Code of Conduct for Civil Servants, Law on Preventing and Combating Corruption, Law on Conflict of Interest, etc. In the new political and administrative conditions, the efforts are directed at changing the role and the status of the civil servant. The new values of the employees in state institutions are: political impartiality, clearly defined rules of loyalty, transparency, stability, professionalism and increased decision-making capacity. Openness and transparency are promoted and implemented in the public service. Progress is achieved in improving decision making through the application of the process of consulting draft bills and regulations with the civil society. New practices are established in the recruitment and the employment in the public service and mechanisms for training and other forms of professional development are organized. Priorities: Continue training the new legal framework based on principles of equity and merit and the successful application of existing laws to strengthen the rule of law and public service eff iciency.
    Keywords: transparency; open competition; personnel procedures; professional competences; public position; civil servants; civil service; public administration reform
    Date: 2011–08–06
  12. By: Sauer, Johannes; Gorton, Matthew; White, John
    Abstract: Drawing on survey data, this paper identifies the determinants of variations in farm gate milk prices for three CIS countries (Armenia, Moldova and Ukraine). We apply a multilevel modeling approach, specifically a bootstrapped and selectivity bias corrected mixedeffects linear regression model. The analysis suggests three main strategies for farmers to improve the price received for their output: consolidation, cooperation and stable supply chain relationships. While selling through a marketing cooperative has a significant and positive effect on farm gate milk prices, the majority of non-members are reluctant to join. The size of dairy operations, trust and contracting also impact positively on the prices received by farmers. Policy implications are drawn.
    Keywords: price heterogeneity, milk, cooperatives, Armenia, Moldova, Ukraine, Marketing, O13, P32, Q13,
    Date: 2011–04
  13. By: Bojnec, Stefan; Ferto, Imre
    Abstract: The paper investigates the impact of off-farm income on farm technical efficiency for the Slovenian Farm Accountancy Data Network farms in the years 2004-2008. Farm stochastic frontier time-varying decay inefficiency is positively associated with total utilised agricultural areas and total labour input, and vice versa with intermediate consumption and fixed assets. We find a positive association between farm technical efficiency and the off-farm income. Farm technical efficiency has increased steadily over time, the process, which was led by the off-farm spill over effect and most efficient farms. Farm technical efficiency is also positively associated with economic farm size, while association with subsidies is mixed depending on the estimation procedure. Quantile regression confirms the positive and significant associations between farm technical efficiency and off-farm income, and between farm technical efficiency and farm economic size, as well as also the positive association between farm technical efficiency and subsidies, but the results are sensitive by quantiles.
    Keywords: Off-farm income, Stochastic frontier analysis, Panel regression, Quantile regression, Slovenia, Farm Management,
    Date: 2011–04
  14. By: Berceanu, Bogdan; Matei, Ani
    Abstract: The aim of the article is to explore the characteristics of the emerging administration of the states from the South-east Europe under the changes and reforms imposed by the European Union pressure and also to present what means these characteristics. EU throw his policies and strategies has a great impact on economic and social conditions in the European states and thus on their economic competitiveness. These countries have to face with political changes, economic changes, social changes and demographical changes. Starting from these premises and under these conditions our research will go on trying to identify the way in which the administrations from south east Europe become emerging, which are the conditions and the instruments that lead to this situation and if there are models and principles that can be internalized to achieve an European Administrative Space.
    Keywords: South-East Europe; transition; reforms; states; emerging administratio n
    Date: 2011–08–06
  15. By: Matei, Ani; Tuca, Mihaela Violeta
    Abstract: The Europe two speeds is a reality that makes its presence felt, especially in the newly acceded countries. Although four years have passed since the last wave of accessions, we still speak about new EU countries, without taking into account the actual age but present discrepancies between member countries member for decades, and new wave countries. The financial crisis had its clear contribution to the slowdown the development, moreover, has pushed the system into reform, because of the new financial requirements. Having theses in mind, we can say that there is a need for "completion" of what the public sector can not do. In support of measures and policies of the state, the importation of practices from the private sector is emerging as a better course of action. CSR policies have recognized the potential to reinforce the symbiotic relationship between business and society, already showing tangible results in areas such as sustainable development, education and social cohesion. The role that CSR practices may play in the development of the Balkan area may include support for a better dialogue between the State, public authorities, social partners and civil society, better jobs, safer work environments and more open to employees, innovation and technology transfer to local communities, etc. Finally, the research objective will be the identification of levers and potential niche markets in the Balkans that the public sector may use and take advantage of using CSR practices.
    Keywords: Actors; Balkan Area; Corporate Social Responsibility
    Date: 2011–08–06
  16. By: Weber, Daniela
    Abstract: Chinasâ successfully increased food production during the last 30 years has caused significant negative external impacts and subsequent escalating environmental costs (Ash and Edmonds, 1998). This dilemma has recently become a popular issue and the government attaches great importance towards a more sustainable agricultural production (UNDP, 2006). The challenge is to enhance well-grounded approaches that accomplish of effective agricultural trainings, encouraging farmers to adopt optimized practices. According to recent decision-making theories, a successful implementation is also closely related to the target groupâs social and cognitive preferences. In order to get more information about farmersâ inherent decision-making factors an explorative quantitative survey of 394 farmers was conducted in Shandong Province. Next to descriptive economic and agronomic analyses, a structural equation model gave evidence that beside farmersâ economic reasons, values and guÄnxi-relationships indeed show an influence on the extracted agri-environmental attitude factors as well as on manifest behaviour variables. Concluding results reveal the farmers varying preferences and give explanations out of the social and cognitive paths to explain why they behave different or have other focussed attitudes. Finally, recommendations for more effective training methods are given that consider the farmersâ individual motivations.
    Keywords: China, agri-environmental attitudes, guÄnxi, SEM, values, Land Economics/Use,
    Date: 2011–04
  17. By: Bálint Tamási (Magyar Nemzeti Bank (central bank of Hungary)); Balázs Világi (Magyar Nemzeti Bank (central bank of Hungary))
    Abstract: Using Hungarian macroeconomic and financial data, we estimate a Bayesian structural VAR model suitable for macroprudential simulations. We identify standard macroeconomic and credit supply shocks by sign and zero restrictions. In contrast to the previous literature, different types of credit shocks are distinguished in our paper: a risk assessment and a policy shock. Our main findings are the following. First, we demonstrate that both credit supply and macroeconomic shocks explain the variance of endogenous variables at roughly similar order of magnitude. Second, it is shown that credit supply shocks do not have a dominant role in the decline of the Hungarian economy over the crisis period that started in 2008, although their contribution was non-negligible. Third, the importance of unidentified shocks increased in the crisis period.
    Keywords: Bayesian SVAR, zero and sign restrictions, credit supply shocks
    JEL: C11 C32 E32 E44
    Date: 2011

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