nep-tra New Economics Papers
on Transition Economics
Issue of 2012‒07‒23
thirty-six papers chosen by
J. David Brown
IZA (Institute for the Study of Labor)

  1. How Much of a Socialist Legacy? The Reemergence of Entrepreneurship in the East German Transformation to a Market Economy By Michael Fritsch; Elisabeth Bublitz; Alina Rusakova; Michael Wyrwich
  2. Effects of Off-Farm Work on Farm Household Production Choices By Wang, Chenggang; Pan, Suwen; Lijian, Qin
  3. The impact of parental migration on children’s school performance in rural China By Zhao, Qiran; Yu, Xiaohua; Wang, Xiaobing; Glauben, Thomas
  4. The impact of land security and input allocation on farm household income By Zhang, Yanjie; Wang, Xiaobing; Bruemmer, Bernhard; Yu, Xiaohua
  5. Consequences of the euro adoption by Central and Eastern European (CEE) countries for their trade flows By Andrzej Cieślik; Jan, Jakub Michałek; Jerzy Mycielski
  6. Market and Non-Market Monetary Policy Tools in a Calibrated DSGE Model for Mainland China By Chen, Qianying; Funke, Michael; Paetz, Michael
  7. Road to Specialization in Agricultural Production: Evidence from Rural China By Qin, Yu; Zhang, Xiaobo
  8. Solid Waste Disposal and Its Relationship with Economic Development in Rural China By Li, Yumin; Bai, Junfei; Wang, Jinxia; Qiu, Huanguang; Min, Shi
  9. Fiscal multipliers and factors of growth in Poland and the Czech Republic in 2009 By Kazimierz Łaski; Jerzy Osiatyński; Jolanta Zięba
  10. The Role of Infrastructure Capital in China’s Regional Economic Growth By Shi, Yingying
  12. Green Growth and Environmental Governance in Eastern Europe, Caucasus, and Central Asia By OECD
  13. The Clan and the City: Sustaining Cooperation in China and Europe By Avner Greif; Guido Tabellini
  14. The Demand for Nutrients in China: A Direct Approach By Tian, Xu; Yu, Xiaohua
  15. The future of grasslands and beef cattle in the Czech Republic By Abrahamova, Miluse; Boudny, Jan; Boskova, Iveta; Foltyn, Ivan; Hruska, Martin; Prazan, Jaroslav; Ratinger, Tomas; Voltr, Vaclav
  16. Monetary policy transmission mechanism in Poland. What do we know in 2011? By Tomasz Łyziak; Oksana Demchuk; Jan Przystupa; Anna Sznajderska; Ewa Wróbel
  17. Does NGO Microfinance Crowd Out Other Credits: Micro Evidence from Rural China By Jia, Xiangping; Xiang, Cheng; Huang, Jikun
  18. Monetary Commitment and Structural Reforms: A Dynamic Panel Analysis for Transition Economies By Ansgar Belke; Lukas Vogel
  19. Large capital inflows and stock returns in a thin market By Janusz Brzeszczynski; Martin T. Bohl; Dobromił Serwa
  20. Some Quantitative Estimates of the Influence of Institutional Constraints of Economic Growth in Russia By Alexey Vedev; Andrey Kosarev
  21. Direct Payments and Land Rents: Evidence from New Member States By Van Herck, Kristine; Vranken, Liesbet
  22. What is Driving Financial Dollarization in Transition Economies? A Dynamic Factor Analysis By Narayan K. Kishor; Kyriakos C. Neanidis
  23. Shifting comparative advantages in Tajikistan : implications for growth strategy By Coulibaly, Souleymane
  24. Global Financial Crisis, Corporate Governance, and Firm Survival: The Case of Russia By Iwasaki, Ichiro
  25. The distribution of monopolistic markups in the Polish economy By Jan Hagemejer; Piotr Popowski
  26. The use of labor in Romania: present and perspective By Balan, Ana Maria
  27. Development of a tool for comparative analysis of agricultural and rural development policies measures and its application on Western Balkan countries By Volk, Tina; Rednak, Miroslav; Erjavec, Emil; Juvancic, Luka
  29. Environmental Compliance and Human Capital: Evidence from Chinese Industrial Firms By Jing Lan; Alistair Munro
  30. Distributional effects and structural change induced by various CAP Pillar 1 proposals; the case of the Czech Republic By Ratinger, Tomas; Foltyn, Ivan; Jelinek, Ladislav; Kristkova, Zuzana
  31. Monetary-Credit and Budgetary Spheres By Sergey Sinelnikov; Ilya Sokolov; Tatiana Tischenko
  32. Economic Loss in Czech Photovoltaic Power Plants By Jan Prùša; Andrea Klimešová; Karel Janda
  33. Service provision and social cohesion in rural areas: interaction between commuting, mobility and the residential preferences in Latvia By Zobena, Aija; Lace, I.; Benga, Elita
  34. The Significance of Market Transaction Costs, Technical Efficiency and Risk in Agriculture: An Empirical Analysis for Tatarstan Republic By Hockmann, Heinrich; Gataulina, Ekaterina
  35. Predictive power of confidence indicators for the Russian economy By Korte, Niko
  36. How Farmers Become Entrepreneurs - Prenatal Diagnostic of Rural Firms in Bulgaria By Traikova, Diana; Mollers, Judith; Buchenrieder, Gertrud

  1. By: Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Elisabeth Bublitz (Friedrich Schiller University Jena, School of Economics and Business Administration); Alina Rusakova (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Wyrwich (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: The 40 years of socialist regime in East Germany were characterized by a massive anti-entrepreneurship policy. We investigate the reemergence of entrepreneurship in East Germany during its transformation to a market economy following the collapse of the East German state in 1989. It took about 15 years until self-employment levels in East Germany reached those of West Germany. Despite this catch up, we find a number of peculiarities in East German self-employment that appear to be a continuing legacy of the socialist period. In particular, older and better-educated East Germans have a relatively low propensity for starting an own business. Moreover, East German workers tend to have a lower variety of skills than their West German counterparts, which could explain a lower propensity for start up in the early years after reunification. Despite this socialist imprint, we also find considerable continuity in the levels of self-employment in the 1920s and those after transition to a market economy, suggesting the existence of a long-lasting regional entrepreneurship culture.
