nep-tra New Economics Papers
on Transition Economics
Issue of 2013‒01‒26
fifteen papers chosen by
J. David Brown
IZA (Institute for the Study of Labor)

  1. On the Relevance of Exports for Regional Output Growth in China By Christian Dreger; Yanqun Zhang
  2. Stock market integration between the CEE-4 and the G7 markets: Asymmetric DCC and smooth transition approach. By Baumöhl, Eduard
  3. Monthly industrial output in China since 1983 By Holz, Carsten A
  4. Gender Wage-Productivity Differentials and Global Integration in China By Dammert, Ana; Ural Marchand, Beyza; Wan, Chi
  5. Who Earns Minimum Wages in Europe? New Evidence Based on Household Surveys By François Rycx; Stephan K. S. Kampelmann
  6. Chinese Renewable Energy Technology Exports: The Role of Policy, Innovation and Markets By Jing Cao; Felix Groba
  7. Chinese statistics: classification systems and data sources By Holz, Carsten A
  8. Chinese food security and climate change: Agriculture futures By Ye, Liming; Tang, Huajun; Wu, Wenbin; Yang, Peng; Nelson, Gerald C.; Mason-D'Croz, Daniel; Palazzo, Amanda
  9. Links Between Transnationalism Integration and Duration of Residence: The Case of eastern European Migrants in Italy By Eralba CELA; Tineke FOKKEMA; Elena AMBROSETTI
  10. Foreign ownership wage premium: Does financial health matter? By Maria Bas
  11. Public- Private Partnerships in Southeastern Europe: The case of Croatia By Metaxas, Theodore; Preza, Elisavet
  12. Composite indicator ECAICI and positioning of Georgia’s innovative capacities in Europe-Central Asia Region By Gogodze, Joseph
  13. Composite indicator for regional innovative systems of the countries with developing and transitional economy By Gogodze, Joseph
  14. Protectionism and Protectionists Theories in the Balkans in the Interwar Period By Bertrand BLANCHETON; Nikolay NENOVSKY
  15. Accounting for regional poverty differences in Croatia: Exploring the role of disparities in average income and inequality By Rubil, Ivica

  1. By: Christian Dreger; Yanqun Zhang
    Abstract: Despite high economic growth during the last decades, China is still vulnerable to shocks arising from industrial states. The advanced economies determine Chinese export performance, with subsequent effects on output growth. Using a production function approach, this paper examines to which extent regional GDP growth in China is export driven. In a panel of 28 Chinese provinces, series are splitted into common and idiosyncratic components, the latter being stationary. The results indicate cointegration between the common components of GDP, the capital stock and exports. In equilibrium, exports increase GDP by more than their impact expected from the national accounts. While exports and capital are weakly exogenous, GDP responds to deviations from the long run. An adjustment pattern can be detected for almost all regions, except of some provinces in the Western part of the country.
    Keywords: Chinese economy, panel co-integration, expert led growth
    JEL: F43 O11 C23
    Date: 2013
  2. By: Baumöhl, Eduard
    Abstract: We study the transition process of emerging CEE-4 stock markets from segmented to integrated markets and hypothesize that this process has been gradual over time. As a proxy for integration, co-movements with developed G7 markets are estimated using the asymmetric DCC-GARCH model. A smooth transition logistic trend model is then fitted to the dynamic correlations to examine the integration process. Evidence of strengthening relationships among the markets under study is provided. In the case of Czech stock market, the results suggest that the transition began between the end of 2005 and first half of 2006. The transition midpoints for the Hungarian and Polish markets seem to overlap with the recent financial crisis. Correlations between CEE-4 and G7 markets have been approximately 0.6 in the last few years. The only exception is the Slovak stock market, which still appears to be more segmented and isolated from others in the CEE region and from the developed markets of the G7.
    Keywords: stock market co-movements; G7; CEE-4; asymmetric GARCH models; ADCC; smooth transition model
    JEL: C32 G15 G01
    Date: 2013–01–16
  3. By: Holz, Carsten A
    Abstract: Monthly economic indicators are used for a variety of purposes, from studying business cycles to determining economic policy and making informed business decisions. China’s published monthly industrial output statistics could hardly be more confusing, with changes in variables, in coverage, in measurement, and in presentation. This paper reviews the available official data and proceeds to construct a monthly industrial output series in nominal terms and in real terms for the period since May 1983, economy-wide and for the state sector.
