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on Transition Economics |
| By: | Thomas P. Triebs; Justin Tumlinson |
| Abstract: | Communism in East Germany sought to dampen the effect of market forces on firm productivity for nearly 40 years. How did East German firms respond to the free market after being thrust into it in 1990? We use a formal learning model and German business survey data to analyze the lasting impact of this far-reaching treatment on the way firms in former East Germany predicted their own productivity relative to firms in former West Germany during the two decades since Reunification. We find in confirmation of our formal model's predictions, that Eastern firms forecast productivity less accurately, particularly in dynamic and uncertain markets, but that the gap gradually closed over 12 to 13 years. Second, by analyzing the direction of firm level errors in conjunction with contemporaneous market signals we find that, in the years immediately following Reunification, Eastern firms estimate the market's role as generally less potent than Western firm do, an observation consistent with overweighting experiences from the communist era; however, over roughly 14 years both converge to the same (incorrect) overestimate of the market's role on their productivity. |
| JEL: | D21 D22 D84 F15 L2 N24 N64 Z1 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19209&r=tra |
| By: | Thomas J. Holmes; Ellen R. McGrattan; Edward C. Prescott |
| Abstract: | Despite the recent rapid development and greater openness of China’s economy, FDI flows between China and technologically advanced countries are relatively small in both directions. We assess global capital flows in light of China’s quid pro quo policy of exchanging market access for transfers of technology capital—accumulated know-how such as research and development (R&D) that can be used in multiple production locations. We first provide empirical evidence of this policy and then incorporate it into a multicountry dynamic general equilibrium model. This extension leads to a significantly better fit of the model to data. We also find large welfare gains for China—and welfare losses for its FDI partners—from quid pro quo. |
| Keywords: | China |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmsr:486&r=tra |
| By: | Thomas J. Holmes; Ellen R. McGrattan; Edward C. Prescott |
| Abstract: | Despite the recent rapid development and greater openness of China’s economy, FDI flows between China and technologically advanced countries are relatively small in both directions. We assess global capital flows in light of China’s quid pro quo policy of exchanging market access for transfers of technology capital—accumulated know-how such as research and development (R&D) that can be used in multiple production locations. We first provide empirical evidence of this policy and then incorporate it into a multicountry dynamic general equilibrium model. This extension leads to a significantly better fit of the model to data. We also find large welfare gains for China—and welfare losses for its FDI partners—from quid pro quo. |
| Keywords: | China |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmsr:487&r=tra |
| By: | Thomas J. Holmes; Ellen R. McGrattan; Edward C. Prescott |
| Abstract: | Despite the recent rapid development and greater openness of China’s economy, FDI flows between China and technologically advanced countries are relatively small in both directions. We assess global capital flows in light of China’s quid pro quo policy of exchanging market access for transfers of technology capital—accumulated know-how such as research and development (R&D) that can be used in multiple production locations. We first provide empirical evidence of this policy and then incorporate it into a multicountry dynamic general equilibrium model. This extension leads to a significantly better fit of the model to data. We also find large welfare gains for China—and welfare losses for its FDI partners—from quid pro quo. |
| Keywords: | China |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmsr:488&r=tra |
| By: | Voskoboynikov, Ilya B.; Timmer, Marcel (Groningen University) |
| Abstract: | GDP per capita growth rates in Russia have been among the highest in the world since the mid-1990s. Previous growth accounting research suggests that this was mainly driven by multi-factor productivity (MFP) growth. In this paper we analyse for the first time the drivers of Russian growth for thirty-four industries over the period 1995 to 2008. We pay in particular attention to the construction of a proper measure of capital services, to use in place of the stock measures employed in previous research. Based on these new measures, we find that aggregate GDP growth is driven as much by capital input as by MFP growth. Mining and Retailing account for an increasing share of the inputs, but are weak in terms of MFP performance. In contrast, MFP growth was rapid in goods-producing industries, but the sector?s GDP share declined. The major drivers of MFP growth were in the high-skilled services industries that were particularly underdeveloped in the Russian economy in the 1990s. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:rugggd:gd-137&r=tra |
| By: | Eller, Markus (BOFIT); Fidrmuc, Jarko (BOFIT); Fungácová , Zuzana (BOFIT) |
| Abstract: | This paper investigates the relationship between fiscal policy and output volatility in Russian regions between 2000 and 2009. System GMM estimation techniques are used to account for potential endogeneity between output volatility and fiscal developments. Our main finding is that fiscal activism, proxied by various measures of discretionary fiscal policy, contributes to output volatility and so induces macroeconomic instability at the regional level in Russia. This result corroborates previous studies using cross-country data. To reduce business cycle fluctuations, it would be necessary to curtail pro-cyclical fiscal activism at the regional level, e.g. via fiscal rules and sound institutions of fiscal federalism. |
| Keywords: | output volatility; automatic stabilizers; discretionary fiscal policy; dynamic panel models; Russia |
| JEL: | E32 E62 R11 |
