nep-tra New Economics Papers
on Transition Economics
Issue of 2013‒11‒14
sixteen papers chosen by
J. David Brown
IZA (Institute for the Study of Labor)

  1. Migration, Remittances and Rural Employment Patterns: Evidence from China By Sylvie Démurger; Shi Li
  2. Foreign Direct Investment across China: what should we learn from spatial dependences? By Nasser Ary Tanimoune; Cécile Batisse; Mary-Françoise Renard
  3. Measurement of the “Underlying energy efficiency” in Chinese provinces By Massimo Filippini; Lin Zhang
  4. Monetary Policy and Bank Lending in China - Evidence from Loan-Level Data By Dong He; Honglin Wang
  5. The integrated approach for Foresight evaluation: the Russian case By Anna Sokolova
  6. The energy metabolism of China and India between 1971-2010: studying the bifurcation By Raúl Velasco Fernández; Jesus Ramos-Martin; Mario Giampietro
  7. Which teaching practices improve student performance on high-stakes exams? Evidence from Russia By Andrey Zakharov; Martin Carnoy; Prashant Loyalka
  8. Would it have paid to be in the eurozone? By Michal Brzoza-Brzezina; Krzysztof Makarski; Grzegorz Wesolowski
  9. The social legitimation of biomedical Technologies in Russia: communication challenges for science and society By Valentina Poliakova
  10. Development of an explicit rule of monetary policy for the economy of Ukraine By Kozmenko, Serhiy; Savchenko, Taras
  11. International Trade Price Stickiness and Exchange Rate and Pass-Through in Micro Data: A Case Study on US-China Trade By Mina Kim; Deokwoo Nam; Jian Wang; Jason Wu
  12. Dissecting foreign bank lending behavior during the 2008-2009 crisis By Choi, Moon Jung; Gutierrez, Eva; Peria, Maria Soledad Martinez
  13. Gender differences in mathematical performance and the school context: Evidence from Russia By Alexey Bessudnov; Alexey Makarov
  14. Governance Strategies and Welfare Effects: Vertical Integration and Contracts in the Catfish Sector in Vietnam By Neda Trifković
  15. One or Many? Using the New Opportunities of the Unified State Exam in Russian University Admissions By Andrey Ampilogov; Ilya Prakhov; Maria Yudkevich
  16. Local government and small business:mismatch of expectations By Juri Plusnin; Jaroslav Slobodskoy-Plusnin

  1. By: Sylvie Démurger (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure [ENS] - Lyon); Shi Li (School of Economics and Business Administration - Beijing Normal University / Beijing)
    Abstract: This paper explores the rural labor market impact of migration in China using crosssectional data on rural households for the year 2007. A switching probit model is used to estimate the impact of belonging to a migrant-sending household on the individual occupational choice categorized in four binary decisions : farm work, wage work, self-employment and housework. The paper then goes on to estimate how the impact of migration differs across different types of migrant households identified along two additional lines : remittances and migration history. Results show that individual occupational choice in rural China is responsive to migration, at both the individual and the family levels, but the impacts differ : individual migration experience favors subsequent local off-farm work, whereas at the family level, migration drives the left-behinds to farming rather than to off-farm activities. Our results also point to the interplay of various channels through which migration influences rural employment patterns.
    Keywords: labor migration; labor supply; remittances; temporary migration; left-behind; China
    Date: 2013
  2. By: Nasser Ary Tanimoune (School of International Development and Global Studies, University of Ottawa (Canada) - School of International Development and Global Studies, University of Ottawa (Canada) - School of International Development and Global Studies - University of Ottawa (Canada)); Cécile Batisse (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Mary-Françoise Renard (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: The paper investigates the importance of spatial dependences on Foreign Direct Investment (FDI) localization across Chinese provinces over the 1992-2009. Based on exploratory spatial data analysis, spatial sigma-convergence and spatial Durbin specifications, we present a much clearer picture of FDI dispersion and spatial convergence across China by highlighting the spillover effects of FDI localization in Chinese provinces and regions. Our results are threefold. First, FDI convergence is more pronounced compared to the Central region, whereas the dispersion is greater when the Coastal and the Western regions are taken as reference points. Second, at the province level, FDI localization seems to present a substitutable configuration. Third, when controlling for the spatial distribution of FDI at the level of regions, it seems, conversely, that the FDI localization presents a complementary configuration. The finding resulting from the opposing configurations of the FDI localizations observed at the region and province levels seems to argue in favor of promoting FDI attractiveness policies based on regional complementarities.