    Keywords: China industrial output; industrial growth; monthly industry data; public sector industrial output; Chinese statistics
    JEL: C43 E01 C80
    Date: 2013–01–10
  4. By: Dammert, Ana (Carleton University); Ural Marchand, Beyza (University of Alberta, Department of Economics); Wan, Chi (University of Massachusetts)
    Abstract: In the absence of discrimination, there should be no wage-productivity differentials as relative wages should be equal to the relative marginal productivity levels of workers. This paper investigates the role of globalization on the structure and evolution of gender differentials in China by simultaneously estimating demand-side wage and productivity outcomes using nonlinear least squares. The analyses are based on a comprehensive population-wide panel survey of manufacturing firms between the years of 2004 and 2007, covering 94 percent of total industry output and providing an accurate representation of labor demand. The results suggest that more exposure to globalization through increased exports is associated with lower gender wage-productivity differentials, and more exposure through increased foreign investment leads to differentials in favor of female workers. On the other hand, gender discrimination is found to be prevalent among domestically owned and non-exporting firms.
    Keywords: China; gender wage discrimination; globalization; firm ownership
    JEL: D22 F21 J16 J31
    Date: 2013–01–01
  5. By: François Rycx; Stephan K. S. Kampelmann
    Abstract: This paper aims to provide a comprehensive, evidence-based, and up-to-date assessment of minimum wages in a range of European countries. A first step towards a better understanding of where Europe stands today on this issue requires to grasp the diversity of European minimum wage systems, a key objective of the paper at hand. The second objective is to document international differences in the so-called "bite" of the minimum wage. This leads to questions such as "how do national minimum wages compare to the overall wage distribution?" and "how many people earn minimum wages in each country?" that are assessed for a set of nine countries from Western, Central and Eastern Europe: Belgium, Bulgaria, Germany, Hungary, Ireland, Poland, Romania, Spain, and the United Kingdom. This sample was designed to include countries for which recent evidence has been missing prior to this paper. What is more, the study also overcomes the narrow focus of extant overviews that have typically focussed only on full-time employment. Crucially, the study improves on existing work by looking beyond aggregate numbers; it provides a detailed panorama of the population of minimum wage earners in each country under investigation, notably by describing their composition in terms of a range of socio-demographic characteristics.
    Keywords: Minimum wage systems; Socio-economic consequences; Europe
    Date: 2013–01–10
  6. By: Jing Cao; Felix Groba
    Abstract: Chinese companies have become major technology producers, with the largest share of their output exported. This paper examines the development of solar PV and wind energy technology component (WETC) exports from China and the competitive position of the country`s renewable energy industry. We also describe the government's renewable energy policy and its success in renewable electricity generation as well as increasing renewable energy innovation and foreign knowledge accumulation, which may drive export performance. We aim at empirically identifying determinants of Chinese solar PV and WETC exports. We estimate an augmented gravity trade model using maximum likelihood estimation. Besides controlling for standard variables derived from the gravity literature, we consider additional explanatory factors by accounting for market, policy and innovation effects steaming from both importing countries and China. We use a panel dataset representing annual bilateral trade flows of 43 countries from the developed and developing world that imported solar PV and WETCs from China between 1996 and 2008. The analysis shows that while the national market remained small for solar PV, the industry successfully entered foreign markets. The export performance of firms producing WETC increased but remained relatively small while the country developed a large home market. Empirical results indicate that high income countries, with a large renewable energy market and demand side policy support scheme, in terms of incentive tariffs, are increasingly importing solar PV components from China. We show that trade costs have a negative impact on exports of solar PV components but not WETC. Additionally, we find a positive impact of research and development (R&D) appropriation growth, especially from provincial governments in China, but no evidence that bilateral knowledge transfer and indigenous innovation affect exports.
    Keywords: China, Gravity model, Trade, Innovation, Policy, Renewable Energy Technologies
    JEL: C32 F14 O30 Q42 Q48 Q56
    Date: 2013
  7. By: Holz, Carsten A
    Abstract: China has become a popular geographic area of research. Researchers make extensive use of Chinese official statistics, but these statistics are often not well understood. This article first clarifies three major issues that affect a wide range of Chinese statistics—from output and employment data to industry profitability—and then elaborates on data sources. The three data issues are changes over time to the sectoral classification system, changes to the ownership classification system, and changes to the coverage of the industry sector. Many of these changes have gone unnoticed or remain poorly understood, leaving the researcher puzzled about varying labels, apparently inconsistent data, and discontinued time series. The second part of the paper offers a gateway to a wealth of Chinese statistics whose existence is not widely known. It also points out the limitations of some of these sources and provides an overview of the secondary literature that discusses the meaning and quality of particular Chinese statistics.
