nep-tra New Economics Papers
on Transition Economics
Issue of 2013‒05‒05
thirteen papers chosen by
J. David Brown
IZA (Institute for the Study of Labor)

  1. Wage Flexibility in Chinese Labor Market 1989-2009 By Peng, Fei; Kang, Lili
  2. Migration Processes in Russia in 2011 By Lilia Karachurina
  3. What We Expect from the New Government By Alexei Kudrin
  4. Trade, Foreign Direct Investment and Wage Inequality in China: A Heterogeneous Firms Approach By Teresa M. Greaney; Yao Li
  5. Banking and the Macroeconomy in China: A Banking Crisis Deferred? By Le, Vo Phuong Mai; Matthews, Kent; Meenagh, David; Minford, Patrick; Xiao, Zhigui
  6. Testing rational speculative bubbles in Central European stock markets By Deev, Oleg; Kajurova, Veronika; Stavarek, Daniel
  7. Indigenous R&D Effectiveness and Technology Transfer on Productivity Growth: Evidence from the Hi-Tech Industry of China By Qazi, Ahmar Qasim; Zhao, Yulin
  8. Does Better Rail Access Improve Homeowners’ Happiness?: Evidence Based on Micro Surveys in Beijing By Wenjie Wu
  9. The Influence of Oil and Gas Revenues on Russia’s Monetary and Credit Policy By Alexei Kudrin
  11. The Cost of Living in China: Implications for Inequality and Poverty By Almås, Ingvild; Johnsen, Åshild Auglænd
  12. Transmission Effects in the Presence of Structural Breaks: Evidence from South-Eastern European Countries By Minoas Koukouritakis; Athanasios Papadopoulos; Andreas Yannopoulos
  13. Linkages between the Eurozone and the South-Eastern European Countries: A Global VAR Analysis By Minoas Koukouritakis; Athanasios Papadopoulos; Andreas Yannopoulos

  1. By: Peng, Fei; Kang, Lili
    Abstract: This paper analyses wage flexibility in Chinese labor market using the China Health and Nutrition Survey (CHNS) for the period 1989-2009. China has highly coordinated wage-setting institutions which might contribute to higher wage sensitivity of the coordinated workers, but lower sensitivity in the workers with coordination failures. Using micro-data matched to local unemployment rates, we find the reaction of wages to local unemployment varies significantly across different employee groups, suggesting disparate wage setting institutions within China. The highly coordinated big firms and public sector show more significant wage flexibility than the lagging small/medium firms and private sector. Workers with characteristics of weak bargaining power also have less flexible wages. The major wage flexibility occurred in the 1990s when the labor market moved from a centrally-planned system to a market-oriented system. After the public sector retrenchment, the labor market seems recover the rigidity in the 2000s. Moreover, sensitivity test using Heckman selection model really shows significant selectivity effects, but the Heckman adjusted results would not change our basic conclusions.
    Keywords: Wage flexibility; Local unemployment; Panel data
    JEL: C33 E32 J31 J64
    Date: 2013–04–10
  2. By: Lilia Karachurina (National Research University-Higher School of Economics, Gaidar Institute for Economic Policy)
    Abstract: This paper deals with a scope of issues related to migration process taking place in the Russian Federation. The author focuses on the issues of labor migration and domestic migration. New legislative initiatives in the area of migration were reviewed.
    Keywords: Labor migration, international migration, Russian economy, Russian demography
    JEL: F22 J11 J61 J62
    Date: 2012
  3. By: Alexei Kudrin (Gaidar Institute for Economic Policy)
    Abstract: This paper deals with a scope of issues related to the formation of the new government of the Russian Federation after the election of the new president in 2012.
    Keywords: Russian economy, economic policy
    JEL: P22
    Date: 2012
  4. By: Teresa M. Greaney (Department of Economics University of Hawaii); Yao Li (School of Management and Economics University of Electronic Science and Technology of China)
    Abstract: We apply insights from the heterogeneous firms’ literature to an empirical investigation of wage inequality in China, focusing on the potential influences of FDI and trade. Using firm-level data, we examine intra-sectoral wage inequality in a major industrial region with firms identified according to five firm ownership types and three exporter status types. We find large ownership-type wage premiums separate from other observable influences on wages, including a firm’s exporter status. Our results indicate that ownership type matters more than exporter status as a determinant in explaining intra-sectoral wage inequality in China’s Yangtze River Delta. We also find evidence of asymmetric wage effects of firm type by exporter status and by other wage determinants.
