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on Transition Economics |
| By: | Pessarossi, Pierre (BOFIT); Weill, Laurent (BOFIT) |
| Abstract: | We study the consequences of CEO turnover announcements on the stock prices of firms in China, where most listed firms remain majority-owned by the state. Our proposition is that state ownership may affect stock market reaction to CEO replacement because state-owned firms often pursue multiple, potentially contradictory, objectives, i.e. economic performance and social objectives. Applying standard event study methodology to a sample of 1,094 announcements from 2002 to 2010, we find that CEO turnover typically produces a positive stock market reaction. The reaction is significantly positive, however, only for enterprises owned by the central government, and not significant for enterprises owned by local governments or privately owned enterprises. These results suggest that a CEO turnover in a central state-owned enterprise signals a renewed commitment to the economic performance objective by state officials. The small size of CEO labor market suggests that other shareholders have a relatively small pool of CEO talent to proceed to managerial improvement when a CEO turnover takes place. |
| Keywords: | CEO turnover; corporate governance; state ownership; China; event study |
| JEL: | G30 M51 O16 P34 |
| Date: | 2012–09–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2012_021&r=tra |
| By: | Feldkircher, Martin (BOFIT); Korhonen, Iikka (BOFIT) |
| Abstract: | This paper studies empirically the role of China in the world economy. We examine both the way the Chinese economy reacts to selected exogenous macroeconomic shocks and the repercussions for the world economy of a shock emanating from China. With regard to the latter, we focus on the responses of emerging markets, in particular those in Europe. Based on a global VAR (GVAR) model and a new data set that excels in country coverage and covers the most recent time period including the global financial crisis, our results are threefold: First, we show that a +1% shock to Chinese output translates to a permanent increase of 1.2% in Chinese real GDP and a 0.1% to 0.5% rise in output for most large economies. The countries of Central Eastern Europe (CEE) and the former Commonwealth of Independent States (CIS) also experience an output rise of 0.2%, while countries in South-Eastern Europe see a permanent 0.1% reduction in output. Secondly, to benchmark the shock to Chinese output, we examine the response to a +1% shock to US GDP. The results show that the US economy remains dominant in the world economy despite the rapid rise of China in recent years. In this vein, output rises in advanced economies by 1% to 1.4% and in the CIS and CEE regions by 1.5% and 0.7% respectively. By contrast China seems to be little affected by the US shock. Finally, we examine the effect of a +50% hike in oil prices on China and emerging economies. As one of the largest oil exporters, Russia’s real output increases by about 6%. In contrast, the surge in oil prices puts a drag on Chinese output, amounting to 4.5% in the long-run. |
| Keywords: | China; macroeconomic shocks; foreign shock; GVAR; great recession |
| JEL: | C32 E32 F44 O54 |
| Date: | 2012–09–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2012_020&r=tra |
| By: | Thomas Windberger; Jesus Crespo Cuaresma; Janette Walde |
| Abstract: | Obtaining reliable estimates of the volatility of interest rates and exchange rates is a necessary condition to evaluate issues related to monetary independence and fear of floating. In this paper we use methods which explicitly account for structural breaks in the volatility dynamics in order to assess monetary independence in the Czech Republic, Hungary and Poland. Our results indicate that the explicit modelling of structural breaks in volatility estimates can lead to striking differences concerning the evidence of monetary independence in Central and Eastern Europe. The results based on volatility estimates which account for regime change tend to indicate that the Czech Republic, Hungary and Poland have had a significant degree of monetary independence in the last decade. |
| Keywords: | Fear of floating, monetary independence, structural break, change-point model |
| JEL: | F31 C22 C11 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2012-21&r=tra |
| By: | Chen, Yuanyuan (Shanghai University of Finance and Economics); Feng, Shuaizhang (Shanghai University of Finance and Economics) |
| Abstract: | A significant proportion of migrant children in China are not able to attend public schools for lack of local household registration (HuKou), and turn to privately-operated migrant schools. This paper examines the consequences of such a partially involuntary school choice, using survey data and standardized test scores from field work conducted in Shanghai. We find that migrant students who are unable to enroll in public schools perform significantly worse than their more fortunate counterparts in both Chinese and Mathematics. We also use parental satisfaction and parental assessment of school quality as alternative measures of the educational outcome and find similar results. Our study suggests that access to public schools is the key factor determining the quality of education that migrant children receive. |
