nep-tra New Economics Papers
on Transition Economics
Issue of 2012‒12‒10
fourteen papers chosen by
J. David Brown
IZA (Institute for the Study of Labor)

  1. What do we know about China's CEO's?: evidence from across the whole economy . By Bryson, Alex; Zhou, Minghai
  2. Foreign Currency Loans and Loan Arrears of Households in Central and Eastern Europe By Elisabeth Beckmann; Jarko Fidrmuc; Helmut Stix
  3. Household Survey Data for Research on Well-Being and Behavior in Central Asia By Tilman Brück; Damir Esenaliev; Antje Kroeger; Alma Kudebayeva; Bakhrom Mirkasimov; Susan Steiner
  4. Exposure to television and individual beliefs: Evidence from a natural experiment By Hennighausen, Tanja
  5. Petroleum Tax Policy in Russia By Yuri Bobylev
  6. International Experience in Export Promotion By Nadezhda Volovik; Sergey Prikhodko; Alexander Pakhomov
  7. The Dynamic Link between Energy Consumption, Economic Growth, Financial Development and Trade in China: Fresh Evidence from Multivariate Framework Analysis By Muhammad, Shahbaz; Saleheen , Khan; Mohammad , Iqbal Tahir
  8. State and Denationalization: Risks and Constraints of a “New Privatization Policy” By Revold Entov; Alexander Radygin; Yuri Sinachev
  9. From Marxian school of economic thought to system paradigm in economic studies: the institutional matrices theory By Kirdina, Svetlana
  10. Modernization or Conservation: The Role of Export Duty on Crude Oil and Petroleum Products By Georgy Idrisov; Sergey Sinelnikov-Murylev
  11. Does Increased Civil Service Pay Deter Corruption? Evidence from China By Gong, Ting; Wu, Alfred M.
  12. GINI DP 45: The Power of Networks. Individual and Contextual Determinants of Mobilising Social Networks for Help By Natalia Letki; Mierina, I. (Inta)
  13. Inflation dynamics and the cost channel in emerging markets By Malikane, Christopher
  14. Socio-Spatial Transformations, Suburbanisation, and Voting Behaviour in the Vilnius Urban Region By Ubarevičienė, Rūta; Burneika, Donatas; van Ham, Maarten

  1. By: Bryson, Alex; Zhou, Minghai
    Abstract: All that we know about the CEO labour market in China comes from studies of public listed companies and state-owned enterprises (SOEs). This paper is the first to examine the operation of the CEO labour market across all sectors of the Chinese economy. We do so using World Bank enterprise data for the first part of the 21st Century. Incentive schemes are commonplace throughout the economy and include contracts linking CEO pay directly to firm performance, annual bonus schemes, the posting of performance bonds, and holding company stock. These incentive mechanisms appear to complement rather than substitute for one another. The elasticity of pay with respect to company performance is one or more in two-fifths of the cases where CEO's have performance contracts, suggesting many face high-powered incentives. CEO's also face a real dismissal threat and financial penalties if they fail to deliver. Incentive contracts are used to attract the most talented executives, as indicated by educational attainment and position in the Communist Party. However, government involvement in the appointment of a CEO reduces the likelihood that the CEO will receive an incentives-based contract, perhaps because governments appoint "bureaucrats" to perform roles which incorporate social and political as well as economic goals. Firms with good corporate governance are more likely to deploy incentive contracts. A picture emerges of a well-functioning labour market for executives in China that exhibits many of the traits common to CEO labour markets in the West.
    Date: 2012–09
  2. By: Elisabeth Beckmann; Jarko Fidrmuc; Helmut Stix
    Abstract: Given recent adverse developments, widespread foreign currency borrowing in CEECs poses a serious challenge for financial stability. Against this background, we use survey data to study the determinants of loan arrears of private households. Our data confirm a non-negligible impact of foreign currency loans on financial vulnerability. However, higher loan delinquency rates in depreciation countries can only partly be explained by foreign currency borrowing. Employing survey formation about the reasons for households’ financial difficulties, we show that income shocks exert a stronger impact on loan delinquency rates than the direct effect which works through increased installments on foreign currency loans. JEL classification: G21, D14, C25
    Keywords: Foreign currency loans, arrears, dollarization, euroization, household debt, non-performing loans, financial vulnerability, CEECs
    Date: 2012–11–25
  3. By: Tilman Brück; Damir Esenaliev; Antje Kroeger; Alma Kudebayeva; Bakhrom Mirkasimov; Susan Steiner
    Abstract: This paper summarizes the micro-level survey evidence from Central Asia generated and analyzed between 1991 and 2012. We provide an exhaustive overview over all accessible individual and household-level surveys undertaken in Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan - and of all English-language academic papers published using these datasets. We argue that Central Asia is a fascinating region for the study of comparative economics given its dual experience of transition and development. However, the region is also understudied, in part due to lack of data, and especially due to a lack of panel data. We identify knowledge gaps caused from this lack of longitudinal surveys and suggest worthwhile areas for future research. Finally, we also present the new and novel individual-level panel dataset called "Life in Kyrgyzstan".
