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on Transition Economics |
| By: | Carlin, Wendy; Schaffer, Mark E; Seabright, Paul |
| Abstract: | Two decades after the end of central planning, we investigate the extent to which the advantages bequeathed by planning in terms of high investment in physical infrastructure and human capital compensated for the costs in allocative inefficiency and weak incentives for innovation. We assemble and analyse three separate types of evidence. First, we find that countries that were initially relatively poor prior to planning benefited more, as measured by long-run GDP per capita levels, from infrastructure and human capital than they suffered from weak market incentives. For initially relatively rich countries the opposite is true. Second, using various measures of physical stocks of infrastructure and human capital we show that at the end of planning, transition countries had substantially different endowments from their contemporaneous non-transition counterparts. However, these differences were much more important for poor than for rich countries. Finally, we use firm-level data to measure the cost of a wide range of constraints on firm performance, and we show that after more than a decade of transition in 2002-05, poor transition economies differ much more from their non-transition counterparts, in respect to both good and bad aspects of the planning legacy, than do relatively rich transition countries. However, the persistent beneficial legacy effects disappeared under the pressure of strong growth in transition economies in the run-up to the global financial crisis. |
| Keywords: | business environment; infrastructure; institutions; planned economy; transition |
| JEL: | O43 P21 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9003&r=tra |
| By: | Daniel Berkowitz; Mark Hoekstra; Koen Schoors |
| Abstract: | This paper examines the effect of banking on economic growth in modern Russia. To overcome simultaneity and selection, we exploit regional banking variation induced by the creation of “specialized banks” (spetsbanks) in the last years of the Soviet Union (1988-1991). Consistent with the qualitative work of Joel Hellman [1993] and Juliet Johnson [2000], we show that these reforms generated an ideal natural experiment in that the concentration of spetsbanks is jointly uncorrelated with 15 predictors of future growth, including pre-banking income, education, anti-market sentiment, institutional quality, and government interference in the economy. Results indicate that while the presence of one additional spetsbank per million inhabitants increased total within-state lending to private firms and individuals by 14 to 26 percent in the early 2000s, it had no effect on investment or per capita income. In contrast, we find that spetsbanks increased employment. Additional results indicate that spetsbanks increased growth in regions in which they were less connected to government and were generally more similar to non-spetsbanks, as well as in regions that were better at protecting property rights. Our results thus indicate that bank origins, political connections, and property rights are important determinants of effective finance. |
| JEL: | O16 O43 P3 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18139&r=tra |
| By: | Zhang, Jian; Giles, John; Rozelle, Scott |
| Abstract: | Recruiting and retaining leaders and public servants at the grass-roots level in developing countries creates a potential tension between providing sufficient returns to attract talent and limiting the scope for excessive rent-seeking behavior. In China, researchers have frequently argued that village cadres, who are the lowest level of administrators in rural areas, exploit personal political status for economic gain. Much existing research, however, compares the earnings of cadre and non-cadre households in rural China without controlling for unobserved dimensions of ability that are also correlated with success as entrepreneurs or in non-agricultural activities. The findings of this paper suggest a measurable return to cadre status, but the magnitudes are not large and provide only a modest incentive to participate in village-level government. The paper does not find evidence that households of village cadres earn significant rents from having a family member who is a cadre. Given the increasing returns to non-agricultural employment since China's economic reforms began, it is not surprising that the returns to working as a village cadre have also increased over time. Returns to cadre-status are derived both from direct compensation and subsidies for cadres and indirectly through returns earned in off-farm employment from businesses and economic activities managed by villages. |
| Keywords: | Small Area Estimation Poverty Mapping,Housing&Human Habitats,Labor Policies,Rural Poverty Reduction,Emerging Markets |
| Date: | 2012–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6082&r=tra |
| By: | Akay, Alpaslan (IZA); Giulietti, Corrado (IZA); Robalino, Juan David (Imperial College London); Zimmermann, Klaus F. (IZA and University of Bonn) |