| Keywords: | education of migrant children, migrant school, standardized test score |
| JEL: | I28 J15 O15 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6853&r=tra |
| By: | Wan-Hsin Liu |
| Abstract: | This paper investigates whether proximity to universities matters for corporate patenting in Chinese provinces. The investigation is based on estimating regional knowledge production functions using a Chinese provincial dataset for the years from 2000 to 2008. Geographic proximity of companies to universities is taken as a key element to measure firms’ accessibility to university research. In addition, quality-adjusted accessibility measures are considered in extended models to take into account quality difference in university research. The results suggest the existence of spatial academic effects on corporate patenting activities in China as found in the previous literature for Western economies. In China, however, these effects are especially strong for realising technologically less demanding non-invention corporate patents than for invention corporate patents. Moreover, companies’ geographic proximity to universities dominates over university research quality difference for determining the relevance of universities as knowledge sources for companies. Extended models are estimated for robustness checks which ascertain the main results |
| Keywords: | spatial proximity, logsum accessibility, university, corporate patenting, China |
| JEL: | O31 O53 R11 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1796&r=tra |
| By: | WAKASUGI Ryuhei; Hongyong ZHANG |
| Abstract: | The standard model in the literature indicates that heterogeneity in productivity and fixed costs is the key in determining firms' internationalization. However, few studies have considered the effect of ownership structure on firms' exporting and foreign direct investment (FDI). This study examines how differences in productivity and ownership structure affect the exporting and FDI of Chinese firms with different types of ownership: privately owned firms, state-owned enterprises (SOE), and foreign affiliates. Using our original dataset of Chinese firms, our statistical estimations yield several new findings. We find that privately-held and SOE firms must be highly productive to engage successfully in both exporting and FDI, whereas foreign-owned firms need relatively little productivity to be successful exporters and foreign direct investors. We also find that the interaction between the mode of ownership and experience with exporting and FDI has heterogeneous effects on expanding FDI. For privately-owned and state-owned Chinese firms, experience with exporting and FDI has a stronger effect on expanding FDI than on foreign-owned firms. |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:12058&r=tra |
| By: | Xin Wang; Yi Wen |
| Abstract: | China’s over 25% aggregate household saving rate is one of the highest in the world. One popular view attributes the high saving rate to fast-rising housing prices in China. However, cross-sectional data do not show a significant relationship between housing prices and household saving rates. This article uses a simple consumption-saving model to explain why rising housing prices per se cannot explain China’s high household saving rate. Although borrowing constraints and demographic changes can translate housing prices to the aggregate saving rate, quantitative simulations of our model using Chinese time-series data on household income, housing prices, and demographics indicate that rising mortgage costs can increase the aggregate saving rate by at most 2 to 4 percentage points in the best down-payment structure. |
| Keywords: | China - Economic conditions ; Housing - China ; Saving and investment - China |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2012-038&r=tra |
| By: | Sato, Hiroshi; Ding, Sai |
| Abstract: | Using a 2006 household survey from the Ningxia Hui autonomous region in China, this paper examines two aspects of the correlation between ethnicity and income: namely, differences in the returns to human capital and the effects of ethnicity- and religion-related social capital. The findings indicate ethnic disparity in the returns to human capital across rural and urban areas. In rural areas, the returns to human capital for the Hui workforce differ according to the place of economic activity (i.e. local employment or migration), whereas no ethnic disparity is found for the urban workforce. We also find that ethnicity- and religion-related social capital plays a significant role among the Hui in rural areas where the level of interethnic social interactions is lower. We use this to suggest that Muslim-oriented attitudes toward trust in social networks of rural Hui households positively and interactively affect income through ethnically open trust attitudes. |