    Keywords: Survey data, poverty, labor force participation, Central Asia
    JEL: O12 I32 J22
    Date: 2012
  4. By: Hennighausen, Tanja
    Abstract: Does the information provided by mass media have the power to persistently affect individual beliefs about the drivers of success in life? To answer this question empirically, this contribution exploits a natural experiment on the reception of West German television in the former German Democratic Republic. After identifying the impact of Western television on individual beliefs and attitudes in the late 1980s, longitudinal data from the German Socio-Economic Panel is used to test the persistence of the television effect on individual beliefs during the 1990s. The empirical findings indicate that Western television exposure has made East Germans more inclined to believe that effort rather than luck determines success in life. Furthermore, this effect still persists several years after the German reunification. --
    Keywords: media,beliefs,East Germany,GSOEP
    JEL: D78 D83 H89 P39
    Date: 2012
  5. By: Yuri Bobylev (Gaidar Institute for Economic Policy)
    Abstract: Petroleum complex is Russia’s basic economic sector which is playing a leading role in providing the state budget revenues. This paper is dedicated to the main issues of the government petroleum tax policy in Russia. The author analyses the outcome of the implemented petroleum tax reform and possible measures designed for further taxation improvement in this sector.
    Keywords: Russian economy, oil production, oil export, oil prices
    JEL: L71 L72
    Date: 2012
  6. By: Nadezhda Volovik (Gaidar Institute for Economic Policy); Sergey Prikhodko (Gaidar Institute for Economic Policy); Alexander Pakhomov (Gaidar Institute for Economic Policy)
    Abstract: Over recent years Russia has actually become a monoculture exporter: three types of energy resources (crude oil, oil products and natural gas) ensure about 60% of the overall export volume. In the circumstances of such high export concentration over a small group of commodities, Russia’s room for maneuver regarding foreign economic ties becomes significantly narrower and its vulnerability with respect to negative changes towards global fluctuations is growing significantly.
    Keywords: international trade, exports, Russian economy
    JEL: F10 F13 F19
    Date: 2012
  7. By: Muhammad, Shahbaz; Saleheen , Khan; Mohammad , Iqbal Tahir
    Abstract: This study investigates the relationship between energy consumption and economic growth by incorporating financial development, international trade and capital as important factors of production function in case of China over the period of 1971-2011. The ARDL bounds testing approach to cointegration was applied to examine long run relationship among the series while stationarity properties of the variables was tested by applying structural break test. Our empirical evidence confirmed long run relationship among the variables. The results showed that energy consumption, financial development, capital, exports, imports and international trade have positive impact on economic growth. The Granger causality analysis revealed that unidirectional causal relationship running from energy consumption to economic growth. Financial development and energy consumption Granger cause each other. There is bidirectional causality between trade and energy consumption. The feedback relation exists between financial development and international trade. There is also bidirectional causality exists between capital and energy consumption, financial development and economic growth and, international trade and economic growth. This paper makes significant contribution in energy literature and opens up new direction for policy makers to explore new and alternative sources of energy to meet the rising demand of energy due to sustained rate of economic growth.
    Keywords: Growth; Energy; Financial Development; Trade
    JEL: E44 F1 Q4
    Date: 2012–11–10
  8. By: Revold Entov (Gaidar Institute for Economic Policy); Alexander Radygin (Gaidar Institute for Economic Policy); Yuri Sinachev (Gaidar Institute for Economic Policy)
    Abstract: It will be some time before we can fully appreciate the radical nature of the socio-economic effects produced by the global crisis of the end of the first decade of the twenty first century. However, it is already evident that the two leading market economic systems of the Western world – that of the USA, based on an ideology of free market competition, and the socially oriented system of Europe, were unable adequately to respond to the initial phase of the crisis. Moreover, the only measures that proved capable of preventing financial and economic collapse were those taken by states that possessed powerful levers for acting upon the economy as the crisis unfolded. Russia was one of these states, though circumstances in Russia were not typical.
    Keywords: privatization, Russian economy, public sector, de-statification
    JEL: H82 K11 K22 L32 L33 P31
    Date: 2012
  9. By: Kirdina, Svetlana
    Abstract: The paper discusses some theoretical-methodological basis for the institutional change analysis in transitional countries. First, the paper shows the specific approach of the Marxian school of economic thought to the analysis of social and economic institutions. Second, the most general features of the system paradigm in economic theory (Kornai, 1998) are presented. Third, the institutional matrices theory, or IMT (Кирдина, 2001; Kirdina, 2001, 2010, etc.), developing Marxian approach and systemic ideas, is presented. An explanatory power of IMT is shown by the analysis of post-soviet reforms in Russia and East-European countries.