| Abstract: | The main objective of this paper is to propose a systematic approach to empirically analyse the effect of remittances on the utility of migrants, as proxied by their subjective well-being (SWB). Using data from a new survey on China (RUMiC), we estimate models in which a measure of subjective well- being is regressed on the level of remittances, and we find a sizeable positive correlation. The effect of remittances on well-being varies with the socio- economic characteristics of migrants, migration experience and the diversity of family arrangements. As a complementary objective, we use SWB measures to elicit the motivations behind remittances and find evidence that both altruistic (such as pure altruism and reciprocity) and contractual motivations (such as co-insurance and investment) are at work among rural-to-urban migrants in China. |
| Keywords: | migrants, subjective well-being, remittances |
| JEL: | J61 D63 D64 I3 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6631&r=tra |
| By: | Kung, James; Shimokawa, Satoru |
| Abstract: | Based on a unique farm survey, this article intends to shed new light on the intriguing relationship between administrative land reallocations and the development of land rental markets in China. We find that the two alternative mechanisms of allocating arable land tend to be substitutes where land is reallocated “partially” only among households affected by demographic change (PLR). Where village-wide or “full-scale” reallocations (FSLR) are conducted among all households, however, land rental market transactions have increased in response to the enlarging mismatch in labor-land ratios across households; transactions that would not have occurred otherwise. While inefficient in the short-run, FSLR potentially facilitates the development of land rental markets as it unwittingly brings together parties with a mere arms-length relationship (e.g., non-relatives) to contract with each other, in light of the finding that households affected by PLR tend to lease land primarily to/from their own relatives or through the village authorities. |
| Keywords: | Land reallocations, Passive Land rental, Rural, China, Agricultural and Food Policy, Land Economics/Use, O12, Q12, Q15, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae12:125099&r=tra |
| By: | Jarko Fidrmuc (Zeppelin University Friedrichshafen, CESifo Munich, Institute for Eastern European Studies, Regensburg, Comenius University Bratislava, and Mendel University in Brno); Matus Senaj (National Bank of Slovakia, Research Department) |
| Abstract: | This paper focuses on human capital and housing in Slovakia during the economic reforms of the last two decades. We compare households that entered the labour market before and after the economic reforms in 1990. On the one hand, we study the returns to education in different labour market cohorts using household consumption surveys. On the other hand, we analyse the determinants of housing wealth and its impact on consumption. We show that old cohorts are characterised by lower returns to human capital and consumption levels, but higher housing wealth. Thus, we do not identify a clear pattern of winners and losers from transition. |
| Keywords: | consumption function, housing wealth effect, human capital, survey data |
| JEL: | C31 D12 J24 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:svk:wpaper:1017&r=tra |
| By: | Alex Bryson; John Forth; Minghai Zhou |
| Abstract: | Using panel data for all of China's public listed firms over the period 2001-2010 we examine how firms have recruited and rewarded their executives over a decade of huge growth and turbulence. CEO pay is sensitive to firm performance, although the elasticities are lower than for the United States and Europe, especially with respect to returns on assets (ROA). CEO pay rises with firm size and growth, with elasticities resembling those for the United States. We find no dramatic response to the stock market crash of 2007/08. The elasticity of pay to stock returns falls to zero after the crash, while elasticities with respect to sales and ROA remain significant. Executive cash compensation rose steeply throughout the period - in contrast to the United States. There are steep gradients in executive compensation within firms, consistent with tournament prizes, and around two-thirds of CEO appointments are internal promotions. Within-firm executive compensation rose at a faster rate than executive compensation across firms, helping to explain why CEO turnover rates declined a little over the decade. Turnover rates did not spike with the stock market crash. Privatisation and reforms to corporate governance contributed to growth in executive compensation. A picture emerges of an executive labour market in which firms are linking pay to performance and relying on incentive structures within firms to foster executive talent. |
| Keywords: | executive compensation, CEOs, corporate governance, tournaments, firm-specific human capital, China |
| JEL: | G34 J31 J33 M12 M52 O16 P31 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1148&r=tra |
| By: | Roman Horvath; Dragan Petrovski |