| Keywords: | ethnic minorities, Hui, household and personal income, China |
| JEL: | J15 D31 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:hit:ccesdp:46&r=tra |
| By: | Dritan Gjika (Institute of Economic Studies, Charles University, Prague); Roman Horváth |
| Abstract: | We examine time-varying stock market comovements in Central Europe employing the asymmetric dynamic conditional correlation multivariate GARCH model. Using daily data from 2001 to 2011, we find that the correlations among stock markets in Central Europe and between Central Europe vis–à–vis the euro area are strong. They increased over time, especially after the EU entry and remained largely at these levels during financial crisis. The stock markets exhibit asymmetry in the conditional variances and in the conditional correlations, to a certain extent, too, pointing to an importance of applying sufficiently flexible econometric framework. The conditional variances and correlations are positively related suggesting that the diversification benefits decrease disproportionally during volatile periods. |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ost:wpaper:322&r=tra |
| By: | Chun Chang; Zheng Liu; Mark M. Spiegel |
| Abstract: | We examine optimal monetary policy under prevailing Chinese policy – including capital controls and nominal exchange rate targets – in a DSGE model calibrated to Chinese and global data. Under the closed capital account, domestic citizens are prohibited from holding foreign assets. Foreign currency revenues are sold to the central bank, which then sterilizes these purchases by issuing domestic debt. Uncovered interest parity conditions do not hold, so sterilization results in transfers between the private sector and the government. Given a negative shock to relative foreign interest rates, similar to that which occurred during the global financial crisis, sterilization costs increase and optimal policy calls for a reduction in sterilization activity, resulting in an easing of monetary policy and an increase in Chinese inflation. We then compare these dynamics to three alternative liberalizations: A partial opening of the capital account, removing the exchange rate peg, or doing both simultaneously. The regime with liberalized capital accounts and floating exchange rate yields the lowest losses to the central bank under the foreign interest rate shock. However, intermediate reforms do less well. In particular, letting the exchange rate float without opening the capital account results in higher losses following the interest rate shock than the benchmark case of no liberalization. |
| Keywords: | Monetary policy ; Foreign exchange ; China |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2012-13&r=tra |
| By: | Popova, Daria |
| Abstract: | The Russian tax-benefit system consists of numerous types of support available to a large circle of beneficiaries; they are regulated by a number of legislative acts that focus on certain types of assistance rather than on vulnerable groups. In addition, the decentralization reform of social protection carried out in 2005 motivated many regional governments to implement their own social programs that differ in terms of design and generosity. So far, however, little is known about the impact of the tax-benefit policies on income distribution and poverty in Russia. This paper describes the construction of a tax-benefit microsimulation model for Russia (RUSMOD) which is based upon the EUROMOD platform. RUSMOD simulates the eligibility and receipt of most of the existing monetary policies at the federal and regional levels and assesses their potential redistributive effect. This paper aims to provide necessary background material on the construction of the model to anyone wishing to work with RUSMOD. |
| Date: | 2012–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:ese:emodwp:em7-12&r=tra |
| By: | Sylvie Dvoráková (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Jakub Seidler (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | This paper studies how the change of wealth of households represented by housing prices and stock market prices influences households’ consumption. We provide empirical analysis based on the Czech aggregate data from 1998–2009. We analyse the effect of change in households’ wealth on the consumption of both durable and non-durable goods employing the VAR and VEC models on quarterly data. The robustness of results is verified by Dynamic OLS and Fully Modified OLS framework. We find a positive effect of both housing wealth and stock market wealth on both types of consumption. In case of non-durable goods consumption, we estimate the cointegrating vector and conclude that the elasticity of non-durable goods consumption with respect to housing wealth is over three times greater than with respect to stock market wealth. |