    Keywords: Entrepreneurship, self-employment, new business formation, transformation, East Germany
    JEL: L26 O11
    Date: 2012–07–16
  2. By: Wang, Chenggang; Pan, Suwen; Lijian, Qin
    Abstract: Using a unique panel of rice-producing Chinese households, this paper tests off-farm employment’s effects on agricultural production. We find the sizable rural out-migration in the past two decades has had negligible effects on China’s rice production. This cannot be explained by farm labor market perfection or any technological improvements financed by off-farm income; rather, evidence points to the persistence of disguised unemployment in 21st century China.
    Keywords: Agricultural Household Model, rural-urban migration, surplus labor, agricultural productivity growth., Agricultural and Food Policy, Community/Rural/Urban Development, Labor and Human Capital, O12, O18, Q12,
    Date: 2012–08–18
  3. By: Zhao, Qiran; Yu, Xiaohua; Wang, Xiaobing; Glauben, Thomas
    Abstract: A substantial amount of China’s rapid economic growth in has been attributed to its large proportion of rural-urban migrants, but more than 80% of these migrants’ children are still left in rural areas mainly due to China’s household registration system. Identification of the impact of parental migration on children’s school performance may encounter the problem of endogeneity. Using unique survey data collected from Qinghai Province and the Ningxia Autonomous Region in Northwestern China where more than 7,100 Grade 4 & 5 students from 74 rural elementary schools participated and by the instrumental-variable estimation, our results indicate that parents’ decisions to migrate are exogenous to their children’s schooling performance, and one more migratory parent can marginally reduce their child’s math score by 1.73 percent in percentile rank, which implies that the current economic growth in China partially jeopardizes the future of the next rural generation. In addition, we find a causal relationship between the poor performance of ethnic minorities and both geographical and social disadvantages.
    Keywords: instrumental variables, migration, rural China, school performance, Labor and Human Capital,
    Date: 2012
  4. By: Zhang, Yanjie; Wang, Xiaobing; Bruemmer, Bernhard; Yu, Xiaohua
    Abstract: China’s rural reforms expose farm households to the risk of administrative land reallocation and adjustment. The possibility of land reallocation gives rise to the problem of tenure insecurity which reduces farm households' incentives to invest in the land and to use the labor forces efficiently and hence negatively affect farmers' income. In this study, the normalized quadratic profit function is used to analyze profit maximization problems in farm households in the Zhejiang and Hubei provinces of China from 1995 to 2002. Additional variables have been introduced to capture the effects of a series of institutional environment and factor market constraints, including land insecurity, crop cultivation structure, labor input and capital input allocations between agricultural and non-agricultural productions. Our results indicate that, although the official controls on rural labor mobility have been relaxed, the rural labor market has not yet reached the optimal level, and a less-than-optimal level of labor input is devoted to non-agriclutural activities for farm households in both provinces. Furthermore, the negative effects of land tenure insecurity on farmhousehold income through the interactions with the other three input allocations are observed in the Hubei province.
    Keywords: Land security, Input allocation, Farm household income, Rural China, Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Crop Production/Industries, Food Security and Poverty, Labor and Human Capital, Land Economics/Use, Production Economics, Q12, Q15, Q18,
    Date: 2012
  5. By: Andrzej Cieślik (Warsaw University, Department of Economics); Jan, Jakub Michałek (Warsaw University, Department of Economics); Jerzy Mycielski (Warsaw University, Department of Economics)
    Abstract: In this paper we estimate the trade effects of the euro adoption in Central European countries using a modified gravity model. In particular, we analyze the ex post implications of accession of Slovenia and Slovakia to the Eurozone. We employ a gravity model that controls for an extended set of trade theory and policy variables. Trade theory variables include both the country size and factor proportion variables. Trade policy variables include the membership in GATT/WTO, CEFTA, OECD, EU and Europe Agreements. The gravity model is estimated using the panel data approach on a sample of CEE countries trading with the rest of the world during the period 1992-2010 using the fixed effects, random effects and Hausman-Taylor estimators. It seems that elimination of exchange rate volatility resulted in trade expansion for the CEE countries but the accession to the Eurozone did not have any significant effects on exports of Slovakia and Slovenia.