| Abstract: | We examine the international stock market comovements betweenWestern Europe vis-à-vis Central (the Czech Republic, Hungary and Poland) and South Eastern Europe (Croatia, Macedonia and Serbia) using multivariate GARCH models in 2006-2011. Comparing these two groups, we find that the degree of comovements is much higher for Central Europe. The correlation of South Eastern European stock markets with developed markets is essentially zero. The exemption to this regularity is Croatia with its stock market displaying a greater degree of integration towards Western Europe recently, but still below the levels typical for Central Europe. All stock markets fall strongly at the beginning of the global fi- nancial crisis and we do not find that the crisis altered the degree of stock market integration between this group of countries. |
| Keywords: | stock market comovements, Central and South Eastern Europe, GARCH |
| JEL: | C22 C32 G15 |
| Date: | 2012–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2012-1028&r=tra |
| By: | Bat Batjargal |
| Abstract: | This study examines the effect of network’s structural holes, i.e., the absence of a link between two contacts who are both linked to an actor, on product development and profit growth of software ventures in two different institutional contexts of China and Russia. Using interview data of 159 software entrepreneurs in Beijing and Moscow, the study found that the effect of structural holes is contingent upon country institutional context and venture development stage. Specifically, structural holes have a positive main effect on product portfolio but a negative main effect on profit growth in the second revenue year - early stage of venture development. Structural holes are more useful in the Russian institutional context compared to the Chinese institutional context due to the polycentricity of institutions. The research implications of the findings are discussed. |
| Keywords: | entrepreneurship, networks, institutions, Russia, China |
| JEL: | L26 L29 L86 P20 |
| Date: | 2012–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2012-1033&r=tra |
| By: | Wang, Hui; Riedinger, Jeffrey; Jin, Songqing |
| Abstract: | We used household and farm-plot level data from a two period panel survey from 6 provinces in China to explore how tenure security, especially issuance of land documents, would affect people’s behavior in China’s rural land rental market. The econometric analysis shows that possession of documents and fewer major land reallocations would encourage households to engage in non-kin land renting, and the effect of land right documents is stronger in 2008 than in 2000. |
| Keywords: | Land use right, Land document, Land Transfer, Chamberlain-Mundlak Method, International Development, Land Economics/Use, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124598&r=tra |
| By: | Tadashi Ito (JETRO-IDE); Toshihiro Okubo (Faculty of Economics, Keio University) |
| Abstract: | This paper discusses some new evidences onintra-industry trade (IIT). In particular, we focus on EU trade with Eastern European countries, using trade data at HS eight-digit product level for the period 1988 - 2010. Our findings include Eastern European countries' rise up the quality ladder, and by contrast, the substantially lower prices of China's exports to EU countries vis-a-vis China's imports from them. Thecontrast between EU trade with Eastern Europeancountries and with China is present even in recent years. |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:kei:dpaper:2012-007&r=tra |
| By: | Aristovnik, Aleksander |
| Abstract: | The paper attempts to provide an overview of the fiscal decentralization process in emerging market economies in Eastern Europe in the last 20 years. Using methodology developed by Vo (2009), the paper assesses the degree of fiscal decentralization in the region. Conceptually, the measurement of fiscal decentralization focuses on fiscal autonomy and the fiscal importance of subnational governments. The empirical analysis reveals that according to our definition of fiscal decentralization the highest level of (average) fiscal decentralization (centralization) is found in Russia (Armenia) among non-EU members and in Estonia (Slovak Republic) among EU members of the Eastern European. In addition, the empirical results show that, in general, the degree of fiscal decentralization is higher in developed OECD countries than in most Eastern European countries (EECs). However, in contrast to our expectations, there has been an alarming downward trend of FDI in most of the region over the last two decades. Moreover, the paper also examines the effects of fiscal decentralization on growth and public sector size in EECs. The analysis provides some evidence that increases in public sector decentralization are associated with higher income levels. However, the growth-enhancing effects of fiscal decentralization are expected to be much greater when supported by a sound institutional environment. Therefore, EECs, in particular non-EU member states, should improve their administrative and technical capability in order to establish sound and effective fiscal decentralization. Finally, our results suggest that fiscal decentralization in EECs generally leads to an increase in the size of government, albeit there are some significant differences between EU and non-EU member states. |