| Date: | 2013–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2013_013&r=tra |
| By: | Andersson, Fredrik N. G. (Department of Economics, Lund University); Burzynska, Katarzyna (Department of Economics, Lund University); Opper, Sonja (Department of Economics, Lund University) |
| Abstract: | This paper provides the first comparative analysis of different types of publicly owned banks operating in China between 1997 and 2008. Using principal component analysis and Granger-causality tests, this study shows that China’s state-owned commercial banks and rural credit cooperatives did not promote GDP growth during the observation period. State-owned commercial banks even had a negative effect on growth in the manufacturing sector. By contrast, state policy banks and joint stock commercial banks did promote domestic growth. China’s experience presents a more nuanced picture of state banking that goes beyond the role of ownership to consider functional and institutional differences. |
| Keywords: | China; Banking sector; Economic growth |
| JEL: | G21 O16 P30 |
| Date: | 2013–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2013_019&r=tra |
| By: | MENG Jianjun |
| Abstract: | The greatest feature of the Chinese economy since the launch of its reform and open-door policies is that its economic resources, including human resources, goods, and capital, have become truly liquid nationwide under a market economy for the first time in the history of Chinese economic development. This process of becoming liquid has transformed China from a traditional or planned economy into a market economy, and has provided the driving force for the reallocation of new economic resources.<br />This paper examines the economic development and interregional migration in China using the migration statistics in the latest (sixth) national population census, conducted in 2010. More specifically, it analyzes regional distribution and migration trends in recent years, and highlights their characteristics by examining the population migration in three levels: cities, towns, and villages. The paper then attempts to examine the relationships between the various factors of the interregional migration and economic development in each region, and the process and mechanism for reallocating economic resources in China under a market economy. |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:13048&r=tra |
| By: | Christophe Charlier (Université Nice Sophia-Antipolis, Gredeg/Cnrs); Sarah Guillou (Ofce sciences-po Paris, Gredeg/Cnrs) |
| Abstract: | The China-Raw materials dispute recently arbitrated by the WTO opposed China as defendant to the US and the EU as claimants, on the somewhat unusual issue of export restrictions. For the claimants, Chinese export restrictions on various raw materials of which the country is a major producer create shortages in foreign markets. This scarcity does not prevail in the Chinese market and the price in the foreign markets increases, providing a cost advantage to the Chinese industries using these raw materials.China defends export limitations using Article XX of the GATT 1994 on possible exceptions to the prohibition of quantitative restrictions to conserve natural resources. This paper offers a theoretical analysis of the dispute with the help of a model of a monopoly extracting a non-renewable resource and selling it on both the domestic and foreign markets using Fischer and Laxminarayan (2004)'s framework. The theoretical results focus on the effects of imposing an export quota on quantities, prices and efficacy, and are used to comment on the claims of the parties and on the findings of the Panel and Appellate Body. Given the crucial importance of demand elasticities in this theoretical understanding of the conflict the empirical part of the paper provides estimates of import demand elasticity of the claimants as well as of China for each product concerned in the case, defined at the HS6 level. The empirical results show that among the products concerned in the dispute, two groups can be differentiated depending on China's export position. When China is a major or first exporter, there is no evident sign of the distortionary effect of an export quota. When China is a weak exporter, but a strong producer and consumer, there is evidence coherent with the model according to which China is imposing a quota export restriction that is inefficient. Key Words:Export restrictions, WTO, exhaustible natural resources, price discrimina- tion,Article XX of the GATT 1994. |
| JEL: | F13 F18 F51 K33 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1307&r=tra |
| 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. |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:13/04&r=tra |
| By: | Konstanin Kazenin (Gaidar Institute for Economic Policy) |
| Abstract: | The author deals with the a wide scope of issues related to the North Caucasus region of the Russian Federation. He provides an in depth analysis of the national movement as well as investment projects and local communities interests. |
| Keywords: | Russian Federation, North Caucasus |
| JEL: | P26 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:gai:ppaper:138&r=tra |
| By: | Petr Rozmahel; Ludek Kouba; Ladislava Grochová; Nikola Najman |
| Abstract: | The paper assesses the heterogeneity of an enlarged European Union and discusses the role and contribution of CEECs on the development of this heterogeneity over time. The two central research questions are: What are the factors that distinguish between successful and less successful CEE countries in terms of the EU enlargement? How was heterogeneity in the EU developed in the last decade? Using cluster analysis methods allow the focusing on heterogeneity in the five selected dimensions of interest: Institutions and Governance; Single Market and Openness; Macroeconomic Policies; Symmetry and Convergence; and Competitiveness. We can find that the specific macroeconomic policies followed by CEE countries during the transformation period were less decisive for a successful transition than the level of (non-elite) political stability, the quality of institutional framework, the maturity and compatibility of informal institutions and the initial level of economic development. We also can find substantial convergence in terms of economic indicators in the EU in the period considered but none or a very slow convergence in terms of institutional indicators. The negative consequences of such heterogeneity were strengthened by the crisis. As a consequence the tensions caused by these different speeds of convergence in different fields challenge the long-term sustainability of EMU, and the consequences of this situation should be more intensively discussed in the EU. We also argue that the experience of transition of CEE countries holds valuable lessons for the currently discussed reforms of the southern periphery of Europe. Similarly to the CEECs before their entrance to the EU, the periphery countries need to find a direction to head for in the next 10-15 years. Budgetary savings are inevitable; nevertheless positive long-term visions should be formulated as well. |