    Keywords: Central and Eastern Europe, exports, euro zone
    JEL: F14 F15 F33 F42
    Date: 2012
  6. By: Chen, Qianying (BOFIT); Funke, Michael (BOFIT); Paetz, Michael (BOFIT)
    Abstract: Monetary policy in mainland China differs from conventional central banking in several respects. The central bank regulates retail lending and deposit rates, influences the credit supply via window guidance, and, in recent years has even used the required reserve ratio as a tool for fine-tuning monetary policy. This paper develops a New Keynesian DSGE model to captures China’s unconventional monetary policy toolkit. We find that credit quotas are important as the interest-rate corridor distorts the efficient reactions of the economy. Moreover, for China’s central bankers the choice of a particular monetary policy tool or a the appropriate combination of instruments depends on the source of the shock.
    Keywords: DSGE models; monetary policy; China; macroprudential policy
    JEL: E42 E52 E58
    Date: 2012–07–13
  7. By: Qin, Yu; Zhang, Xiaobo
    Abstract: We used a primary panel survey at the household level conducted in 18 remote natural villages over three waves in China to study how road access shapes farmers’ agricultural production patterns and input uses. Our results show that access to roads is strongly associated with specialization in agricultural production. In natural villages with better road access, farmers plant fewer numbers of crops, purchase more fertilizer, and invest more money on labor hiring. In combination of these factors, road connections improve household agricultural income, and in particular cash income. However, better access to rural roads does not appear to bring about significant changes in non-agricultural income.
    Keywords: Rural Road, Agricultural Specialization, China, International Development, O18,
    Date: 2012–06–28
  8. By: Li, Yumin; Bai, Junfei; Wang, Jinxia; Qiu, Huanguang; Min, Shi
    Abstract: Applied a recently collected household data in 6 provinces in rural China, the purpose of this paper is to analyze solid waste disposal and its relationship with economic development in rural China. Domestic solid waste disposal per capita is about 1.07 kg/daily, or about 390 kg/year, and varies across regions and components. Major findings support the existence of the environmental Kuznets curves for domestic solid waste disposal with the estimated turning point of 17, 446 RMB per capita income.
    Keywords: Solid waste disposal, Per capita income, rural China, Environmental Economics and Policy,
    Date: 2012
  9. By: Kazimierz Łaski (retired professor of University of Linz, research consultant of the Vienna Institute for International Economic Studies); Jerzy Osiatyński (Institute of Economics of the Polish Academy of Sciences); Jolanta Zięba (National Bank of Poland, Economic Institute)
    Abstract: First, the concept of public expenditure multiplier is redefined to allow for import intensity of exports, and its value is estimated for Poland and the Czech Republic in 2008–2009. Next, on the basis of effective demand model of economic dynamics, there follows a comparative analysis of GDP dynamics in the two countries in 2008-09 and of the factors that in 2009 made the rate of GDP growth positive in Poland and negative in Czech Republic. In 2009 both countries experienced the rate of exchange depreciation which, however, was significantly greater in Poland, as was the rise of rate of private savings, which negatively affects the GDP growth rate. On the other hand, fiscal expansion was slightly greater in Czech Republic than in Poland. What factors then helped to avoid the GDP growth to decline in 2009 in Poland but not in the Czech Republic? The key difference in the GDP generation was that in the latter country net exports were too small to offset the rate of growth of private savings, while in Poland improvement in the trade balance, heavily negative in earlier years, together with strong fiscal expansion outbalanced the effect of much greater than in the Czech Republic rise in the rate of private savings. The derived results are strongly sensitive to variations in such parameters of our model as sectoral import intensities and private propensity to save, which may well change with changes in growth of GDP and its components. This does not undermine theoretical foundations of our analysis, yet it limits validity of any conclusions with respect to hypothetical future impact of fiscal expansion or fiscal contraction. Nevertheless, it appears that maintaining a positive rate of GDP growth may require that the rate of private savings no longer continues to rise (i.e. that the average private propensity to consume no longer falls) at least until the dynamics of private investment and/or exports do not recover.
    Keywords: macroeconomics, effective demand principle, multiplier, stabilization policy
    JEL: E0 E12 E20 E63
    Date: 2012
  10. By: Shi, Yingying
    Abstract: This paper investigates the role of infrastructure capital in China’s regional economic development during 1990 to 2009 in a neoclassical economic growth model. Four types of infrastructure capital are discussed; electricity, road, rail, and land-line telephone. The results support a positive role of infrastructure in improving economic wellbeing in China. It shows that infrastructure has contributed to the convergence among China’s provinces. However, declining growth momentum from rapid increase of road infrastructure, in particular for the Western region, suggests that road development in the region has been growing too fast. The results counter the conventional wisdom of “road leads to prosperity” widely accepted among national and local governments in China. Thus, the seemingly productive infrastructure capital, when invested beyond a proper level or speed, will become unproductive. The results resonate with the theoretical literature on the inverse U shaped growth impact of infrastructure capital and the dominant “crowding out” of private capital if there is too much infrastructure. They also address the puzzle in the current literature debates as to the direction and magnitude of the growth impact of infrastructure capital.