| Keywords: | fiscal decentralization; fiscal autonomy; fiscal importance; Eastern European countries; economic growth; public sector size |
| JEL: | H4 H0 H5 H2 O4 |
| Date: | 2012–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39316&r=tra |
| By: | Phan, Diep; Coxhead, Ian A. |
| Abstract: | “Shock therapy” transitions in Eastern Europe facilitated movement of skilled workers into privatized industries offering high wage premia relative to state industries. Other transitional economies (notably China and Vietnam) have been slower to relinquish control over key industries and factor markets. Some costs of this piecemeal approach are now becoming apparent. We examine the spillover of continuing capital market distortions into the market for a complementary factor, skilled labor. Using Vietnamese data we find that capital market segmentation creates a two-track market for skills, in which state sector workers earn high salaries while non-state workers face lower demand and lower compensation. Growth is reduced directly by diminished allocative efficiency and incentives to acquire education, and indirectly by higher wage inequality and rents for workers with access to state jobs. |
| Keywords: | Labor, skills, state-owned, inequality, wages, Vietnam, International Development, Labor and Human Capital, J31, P23, F16, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124207&r=tra |
| By: | Yang, Jun; Zhang, Wei; Tokgoz, Simla |
| Abstract: | There has been contentious debate surrounding the issue of undervaluation of the Chinese Renminbi, with continuous international political pressure on China to appreciate its currency and the Chinese government resisting significant changes in its policy. A key question underlining the debate is whether a Renminbi appreciation would deliver substantial gains for exports and employment as the United States has argued or a significant slowdown of Chinese economy as feared by the Chinese government, and if so to what extent. This paper analyzes the ex-ante, short-term impacts of the Chinese Renminbi appreciation on the Chinese and world economies using the novel approach of modeling nominal exchange rate adjustment in the Global Trade Analysis Project, a global computable general equilibrium model. Scenario results show that the Chinese economy will be affected negatively, with lower real gross domestic product, lower employment rates, and a decline in the trade surplus. Chinese currency appreciation has a positive impact on the GDP of the major countries and regions, but by a small margin. With a higher Chinese exchange rate, trade balances for other trading partner countries, with the exception of the United States, improve. |
| Keywords: | China, computable general equilibrium model, economic impacts, exchange rate, Renminbi appreciation, Financial Economics, International Relations/Trade, |
| Date: | 2012–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae12:125010&r=tra |
| By: | Rong, Zhao; Yang, Liu; Yuan, Yan |
| Abstract: | Cross-sectional analysis is problematic when examining the determinants of migration as well as its impacts. Panel data may potentially solve the problem by tracking households over different time periods. Using panel data from household surveys in six provinces in rural China over 1986 to 1999, this paper examines the determinants of rural-to-urban migration and its impacts on rural households. We find that number of laborers, income, education level and village migrating network increase the likelihood of migration for households with no migration experience as well as households with experience. By estimating the dynamic difference on migration impacts, at the household level we find that grain output declines by less than 2 percent while net income increases by 16 percent upon migration. |
| Keywords: | internal migration, grain output, labor migration, rural China, Consumer/Household Economics, Labor and Human Capital, O15, J61, Q12, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124842&r=tra |
| By: | Zuzana Brixiova; Balazs Egert |
| Abstract: | The unemployment rate in Estonia rose sharply in 2010 to one of the highest levels in the EU, after the country entered a severe recession in 2008. While the rate declined relatively rapidly in 2011, it remained high especially for the less educated. In 2009, the Employment Contract Law relaxed employment protection legislation and sought to raise income protection of the unemployed to facilitate transition from less to more productive jobs while mitigating social costs. Utilizing a search model, this paper shows that increasing further labour market flexibility through reducing the tax wedge on labour would facilitate the structural transformation and reduce the long-term unemployment rate. Linking increases in unemployment benefits to participation in job search or training programmes would improve the unemployed workers’ incentives to search for jobs or retrain and the medium term labour market outcomes. Social protection schemes for the unemployed should be also strengthened as initially intended to give the unemployed sufficient time to search for adequate jobs or retrain for new opportunities. |