| Keywords: | CEE countries, cluster analysis, European governance, European Monetary Union, European integration, European economic policy, European heterogeneity |
| JEL: | E63 F15 F42 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2013:m:6:d:0:i:9&r=tra |
| By: | Xing, Yuqing (Asian Development Bank Institute); Pradhananga, Manisha (Asian Development Bank Institute) |
| Abstract: | The global financial crisis and the recent growth slowdown in the People’s Republic of China (PRC) have led to questions about the sustainability of the PRC’s growth. The commonly used argument is that the PRC is too dependent on external demand and that it needs to rebalance its economy toward domestic consumption. However, conventional measures of external demand—share of net exports and exports as a share of gross domestic product (GDP)—are biased and do not accurately measure the contribution of external demand to GDP growth. In this paper, the authors propose two measures that provide a more accurate estimate of the vulnerability of the PRC economy to external shocks, in the form of sudden drops in exports and foreign direct investment (FDI). Based on their findings, the authors conclude that the PRC economy remains highly dependent on external demand in the form of exports and FDI, and rebalancing the economy toward domestic demand has not yet been achieved. |
| Keywords: | prc economy; growth; external demand; gdp accounting |
| JEL: | E01 F43 |
| Date: | 2013–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0427&r=tra |
| By: | Pille Motsmees; Jaan Masso; Raul Eamets |
| Abstract: | The existing literature on return migration has resulted in several studies analysing the impact of foreign work experience on the returnees' earnings or their decision to become self-employed; however, in this paper we analyse the less studied effect on occupational mobility - how the job in the home country after returning compares to the job held before migration. The effect of temporary migration on occupational mobility is analysed using unique data from an Estonian online job search portal covering approximately 10-15% of the total workforce, including thousands of employees with temporary migration experience. The focus on data from a Central and Eastern European country is motivated given that the opening of labour markets in old EU countries to the workforce of the new member states has led to massive East-West migration. We did not find any positive effect of temporary migration on upward occupational mobility and in some groups, such as females, the effect was negative. These results could be related to the typically short-term nature of migration and occupational downshifting abroad as well as the functioning of the home country labour market. |
| Keywords: | occupational mobility, temporary migration, Central- and Eastern Europe |
| JEL: | F22 J62 |
| Date: | 2013–07–05 |
| URL: | http://d.repec.org/n?u=RePEc:cel:dpaper:14&r=tra |
| By: | Garcia-Herrero , Alicia (BOFIT); Xia, Le (BOFIT) |
| Abstract: | This paper analyzes empirically what determines the choice of countries signing an RMB-denominated Bilateral Swap Agreement (BSA) with China. The gravity motif is predominant (both in terms of country size and distance from China) but so is the trade motif, in terms of both exports to China and the existence of an FTA with China. Institutional soundness also matters since countries with better government and less corruption are more likely to sign an RMB-denominated BSA. This contravenes the view that China has used RMB BSAs as a soft power tool in more corrupted countries. However, the fact that China has a preference for countries with a default history and a closed capital account calls for caution. |
| Keywords: | RMB internationalization; bilateral swap agreements |
| JEL: | F33 F36 F42 |
| Date: | 2013–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2013_012&r=tra |
| By: | Ágnes Orosz |
| Abstract: | The general idea is to follow the Varieties-of-Capitalism literature on generating indicators on the economic systems actually implemented. However, this literature mostly concentrates on the enterprise (or micro) level in traditional OECD countries, categorizing countries between the extremes: liberal market economies and controlled market economies. It largely neglects the role of the government spending, the transition of former socialist countries and developing countries, and the political process behind the choice of an economic system. We broaden the perspective by combining the Varieties-of-Capitalism with the Worlds-of-Welfare-States literature in order to provide a comprehensive view on government activities in transition. With the perspective of our contribution to WWWforEurope, we concentrate especially on social welfare, innovation systems, macro stability, and, of course, how these aspects work together (or not) and are explained by the political background. We will a cluster analysis for OECD and European transition countries and comparative country studies on Slovakia and Hungary. These countries are of special relevance because they represent extreme cases (Slovakia: significant switch in transition path towards star performer, Hungary: muddling towards problem case). One part of the comparative work concentrates on the comparison of Slovakia with other new EU members that also