    Keywords: infrastructure, economic growth, regional inequality, China, International Development, Production Economics, Public Economics, H54, O18, R11,
    Date: 2012–06–20
  11. By: Wang, Xiaobing; Hockmann, Heinrich
    Abstract: Differences in resource endowment between regions influence the technologies applied in agriculture and cause location-specific effects on production and technical change. Access to technologies may also differ within regions because producers may apply different technologies in production due to different characteristics. Within this setting, we extend the existing literature by considering that producers face region- and farm-specific production frontiers. The treatment of essentially heterogeneous technical efficiency (TE) is performed following a two-step procedure. First, a random coefficient specification of the production technology is used to measure the interactions of technology adoption with time, input factors and output. Second, linear programming techniques are employed to envelop the optimal level of technology. This procedure is applied to household-level data from eastern, central and western provinces in China. Our results provide evidence that technical efficiency is significantly affected by farm heterogeneity. This factor influences TE directly as a producer-specific input, and indirectly through interaction with observable inputs such as land, labor, capital and intermediate inputs. Our results also prove the assumption that farming technology exhibits region-specific characteristics. Furthermore, there is a disparity of TE across provinces that narrows over the study period and is driven by the shifts of production to the metafrontier.
    Keywords: technical efficiency, metafrontier, random coefficient model, Chinese agriculture, Research and Development/Tech Change/Emerging Technologies, D24, N55, O13,
    Date: 2012
  12. By: OECD
    Abstract: The report takes stock of the latest developments in the overall economic and social conditions in EECCA countries, market signals and environmental governance arrangements that may facilitate the shift towards green growth, and discusses possible barriers and measures to overcome them. At the same time, the report delineates the possible elements of a more coherent and effective reform agenda. In such a way the report aims to serve as background and a starting point for follow up development of green growth policies in EECCA.
    Date: 2012–07
  13. By: Avner Greif; Guido Tabellini
    Abstract: Over the last millennium, the clan and the city have been the locus of cooperation in China and Europe respectively. This paper examines - analytically, historically,and empirically - the cultural, social, and institutional co-evolution that led to this bifurcation. We highlight that groups with which individuals identify are basic units of cooperation. Such groups impact institutional development because intra-group moral commitment reduces enforcement cost implying a comparative advantage in pursuing collective actions. Moral groups perpetuate due to positive feedbacks between morality, institutions, and the implied pattern of cooperation.
    Date: 2012
  14. By: Tian, Xu; Yu, Xiaohua
    Abstract: China is experiencing a nutrition transition which is coextensive with its rapid economic growth, and the most dramatic changes can be seen in food structure and nutritional demand. However, the relationship between income growth and changes in the demand for nutrients are still unclear. This paper uses household survey data and a direct method to estimate the income elasticities for 22 nutrients to fill the gap in the current literature. Our results show that the income elasticities of most nutrients are quite small and vary for different income groups, which implie that economic success has different influence on nutrition status for different families and the effect is not substantial.
    Keywords: Nutrient, Income elasticity, Nutrition improvement, China, Agricultural and Food Policy, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety,
    Date: 2012–08
  15. By: Abrahamova, Miluse; Boudny, Jan; Boskova, Iveta; Foltyn, Ivan; Hruska, Martin; Prazan, Jaroslav; Ratinger, Tomas; Voltr, Vaclav
    Abstract: Grasslands received policy attention in the Czech Republic only just fifteen years ago, when they were threatened to be abandoned in the economic transition process. The supports to farming on grasslands have grown gradually, particularly after the EU accession. The policy followed the notion of joitness between grassland management and beef cattle raising and conditioned AE and LFA payments by a minimum livestock density. There are many reasons why the current policy will change in the new programme period. The paper tries to assess the impact of the envisaged changes on grassland maintenance. It is showed that overall future supports to farming will be sufficient to keep positive profit on grassland farms, however the structure of supports might be less appropriate to the actual objectives of grassland protection and hence, there is a threat of policy failure in the end.
