nep-tra New Economics Papers
on Transition Economics
Issue of 2013‒04‒27
24 papers chosen by
J. David Brown
IZA (Institute for the Study of Labor)

  1. China and the Two Crises: From 1997 to 2009 By Naughton, Barry
  2. The European Welfare State from the Prospect of New EU Member States By Ludek Kouba; Ladislava Grochova
  3. Seeking the Best Practices in rural agricultural informatization: Evidence from China's Sichuan Province By Liu, Chun
  4. Intra-National Protectionism in China: Evidence from the Public Disclosure of ‘Illegal’ Drug Advertising By Markus Eberhardt; Zheng Wang; Zhihong Yu
  5. Региональная диагностика и отраслевой анализ производительности труда By Zaytsev, Alexander
  6. A Study on Industrial Green Transformation in China By Li Ping; Yang Danhui; Li Pengfei; Ye Zhenyu; Deng Zhou
  7. "Currency Concerns under Uncertainty: The Case of China" By Sunanda Sen
  8. New Technology Adoption for Russian Regional Energy Generation: Moscow Case Study By Alexandra Bratanova; Jacqueline Robinson; Liam Wagner
  9. Развитие методологии предварительного финансового контроля государственных программ регионов России By Bratanova, Alexandra
  10. China's Pure Exporter Subsidies By Fabrice Defever; Alejandro Riaño
  11. Impact assessment of alternative reforms of child allowances using RUSMOD - the static tax-benefit microsimulation model for Russia By Popova, Daria
  12. Speculating China economic growth through Hong Kong? Evidence from the stock market IPO and real estate markets By Leung, Charles Ka Yui; Tang, Edward Chi Ho
  13. Элементы региональной диагностики (на примере Краснодарского края) By Zaytsev, Alexander
  14. China's role in global inflation dynamics By Eickmeier, Sandra; Kühnlenz, Markus
  15. Board Games: Timing of Independent Directors’ Dissent in China By Juan Ma; Tarun Khanna
  16. Demographic Transition and an Ageing Society: Implications for Local Labour Markets in Poland By Cristina Martinez-Fernandez; Tamara Weyman; Jolanta Perek-Białas; Iwona Sagan; Piotr Szukalski; Piotr Stronkowski
  17. Malopolska Region Demographic Transition: Working for the Future By Jolanta Perek-Białas; Cristina Martinez-Fernandez; Tamara Weyman
  18. Lódzkie Region: Demographic Challenges Within an Ideal Location By Piotr Szukalski; Cristina Martinez-Fernandez; Tamara Weyman
  19. Foreign job opportunities and internal migration in Vietnam By Fukase, Emiko
  20. Productivity grwoth and efficiency changes in the Mongolian mobile communications industry By Byambaakhuu, Badamasuren; Kwon, Youngsun; Rho, Jaejeung
  21. Foreign wage premium, gender and education : insights from Vietnam household surveys By Fukase, Emiko
  22. Risk Preferences and Pesticide Use by Cotton Farmers in China By Elaine Liu; JiKun Huang
  23. Euroization and cyclical stabilization in Montenegro: an empirical analysis By Sokic, Alexandre; FABRIS, Nikola
  24. Vietnam: An Emerging Economy at a CrossRoads By Quang Truong

  1. By: Naughton, Barry
    Abstract: China appears to have successfully weathered the worst impact of both the Asian Financial Crisis (1997-98) and the Global Financial Crisis (2008-2009). Chinese leaders did respond quickly, and on occasion massively, to the challenge of external crisis. In retrospect, however, each crisis response can be seen to have involved an element of over-shooting, which was followed by domestic reformulation and retrenchment. This paper will track commonalities and differences of the two crises in three dimensions: immediate macroeconomic crisis response; institutional adaptations; and trade and exchange rate policies. The discussion will clarify that the very “success†of the response to the AFC laid the foundation for deeper economic problems relating to the GFC. In turn, the response to the GFC gave government officials and state-owned enterprises control over an even larger volume of resources, and reduced the accountability of both officials and financial institutions, changes that inevitably have softened budget constraints, reduced individual risk, and encouraged even larger investments. In consequence, the Chinese economy now faces accumulating problems from the maladaptation of domestic institutions, a maladaptation that is not unrelated to the crisis response.