    Keywords: Exporter, pure exporter, foreign direct investment, wage premium, manufacturing, China
    JEL: F16 F23 J31 L60
    Date: 2013–04
  5. By: Le, Vo Phuong Mai (Cardiff Business School); Matthews, Kent (Cardiff Business School); Meenagh, David (Cardiff Business School); Minford, Patrick (Cardiff Business School); Xiao, Zhigui
    Abstract: The downturn in the world economy following the global banking crisis has left the Chinese economy relatively unscathed. This paper develops a model of the Chinese economy using a DSGE framework with a banking sector to shed light on this episode. It differs from other applications in the use of indirect inference procedure to test the ?tted model. The model finds that the main shocks hitting China in the crisis were international and that domestic banking shocks were unimportant. However, directed bank lending and direct government spending was used to supplement monetary policy to aggressively offset shocks to demand. The model finds that government expenditure feedback reduces the frequency of a business cycle crisis but that any feedback effect on investment creates excess capacity and instability in output.
    Keywords: DSGE model; Financial Frictions; China; Crises; Indirect Inference
    JEL: E3 E44 E52 C1
    Date: 2013–04
  6. By: Deev, Oleg; Kajurova, Veronika; Stavarek, Daniel
    Abstract: This study examines the existence of rational speculative bubbles in selected Central European stock markets. We employed the duration dependence test for bubble detection, which we believe provides reliable results for the specific properties of the markets studied. In addition to the stock market indices the prices of individual stocks with the highest capitalization were investigated in order to identify the source of bubble. In contrast to the findings of previous studies on bubbles in emerging markets, no significant bubbles in asset prices were reveiled, except for the Polish stocks of chemical companies from 2004-2007 and Czech and Hungarian stocks of new and prospective sectors.
    Keywords: rational speculative bubble; Central European stock markets; duration dependence test
    JEL: C52 G12
    Date: 2013–02–11
  7. By: Qazi, Ahmar Qasim; Zhao, Yulin
    Abstract: The study employs the panel data of 15 hi-tech industries over the period of 2000-2010 in order to examine the effectiveness of R&D with respect to productivity change and indentify the significant contributing factors with intensity in the Chinese hi-tech sector. The Malmquist Productivity Indexes are calculated by using the non-parametric programming technique and censored regression model is applied to conduct the empirical investigation. We find that on average, the sector is confronting productivity deterioration which is mainly due to the technical inefficiency. The Office Equipments industry has the highest productivity gain in our sample at the rate of, on average, 3.7% per year and all of which is caused by technical change. Furthermore, the electronic components industry is found to be the most efficient industry in the sector that drives an industry to have productivity progress on average, of 1.7% per year over the study period. At last, Tobit results indicate that spillovers through FDI and technology import are having significant and positive effect on the productivity progress.
    Keywords: Productivity Growth;DEA;Tobit Model
    JEL: C34 C61 D24
    Date: 2013
  8. By: Wenjie Wu
    Abstract: Development of urban transport infrastructures is a key policy focus---particularly in countries like China which have experienced fast urbanisation over the past decade. While existing studies provide marginal values for rail access on the real estate market, little is known about the consequences of local public goods improvements for homeowners' subjective wellbeing using reported happiness data. This paper uses a difference-in-difference method to empirically measure the impact of rail access on homeowners' happiness. My identification strategy takes advantage of micro happiness survey data conducted before-and-after the opening of new rail stations in 2008 Beijing. I deal with the potential concern about the endogeneity in sorting effects by focusing on "stayers" and using non-market (fang gai) housings with pre-determined locations. I find the significantly heterogeneity in the effects from better rail access on homeowners' happiness with respect to different dimensions of residential environment. The welfare estimates suggest that better rail access provided substantial benefits to homeowners' happiness, but these benefits have strong social-spatial differentiations. These findings add to the evidence that transport improvement has an important role to play in influencing local residents' subjective wellbeing.