| Keywords: | households, housing prices, consumption, housing wealth, stock market wealth, VAR model, VECM |
| JEL: | C22 E39 G12 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2012_22&r=tra |
| By: | Tomas Frejka (Max Planck Institute for Demographic Research, Rostock, Germany); Sergei Zakharov |
| Abstract: | The transformation of traditional childbearing patterns of early family formation to later family formation characterized recent fertility trends in Russia. These were intrinsically interwoven with fundamental changes in all aspects of life of young people in the 1990s and the 2000s. The past quarter century was also marked by concern with low fertility and attempts to increase fertility in the early 1980s and the late 2000s. The family policies of the 1980s failed to raise fertility. Preliminary analyses indicate that the fate of the 2007 policies could be similar. In both cases the main emphasis was on material birth and child benefits, parental leaves and child care. Presumably insufficient attention was devoted to improving living conditions of young people and promoting gender equality. Will government efforts to raise fertility during the 2010s be sufficiently effective to offset economic and social forces challenging childbearing? As of 2012 the outlook for a future fertility increase does not appear hopeful. |
| Keywords: | Russian Federation, fertility |
| JEL: | J1 Z0 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2012-027&r=tra |
| By: | Galina Besstremyannaya (Center for Economic and Financial Research at New Economic School); Jaak Simm (Tokyo Institute of Technology, Graduate School of Information Science and Engineering) |
| Abstract: | The 1991 law ‘On health insurance for the citizens of the Russian Federation’ established that social health insurance is to be offered by multiple private insurance companies. The paper is the first econometric analysis measuring the effect of private health insurers on quality related outcomes of social health insurance (SHI) systems in Russian regions. The baseline model introduces regional SHI system as a binary variable with unity value corresponding to the presence of private health insurers as the only agents at the SHI market. The extended model captures endogeneity by employing an instrumental variable approach. The non-parametric model uses kernel regressions. The results of parametric and kernel regressions reveal that the presence of private insurers is a significant determinant of infant and under-five mortality. The positive impact of private insurers is explained by regional institutional reforms. The methods of provider reimbursement are related to infant and under-five mortality, which offers suggestive evidence for enabling insurer competition through selective contracting with health care providers. |
| Keywords: | social health insurance, infant mortality, under-five mortality, kernel regression, health care systems, health care quality, provider payment |
| JEL: | I10 I18 G22 R22 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:cfr:cefirw:w0177&r=tra |
| By: | Dumitriu, Ramona; Stefanescu, Razvan; Nistor, Costel |
| Abstract: | This paper explores the relation between the prices and the trading volume from the Bucharest Stock Exchange. The data employed consist in the daily values from January 2002 to March 2011. We identify some significant changes caused by events such as Romania’s adhesion to the European Union or the effects of the global crisis. |
| Keywords: | Romanian Stock Exchange; Stock Index Volume; Trading Volume Causality |
| JEL: | G15 G10 |
| Date: | 2011–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:41602&r=tra |
| By: | Ksenia Gatskova; Maxim Gatskov |
| Abstract: | This study explores the determinants of the low level of civic engagement in Ukraine. Applying the methodological framework of analytical sociology we consider different social mechanisms that explain the weakness of Ukrainian civil society. First, we discuss how the political system and economic performance of the country shape beliefs, values and motives of people by creating the context for their actions. Second, we focus on different aspects of people’s experience during the Soviet times to rule out a number of hypotheses concerning unwillingness of citizens to join formal voluntary organizations. Using the results of the individual-level data analysis we show that the specific features of the Homo Sovieticus “socio-cultural type”, such as passivity towards management of the own life, absence of political identification, and reliance on informal networks affect negatively the propensity of people to be members of civic organizations. These effects are complemented by the negative impact of post-Soviet transformation disappointment and subjective perception of low social status. Based on the results of analyses we formulate suggestions oncerning possible ways to foster the civil society development in Ukraine. |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ost:wpaper:323&r=tra |