    Keywords: China , Asian Financial Crisis , Global Financial Crisis , monetary policy , stimulus , economic reform
    Date: 2013–02–01
  2. By: Ludek Kouba (Department of Economics, Faculty of Business and Economics, Mendel University in Brno); Ladislava Grochova (Department of Economics, Faculty of Business and Economics, Mendel University in Brno)
    Abstract: The aim of this paper is to analyse and discuss the heterogeneity level between the old and new EU member states in terms of welfare state development. In order to discuss the research questions, we performed the cluster analysis that provides the overall survey of the welfare state development and besides that, the results were divided into four dimensions: demographic, economic, institutional and social. In comparison with the thematic literature, we modified the dimensions, including our original institutional dimension, and added a dynamic point of view. The cluster analysis resulted in the existence of three clusters: Core cluster, Periphery cluster and Eastern cluster. The Eastern cluster is still relatively stable and covers in a total of nine of the ten Central and Eastern European countries that were included in the analysis: Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia (hence apart from Slovenia). On the other hand, using the dimensional approach, the CEE countries were grouped together with the old EU member countries, both from the Core cluster and from the Periphery cluster, within the economic and institutional dimensions. Therefore, we conclude that the new EU member countries, nowadays, do not form an internally homogenous group in terms of the features of their welfare state.
    Keywords: Welfare state, CEE countries, new EU member states, cluster analysis
    JEL: H5 C38
    Date: 2013–04
  3. By: Liu, Chun
    Abstract: Informatization, a policy of integrated telecommunications development, is regarded as one of the driving forces behind the Chinese government's new socialist countryside program. Various national and provincial programs have been initiated to connect the agricultural communities to the information highway. Most of the existing studies are conducted at the national level, which largely neglects the fact that China's unique central-provincial-local institutional arrangement makes the provincial/local government not only the implementers of center-initiated projects but also the initiators of informatization programs specific to their territory. This paper studies Sichuan province because its geographic and economic features make it an ideal site. Moreover, Sichuan probably has the widest variety of agricultural informatization programs among all the provinces in China because of the relief efforts after the 2008 Wenchuan earthquake by various entities. It is now imperative to critically revisit those programs to find out their status and identify the factors for both their successes and failures. This paper aims to complement the existing rural informatization research in China with a comprehensive provincial/local-level analysis, using an analytical framework that evaluates the performance and sustainability of major ongoing agricultural informatization programs. This paper will identify the best practices for rural development in other countries. --
    Date: 2012
  4. By: Markus Eberhardt; Zheng Wang; Zhihong Yu
    Abstract: This paper provides micro-level evidence that drug advertising regulations and inspections in China are used by local governments to discriminate against firms from outside the province. Furthermore, the degree of discrimination varies across firms in that drug manufacturers which have closer ties with rival provinces are more likely to be targeted. These findings demonstrate that giving provincial governments strong incentives to compete with each other may exacerbate the market distortions inherent in a partially reformed economy such as China.
    Keywords: China, intra-national protectionism, drug advertising
    JEL: F15 P26 L25
    Date: 2013
  5. By: Zaytsev, Alexander
    Abstract: The article considers perspective ways of technology borrowing in industry-regional level in Russia and offers preliminary methodology for identification of suitable technology for particular region. Methodology is based on labor productivity comparisons. For this purposes productivity levels for all Russian regions in industry level were calculated. International productivity comparison with 16 foreign countries is also done. Using obtained productivity ratings, perspective sources for technology borrowing were identified for all main industries of Krasnodar region.
    Keywords: regional competitive advantage, regional economic diagnostics, regional development, technology borrowing, technology transplantation.