    Keywords: grasslands, beef cattle, mathematic programming model, Agricultural and Food Policy, Land Economics/Use, Research Methods/ Statistical Methods, Q20, Q28,
    Date: 2012–06
  16. By: Tomasz Łyziak (National Bank of Poland, Economic Institute); Oksana Demchuk (National Bank of Poland, Economic Institute); Jan Przystupa (National Bank of Poland, Economic Institute); Anna Sznajderska (National Bank of Poland, Economic Institute); Ewa Wróbel (National Bank of Poland, Economic Institute)
    Abstract: In the light of the results of empirical studies presented in the Report and the literature available45 it may be concluded that the form of the monetary policy transmission mechanism in Poland is consistent with structural features of the Polish economy and coincides with those characteristic of more developed European economies, e.g. the euro area. Although the financial intermediation system is less developed than in the euro area, Poland, like the new EU Member States is characterised by a lower degree of rigidity and more frequent price adjustments (as a result of a relatively higher and more volatile inflation), due to which there exist no grounds for stating that the transmission mechanism is weaker in these countries than in the euro area countries. The characteristics of the monetary policy transmission mechanism in Poland, which changed considerably in the transition period along with the development of the financial system and changes in the monetary policy, displayed symptoms of stabilisation in 2004/2005-2007. Poland’s accession to the European Union, resulting in a major reduction of macroeconomic uncertainty, was one of the factors that contributed to this process. The monetary policy transmission mechanism was, however, disturbed by the financial crisis. Its impact on the transmission mechanism remains strong, which is demonstrated notably by the analysis of the effectiveness of transmission mechanism channels.
    Date: 2012
  17. By: Jia, Xiangping; Xiang, Cheng; Huang, Jikun
    Keywords: Agribusiness, International Development,
    Date: 2012–06–29
  18. By: Ansgar Belke; Lukas Vogel
    Abstract: This paper examines the contemporaneous relationship between the exchange rate regime and structural economic reforms for a sample of CEEC/CIS transition countries. We investigate empirically whether structural reforms are complements or substitutes for monetary commitment in the attempt to improve macroeconomic performance. Both EBRD and EFW data suggest a negative relationship between flexible exchange rate arrangements and external liberalization. Another finding from the EFW sample is that economic liberalisation has tended to be stronger under better macroeconomic fundamentals, suggesting that the impact of good macroeconomic conditions as facilitating structural reforms outweighs countervailing effects in the sense of lower reform pressure.
    Keywords: exchange rate regime, structural reform, panel data, political economy of reform, transition countries
    JEL: D78 E52 E61 F36
    Date: 2012
  19. By: Janusz Brzeszczynski (Department of Accountancy, Economics and Finance, Heriot-Watt University); Martin T. Bohl (Westfälische Wilhelms University); Dobromił Serwa (National Bank of Poland, Warsaw, Poland and Warsaw School of Economics)
    Abstract: Using unique data about capital flows to private pension funds in Poland, we find that their impact, as a group of large institutional investors, on stock returns is statistically significant in short-term but no such effect exists in the long-run. We analyze the capital transfers, in form of the aggregated pension contributions collected from all employees in the entire Polish economy, from the public social security institute ZUS in Poland to the private pension funds, which further invest this capital on the stock market. The average time for the subsequent reaction of stock prices is found to be 4 days.
    Keywords: Institutional Investors, Stock Market Returns, Pension Funds, Capital Flows.
    JEL: G23 G15
    Date: 2012
  20. By: Alexey Vedev (Gaidar Institute for Economic Policy); Andrey Kosarev (Gaidar Institute for Economic Policy)
    Keywords: : business climate, economic growth,
    Date: 2012
  21. By: Van Herck, Kristine; Vranken, Liesbet
    Abstract: This paper analyses the impact of increasing direct payments on land rents in six new EU member states in which agricultural subsidies largely increased as a result of their EU accession. We find that up to 25 eurocents per additional euro of direct payments is capitalized in land rents. In addition, the results show that capitalization of direct payments is higher in more credit constrained markets, while capitalization of direct payments is lower in countries where more land is used by corporate farms.
    Keywords: Land rental prices, Farm subsidies, New Member States, Agricultural Finance, International Development,
    Date: 2012
  22. By: Narayan K. Kishor; Kyriakos C. Neanidis
    Abstract: This paper investigates the impact of institutions on the dollarization of the domestic banking system by using a unique policy experiment: the accession process of countries to the European Union (EU). Using a dynamic factor model, we decompose fluctuations in financial dollarization for 24 transition economies into a world factor, an EU factor, and country-specific factors. The EU factor, which proxies for improvements in institutions under the set criteria for eventual membership, reveals the importance of institutions for the extent of …nancial dollarization over time. The results also indicate the asymmetric impact of improved institutions on the domestic bank’s balance sheets by inducing higher loan dollarization and lower deposit dollarization. The relative importance of the EU factor to the financial dollarization of a country is associated with the degree of comovement of its business cycle with that of the EU.
    Date: 2012
  23. By: Coulibaly, Souleymane
    Abstract: The future development of the Tajik economy will be shaped by its comparative advantage on world markets. Exploiting comparative advantage enables an economy to reap gains from trade. Tajikistan's most important comparative advantage is its hydropower potential, which is far larger than the economy's domestic requirements. Yet, high capital costs of building hydropower plants and the unstable geopolitical situation in the transit region to reach South Asian export markets are constraining the realization of this potential. In the short term, the sector, which provides the greatest opportunity for Tajikistan to diversify its exports, appears to be agro-industry and, to a lesser extent, clothing. For both sectors, the main export market is likely to be the regional market. Tajikistan also has a comparative advantage in labor exports, which it has successfully exploited since the mid-2000s. To harness the full potential for labor exports will require improving the skills base of migrant workers and, in particular, their command of the Russian language. In the medium term, the paper argues that an export diversification strategy should tap the agglomeration economies generated by cities. More specifically, establishing Tajikistan's two leading cities, Dushanbe and Khujand, and their surroundings as enclave economies, linked to each other and to major regional markets through improved transport infrastructure so as to minimize production and transportation costs. The two enclave economies should provide the supporting services (finance, logistics, transport and storage) for private sector businesses. In the long term, regional cooperation on trade and transport facilitation could be pursued to reduce transport costs to attractive regional markets such as China, India, Russia and Turkey.