| Keywords: | Labour market reforms, search model, Estonia, OECD countries |
| JEL: | J08 J64 E24 |
| Date: | 2012–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2012-1027&r=tra |
| By: | Baylis, Katherine R.; Fan, Linlin; Nogueira, Lia |
| Abstract: | China underwent tremendous agricultural market reforms in the 1990s prior to its accession to the WTO, drastically decreasing domestic market distortions. We ask whether these reforms have led to agricultural commercialization and have improved the welfare of rural Chinese households measured by household average share of calories from non-staples. We identify the effect of local market liberalization by calculating the degree to which local markets reflect world prices. We find that farmers have commercialized in response to market liberalization and that particularly for food insecure households, commercialization has increased household nutrition. The commercialization of field crops and horticulture increases nutrition while the commercialization of livestock does not. |
| Keywords: | market liberalization, commercialization, food security, agriculture, China, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, International Development, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124621&r=tra |
| By: | Yuan, Yan; Rong, Zhao; Xu, Lihe |
| Abstract: | It is well acknowledged that the entrepreneurship is important to economic development. In this paper, we suggest a gender-related determinant of entrepreneurship, local sex imbalance. Using a 2009 rural finance survey, we examine how this imbalance influences the venturing at the household level in China. We find that households with a son in more sex-imbalanced villages are more likely to have a business. Further examination reveals that these households have any advantage in borrowing. |
| Keywords: | entrepreneurship, sex ratio, China, Community/Rural/Urban Development, Consumer/Household Economics, Farm Management, Financial Economics, J1, J2, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:125021&r=tra |
| By: | Funke, Michael (BOFIT); Chen, Xi (BOFIT) |
| Abstract: | This paper accounts for China’s economic growth since 1980 in a unified endogenous growth model in which a sequencing of physical capital accumulation, human capital accumulation and innovation drives the rise in China’s aggregate income. The first stage is characterized by physical capital accumulation. The second stage includes both physical and human capital accumulation, and in the final stage innovation is added to the mix. Model calibrations indicate that the growth model can generate a trajectory that accords well with the different stages of development in China. |
| Keywords: | China; economic growth; transitional dynamics |
| JEL: | D90 O31 O33 O41 |
| Date: | 2012–06–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2012_013&r=tra |
| By: | Aleksandra Parteka (Gdansk University of Technology, Gdansk, Poland); Joanna Wolszczak-Derlacz (Gdansk University of Technology, Gdansk, Poland) |
| Abstract: | This paper addresses the relationship between growth of relative productivity in Polish manufacturing sectors and forces stemming from trade integration with the EU. We look at the productivity growth from the perspective of relations between Polish manufacturing sectors and the foreign ones, focusing on partner countries from the enlarged EU. Empirical analysis is based on sector level bilateral data concerning both domestic (Polish) and foreign markets’ characteristics and their degree of openness in the period 1995-2006. Main results indicate that, both in the short and long run, an increase in domestic sectors’ openness exerts a positive effect on productivity growth in Poland (the opposite effect is exhibited by foreign sectors’ openness). In addition, expansion in relative size of Polish sectors versus foreign ones boosts domestic labour productivity growth. |
| Keywords: | labour productivity, trade, integration |
| JEL: | F14 F15 F16 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iro:wpaper:1202&r=tra |
| By: | Yang, Juan; Leatham, David J. |
| Abstract: | In this paper we examine price transmission for major agriculture (food) and energy products in China for the years 2004 to 2010. The Error correction model (ECM) and the directed acyclic graphs (DAG) are applied to identify price dynamics among these six variables: rice, wheat, corn, coal, crude oil and ethanol. Our major contribution to the existing literature lies in two perspectives: 1) We firstly employ the error correction model with directed acyclic graphs to study the price dynamics in the food-energy sector in China. The advantage of this approach is that it can offer data-determined (as opposed to a subjectively-determined) pattern for the contemporaneous causal flows which are then used to conduct a more reliable innovation accounting analysis of the ECM shocks. 2) We uncover a recent price transmission among major food-energy markets in China and provide a broad understanding of price adjustments across markets. The result indicates that in the short run, crop price is driving the energy price, while in the long run, crude oil is the leading factor that drives food and other energy prices. We also find that ethanol price is neither in the long-run equilibrium nor responding to deviation from long-run equilibrium. It supports that under the current policy, Chinese government has done well to prevent the ethanol price driving up the food price. The biofuel production is not the cause of rising food price in China. |