    JEL: O14 O3 O47 R11 R30
    Date: 2012–12
  6. By: Li Ping (Institute of Quantitative and Technological Economics, Chinese Academy of Social Sciences); Yang Danhui (Institute of Quantitative and Technological Economics, Chinese Academy of Social Sciences); Li Pengfei (Institute of Quantitative and Technological Economics, Chinese Academy of Social Sciences); Ye Zhenyu (Institute of Quantitative and Technological Economics, Chinese Academy of Social Sciences); Deng Zhou (Institute of Quantitative and Technological Economics, Chinese Academy of Social Sciences)
    Abstract: China’s speedy industrialization has undertaken mostly a crude path with extensive energy consumption and severe environmental damage. In face of the challenge of global warming and resource restrictions, it calls for urgent green transformation for the sustainable development of China’s industry. With huge potentials and more general benefits than costs, the industrial green transformation in China will have more positive effects and accelerate the whole process of the development of China’s green economy. From this perspective, China needs to adopt a comprehensive and open mechanism for green transformation with more strict environmental regulations, effective energy conservation and emissions reduction, green technology R&D and application, as well as international cooperation in the related fields with market-oriented reform, government strategies and regulations, proactive response from the industry sector, self-initiative of enterprises and active public participation.
    Keywords: Industry, Green Transformation, Technology Roadmap, Cost and Benefit
    JEL: Q5 Q55
    Date: 2013–03
  7. By: Sunanda Sen
    Abstract: The recent declines in China's financial account balance ended the "twin surplus" era and led to a modest decline in the stock of official reserves, which reflects a reversal in expectations for the Chinese currency. Negative balances, which have been visible in China's financial balances since the last quarter of 2011, have heightened fears/anxiety in markets. These deficits stand in sharp contrast to the typical financial account surplus that existed until 2010. The announcement in September 2011 by Chinese monetary authorities of a "two-way floating" RMB in the foreign exchange market has unsettled market expectations and has led to a sharp fall in the financial balance. The latter brought a change in the expectations regarding the RMB-USD exchange rate. This change was reflected in the drop in foreign exchange assets, which was caused by a jump in short-term trade credits to prepay (for imports) in dollars, a rise in dollar advances from banks, and a withdrawal of dollar deposits. These changes have, of late, been a cause of concern relating to the future of China's economic relations vis-a-vis trading and financial partners, which include the United States. The experience of China, in a changing world beset with deregulation and with speculation affecting her external balance in recent years, provides further confirmation of John Maynard Keynes's observation, in 1937, regarding uncertainty in markets: "About these matters there is no scientific basis on which to form any calculable probability whatever. We simply do not know."
    Keywords: China; Financial Balances; Official Reserves; Twin Surpluses; Rebalancing; Expectations; Internationalization; Managed Exchange Rate
    JEL: E31 E52 F42 O16 O53
    Date: 2013–03
  8. By: Alexandra Bratanova (Department of Economics, University of Queensland); Jacqueline Robinson (Department of Economics, University of Queensland); Liam Wagner (Department of Economics, University of Queensland)
    Abstract: Russia is frequently referred to as a country with sufficient energy efficiency and renewable energy potential [2, 3]. Although an improvement has been shown (energy-GDP ratios were improved by 35% between 2000-2008 [4]), the contribution of technological progress is estimated to account for only 1% of the energy-GDP ratio reduction, the existing share of renewable energy sources (RES) based electricity generation is estimated at 0.1%. Analysis shows that regional and federal levels of governance in Russia are missing efficient mechanisms for stimulation of energy saving, technological development [5] and RES deployment. This research aims to develop an analytical tool for energy sector economic analysis for technological development planning to support policy decision making. The paper adapts the levelized cost of energy (LCOE) methodology of Wagner and Foster [6], which has been upgraded to facilitate combined energy generation processes, to examine the cost structures associated with energy system and applies it to a Russian regional case study. The model run for two fuel price scenarios allowed us to conclude that the regional energy supply system is dependent on natural gas price. We conclude that new and RES based technologies become cost-effective for electricity generation as domestic natural gas prices reach parity with export prices. However, strong political and financial support is needed to boost technological development and RES application.