    Keywords: China;Convergence;FDI;spatial panel data;spatial Durbin model
    Date: 2013–10–31
  3. By: Massimo Filippini (ETH Zurich, Switzerland); Lin Zhang (ETH Zurich, Switzerland)
    Abstract: China is one of the largest consumers of energy globally. The country also emits some of the highest levels of CO2 globally. In 2009, 18% of the world’s total energy was consumed in China and the growth rate of energy consumption in China is 6.4% per year. In recent years, the Chinese government decided to introduce several energy policy instruments to promote energy efficiency. For instance, reduction targets for the level of energy intensity have been defined for provinces in China. However, energy intensity is not an accurate proxy for energy efficiency because changes in energy intensity are a function of changes in several socioeconomic factors. For this reason, in this paper we present an empirical analysis on the measurement of the persistent and transient “underlying energy efficiency” of Chinese provinces. For this purpose, a log-log aggregate energy demand frontier model is estimated by employing data on 29 provinces observed over the period 1996 to 2008. Several econometric model specifications for panel data are used: the random effects model and the true random effects model along with other versions of these models. Our analysis shows that energy intensity cannot measure accurately the level of efficiency in the use of energy in Chinese provinces. Further, our empirical analysis shows that the average value of the persistent “underlying energy efficiency” is around 0.78 whereas the average value of the transient “underlying energy efficiency” is approximately 0.93.
    Keywords: Chinese energy demand; Stochastic frontier analysis: Underlying energy efficiency; Energy intensity.
    JEL: D D2 Q Q4 Q5
    Date: 2013–10
  4. By: Dong He (Hong Kong Monetary Authority and Hong Kong Institute for Monetary Research); Honglin Wang (Hong Kong Institute for Monetary Research)
    Abstract: We investigate how monetary policy in a mixed financial system such as that of China, which is characterized by a juxtaposition of quantity- and price-based policy instruments and the co-existence of regulated and market-determined interest rates, affects bank lending. Using a newly constructed loan-level dataset, we find that loan rates but not loan size are affected by both the regulated and the market-determined interest rates and that loan size is instead affected by an implicit quota that is imposed on aggregate bank lending through window guidance. We interpret this finding to be evidence of credit rationing.
    Keywords: Monetary Policy, Bank Lending, The People's Bank of China (PBC)
    JEL: E52 E58 G21 G34
    Date: 2013–10
  5. By: Anna Sokolova (National Research University Higher School of Economics (Russia), Laboratory for Science and Technology Studies, senior research fellow)
    Abstract: As the impact of strategic decision-making at the corporate, sectoral and national levels increases, there are growing demands for high quality and solid Foresight outputs. In this regard, a timely detection and elimination of problems in Foresight projects is of great importance. A thorough evaluation of criteria and methods used in Foresight analysis would permit the improved effectiveness of Foresight activities. The results could be set against the aims to decide on the feasibility of projects and identify ways to improve them. Despite great interest in Foresight evaluation demonstrated by stakeholders at various levels, the general principles for conducting it have not yet been formulated, which hinders its development and the diffusion of successful expertise. The purpose of this paper is to develop an integrated approach for the evaluation of Foresight projects, including their classification, basic criteria to evaluate project realisation, results and impact and a SWOT analysis. The proposed methodology was tested on Russian National Foresight 2030 and the results are described and analysed. Further ways of developing this approach are suggested
    Keywords: foresight, evaluation, Russia
    JEL: O22 O32
    Date: 2013
  6. By: Raúl Velasco Fernández (Institut de Ciencia i Tecnologia Ambientals, Universitat Autònoma de Barcelona); Jesus Ramos-Martin (Departament d'Economia i d'Història Econòmica, Universitat Autònoma de Barcelona); Mario Giampietro (Institut de Ciencia i Tecnologia Ambientals, Universitat Autònoma de Barcelona)