face to challenge of state building after dissolution of one or the other sort (Czech Rep. and the Baltics). The other part of the comparative work concentrates on Hungary in comparison with the other EU-CEECs. A broad based comparison will most likely be possible on available data only. The possibility for deeper qualitative comparisons will have to be determined during the project. The comparative components will focus on the macroeconomic background (Slovakia) and the welfare state (Hungary) respectively. Cluster analysis (initially forseen for MS25) and comparative country studies allows us to draw conclusions for the EU by providing a first comparison of the position of CEECs with respect to the “old” EU members, most interestingly the southern crisis countries that are often categorized into a form called mixed market economies with sometimes contradicting institutional set ups. Do CEECs converge towards prototype models or do they (still) constitute own models? |
| Keywords: | EU integration, innovation, innovation policy, institutional reforms, macroeconomic disequilibria, market economy with adjectives, social development, welfare reform, welfare state |
| JEL: | P10 P51 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2013:m:7:d:0:i:18&r=tra |
| By: | Farkas, Beáta |
| Abstract: | One of the fundamental goals of European integration is to provide less-developed member states opportunities for convergence and strengthen economic and social cohesion. Before the crisis the convergence process was impressive in the new member states. This success raises the question of how the institutions of the new EU member states match the institution types previously worked out for the old member states, and whether they resemble any of the broadly accepted four models of capitalism (Anglo-Saxon, Nordic, Continental European and Mediterranean) or represent a new type of model. Empirical analysis suggests that an independent Central and Eastern European model is eligible for existence. The characteristics of the model may be derived from three main factors: the lack of capital, weak civil society and the impact of the European Union and other international organisations influencing the new member states. FDI inflow could help to reduce the lack of capital. The success of convergence can be explained through the reconfiguration of the value chain after the collapse of communism by companies located in Continental and Northern Europe. These companies located their assembly activities in Central and Eastern Europe, and these countries could integrate not only within the EU but also within the world economy through increased investment and productivity. Although this convergence model has its limits, it provided sufficient space for the Central and Eastern European countries to develop, due to their low initial GDP levels. During the crisis the convergence has slowed down. The forthcoming period makes some changes in the convergence model necessary. The reduction in the private sector savings-investment gap is unavoidable. Savings must be used more efficiently than in the past. These suggestions are known in literature. However, two other important factors should also be taken into consideration. Failing to bridge the current productivity gap between foreign and domestic companies makes catching-up impossible. Population ageing and increased net migration from the Central and Eastern European countries has reached the level which demolishes their economic potential and destabilizes their societies in the medium and long run. These issues mean severe challenges on both national and European level. |
| Keywords: | Central and Eastern European; convergence; global crisis; varieties of capitalism |
| JEL: | O43 P17 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48172&r=tra |
| By: | Miklós Szanyi |
| Abstract: | The general idea is to follow the Varieties-of-Capitalism literature on generating indicators on the economic systems actually implemented. However, this literature mostly concentrates on the enterprise (or micro) level in traditional OECD countries, categorizing countries between the extremes: liberal market economies and controlled market economies. It largely neglects the role of the government spending, the transition of former socialist countries and developing countries, and the political process behind the choice of an economic system. We broaden the perspective by combining the Varieties-of-Capitalism with the Worlds-of-Welfare-States literature in order to provide a comprehensive view on government activities in transition. With the perspective of our contribution to WWWforEurope, we concentrate especially on social welfare, innovation systems, macro stability, and, of course, how these aspects work together (or not) and are explained by the political background. We will a cluster analysis for OECD and European transition countries and comparative country studies on Slovakia and Hungary. These countries are of special relevance because they represent extreme cases (Slovakia: significant switch in transition path towards star performer, Hungary: muddling towards problem case). One part of the comparative work concentrates on the comparison of Slovakia with other new EU members that also face to challenge of state building after dissolution of one or the other sort (Czech Rep. and the Baltics). The other part of the comparative work concentrates on Hungary in comparison with the other EU-CEECs. A broad based comparison will most likely be possible on available data only. The possibility for deeper qualitative comparisons will have to be determined during the project. The comparative components will focus on the macroeconomic background (Slovakia) and the welfare state (Hungary) respectively. Cluster analysis (initially forseen for MS25) and comparative country studies allows us to draw conclusions for the EU by providing a first comparison of the position of CEECs with respect to the “old” EU members, most interestingly the southern crisis countries that are often categorized into a form called mixed market economies with sometimes contradicting institutional set ups. Do CEECs converge towards prototype models or do they (still) constitute own models? |