    Keywords: Russian Electricity Sector; Levelised Cost of Energy; Electricity Generation;
    JEL: Q40 G12 Q48
    Date: 2013–04
  9. By: Bratanova, Alexandra
    Abstract: Shift to the program planning and budgeting is a budget policy priority in Russia. However, the current system of public programs development and implementation needs to be improved. The research aims at development of methodological approaches for a priori financial control of public programs based on international best practice of the evaluation theory and implementation. Author has formed criteria and algorithm of the evaluation method choice for Russian regional public programs. The algorithm is showing a new approach to address a problem of methodological support of program financial and economic analysis in Russia. It also has a practical significance for public administration.
    Keywords: program planning and budgeting, public program, financial and economic analysis, project evaluation, cost-benefit analysis, multi-criteria analysis
    JEL: G28 H5 H61
    Date: 2012–11–01
  10. By: Fabrice Defever; Alejandro Riaño
    Abstract: One third of Chinese exporters sell more than ninety percent of their production abroad. We argue that this distinctive pattern is attributable to the widespread use of subsidies that require firms to export the vast majority of their output. We study this type of subsidy in the context of a heterogeneous-firm model, and show that it is worse from a welfare standpoint than a regular export subsidy, partly because it increases protection of the domestic market. A counterfactual analysis suggests that eliminating these subsidies would result in a welfare gain for China comparable to that of halving its trade costs.
    Keywords: Trade Policy, Export Subsidies, Heterogeneous Firms, China
    JEL: F12 F13 O47
    Date: 2013–04
  11. By: Popova, Daria
    Abstract: RUSMOD is a static tax-benefit microsimulation model for Russia. The model can be used for ex post and ex ante evaluation of reforms of personal income taxation and social benefits in Russia. In addition, being compatible with EUROMOD, the Russian model is suitable for simulation of cross-country policy transfers. The aim of this paper is to shed light on various aspects of the model. It discusses specific problems arising in the evaluation of unreported income and benefits non-take up in Russia. The final estimates of poverty and inequality from RUSMOD are very close to those based on National accounts; hence, the model can be seen as a reliable tool for evaluating the current performance of the Russian tax-benefit system and the distributive impact of potential tax-benefit reforms. Then the paper provides an example of application of the model an analysis of alternative scenarios for improving the design of child allowances in Russia. Currently, this benefit has a poor targeting performance and varies across regions of Russia in terms of design and generosity, which raises serious equity concerns. Redirecting these resources to the poor by means of better targeting and raising the benefit amounts brings about significant improvements in overall and child poverty indicators even at the current level of spending. The most sizable impact on poverty is achieved by implementing the unified national design of the program.
    Date: 2013–03–28
  12. By: Leung, Charles Ka Yui; Tang, Edward Chi Ho
    Abstract: This paper argues that since China closes her asset markets, investors turn to Hong Kong instead. The initial public offerings (IPO) of Chinese firms in the Hong Kong stock market and the local housing market of Hong Kong improve the prediction of each other, as they may serve as a coordinator of herds among investors. Alternative explanations such as the “production conjecture” and “underlying factor conjecture” are found to be inconsistent with the data. Our results are also consistent with the increasing importance of Chinese tourists in the world. Directions for future research are also discussed.
    Keywords: Animal spirits conjecture, production conjecture, underlying factor conjecture, causality, wealth effect
    JEL: G10 R20 R33
    Date: 2013–04
  13. By: Zaytsev, Alexander
    Abstract: The work considers perspective ways of technology borrowing on industry-regional level in Russia and offers preliminary methodology for identification of suitable technologies for particular region. Methodology is based on labor productivity comparisons. For this purposes productivity levels for all Russian regions in industry level were calculated. International productivity comparison with 16 foreign countries is also done. Krasnodar region was chosen as an example for such diagnostics and short overview of the region`s economy features is presented. Using obtained productivity ratings, perspective sources for technology borrowing were identified for all main industries of Krasnodar region.