    Keywords: (all: China) national income accounting; national statistical system; China Standard Industrial Classification System; industrial statistics coverage; ownership classification system; national statistical data sources/limitations/explanations
    JEL: R1 C82 P27
    Date: 2013–01–07
  8. By: Ye, Liming; Tang, Huajun; Wu, Wenbin; Yang, Peng; Nelson, Gerald C.; Mason-D'Croz, Daniel; Palazzo, Amanda
    Abstract: Food security in China affects the livelihood and well-being of one-fifth of the world population. Climate change is now affecting agriculture and food production in every country of the world. Here the authors present the IMPACT model results on yield, production, and net trade of major crops (wheat, rice, and maize) in China, and on daily calorie availability as an overall indicator of food security under climate change scenarios and socio-economic pathways in 2050. The obtained results show that wheat, maize, and rice yields will increase by 17%, 45%, and 15%, alongside price increases of 60%, 100%, and 40%, respectively, during 2010-2050. Crop production is projected to increase by 23%, 70%, and 3% reaching 123, 240, and 125 million tons for wheat, maize, and rice, respectively, in 2050. The results also show that China will remain a major importer of maize at 20 million tons per year, but turn from a net importer of rice (5 million tons per year in 2010) to a net exporter in 2020 (5-9 million tons per year by 2050), while becoming a self-sufficient consumer of wheat by 2050. The outcomes of calorie availability suggest that China will be able to maintain a level of at least 3,000 kilocalories per day through 2010-2050. Climate change has relatively little effect on calorie availability within a pathway scenario.The authors conclude that Chinese agriculture is relatively resilient to climate change. Chinese food security by 2050 will unlikely be compromised in the context of climate change. The major challenge to food security, however, will rise from increasing demand coupled with regional disparities in the adaptive capacity to climate change. --
    Keywords: Climate change,food security,scenario,adaptation,mitigation,policy
    JEL: Q56 Q18 Q54
    Date: 2013
  9. By: Eralba CELA (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali); Tineke FOKKEMA (Netherlands Interdisciplinary Demographic Institute (NIDI)); Elena AMBROSETTI (Universir… La Sapienza, Roma)
    Abstract: Transnationalism of first-generation migrants, usually considered as the core element of their migratory projects, is taken nowadays to some extent for granted. Several migration scholars have mainly focused their research on demonstrating the complementarity or dualism between integration and transnationalism and the degree of persistence of the latter over one's life course and generations. In line with this research, the aim of the present study is to examine empirically the relations of transnationalism with duration of residence and integration of Eastern Europe communities in the specific case of Italy. Data come from the Integrometro survey 2008-2009, encompassing more than 4500 Eastern European migrants, currently representing half of the foreign population in Italy, allowing us to study nationalities that have been overlooked by migration research in transnational topics. Our results clearly show a positive relationship between migrants' economic integration and transnationalism, suggesting that economic resources facilitate the maintenance and development of cross-border ties. Being more integrated socio-culturally, however, is accompanied with weaker transnational practices. Moreover, the level of transnational behaviour decreases the more years Eastern European migrants spend in Italy, which cannot be fully attributed to a higher level of socio-cultural integration.
    Keywords: integration, migration, transnationalism
    JEL: F22 F24
    Date: 2012–11
  10. By: Maria Bas
    Abstract: Microeconometric studies have shown that foreign-owned firms pay a wage premium in developing countries. This paper investigates one of the possible channels that explain why foreign firms pay higher wages than their domestic counterparts in developing economies. Under imperfect financial markets, foreign affiliates have a greater access to funds to finance high-technology investments and to compensate their workers. The empirical analysis relies on firm-level data from Romania during the 1998-2006 period. The identification strategy exploits the financial sector reform in Romania during this period as a proxy of an exogenous shock of improvement of financial resources. Changes in the IMF financial reform index across manufacturing industries are related to the ownership status of the firm to investigate how the differential access to finance of foreign firms shapes wages. The findings suggest that a one-standarddeviation increase in the financial reform index increases firms’ wages by 7 percent for domestic firms and 11.2 percent for foreign affiliates. These results are mainly driven by foreign firms from developed countries that might benefit from connections with foreign-owned banks. These findings are stable and robust to different sensitivity tests related to the financial reform indicator, other reforms and industry trends.