| Keywords: | EU integration, innovation, innovation policy, institutional reforms, macroeconomic disequilibria, market economy with adjectives, social development, welfare reform, welfare state |
| JEL: | P10 P51 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2013:m:7:d:0:i:19&r=tra |
| By: | Ivana Sikulová; Karol Frank |
| Abstract: | The general idea is to follow the Varieties-of-Capitalism literature on generating indicators on the economic systems actually implemented. However, this literature mostly concentrates on the enterprise (or micro) level in traditional OECD countries, categorizing countries between the extremes: liberal market economies and controlled market economies. It largely neglects the role of the government spending, the transition of former socialist countries and developing countries, and the political process behind the choice of an economic system. We broaden the perspective by combining the Varieties-of-Capitalism with the Worlds-of-Welfare-States literature in order to provide a comprehensive view on government activities in transition. With the perspective of our contribution to WWWforEurope, we concentrate especially on social welfare, innovation systems, macro stability, and, of course, how these aspects work together (or not) and are explained by the political background. We will a cluster analysis for OECD and European transition countries and comparative country studies on Slovakia and Hungary. These countries are of special relevance because they represent extreme cases (Slovakia: significant switch in transition path towards star performer, Hungary: muddling towards problem case). One part of the comparative work concentrates on the comparison of Slovakia with other new EU members that also face to challenge of state building after dissolution of one or the other sort (Czech Rep. and the Baltics). The other part of the comparative work concentrates on Hungary in comparison with the other EU-CEECs. A broad based comparison will most likely be possible on available data only. The possibility for deeper qualitative comparisons will have to be determined during the project. The comparative components will focus on the macroeconomic background (Slovakia) and the welfare state (Hungary) respectively. Cluster analysis (initially forseen for MS25) and comparative country studies allows us to draw conclusions for the EU by providing a first comparison of the position of CEECs with respect to the “old” EU members, most interestingly the southern crisis countries that are often categorized into a form called mixed market economies with sometimes contradicting institutional set ups. Do CEECs converge towards prototype models or do they (still) constitute own models? |
| Keywords: | EU integration, innovation, innovation policy, institutional reforms, macroeconomic disequilibria, market economy with adjectives, social development, welfare reform, welfare state |
| JEL: | P10 P51 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2013:m:7:d:0:i:17&r=tra |
| By: | Martine AUDIBERT; Yong HE; Jacky MATHONNAT (Centre d'Etudes et de Recherches sur le Développement International) |
| Abstract: | We estimate the evolution of healthcare demand under the influence of income growth and population aging with two samples of patients surveyed in the same regions, but with an interval of 18 years in rural China and with mixed logit to deal with heterogeneity. In accordance with theoretical and inductive inferences, it is found that healthcare price effects decreased and became more heterogeneous. Aging impact overweighed income growth impact, resulting in increasing distance effect and patients' preference to proximity. In the face of this demand change, the adjustment of governmental supply should be to promote small and middle-sized healthcare providers. However during this period to cope with urbanization, the Chinese policy consisted of privileging large hospitals. This has led to a higher share of patients, especially the aging patients, to choose self-care and a higher share of poorer patients to suffer from catastrophic health expenditures. This finding carries broad implications for rural health policy-making on, along with income growth, population aging and urbanization, how to provide better coverage of rural areas by enough qualified and multifunctional small and middle-sized healthcare providers in the developing world. |
| Keywords: | Two-period healthcare demand comparison, mixed logit model, price and distance effects, heterogeneity, insurance, rural China |
| JEL: | I1 C5 D1 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1450&r=tra |
| By: | Rainer Schweickert; Markus Ahlborn; Karol Frank; Ágnes Orosz; Ivana Sikulová; Miklós Szanyi |
| Abstract: | The general idea is to follow the Varieties-of-Capitalism literature on generating indicators on the economic systems actually implemented. However, this literature mostly concentrates on the enterprise (or micro) level in traditional OECD countries, categorizing countries between the extremes: liberal market economies and controlled market economies. It largely neglects the role of the government spending, the transition of former socialist countries and developing countries, and the political process behind the choice of an economic system. We broaden the perspective by combining the Varieties-of-Capitalism with the Worlds-of-Welfare-States literature in order to provide a comprehensive view on government activities in transition. With the perspective of our contribution to WWWforEurope, we concentrate especially on social welfare, innovation systems, macro stability, and, of course, how these aspects work together (or not) and are explained by the political background. We will a cluster analysis for OECD and European transition countries and comparative country studies on Slovakia and Hungary. These countries are of special relevance because they represent extreme cases (Slovakia: significant switch in transition path towards star performer, Hungary: muddling towards problem case). One part of the comparative work concentrates on the comparison of Slovakia with other new EU members that also face to challenge of state building after dissolution of one or the other sort (Czech Rep. and the Baltics). The other part of the comparative work concentrates on Hungary in comparison with the other EU-CEECs. A broad based comparison will most likely be possible on available data only. The possibility for deeper qualitative comparisons will have to be determined during the project. The comparative components will focus on the macroeconomic background (Slovakia) and the welfare state (Hungary) respectively. Cluster analysis (initially forseen for MS25) and comparative country studies allows us to draw conclusions for the EU by providing a first comparison of the position of CEECs with respect to the “old” EU members, most interestingly the southern crisis countries that are often categorized into a form called mixed market economies with sometimes contradicting institutional set ups. Do CEECs converge towards prototype models or do they (still) constitute own models? |