    Abstract: This paper presents a comparison of the changes in the energetic metabolic pattern of China and India, the two most populated countries in the world, with two economies undergoing an important economic transition. The comparison of the changes in the energetic metabolic pattern has the scope to characterize and explain a bifurcation in their evolutionary path in the recent years, using the Multi-Scale Integrated Analysis of Societal and Ecosystem Metabolism (MuSIASEM) approach. The analysis shows an impressive transformation of China’s energy metabolism determined by the joining of the WTO in 2001. Since then, China became the largest factory of the world with a generalized capitalization of all sectors ?especially the industrial sector? boosting economic labor productivity as well as total energy consumption. India, on the contrary, lags behind when considering these factors. Looking at changes in the household sector (energy metabolism associated with final consumption) in the case of China, the energetic metabolic rate (EMR) soared in the last decade, also thanks to a reduced growth of population, whereas in India it remained stagnant for the last 40 years. This analysis indicates a big challenge for India for the next decade. In the light of the data analyzed both countries will continue to require strong injections of technical capital requiring a continuous increase in their total energy consumption. When considering the size of these economies it is easy to guess that this may induce a dramatic increase in the price of energy, an event that at the moment will penalize much more the chance of a quick economic development of India.
    Keywords: China, India, Energy, Multi-scale integrated analysis, Societal Metabolism, Sustainability, Socio-metabolic Transitions, Economic development
    JEL: Q43 Q48 Q56 Q57
    Date: 2013–09
  7. By: Andrey Zakharov (National Research University Higher School of Economics. International Laboratory for Educational Policy Research. Deputy Head.); Martin Carnoy (Stanford University. Vida Jacks Professor of Education.); Prashant Loyalka (Stanford University. Freeman Spogli Institute for International Studies. Center Research Fellow.)
    Abstract: This study examines the relationship between teaching practices aimed at raising student performance on a high stakes college entrance examination—the Russian Unified State Exam (USE) — and student performance on that test. The study uses data from a school/classroom survey of almost 3,000 students conducted in 2010 in three Russian regions. The analysis employs a student fixed effects method that estimates the impact of teaching practices used by students’ mathematics and Russian language teachers on students’ exam results. To test for possible heterogeneous effects of practices in different academic tracks, the study estimates the practices’ effect on USE scores for students in advanced and basic level tracks. The study finds that the only strategy with positive effects on test outcomes is greater amounts of subject-specific homework geared to different types of test items, and that the most effective type of homework differs across tracks
    Keywords: teaching practices, curriculum, student achievement, selection bias, student fixed effect, high-stakes examinations
    JEL: I21
    Date: 2013
  8. By: Michal Brzoza-Brzezina (National Bank of Poland, Warsaw School of Economics); Krzysztof Makarski (National Bank of Poland, Warsaw School of Economics); Grzegorz Wesolowski (National Bank of Poland, Warsaw School of Economics)
    Abstract: Giving up an independent monetary policy and a flexible exchange rate are the key sources of costs and benefits entailed to joining a monetary union. In this paper we analyze their ex post impact on the stability of the Polish economy during the recent financial crisis. To this end we construct a small open economy DSGE model and estimate it for Poland and the euro area. Then we run a counterfactual simulation, assuming Poland's euro area accession in 1q2007. The results are striking - volatilities of GDP and inflation increase substantially. In particular, had Poland adopted the euro, GDP growth would have oscillated between -6% and +9% (-9% to +11% under more extreme assumptions) instead of between 1% and 7%. We conclude that during the analyzed period independent monetary policy and, in particular, the flexible exchange rate played an important stabilizing role for the Polish economy.