| Keywords: | energy, food, biofuel, ethanol, error correction model, direct acyclic graph, Agricultural and Food Policy, Demand and Price Analysis, Environmental Economics and Policy, Food Security and Poverty, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124631&r=tra |
| By: | Torok, Aron; Jambor, Attila |
| Abstract: | In 2004 and 2007 twelve New Member States (NMS) joined the European Union (EU), 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 NMS agri-food trade, especially considering revealed comparative advantages. Results suggest that the intensity of NMS agri-food trade has increased significantly after accession, though there was a serious deterioration in NMS agri-food trade balance in most cases. It has also become evident that NMS agri-food trade was highly concentrated by country and by product, though concentration has not changed significantly after EU accession. Moreover, our analyses highlight one of the most important characteristics of NMS agri-food trade structure - the focus on agri-food raw materials in export together with agri-food processed products in import. As to NMS agri-food trade specialisation, the diversity among member states becomes apparent. Almost all countries experienced a decrease in their comparative advantage after accession, though it still remained at an acceptable level in most cases. As for the stability of comparative advantage, results suggest a weakening trend, underpinned by the convergence of the pattern of revealed comparative advantage. By estimating the survival function to the sample, it is observable that the accession has radically changed the survival time of agri-food trade, meaning that revealed comparative advantage has not turned out to be persistent in the period analysed. From the policy perspective, there is a clear need for structural changes in NMS agriculture and agri-food sector in order to tackle the negative tendencies of national agri-food trade. The most important long-term goal should be the production and export of higher value-added processed products based on domestic raw materials. |
| Keywords: | EU accession, agri-food trade, New Member States, Agricultural and Food Policy, International Relations/Trade, Q17, Q18, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae12:125140&r=tra |
| By: | Cheung, Yin-Wong (BOFIT); Chinn, Menzie D. (BOFIT); Qian, Xing Wang (BOFIT) |
| Abstract: | We find that Chinese trade flows respond to economic activity and relative prices -- as represented by a trade weighted exchange rate -- but the relationships are not always precisely or robustly estimated. Chinese exports are generally well-behaved, rising with foreign GDP and decreasing as the Chinese renminbi (RMB) appreciates. However, the estimated income elasticity is sensitive to the treatment of time trends. Estimates of aggregate imports are more problematic. In many cases, Chinese aggregate imports actually rise in response to a RMB depreciation and decline with Chinese GDP. This is true even after accounting for the fact a substantial share of imports are subsequently incorporated into Chinese exports. We find that some of these counter-intuitive results are mitigated when we disaggregate the trade flows by customs type, commodity type, and the type of firm undertaking the transactions. However, for imports, we only obtain more reasonable estimates of elasticities when we allow for different import intensities for different components of aggregate demand (specifically, consumption versus investment), or when we include a relative productivity variable. |
| Keywords: | China; imports; exports; real exchange rate |
| JEL: | F14 F41 |
| Date: | 2012–06–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2012_014&r=tra |
| By: | Mario Liebensteiner |
| Abstract: | In recent years, a new trend of seasonal labour migration from Armenia to Russia has emerged. Based on a novel household survey, this paper analyses how successful seasonal migrants are in increasing their incomes. Applying matching operators allows addressing endogenous self-selection to migration. We identify negative selection based on education, employment and pre-migration income. This is reflected by a premium for low skills in Russia relative to Armenia, luring seasonal migrants into low-skill jobs, mainly in the construction sector. The income gain for a migrant is estimated at $ 480 relative to the approximately $ 50 that the same individual would have earned in Armenia. The results are robust to various matching techniques and specifications. |
| Date: | 2012–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2012:i:430&r=tra |
| By: | Renner, Swetlana; Glauben, Thomas; Hockmann, Heinrich |