| Keywords: | EU integration, innovation, innovation policy, institutional reforms, macroeconomic disequilibria, market economy with adjectives, social development, welfare reform, welfare state |
| JEL: | P10 P51 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2013:m:7:d:0:i:16&r=tra |
| By: | Allen, Franklin; Jackowicz, Krzysztof; Kowalewski, Oskar |
| Abstract: | We examine whether foreign-owned and government-owned banks in Central and Eastern Europe reacted differently during a domestic systematic banking crisis and the global financial crisis of 2008. Our panel dataset comprises data on more than 400 banks for the period 1994- 2010. Our analysis shows that foreign banks provided credit during domestic banking crises in host countries, while government-owned banks contracted. In contrast, foreign-owned banks reduced their credit base during the global financial crisis, while government-owned banks expanded. Consequently, our results show that foreign-owned banks may contribute to financial stability during domestic crisis episodes, but also increase the risk of importing instability from abroad during a crisis in their home markets. However, government-owned banks may substitute for foreign-owned banks and hinder the transmission of international shocks. Thus, our results indicate that a mixed banking sector consisting of foreign-owned and government-owned banks is most advisable. |
| Keywords: | foreign banks, government-owned banks, credit growth, crisis, emerging market |
| JEL: | F36 G21 P34 |
| Date: | 2013–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48059&r=tra |
| By: | Josheski, Dushko; Apostolov, Mico |
| Abstract: | This paper examines the export performance of the Republic of Macedonia to its main trading partners; hence we focus on the major importing countries which are most present in the Macedonian trade balance. The data used in this article are analyzed with gravity model, which has good characteristics and very stable performance. Further, the data sample is formed on the Balkan countries i.e. Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Romania, Slovenia, Turkey and Serbia and Montenegro. The results show that the domestic country GDP is positively correlated with the exports from the source country to target countries and that Balkan countries have positive propensities to import from Macedonia, however it was found that populations of source country and target country are negatively correlated with exports from the source country to target countries. Additionally, the business cycles had no positive effect on Macedonian export to the target countries. |
| Keywords: | exports, gravity model, Macedonia |
| JEL: | E30 F10 O10 P20 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48180&r=tra |
| By: | Noémie Dominguez (Centre de Recherche Magellan - Université Jean Moulin - Lyon III : EA3713); Ulrike Mayrhofer (Centre de Recherche Magellan - Université Jean Moulin - Lyon III : EA3713) |
| Abstract: | This paper focuses on the international development of SLAT, an independent SME which develops, produces and markets solutions of secured alimentations. Located in the Rhône-Alpes region, the company has 67 employees. The SME has mainly developed in international markets through export activities: it realizes 15% of its total sales abroad and its products are marketed in 37 countries. The company has recently decided to implement a sales subsidiary in Germany to strengthen its presence in international markets. In this process, the company was accompanied by ERAI (Entreprise Rhône-Alpes International), a French agency which helps companies from the Rhône-Alpes region to expand into foreign markets. The authors of this paper explain the role played by ERAI in the establishment of the foreign subsidiary and the influence of a successful accompaniment experience on the internationalization process. |
| Keywords: | SLAT, international expansion, gateway strategy, Central and Eastern Europe. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00839726&r=tra |
| By: | TRIANDAFIL, Cristina Maria (National Institute of Economic Research of the Romanian Academy, The National Bank of Romania.) |
| Abstract: | This postdoctoral research aimed to highlight sustainability convergence criteria in the context of financialisation, with impact on the prudential regulator. Based on complex analysis, the research work has revealed that countries in Central and Eastern Europe still face significant macroeconomic risks caused by fragile macroeconomic structures. These countries have been undergoing a catching up process that contributes to the amplification of divergence across the European Union. Being heavily dependent on external financial flows, these countries involve a high macro-prudential risk, affecting the pace of real convergence. |
| Keywords: | convergence, macro-prudential, sustenability, nominal and real economy |
| JEL: | E20 E60 E51 E52 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:ror:wpince:130618&r=tra |
| By: | Zachary Zimmer; Codrina Rada; Catalin Stoica |