    Keywords: optimum currency area, euro-area accession, emerging market
    JEL: E32 E58 E65
    Date: 2013–10–23
  9. By: Valentina Poliakova (Research Fellow, Institute of Statistical Studies and Economics of Knowledge, National Research University – Higher School of Economics)
    Abstract: Throughout history the development of medical institution was followed by the extension of medical expertise boundaries. Progress in new medical biotechnologies and the manipulation of human biological material, in particular, raise the conceptual question of how to define the boundaries between human beings and biological material. This paper focuses on the analysis of attitudes towards research on the human body, in scientific, political and cultural discourse. In public discussions about stem cell technology we found that the extension of medical expertise boundaries caused an intervention of ethical expertise in the fields of science and medicine. Nevertheless, the cultural conflict does not become an obstacle to the recognition of stem cell research and its legitimation in the collective consciousness.
    Keywords: stem cells, bioethics, public opinion, bans on scientific research, discourse.
    JEL: I10 I11 I18 O33 O38
    Date: 2013
  10. By: Kozmenko, Serhiy; Savchenko, Taras
    Abstract: The paper explains the expediency of developing an explicit rule of monetary policy for the economy of Ukraine. It studies the stages of its development, proving the expediency of formation of monetary rules for money aggregates, evaluates equilibrium values of the rule’s parameters based on the use of the modified Hodrick-Prescott filter, and determines the possible parameters of the monetary rule and their estimated coefficients by developing multivariate regression models.
    Keywords: monetary policy rule, central bank, monetary policy, the Hodrick-Prescott filter, inflation targeting.
    JEL: E50 E52 E58
    Date: 2013–03–01
  11. By: Mina Kim (Bureau of Labor Statistics); Deokwoo Nam (City University of Hong Kong); Jian Wang (Federal Reserve Bank of Dallas and Hong Kong Institute for Monetary Research); Jason Wu (Federal Reserve Board)
    Abstract: The interaction between the exchange rate regime, trade firms' price-setting behavior, and exchange rate pass-through (ERPT) is an important topic in international economics. This paper studies this using a goods-level dataset of US-China trade prices collected by the US Bureau of Labor Statistics. We document that the duration of US-China trade prices has declined almost 30% since China abandoned its hard peg to the US dollar in June 2005. A benchmark menu cost model that is calibrated to the data can replicate the documented decrease in price stickiness. We also estimate ERPT of Renminbi (RMB) appreciation into US import prices between 2005 and 2008. Goods-level data allows us to estimate that the lifelong ERPT is close to one for goods that have at least one price change, but less than one-half when all goods are included. This finding can be attributed to the fact that around 40% of the goods never experienced a price change, and supports the hypothesis that price changes that take the form of product replacements may bias ERPT estimates downwards.
    Keywords: Price Stickiness, Menu Cost Model, International Trade Prices, RMB, Exchange Rate Pass-Through
    JEL: E31 F14 F31
    Date: 2013–10
  12. By: Choi, Moon Jung; Gutierrez, Eva; Peria, Maria Soledad Martinez
    Abstract: This paper analyzes the lending behavior of foreign-owned banks during the recent global crisis. Using bank-level panel data for countries in Central and Eastern Europe, East Asia, and Latin America, the paper explores the role of affiliate and parent financial characteristics, host location, as well as the impact of parent geographic origin and reach on foreign banks'credit growth. Overall, the analysis finds robust evidence that foreign banks curtailed the growth of credit relative to other banks, independent of the host region. Banks from the United States reduced loan growth less than other parent banks. Neither the global nor regional reach of parent banks influenced the lending growth of foreign affiliates. However, the funding structure of foreign bank affiliates and the capitalization of parent banks do help explain the lending behavior of foreign banks during the global crisis. Although not the focus of the paper, it also finds that government-owned banks played a countercyclical role in all regions.