    Keywords: institutions; economic systems; Marxian approach; institutional matrices
    JEL: B10 B14 B15
    Date: 2012–08
  10. By: Georgy Idrisov (Gaidar Institute for Economic Policy); Sergey Sinelnikov-Murylev (Gaidar Institute for Economic Policy)
    Abstract: This paper deals with the analysis of the consequences of the abolition of export duties on crude oil and petroleum products as a necessary measure to create incentives to improve energy efficiency of the Russian economy and the elimination of underdevelopment caused by the unprecedented long-term subsidies to inefficient Russian oil refining. The authors consider three possible scenarios for the abolition of export duties on crude oil and domestic market and the conservation of tax revenues at a constant level.
    Keywords: resource rent, oil refining, export duty on crude oil and petroleum products, energy efficiency of the Russian economy
    JEL: L71
    Date: 2012
  11. By: Gong, Ting; Wu, Alfred M.
    Abstract: The temporal persistence and geographical prevalence of corruption in the world have provoked a vast amount of research into its causes. Low civil service remuneration, especially in less developed nations, is believed to be an important contributing factor to corruption. The assumption is that when salaries are low but expectations for service remains high, government officials may demand more compensation from informal or even illegal channels than what is officially sanctioned; hence, corruption arises. Accordingly, increased pay level is assumed to be effective in deterring corruption.Using China as a case, we argue that the relationship between civil service pay and corruption is not as simple as suggested. The empirical evidence gathered from China casts doubt on the assumed connection between the two to debunk the myth that increasing civil service pay contributes to the control of corruption. The article also presents the policy implications of the above analysis for human resource management and civil service governance.
    Keywords: corruption; civil service pay; efficiency wage model; relative deprivation theory
    JEL: D73
    Date: 2012
  12. By: Natalia Letki (PGPE Project, Institute of Sociology, University of Warsaw); Mierina, I. (Inta)
    Abstract: In this paper we treat social networks as a resource of individuals, that is used in conjunction with other types of capital, and similarly to other types of capital, its use is context-specific. We propose a conditional mechanism for how context determines networks use: not only does context affect network mobilisation, but that it affects behaviour of different groups differently. We test this proposition on the example of social and economic polarisation influencing probability of turning to networks for help by different income groups. Our findings show that although the poor have the greatest need to turn to networks to compensate for the shortage of other forms of capital, when context becomes adverse, in comparison with other groups they are always disadvantaged in terms of networks mobilisation.
    Keywords: social capital, networks, inequality, income, post-communist, Central Eastern Europe
    Date: 2012–06
  13. By: Malikane, Christopher
    Abstract: We investigate inflation dynamics and the presence of the cost channel in ten emerging markets since the 1990's from the new Keynesian and triangle Phillips curve perspectives. A negative sign on the output gap is a common finding in new Keynesian specifications. This problem may be addressed by taking into account the endogeneity of the nominal interest rate in the instrument set of GMM estimations. We confirm substantial and significant backward-looking behavior in the inflation process of emerging markets, but its size is not robust to specification in some economies. In almost all the triangle model estimations, except for Hungary, the output gap exhibits the correct sign. Except for Mexico, there is no evidence of the cost channel in emerging market economies. The cost channel is not robust to the endogeneity of the nominal interest rate and to the specification of the Phillips curve.
    Keywords: Cost channel; inflation dynamics; Phillips curve
    JEL: E31 E50
    Date: 2012–10–31
  14. By: Ubarevičienė, Rūta (Lithuanian Social Research Centre); Burneika, Donatas (Lithuanian Social Research Centre); van Ham, Maarten (Delft University of Technology)
    Abstract: This paper analyses the interrelationship between the process of suburbanization and a changing political and ethnic landscape in the Vilnius urban region. The region surrounding Vilnius city is dominated by Polish identity residents while those who suburbanise into the region are mainly ethnic Lithuanians. This may lead to potential tension and conflicts in the region which may find its expression in the voting behaviour of residents of the region. Using data from the 1997 and 2011 municipal elections we found that the share of votes for the Polish party in the region decreases over time, while the absolute number of votes for this party increases. At the same time we find increasing voting activity in the suburban ring. The changing electoral behaviour can be regarded as an indicator of a growing ethnic identity. The voting results also identify the zones of the most intense changes in the electoral behavior and thus indicate areas of potential social tensions between two ethnic groups.
    Keywords: suburbanisation, ethnicity, conflict, voting behaviour, electoral data, Lithuania
    JEL: D72 J15 R11 R14 R23
    Date: 2012–11

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