    Keywords: regional economic diagnostics, labor productivity, technology borrowing, regional development, regional competitive advantage.
    JEL: J24 O14 O3 O47 R11 R30
    Date: 2012–10–15
  14. By: Eickmeier, Sandra; Kühnlenz, Markus
    Abstract: We apply a structural dynamic factor model to a large quarterly dataset covering 38 countries between 2002 and 2011 to analyze China's role in global inflation dynamics. We identify Chinese supply and demand shocks and examine their contributions to global price dynamics and the transmission mechanism. Our main findings are: (i) Chinese supply and demand shocks affect prices in other countries significantly. Demand shocks matter slightly more than supply shocks. Producer prices tend to be more strongly affected than consumer prices by Chinese shocks. The overall share of international inflation explained by Chinese shocks is notable (about 5 percent on average over all countries but not more than 13 percent in each region); (ii) Direct channels (via import and export prices) and indirect channels (via greater exposure to foreign competition and commodity prices) seem both to matter; (iii) Differences in trade (overall and with China) and in commodity exposure help explaining crosscountry differences in price responses. --
    Keywords: global inflation,China,international business cycles,structural dynamic factor model,sign restrictions
    JEL: F41 E31 C3
    Date: 2013
  15. By: Juan Ma (Harvard Business School); Tarun Khanna (Harvard Business School, Strategy Unit)
    Abstract: This paper examines the circumstances under which so-called "independent" directors voice their independent views on public boards in a sample of Chinese firms. Controlling for firm and board characteristics, we find that independent directors' dissent is associated with breakdown of directors' interpersonal ties with board chairpersons who locate at the center of the board bureaucracy in China. In particular, independent directors tend to "time" their dissent into a restricted set of socially-appropriate circumstances, either when the board chairperson who appoints the independent director has left the board, or when the voting occurs at the end of board "games" that corresponds to a 60-day window prior to departure of the board chairperson or departure of the independent director herself. The endgame effect is particularly strong: 27% of the dissent was issued at board "endgames" which represent merely 4% of independent directors' average tenure. While directors with foreign experience are more likely to dissent, we do not find that academics, accounting and law professionals are significantly more active. We also show that dissent is consequential, to the director and the firm. Although dissent has no significant marginal effect on the total number of board seats received subsequently by an independent director, it significantly increases the chance for a director to exit the director labor market. Firms suffer an economically and statistically significant cumulative abnormal return of -0.97% around announcement of dissent. Literature has suggested that dissent might be reflecting of diverse viewpoints, perhaps beneficial in and of itself through reducing variability of firm performance, however we do not find this offsetting beneficial effect to be strong.
    JEL: G3
    Date: 2013–04
  16. By: Cristina Martinez-Fernandez; Tamara Weyman; Jolanta Perek-Białas; Iwona Sagan; Piotr Szukalski; Piotr Stronkowski
    Abstract: This report outlines the findings of the Poland case study for the combined study regions of Lódzkie, Malopolska and Pomorskie for the international project, Local scenarios of demographic change. The demographic situation is changing significantly within Poland with two major trends occurring, population decline and population ageing, as a result of decreasing fertility rates and increased life expectancy. However, the Polish case study revealed the complexity of demographic challenges with each region experiencing different issues associated with socio-economic context such as: population ageing experienced in all three study regions; and population shrinkage in Lódzkie. These differences in demographic situations require a territorial, local and regional strategy co-ordinated policy response with national policy efforts. Policy themes and recommendations focus on sustainable economic development, family policy, ageing workforce, silver economy, and skills and education.