| Abstract: | The combined demographic developments of population aging and high rates of migration of young adults are consequential for older parents who face a potential decline in support from adult children. These developments also impact the lives of migrant adults who face the challenge of providing support to aging parents from a distance. Systematic data that allow examination of associations between the location of migrants and the provision of support to aging parents are difficult to find for Eastern Europe, a region undergoing enormous demographic and socio-economic transition. Using recently collected data from Romania, a country facing both rapid aging and out-migration, and building upon a family altruism framework, this study models provision of monetary and instrumental support as a function of migrant’s location of residence, location of their siblings in relation to parents, and other characteristics that fall under domains of parental need, ability of migrant to provide, and predisposing characteristics of migrant and parent. Models are run using a mixed methods approach accounting for the random effects at the family level. Results indicate international migrants are more likely to give money while those migrating within Romania are more likely to provide instrumental support. Regardless of type of support or location of migrant, the probability of support increases when other sources are less available and when a parent has greater need. Results provide support for the altruistic framework and help to build upon the understanding of intergenerational exchanges within rapidly changing demographic environments. |
| Keywords: | population aging; migration; intergenerational support; Romania JEL Classification: F22; F24; N30; R23 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:uta:papers:2013_09&r=tra |
| By: | Wit, J.W. de |
| Abstract: | After the Doi Moi (‘renovation’) reforms in Vietnam from 1986, land ownership rules were adjusted, effectively terminating former land collectivisation efforts. While land ownership remained fully under the control of the state, a 1993 land law conferred 20-year leaseholds to most farmers. They could now utilize farm land individually, and sell, swap and mortgage the land in a situation similar to private ownership. These leaseholds are now expiring and a new 2013 land law is in the making. This paper was initially written for UNDP Vietnam which supports Vietnam to help formulate a strong new land law, and brings out the complexities of land governance in the suburban areas of fast expanding Vietnamese cities. It first considers the present and changing land use of suburban areas and the key stakeholders involved here – powerful State Owned Enterprises, farmers, bureaucrats and communist party leaders. Planning practices are then assessed – and seen to be both rigid and complex, with different departments at various levels working at cross purposes under conditions of conflicting rules, laws and weak capacities. This is one reason for the dominance of informal arrangements and widespread corruption, where powerful actors benefit hugely and illegally from conditions of opacity and informal networks. Overall outcomes are that cities expand in a haphazard (‘leapfrog’) and inefficient manner, with insufficient attention for timely and adequate infrastructure, the environment and for people’s welfare as in social amenities and parks. As a result of lopsided incentive systems, it is the state which foregoes huge incomes and faces more costly investments, while many suburban farmers are affected through (arbitrary) land acquisition and inadequate compensation. |
| Keywords: | planning;Vietnam;environment;urban housing;land governance;suburban land |
| Date: | 2013–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:euriss:561&r=tra |
| By: | Zsofia Komuves; Miguel Ramirez (Department of Economics, Trinity College) |
| Abstract: | This paper investigates the causal relationship between FDI, GDP and the Euro/Hungarian Forint exchange rate in Hungary during the 1995-2012period. Although the question has great significance from an economic policy standpoint, there has been little to no empirical analysis undertaken so far in the case of transition economies such as Hungary. Utilizing unit root and cointegration analysis, this study finds a stable long-run relationship among the included variables, thus an error correction model is developed to capture the short-and long-run behavior of the variables. In the long run, changes in realGDP are positively associated with changes in the stock of FDI, while changes in the real effective exchange have a negative effect. In the short run, a 1 % deviation of FDI from its long-run relationship will be corrected by 0.48 % the following year. The VEC model leads to the general conclusion that all the variables in the system have a short-run adjustment mechanism. Finally, the Block Granger Causality tests generate mixed results with regard to the direction of causality among the variables, thus leadingto the conclusion that they are all endogenous. |
| Keywords: | Granger causality test, error correction model (ECM), foreign direct investment (FDI), Johansen cointegration test, KPSS unit root test, vector error correction model (VECM), Zivot-Andrews single-break unit root test. |
| JEL: | C22 F21 O52 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:tri:wpaper:1308&r=tra |
| By: | Azis, Iwan J. (Asian Development Bank) |
| Abstract: | Although growth deceleration in the People’s Republic of China (PRC) is inevitable, if the country’s new direction of financial policy (on exchange rate, capital flows, banking, capital market) can be achieved, it will be good not only for the country but also for the rest of Asia. This is consistent with the increased degree of Asia’s integration and interdependence. But given the nature of financial contagion and spillovers across countries and asset classes, the financial headwinds from global crisis may require regional cooperation in safety nets provision, as the domestic policy in the PRC and other Asian countries is likely insufficient. Equally essential is the cooperation among Asian regulators to secure financial stability and enhance market liquidity. If coordinated well, such cooperation can also strengthen Asia’s collective voice to ensure that harmonization of international rules does not mean applying the same laws in all jurisdictions, and that the global debates on bank-centric regulations do not have adverse consequences on Asian capital markets. |