    Keywords: Transport Economics Policy&Planning,Environmental Economics&Policies,Markets and Market Access,Economic Theory&Research,Banks&Banking Reform
    Date: 2012–07–01
  24. By: Iwasaki, Ichiro
    Abstract: Using a unique dataset obtained from large-scale panel enterprise surveys conducted in 2005 and 2009, we clarify the survival status of Russian industrial firms before and after the global financial crisis and empirically examine the determinants of firm survival. The estimation of the Cox proportional hazard model provided evidence that the independence of company’s governance bodies, their human resource abundance, and assertiveness in corporate management are statistically significant factors affecting the survival probability of the surveyed firms. In particular, the board of directors and the board of auditors are likely to play a vital role in reducing the potential exit risk. We also found that there is a significant difference in the viewpoints of economic logic for firm survival held by independent firms and group companies
    Keywords: global financial crisis, firm survival, corporate governance, business group, Russia
    JEL: D22 G01 G33 G34 P34
    Date: 2012–07
  25. By: Jan Hagemejer (University of Warsaw and National Bank of Poland); Piotr Popowski (National Bank of Poland)
    Abstract: Estimates of monopolistic markups are relatively scarce in the literature mostly due to lack of appropriate data and methodological difficulties, while their behaviour has important implications for the conduct of monetary policy. We estimate the monopolistic markups in the Polish economy in the period of 1995-2009 using Polish firm level data.. We show the association of the markup level with the sectoral characteristics, type of good produced and the form of ownership, as well as investigate the impact of both internationalization and competitive pressure on the level of markups. We show a somewhat puzzling and at the same time robust increase in markups after the EU accession of the Polish economy to the EU in 2004. Moreover, in line with previous findings, we show that price cost margins are countercyclical with respect to the macroeconomic cycle and procyclical at sectoral level
    Date: 2012
  26. By: Balan, Ana Maria
    Abstract: For the efficient running of activities in the labor market it is required a rational use of working age people. This article analyzes theoretically and then in terms of its evolution, the use of labor in terms of employment, taking out the values which people actually occupied, so used, have recorded during 2002 - 2010 , on the ownership of the job: public, private, mixed or cooperative. Also, I made a forecast of the occupancy rate for 2020, based on the values of this index during the same period-from 2002 to 2010. We note therefore that the purpose of this paper is to inform the reader how the use of labor evolved in Romania and also its evolutionary possible perspectives.
    Keywords: Employment; use of labor; quantitative analysis; ownership of job; forecast
    JEL: J21 G32 J11
    Date: 2012–07–11
  27. By: Volk, Tina; Rednak, Miroslav; Erjavec, Emil; Juvancic, Luka
    Abstract: The paper describes the development of a methodological tool for classification and analysis of agricultural and rural development policies. The tool called APM (Agri-Policy Measures template) compiles a comprehensive database of measures, allowing for the international comparison of agricultural policies. Uniform classification of agricultural policy measures has all the characteristics of internationally-recognized classifications (OECD, EU, EAA). The method was applied in the Western Balkan countries (WBs) in order to provide an analysis of the development and current situation in agriculture and agricultural policy in Western Balkan countries (WBs) in relation to the EU accession process.