    Date: 2013–04–18
  17. By: Jolanta Perek-Białas; Cristina Martinez-Fernandez; Tamara Weyman
    Abstract: This paper outlines the findings of the Poland case study of the Malopolska region for the international project, Local scenarios of demographic change. The Malopolska region is located in the southern part of Poland, boarding Slovakia, and was created in 1999 from voivodship amalgamations of Krakow, Nowy Sacz, and parts of Bielsko-Biala, Kielce, Katowice, Krosno and Tarnów. Although the population size will not change dramatically over the next few years, the consequences of population ageing are and will be challenging. The region has much potential in various sectors that can be exploited in preparation for the demographic transition. The paper presents various examples of initiatives and projects related to demographic issues (older workers, older persons, and families), however, awareness of demographic challenges and the need for better policy implementation are key priorities at the regional/local level.
    Date: 2013–04–18
  18. By: Piotr Szukalski; Cristina Martinez-Fernandez; Tamara Weyman
    Abstract: This paper outlines the findings of the Poland case study of the Lódzkie region for the international project, Local scenarios of demographic change. The Lódzkie region is located in the central part of Poland, at the intersection of several major arterial roads; Berlin-Moscow and Gdansk-Vienna. Despite the excellent location, the region is affected by several demographic challenges, partly related to the region’s proximity to Warsaw, the Polish capital city. The official strategic documents for regional development have been focused on “hard” infrastructure development, with limited attention being paid to current or future demographic and social challenges, such as the declining and ageing population, which pose significant obstacles to future regional development. Profound public interest in demographic change, however, has resulted in the creation of a plan for 2013-2014 to forestall this predicted depopulation, and also, in the preparation of a demographic development strategy for the following years.
    Date: 2013–04–18
  19. By: Fukase, Emiko
    Abstract: This paper investigates the role of employment opportunities created by foreign-owned firms as a determinant of internal migration and destination choice using the Vietnam Migration Survey 2004 and the Vietnam Household Living Standards Survey 2004. Multinomial logit and conditional logit models are estimated to study both origin and destination-specific characteristics of migrants. The paper finds that the migration response to foreign job opportunities is larger for female workers than male workers; there appears to be intermediate selection in terms of educational attainment; and migrating individuals on average tend to go to destinations with higher foreign employment opportunities, even controlling for income differentials, land differentials, and distances between sending and receiving areas.
    Keywords: Population Policies,Labor Markets,Anthropology,Voluntary and Involuntary Resettlement,Human Migrations&Resettlements
    Date: 2013–04–01
  20. By: Byambaakhuu, Badamasuren; Kwon, Youngsun; Rho, Jaejeung
    Abstract: In the mid 1990s Mongolia has introduced competition in the telecommunications market by deregulating it and opening up its mobile communications market to foreign direct investments. Since this policy reform, mobile service penetration has grown fast, recently exceeding 100 % penetration rate and mobile communications service has become the biggest among telecommunications services in Mongolia. Latest periods of the industry have been witnessing strong competition among the mobile service providers and challenge for reaching customers in remote areas of the country. On the other hand, the mobile service providers are uncertain for efficiency of their investments and benefits from competition. Policy and regulatory departments are unaware productivity growth of the sector which is crucial for the next policy and regulatory decisions. Considering such situation, this study estimates productivity growth and efficiency changes in the mobile communications industry of Mongolia over the period of 2007-2011 using firm level data and employing a Malmquist total factor productivity index method. By determining the changes in total factor productivity (TFP) growth and its components, technical change and technical efficiency change, we find that the productivity increased about 44.7 percent during the study period or nearly 9 percent annually. Our research identifies that a scale change component played as a most significant source of the TFP growth in the market. In addition, our study reveals a fluctuation pattern of the productivity growth caused by catch-up effect and technology-change components during the study period. The results of the study indicates effectiveness of a competition policy for the mobile telecommunications market with shared telecommunications network for gaining the productivity growth which may provide some lessons for similar economies as Mongolia. --
    Keywords: Mongolian mobile communications,Total factor productivity,Malmquist TFP index.