    Keywords: Happiness, transport improvement, Geographical Information System, Wellbeing, China
    JEL: D60 H41 R41
    Date: 2013–04
  9. By: Alexei Kudrin (Gaidar Institute for Economic Policy)
    Abstract: This article examines the problems of implementing monetary and credit policy when there is significant flow of currency revenues from the export of raw materials. It argues that, given a strong balance of payments, the Central Bank has to accept either a strengthening of the rouble or inflation. Only the RF Government has the power to prevent an appreciation of the currency whilst at the same time controlling inflation. This dual task can be achieved by saving, when external economic conditions are favourable, a share of the revenues from oil and gas in reserve funds. Such a policy can create the foundations for macroeconomic stability and a favourable investment climate.
    Keywords: monetary and credit policy, oil and gas dependency “Dutch disease”, reserve fund, inflation
    JEL: E52 E58 E61
    Date: 2013
  10. By: Vladimir Mau (Russian Presidential Academy of National Economy); Konstantin Yanovsky (Samuel Neaman Institute for Advanced Studies in Science and Technology, Technion (Israel))
    Abstract: The last decade’s Reforms in post-communist countries demonstrated, the aid proved to be most efficient in the countries where due to a timely schedule and consistency in reform implementation, governments can easily do without it. In case of Russia both the reformists and officials of international financial institutions have failed to race through the “window of opportunity”, while their vision of its necessary and sufficient qualities were likely to be inaccurate.
    Keywords: demand for institutions, electoral support to reforms; political factors of assistance programs efficiency, window of opportunity for reforms & for assistance program
    JEL: D72 F59 N14 N44 P16 P33
    Date: 2013
  11. By: Almås, Ingvild (Norwegian School of Economics and Business Administration); Johnsen, Åshild Auglænd (University of Stavanger)
    Abstract: China’s economic development in recent decades has been tremendous, but subject to debate. This paper calculates regional prices that make incomes comparable across both time and space using the Engel-curve approach. Incomes are adjusted using these price indices, providing new estimates of inequality and poverty development. Our findings contrast with measures based on the official consumer price indices (CPIs) – in a time characterized by high economic growth, we find a larger increase in inequality and a more moderate poverty reduction than what is indicated by the CPI-adjusted measures.
    Keywords: China; Poverty; Inequality; CPI
    JEL: D01 E31 F01
    Date: 2013–02–07
  12. By: Minoas Koukouritakis (Department of Economics, University of Crete, Greece); Athanasios Papadopoulos (Department of Economics, University of Crete, Greece); Andreas Yannopoulos (Department of Economics, University of Crete)
    Abstract: In this paper, we investigate the monetary transmission mechanism through interest rate and real effective exchange rate channels, for five South-Eastern European countries, namely Bulgaria, Croatia, Greece, Romania and Turkey. Recent unit root and cointegration techniques in the presence of structural breaks in the data have been used in the analysis. The empirical results validate the existence of a valid long-run relationship, with parameter constancy, for each of the five sample countries. Additionally, the estimated impulse response functions regarding the monetary variables and the real effective exchange rate converge and follow a reasonable pattern in all cases.
    Keywords: Monetary Transmission Mechanism, Structural Breaks, LM Unit Root Tests, Cointegration Tests, Impulse Responses.
    JEL: E43 F15 F42
    Date: 2013–02–01
  13. By: Minoas Koukouritakis (Department of Economics, University of Crete, Greece); Athanasios Papadopoulos (Department of Economics, University of Crete, Greece); Andreas Yannopoulos (Department of Economics, University of Crete)
    Abstract: In the present paper we assess the impact of the Eurozone�s economic policies on specific South-Eastern European countries, namely Bulgaria, Croatia, Cyprus, Greece, Romania, Slovenia and Turkey. Since these countries are connected to the EU or the Eurozone and the economic interdependence among them is evolving, we implemented the Global VAR model. Our results indicate that all sample countries, except Turkey, react in a similar manner to changes (a) in the macroeconomic policies of the Eurozone, and (b) in the nominal exchange rate of the euro against the US dollar. There is evidence of linkages among the EU or Eurozone members of the region, and between each of them and the Eurozone.
    Keywords: Monetary Transmission, Global VAR Model, Weak Exogeneity, Impact Elasticities, Generalised Impulse Responses.
    JEL: E43 F15 F42
    Date: 2013–02–08

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