    Keywords: Banks&Banking Reform,Access to Finance,Debt Markets,Bankruptcy and Resolution of Financial Distress,Financial Intermediation
    Date: 2013–10–01
  13. By: Alexey Bessudnov (Department of Sociology, Centre for Advanced Studies, National Research University - Higher School of Economics.); Alexey Makarov (Department of Mathematics, National Research University - Higher School of Economics)
    Abstract: Gender dierences in mathematical performance have been long debated in psychology, economics, and sociology. We contribute to this literature by analyzing a large data set of high school graduates who in 2011 took a standardized mathematical test in Russia (n = 738; 456). We nd no substantial dierence in mean test scores of boys and girls. However, boys have a greater variance of scores and are more numerous at the top of the distribution. We apply quantile regression to model the association between school characteristics and gender dierences in test scores throughout the distribution. Male advantage in test scores, particularly at the top of the distribution, is concentrated in cities and in schools with the advanced curriculum. In ordinary high schools, especially in the countryside, gender dierences in all parts of the distribution are very small. A separate analysis at the regional level conrms that male advantage in mean test scores is higher in more urbanized regions
    Keywords: gender inequality, mathematical performance, school context
    JEL: I21 I24
    Date: 2013
  14. By: Neda Trifković (Department of Food and Resource Economics, University of Copenhagen)
    Abstract: Using an original dataset from the Vietnamese catfish sector, we study the impact of vertical coordination options on household welfare and the implications of different stages of vertical coordination for the success of the whole sector. The welfare gain from contract farming and employment on processor-owned estate farms is estimated using a maximum simulated likelihood estimator. Our results show positive welfare effects from participating in contract farming, but not from employment on processor-owned estate farms. The results imply that contract farming presents opportunities for economic growth, but additional effort is required to make the contracts more accessible to smallholders.
    Keywords: vertical coordination, catfish, maximum simulated likelihood, agri-food transformation, Vietnam
    JEL: D02 D31 O17 L14 L24
    Date: 2013–10
  15. By: Andrey Ampilogov (Research assistant, Center for Institutional Studies at the National Research University Higher School of Economics, Moscow, Russia.); Ilya Prakhov (Research fellow, Center for Institutional Studies at the National Research University Higher School of Economics, Moscow, Russia.); Maria Yudkevich (Director, Center for Institutional Studies at the National Research University Higher School of Economics, Moscow, Russia.)
    Abstract: The introduction of the Unified State Exam (USE) has simplified the process of university entry by decreasing transaction costs associated with the application process. The new system allows applicants to apply to several higher education institutions at the same time. However, many students do not take advantage of this opportunity and apply only to a single university. In this study we analyze the factors that influence application strategies, whether to apply to only one institution or to apply to several. We argue that higher USE scores predict a higher probability of multiple applications. Additionally, graduating from a high school that offers advanced training in a particular discipline positively influences this probability. The variables of family income and social capital, a parent’s level of education, and their age, as well as attending additional programs of pre-entry training are statistically insignificant.
    Keywords: higher education; university admission, application strategy
    JEL: I21 I24
    Date: 2013
  16. By: Juri Plusnin (National Research University Higher School of Economics. Faculty of Public Administration. Professor); Jaroslav Slobodskoy-Plusnin (Russian Academy of Sciences. Institute of Higher Nervous Activity and Neurophysiology. Researcher;)
    Abstract: The article summarizes the data from a few tens of interviews with entrepreneurs – representatives of a small business. The purpose of the interview was to discover expectations and suggestions from entrepreneurs to the local and state government. Interview data reveal the profound contradictions between the business and the authorities. These contradictions are based not only on results of the local administration’s actions, but also on the specific current status of local (self-)government that makes it impossible to effectively interact with the business. On the other hand, the development of local businesses has led to a peculiar configuration of the business community, also making it difficult to communicate with the authorities. As a result is trying to get protection from the local government that leads to inadmissible merging of business and government and monopolizing of business in almost every district. Direct consequences of such a merging are government inefficiency, lack of incentives for business development, and stagnation. Some “evolutionary stable strategy” has been developed, that does not allow winning any of the actors yet saving them from loses in competition with the outside players. Understanding of the inefficiency and dead-end of such an interaction by some entrepreneurs forces them to raise claims to local authority. Interviews analyses resulted in the list of complaints and suggestions on how to optimize an interaction between the local business and local authorities
    Keywords: municipal government, local self-government, small business, business-government interactions, partnership between municipality and business.
    JEL: H73
    Date: 2013

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