    Keywords: agricultural and rural development policy, policy assessment, Western Balkan countries, EU accession, Agricultural and Food Policy, International Development, Research Methods/ Statistical Methods,
    Date: 2012
  28. By: Eliasson, Gunnar (KTH and Entrepreneurship Forum); Braunerhjelm, Pontus (KTH and Entrepreneurship Forum)
    Abstract: Historically, the Baltic Sea Region (BSR) has been an institutionally homogeneous economy, integrated economically and culturally through the sea lanes of the Baltic. After WWII the BSR was broken up into a dual economy, consisting of a poor Soviet block of centrally planned economies, on the one hand, and the industrially advanced BSR economies Finland, Denmark, Germany and Sweden, on the other. 1990 saw the break up of the soviet political system. The liberated, but poor formerly planned economies were left to restore their institutions on their own to that of a market organization. 60 years of Soviet isolation had left the formerly planned BSR economies in an industrially backward state. Critical market functions did not exist, and corrupt institutions made normal business life impossible. Catch up with Western industrial economies therefore became a policy priority. During the 1970s also Western economies introduced elements of central planning in their industrial policy repertoires on the belief that it would improve economic performance. Policies to support “plans” by definition meant restrictions on entrepreneurial activity. By the Soviet break up, however, stagnation had also brought the need for entrepreneurship onto the policy agenda of Western nations. Obstacles to economic progress were gradually being dismantled. These shifts in policy attention in turn relate to the current discussion about globally increasing inequality. Are the economies of the world economy converging onto the same national standards of living, as was believed not long ago, or diverging. The industrial dynamics of the BSR pits those two hypotheses against each other. Will the previously centrally planned soviet economies of the BSR catch up with the living standards of the more market governed Western economies, or lag further behind? Perhaps some “mixed” Western economies with large and rigid public production of welfare services have got stuck with problems similar to those of the formerly planned economies? Do some formerly planned economies that have taken on a strong pro market policy agenda exhibit a superior catch up record to those that have not? The contrasting policy experiences among the BSR economies allow us to compare the catch up records in terms of policies chosen. The formerly planned Baltic economies, excepting Russia, were institutionally and industrially roughly on par with Denmark, Finland and Sweden before the Soviet occupation. The industrial backwardness of the formerly planned economies at the time they were liberated was therefore due to constraints on entrepreneurial initiatives, once imposed by the Soviet Union. So by definition there is a policy task of some magnitude to undo that heritage. More precisely asked, central planning in the formerly planned economies stifled entrepreneurial activities. Can the obstacles to catch-up in the transition economies through an entrepreneurially moved reallocation of resources then be overcome through centrally directed policy? If not, which is a key question of this paper, how can the diverse information and knowledge embodied in the agents of markets be mobilized for that task? Who knows best, the central policy maker, supported by his economic advisors, or the collective knowledge of all economic actors as intermediated through dynamically competitive product and factor markets. The historic developments in the BSR have therefore accidentally staged a unique economic policy experiment that allows us to distinguish between the relative roles in economic progress of improvements in local entrepreneurial environments (a policy task) and of individual entrepreneurial action. In carrying out that analysis we draw on the detailed statistical analysis in Braunerhjelm & Eliasson (2011). The Swedish evolutionary micro firm to macro model has provided a theoretical structure, both to support our reasoning on the catch-up dynamics, and to provide quantitative evidence for the empirical evaluation. Empirical research suggests that growth through entrepreneurial new firm formation is a slow process that may however suddenly and unexpectedly gain momentum. The import of new technology is the fast way to catch up. Both forms of innovation and entrepreneurship, however, benefit from the same positive entrepreneurial climate. On this we found that successful catch up among the formerly planned BSR economies still has a long way to go, and that political impatience in waiting for the dividends of economic liberalization to become available may have been destructive. Policy focus should therefore be set on the local entrepreneurial environments which are in great need of continued improvements to support both new firm formation for long run development, and to induce immediate FDI for the short term. More flexible labor markets will be required to support continued reallocation of resources from inefficient “soviet” installations to productive businesses of western quality. Significant remaining obstacles to trade and ownership transactions across BSR internal borders will have to be removed, so success in catch up should be expected to differ significantly among the BSR countries. We therefore propose a policy competition among those countries in improving their entrepreneurial environments to beat each other in catch-up performance. This policy competition is best enacted individually, without any delaying cooperation among the competing economies and, if individually enacted in a competitive spirit, will benefit both the winners and the entire BSR economy.
    Keywords: Central planning; Commercialization competence; Competence bloc; Dual economy; Entrepreneurship; Experimentally Organized Economy (EOE); Foreign Direct Investment (FDI); Policy experiments
    JEL: L16 L52 M13 N20 N40 O50 P21 P51
    Date: 2012–07–09
  29. By: Jing Lan (National Graduate Institute for Policy Studies); Alistair Munro (National Graduate Institute for Policy Studies)
    Abstract: By using a unique cross-sectional dataset of Chinese industrial firms, this paper investigates the external and internal effects of human capital on firms’ environmental performance. The result shows that firms have better environmental compliance because they are ‘pushed’ into making compliance decision by internal driver of human capital and ‘pulled’ to be environmental friendly by external force of social human capital stock. This finding is robust when we take into account of possible endogeneity of human capital. In addition, evidence from this study suggests that the situation of weak implementation of environmental supervision and evasion of environmental monitoring could be reconciled by internal and external effects of human capital.
    Date: 2012–07
  30. By: Ratinger, Tomas; Foltyn, Ivan; Jelinek, Ladislav; Kristkova, Zuzana
    Abstract: This paper deals with the potential effects of the CAP pillar 1 on farm incomes and structural changes. It uses a dynamic Computable General Equilibrium model and a specific analysis on distributional effects. The effect of payments ceiling in the current CAP 2020 proposal with subtracting labour costs will bring only insignificant payment reduction for most farmers except large extensive beef breeders whose direct payments will drop by 13% on average. However, if the condition on labour costs is removed, capping will become effective, payments in some specialisations will drop to half and the production and employment will decline by 6% and 10%, respectively, compared to the current situation. It is showed that small farm measures could easily miss its goal if there is no possibility to adjust the threshold measure more respecting national conditions. Analogously, due to prevalence of large corporate farms on land it is very unlikely that the measure targeted on young farmers will significantly reduce an ageing problem. Regarding greening, the current proposal will induce additional operating costs on farms between 4 and 10 hectares without adequate environmental improvements. We conclude that more flexibility at the national level for respecting national farm structure will be needed if the good intentions of CAP reform are to be effective and efficient.