| Abstract: | Flexibility can be considered as a crucial factor of competitive advantage, especially under conditions of dynamically changing environments. Based on the classical microeconomic definition of flexibility, as introduced by Stigler, and some recent concepts developed in the production economics, this article proposes a primal flexibility measure for multi-product firms. When decomposed, this measure offers useful insights into possible sources of flexibility, especially by investigating the role of both scale and scope economies. This approach provides the theoretical basis to investigate the magnitude and sources of flexibility in the Polish agricultural sector during the transition period. |
| Keywords: | cost function, duality, input distance function, flexibility, Poland, scale economies, scope economies, Production Economics, Productivity Analysis, D24, Q12, L25, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae12:124865&r=tra |
| By: | Adam Gersl; Petr Jakubik; Dorota Kowalczyk; Steven Ongena; Jose-Luis Peydro Alcalde |
| Abstract: | This paper examines the impact of monetary conditions on the risk-taking behaviour of banks in the Czech Republic by analysing the comprehensive credit register of the Czech National Bank. Our duration analysis indicates that expansionary monetary conditions promote risk-taking among banks. At the same time, a lower interest rate during the life of a loan reduces its riskiness. While seeking to assess the association between banks’ appetite for risk and the short-term interest rate we answer a set of questions related to the difference between higher liquidity versus credit risk and the effect of the policy rate conditioned on bank and borrower characteristics. |
| Keywords: | Business cycle, credit risk, financial stability, lending standards, liquidity risk, monetary policy, policy interest rate, risk-taking. |
| JEL: | E5 E44 G21 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2012/02&r=tra |
| By: | Sonoda, Tadashi |
| Abstract: | This study uses an agricultural household model to examine the tradeoff between farm profitability and a household head’s desire for market work. The theoretical analysis is a comparative statics analysis relative to the two variables. Results show that the tradeoff can arise for non-participants in the labor market under plausible conditions and that the desire for market work has no effect on farm profitability for participants in the labor market. The empirical analysis derives simultaneous equations of the two variables. These equations reveal exclusion restrictions on specific exogenous variables and “local separability” of the model in the equation of farm profitability. Estimation results for Chinese farm households in 2002 verify the tradeoff for the Western region, although it is not found for the other regions. The results are also used to demonstrate the plausibility of the model under “local separability” compared with that under “global separability.” |
| Keywords: | farm profitability, desire for market work, agricultural household model, local separability, global separability, Chinese farm households, Consumer/Household Economics, Labor and Human Capital, Production Economics, J22, Q12, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124624&r=tra |
| By: | Vilimir Yordanov |
| Abstract: | Bulgaria started the transition in the early 90’s with a sovereign default and debt restructuring. Later on, under a strict fiscal discipline, the country succeeded to reduce significantly its debt burden and is currently among the top EU performers in that respect. The current debt outstanding is composed mainly of local currency treasuries issued on the domestic market as well as Eurobonds and Global bonds on the international one. These instruments give rise to two risky spreads - credit and currency. The Currency Board Arrangement and the fixed exchange rate regime the country follows prevent from a discretionary monetary policy and this gives relative stability to the bonds’ yields and the risky spreads. Their financial role starts dominating over any macroeconomic one making them a natural object for investigation with financial engineering tools. The main focus of the paper is an analysis of the informational content of the risky spreads in a multifaceted way from noarbitrage,financial, and macroeconomic points of view. |
| Keywords: | arbitrage; term structure; credit risk; credit spread; currency spread; HJM |
| JEL: | F31 G12 E43 C58 |
| Date: | 2012–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2012-1032&r=tra |
| By: | Ryo Ishida (Policy Research Institute, the Ministry of Finance, Japan) |
| Abstract: | Many countries have adopted policies to give preferential treatment for voluntary contributions to certain public goods. Taxable deductions, matching subsidies and rebate subsidies, which decrease gthe price of givingh for donors, are prototypical examples. However, the more aggressive policy of tax credit for voluntary contributions to certain public goods which decreases gthe price of givingh to zero, has not been studied so far in detail, although such a policy can be seen in several countries: the Percentage Law in Hungary, Lithuania, Poland, Romania and Slovakia, and the Hometown Tax-payment policy in Japan. In these countries, and especially in Eastern European countries, such a policy is justified because, by decentralizing the power of government, it allows individuals to reveal their gtrueh preferences and thus allows necessary adjustment for distorted government allocations. In this paper, I find that, such a policy has this adjustment effect if, and only if, the size of the tax credit exceeds certain threshold. In other words, such a policy can be totally cancelled out by a lobby-government coalition if its size falls beneath a threshold. |