| Keywords: | PRC financial policy; global headwind; Asia interdependence; regional cooperation; financial regulation |
| JEL: | E52 E58 F31 F36 G15 G18 |
| Date: | 2013–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbrei:0114&r=tra |
| By: | Ćwiklicki, Marek; Golanko, Mirosław |
| Abstract: | The purpose of this article is to characterize the role of management control and its potential functions from the perspective of New Public Management with regard to Polish realities. The premise for undertaking the subject is the observation that the potential of this control in Poland has not been used to a sufficient extent. At the same time, the authors argue that the actual application of the idea of New Public Management (NPM) in conditions of the Polish local government may occur through management control. The argumentation has been conducted in the following structure: the idea of NPM and its application in management control, the definition of management control as defined in the Act on public finance, management control as an example of approach to management in the public sector, the dominant view on management control in public administration in Poland and functions of management control from the perspective of New Public Management with regard to domestic practice. The conclusion sums up the presented analysis and indicates key elements in the development of management control as an NPM tool. |
| Keywords: | management control, New Public Management, Poland |
| JEL: | H0 H11 H30 |
| Date: | 2013–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48089&r=tra |
| By: | ANTONESCU, Daniela (Institutul de Economie Nationala al Institutului National de Cercetari Economice - Academia Româna) |
| Abstract: | This study has as general objective to evaluate regional disparities and the territorial convergence process under the impact of the cohesion policy, in the context of European Union integration. The specific objectives to which the research included in this work focused are the following: specific objectives: (i) analysis and interpretation of main theories of regional science, evolution and influence factors, main representatives, (ii) analysis of regional disparities in Romania on different fields of activity, (iii) analysis of convergence at regional level within the European Union, (iv) evaluating the impact of implementing regional policy in Romania and (v) suggestions regarding a possible model of regional strategy for the future programming period, from the perspective of the Europe 2020 Strategy. The study contains certain quantitative and qualitative estimates on the economic effects generated by the use of Structural Funds at regional level in Romania. The data and information presented in the research paper regarding the gross impact of allocated resources are verified by computing in a first stage an average level of obtained effects. By using currently existing qualitative and quantitative data and some analysis techniques of territorial convergence recognised at international level, the study presents the trends that took place at regional and local level in certain fields of activity. |
| Keywords: | regional convergence, economic and social cohesion, regional programmes and policies, territorial disparities, evaluation |
| JEL: | R11 R12 F02 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:ror:seince:130516&r=tra |
| By: | Tamar Khitarishvili |
| Abstract: | This paper evaluates the gender wage gap among wage workers along the wage distribution in Georgia between 2004 and 2011, based on the recentered influence function (RIF) decomposition approach developed in Firpo, Fortin, and Lemieux (2009). We find that the gender wage gap decreases along the wage distribution, from 0.64 log points to 0.54 log points. Endowment differences explain between 22 percent and 61 percent of the observed gender wage gap, with the explained proportion declining as we move to the top of the distribution. The primary contributors are the differences in the work hours, industrial composition, and employment in the state sector. A substantial portion of the gap, however, remains unexplained, and can be attributed to the differences in returns, especially in the industrial premia. The gender wage gap consistently declined between 2004 and 2011. However, the gap remains large, with women earning 45 percent less than men in 2011. The reduction in the gender wage gap between 2004 and 2007, and the switch from a glass-ceiling shape for the gender gap distribution to a sticky-floor shape, was driven by the rising returns in the state sector for men at the bottom, and by women at the top of the wage distribution. Between 2009 and 2011, the decline in the gender wage gap can be explained by the decrease in men's working hours, which was larger than the decrease in women's working hours. We assess the robustness of our findings using the statistical matching decomposition method developed in Nopo (2008) in order to address the possibility that the high degree of industrial segregation may bias our results. The Nopo decomposition results enrich our understanding of the factors that underlie the gender wage gap but do not alter our key findings, and in fact support their robustness. |
| Keywords: | Gender Wage Gap, Decomposition Methods, Wage Distribution, Transition Economies, Georgia, Glass Ceiling Effect, Sticky Floor Effect |
| JEL: | J16 J31 P2 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_768&r=tra |
| By: | Poghosyan, K. |
| Abstract: | Abstract: The thesis deals with structural and reduced-form modeling and forecasting of key macroeconomic variables (real growth of GDP, inflation, exchange rate, and policy interest rate). The central part of the thesis (Chapters 2-4) consists of three chapters. Chapter 2 considers the structural DSGE model and its forecasting possibilities. Chapter 3 considers the dynamic factor model (DFM) and its forecasting possibilities. Finally, Chapter 4 compares these two popular forecasting approaches, and describes which modeling approach gives more accurate and reliable forecasting results. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ner:tilbur:urn:nbn:nl:ui:12-5590845&r=tra |