    Keywords: foreign-wage premium;financial reform;developing countries;firm level data
    JEL: O10 O12
    Date: 2012–10
  11. By: Metaxas, Theodore; Preza, Elisavet
    Abstract: This paper aims to define Public Private Partnerships (PPPs) that are considered as a major approach in delivering public infrastructure projects in recent years. The paper analyses PPPs in Southeastern Europe, particularly in Croatia, describing the projects that have been achieved and the efforts of governments to promote the PPPs as alternative means of funding and bearing into consideration the formulation of the theoretical framework of PPP. The paper concludes that although the need for infrastructural projects in Croatia is huge, however the number of projects proposed are confined, according the Agency for PPPs for the approved PPP projects
    Keywords: Public – private partnership; EU; Croatia; Law; projects
    JEL: R58 R50 O52
    Date: 2012
  12. By: Gogodze, Joseph
    Abstract: ECAICI indicator introduced in the present article enables to analyze innovative capacities dynamics of the ECA region (by The World Bank classification) countries in 1996-2010. Thorough research reveals four leading unobservable factors, affecting innovative processes in ECA region. These factors may be referred as Knowledge creation, Economy sophistication, Knowlege Absorption-Diffusion, Human Capital Production. We show that there is a close link between ECAICI indicator and other well-known innovation indicators and show also that there is a close link between ECAICI indicator and GDP per capita. Indicator ECAICI may be applied as an instrument for innovative capacities assessment and analysis. Presented brief analysis of current innovative capacities of Georgia, carried out by means of this indicator serves as illustration of the fact. ECAICI indicator may prove to be useful and interesting also for other post-USSR countries.
    Keywords: National innovation systems; Developing countries; Countries in transition; Composite indicator; Factor analysis
    JEL: C43 O30 C81
    Date: 2013–01–20
  13. By: Gogodze, Joseph
    Abstract: Present article introduces composite indicator for regional innovative systems of the countries with developing and transitional economy. Using the factor analysis technique it exposes four principal unobservable factors, which reflect basic aspects of regional innovative systems. Those factors are used as sub indicators to elaborate composite indicator of the regional innovative systems. This composite indicator may be used for measurement of the regions innovative lavel. Proposed composite indicator can be easily adapted for other countries with developing and transitional economy (e.g. for the post USSR space). By way of illustration here are provided calculations of sub indicators and the composite indicator for Georgian regions (GRIS-2010).
    Keywords: Regional innovation systems; Developing countries; Countries in transition; Composite indicator; Factor analysis
    JEL: O18 C43 O30 C81
    Date: 2013–01–15
  14. By: Bertrand BLANCHETON; Nikolay NENOVSKY
    Abstract: This paper makes a comparative analysis between two unique theories of international trade and protectionism which emerged in Bulgaria and Romania during the period between the two World Wars as a response to the specific economic environment and the spread of economic ideas coming from economically developed countries. These are the general theory of protectionism based on Mihail Manoilescu’s (1891-1950) ideas of national productivity and the theory of international trade and productive forces forwarded by Konstantin Bobchev (1894-1976). Probing into the two theories allows the formulation of interesting academic and purely practical assertions and ideas that could help understand the trajectories and limits of the independent development of peripheral European economies. As in the past, so today, Bulgaria and Romania share more or less similar problems – those of the catching-up economies, lack of own capitals, severe strain on their balance of payments, dependence on the leading countries in the European Union, etc. Following this logic, a look back at the “protectionist past” of the Balkan countries opens new possibilities of highlighting the so-called Bairoch paradox, which claims the positive impact of protectionism on economic growth, and which in a sense comes into conflict with the main postulates of free international trade (Bairoch, 1999 [1993]; Becuwe, Blancheton, 2011).
    Keywords: economic thought, theories of protectionism, protectionism, Balkan economies, Bulgaria, Romania
    JEL: B30 N7
    Date: 2013
  15. By: Rubil, Ivica
    Abstract: The prevalence of poverty in a given population is determined by both the level of average income and the shape of income distribution. Accordingly, the difference in poverty between two populations can be attributed to disparities in their average incomes and in the levels of income inequality. In this paper, we decompose the differences in relative poverty between each of the twenty-one Croatian counties and Croatia as a whole into the contributions of the mean income and income inequality, using the Household Budget Survey data for 2010. The decomposition framework that we utilize here is one usually applied for decompositions of intertemporal poverty changes, and is based on the concept of Shapley value from cooperative game theory. Poverty is measured by three conventional measures – the headcount ratio, the poverty gap, and the squared poverty gap – and robustness of the results to switching from one measure to another is discussed. The results of decompositions show that in most cases both the mean income and inequality differences contribute to poverty variation across the counties, relative to poverty in Croatia as a whole. When poverty is measured by the headcount ratio, the income contribution dominates the inequality contribution, while when we switch to the other two measures, which give more weight to poorer among the poor, the inequality contribution starts to dominate.
    Keywords: regional poverty; decomposition; income contribution; inequality contribution; Shapley value; Croatia
    JEL: D63 I32
    Date: 2013–01–16

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