| Keywords: | Public Good, Tax Credit, Lobbying, Decentralization |
| JEL: | D72 H23 H41 L30 P16 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:mof:wpaper:ron234&r=tra |
| By: | Andrievskaya, Irina (BOFIT) |
| Abstract: | The 2007-2009 global financial crisis demonstrated the need for effective systemic risk measurement and regulation. This paper proposes a straightforward approach for estimating the systemic funding liquidity risk in a banking system and identifying systemically critical banks. Focusing on the surplus of highly liquid assets above due payments, we find systemic funding liquidity risk can be expressed as the distance of the aggregate liquidity surplus from its current level to its critical value. Calculations are performed using simulated distribution of the aggregate liquidity surplus determined using Independent Component Analysis. The systemic importance of banks is then assessed based on their contribution to variation of the liquidity surplus in the system. We apply this methodology to the case of Russia, an emerging economy, to identify the current level of systemic funding liquidity risk and rank banks based on their systemic relevance. |
| Keywords: | systemic risk; liquidity surplus; banking; Russia |
| JEL: | G21 G28 P29 |
| Date: | 2012–06–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2012_012&r=tra |
| By: | Huynh Truong, Huy; Walter, Nonneman |
| Abstract: | This paper adopts the push and pull model of migration to explain inter-provincial migration flows across 63 provinces or cities of Vietnam in the period 2004-2009. We used a solution to a quadratic cost migration problem by combining the total number of in and out-migration of various provinces and inverse distances between provinces that aims at calculating the push and pull factors of each province. The result confirms the hypothesis that push factors correlate well with total out flows of provinces and pull factors with total inflows of provinces. In addition, it is found that pull and push factors are explained rather well by population size and income, but not so by urbanization and poverty |
| Keywords: | push factors; pull factors; migration; distance |
| JEL: | C00 J00 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39559&r=tra |
| By: | Jürgen Jerger (IOS-Regensburg) |
| Abstract: | In the transformation economies of Eastern Europe a rather high level of institutional heterogeneity developed after having started at low, albeit quite similar levels after the fall of the Iron Curtain. This heterogeneity is relevant both at the level of the major macroeconomic indicators and the level of indicators of institutional reforms and the resulting institutional quality. It is remarkable that political and economic liberty did not develop in lockstep as could have been expected from Walter Eucken’s reflections on the interdependency of orders. In this contribution, some conceptual remarks are made on the role of the acceptance of economic and political systems. After that, we look at macro- and microeconomic datasets in order to describe the situation in the transformation economies. |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:ost:wpaper:315&r=tra |
| By: | Shinsuke Tanaka (Fletcher School of Law and Diplomacy, Tufts University) |
| Abstract: | Developing countries rank highest in air pollution worldwide, yet regulations of such pollution are still rare in these countries, thereby whether, and to what extent, those regulations lead to health benefits remain an open question. Since 1995, the Chinese government has imposed stringent regulations on pollutant emissions from power plants, as one of the first regulatory attempts on a large scale in a developing country. Exploiting the variation in the regulatory status across time and space, we find that infant mortality fell by 21 percent in the treatment cities designated as the so-called gTwo Control Zones." The greatest reduction of mortality occurred during the neonatal period, highlighting the importance of fetal exposure as a biological mechanism, and was largest among the households with low mother's educational attainment. On the other hand, the regulations are found to be uncorrelated with deaths from causes unrelated to air pollution. When the regulatory status is used as an instrumental variable for air pollution reductions, we estimate that the impact of a unit change in total suspended particulates on infant mortality is of similar magnitude to that found in the U.S., but the elasticity is substantially higher in China, suggesting the greater benefits associated with regulations when pollution is already quite high. |
| Keywords: | Environmental regulation, infant mortality, air quality, China |
| JEL: | Q56 I18 Q53 J13 O13 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:hir:idecdp:2-11&r=tra |