    Date: 2012
  21. By: Fukase, Emiko
    Abstract: This paper investigates the differential impacts of foreign ownership on wages for different types of workers (in terms of educational background and gender) in Vietnam using the Vietnam Household Living Standards Surveys of 2002 and 2004. Whereas most previous studies have compared wage levels between foreign and domestic sectors using firm-level data (thus excluding the informal sector), one advantage of using the Living Standards Surveys in this paper is that the data allow wage comparison analyses to extend to the informal wage sector. A series of Mincerian earnings equations and worker-specific fixed effects models are estimated. Several findings emerge. First, foreign firms pay higher wages relative to their domestic counterparts after controlling for workers’ personal characteristics. Second, the higher the individual workers'levels of education, the larger on average are the wage premiums for those who work for foreign firms. Third, longer hours of work in foreign firm jobs relative to working in the informal wage sector are an important component of the wage premium. Finally, unskilled women experience a larger foreign wage premium than unskilled men, reflecting the low earning opportunities for women and a higher gender gap in the informal wage sector.
    Keywords: Labor Markets,Labor Policies,Economic Theory&Research,Gender and Development,Bankruptcy and Resolution of Financial Distress
    Date: 2013–04–01
  22. By: Elaine Liu (University of Houston); JiKun Huang (Center for Chinese Agricultural Policy)
    Abstract: Despite insect-resistant Bt cotton has been lauded for its ability to reduce the use of pesticides, studies have shown that Chinese Bt cotton farmers continue to use excessive amounts of pesticides. Using results from a survey and an artefactual field experiment, we find that farmers who are more risk averse use greater quantities of pesticides. We also find that farmers who are more loss averse use lesser quantities of pesticides. This result is consistent with our conceptual framework and suggestive evidence where farmers behave in a loss averse manner in the health domain and place more weight on the importance of health over money in the loss domain.
    Keywords: Risk Preferences, Prospect Theory, Pesticide Use
    JEL: O13 O14 O33 D03 D81 D83
    Date: 2013–04–19
  23. By: Sokic, Alexandre; FABRIS, Nikola
    Abstract: The aim of this paper is to evaluate the importance of the issue of the loss of an independent monetary policy in the case of officially euroized Montenegro. We examine the extent to which the monetary policy of the European Central Bank, which is set according to the economic conditions prevailing in the euro area, has contributed to the stabilisation of the business cycle of unilaterally euroized Montenegro. It is shown that under euroization the ECB monetary policy has been acyclical with respect to Montenegrin inflation and significantly countercyclical with respect to Montenegrin output growth. The comparative analysis with Serbia does not show that keeping an independent monetary policy would have improved the cyclical stabilisation in Montenegro. The pass-through from ECB policy rates to retail interest rates prevailing at commercial banks in Montenegro is shown to depend significantly on the macroeconomic and banking conditions prevailing in Montenegro.
    Keywords: euroisation, dollarization
    JEL: E3 E31 E5 E52
    Date: 2013–04–25
  24. By: Quang Truong (Emeritus Professor at Maastricht School of Management, The Netherlands. E-mail:
    Abstract: This paper provides an overview of the institutional structure of the business system of Vietnam. It explores the role of the state, the financial system, ownership and corporate governance, the internal structure of the firm (management), employment relations, education and skills formation, inter-company relations (networks), and social capital. It highlights the critical crossroads Vietnam is facing, after a period of steady growth, in a desperate effort to save its economy from going virtually bankrupt as a result of ideological ambiguity, cronyism, vested interests, corruption, poor governance, and the absence of stakeholders’ participation in the process of sustainable development of the country. This paper contributes to the business systems and varieties of state capitalism literatures and identifies institutional contingencies for comparative and international social science research in general.
    Keywords: Vietnam, Asia, business systems, varieties of capitalism, institutions, cronyism, vested interests, corruption, sustainable development
    JEL: O11 O53 N15
    Date: 2013–04

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