    Keywords: CAP 2020, income distribution, structural change, Czech Republic, Agricultural and Food Policy, Q10, Q18,
    Date: 2012–06
  31. By: Sergey Sinelnikov (Gaidar Institute for Economic Policy); Ilya Sokolov (Gaidar Institute for Economic Policy); Tatiana Tischenko (Gaidar Institute for Economic Policy)
    Abstract: In the context of limitation of government expenditures, efficiency of their spending should be improved. The quality of budget governance can be improved by using a comprehensive approach only that will help to cover the broadest range of the applied regulating tools and to align their application in time. With this in view, in the near future a focus should be placed on resolution of the issues of budget system restructuring, higher transparency of the state procurement system and optimization of certain budget procedures. As a favorable institutional environment evolves in the country, any further development of such governance tools as the result-oriented budget, target program activities, state and private partnership can become an important factor of budget expenditures streamlining and improvement of efficiency of the entire budget process.
    Keywords: monetary policy, national budget
    JEL: E5 E6
    Date: 2011
  32. By: Jan Prùša (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Andrea Klimešová (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Karel Janda (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)
    Abstract: This text provides a financial survey of a small sample of Czech photovoltaic (PV) plants. To evaluate the extent of market losses, we calculate the shadow market price of solar electricity. From the profit and loss accounts of the PV plants and the shadow market price we estimate the total economic loss generated by PV electricity sector in the Czech Republic. <BR>The presented microeconomic approach has two main advantages: Firstly, we work with real observed data, which offsets the drawback of a limited sample. Secondly, the profit accounting calculation enables sensitivity analysis with respect to key variables of the plants.<BR>We show that every million invested in PV plants would generate an annual loss of 11%. Given the estimated solar assets of CZK 127.4 billion (EUR 560 million) as of December 2010, this translates in at least CZK 14 billion lost in the Czech solar sector in 2011.<BR>About 42% of this loss is due to high technology costs and corresponds to pure dead weight loss, while the remaining 58% constitute the redistributive profit component of subsidies. Finally, we calculate that unless electricity prices increase or technology costs decrease approximately tenfold, PV plants will remain loss making.
    Keywords: energy subsidies; photovoltaic; renewables
    JEL: Q42 H23 M21
    Date: 2012–07
  33. By: Zobena, Aija; Lace, I.; Benga, Elita
    Abstract: The main issue addressed in this study is interaction of development policy of agricultural and rural areas with the regional and cohesion policies. This paper is based on an empirical study of everyday commuting models and spatial practices of different social groups of rural people in Latvia. This article analyzes data from a survey “Place, capabilities, migration” conducted in 2011 with a total of 1009 respondents in Latvia. The theoretical basis of research is rooted in the mobility studies and sociological and geographical conceptualization of space and place. The main focus is on analysis of relationship between commuting, mobility and the placeattachment. What are the main reasons of rural population mobility and everyday commuting? What services and where rural people use? What should be done to make rural places more attractive for people as places of work and residence?
    Keywords: rural and local development, social cohesion, commuting, mobility, Agricultural and Food Policy, Community/Rural/Urban Development, R58,
    Date: 2012–06
  34. By: Hockmann, Heinrich; Gataulina, Ekaterina
    Abstract: The paper investigates the significance of risk, external and internal transaction costs in the agriculture of the Tatarstan Republic. The analysis is conducted for two categories of organ-isational forms, independent farms and members of agroholdings. Although average prices do not differ among organisational forms, the results indicate that external transaction costs are more pronounced in independent farms, whereas agroholding membership entails higher in-ternal transaction costs, thereby making agroholdings more vulnerable to inefficiency than independent farms. In addition, the estimation suggests that this higher inefficiency results from the more enhanced risk management in agroholding members. Since this strategy leads to a more intensive factor use, members of business groups are able to allocate inputs so as to increase production at the same time.
    Keywords: Risk production function, internal and external transaction costs, Risk and Uncertainty, Q110, D220, P230,
    Date: 2012–08
  35. By: Korte, Niko (BOFIT)
    Abstract: This study examines the forecasting power of confidence indicators for the Russian economy. ARX models are fitted to the six confidence or composite indicators, which were then compared to a simple benchmark AR-model. The study used the output of the five main branches as the reference series. Empirical evidence suggests that confidence indicators do have forecasting power. The power is strongly influenced by the way which the indicator is constructed from the component series. The HSBC Purchasing Managers' Index (PMI), the OECD Composite Leading Indicator (CLI) and the OECD Business Confidence Indicator (BCI) were the best performers in terms of both the information criterion and forecasting accuracy.
    Keywords: confidence indicators; forecasting; Russia
    JEL: E37 P27
    Date: 2012–07–12
  36. By: Traikova, Diana; Mollers, Judith; Buchenrieder, Gertrud
    Keywords: Community/Rural/Urban Development,
    Date: 2012

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