nep-tra New Economics Papers
on Transition Economics
Issue of 2014‒01‒10
seventeen papers chosen by
J. David Brown
IZA (Institute for the Study of Labor)

  1. The political roots of intermediated lobbying: evidence from Russian firms and business associations By Andrei Govorun; Israel Marques; William Pyle
  2. Export diversification in the product space and regional growth: Evidence from Russia By Sergey Kadochnikov; Anna Fedyunina
  3. The formation of China's Mobile TV standards/regulations and for future sustainable development: Socio-technical translation process study for the China's Mobile TV standard By Chao, Caleb Fu-Cheng
  4. Chinese Political and Economic Governance System and the Imbalance between Consumption and Investment By Julan Du; Hongsheng Fang; Xiangrong Jin
  5. Understanding the Russian malaise: The collapse and recovery of subjective well-being in post-communist Russia By Ronald Inglehart; Roberto Foa; Eduard Ponarin; Christian Welzel
  6. Sustainable agriculture and rural development in terms of the republic of Serbia strategic goals realization within the Danube region. Achieving regional competitiveness By Cvijanović, Drago; Subić, Jonel; Andrei, Jean
  7. Expanding Beyond Borders : The Yen and the Yuan By Paola Subacchi
  8. Patient choice in the post-Semashko health care system By Sergey Shishkin; Alexandra Burdyak; Elena Potapchik
  9. Households' saving mobility in Poland By Liberda, Barbara; Peczkowski, Marek
  10. Economic and Employment Effects of Microloans in a Transition Country By Baldi, Guido; Sadovskis, Vairis; Šipilova, Viktorija
  11. Estimating the relationship between rate of time preferences and healthy lifestyle in Russia By Tatiana Kossova; Elena Kossova; Maria Sheluntcova
  12. The Impact of Merger and Acquisition on Value at Risk (VaR): A Case Study of China Eastern Airline By Fung, Ka Wai Terence; Wan, Wilson
  13. Working Document: Towards a vision for research, technology and innovation cooperation between Russia and the EU, its Member States and Associated States By Manfred Spiesberger; Marion Mienert; Jörn Sonnenburg; Karel Haegeman; Oguz Ozkan; Alexander Sokolov; Natalya Veselitskaya; Gorazd Weiss; Andreas Kahle; Klaus Schuch; Ilter Haliloglu; Irina Kuklina; Elisabetta Marinelli; Maria Balashova
  14. The Road out of Crisis and the Policy Choices Facing Russia By Freeman, Alan
  15. How do free trade agreements change import prices? : firm-level evidence from China's imports from ASEAN By Hayakawa, Kazunobu; Yang, Chih-Hai
  16. Entry and Competition in a Transition Economy: The Case of Slovakia By Martin Lábaj; Peter Silaniè; Christoph Weiss
  17. Food Standards and Vertical Coordination in Aquaculture: The Case of Pangasius from Vietnam By Neda Trifković

  1. By: Andrei Govorun (National Research University Higher School of Economics); Israel Marques (National Research University Higher School of Economics); William Pyle (Economics Department, Middlebury College)
    Abstract: How does political competition shape the way that firms pursue legislative change? A rich political economy literature describes various ways in which firms influence the design and enforcement of laws, rules and regulations germane to their business activities. Although helpful, this literature is disconnected from work on legislative accountability and political concentration. Making a distinction poorly developed in prior research, we contrast firms that choose to influence policy directly, through un-mediated contacts with executive and legislative branch personnel, and those that do so indirectly, through lobby groups acting as intermediaries. We propose a simple theory that relates the relative costs of lobbying and the strategies firms select to the extent of political competition and concentration. As competition increases and concentration decreases in a region, the use of indirect channels of lobbying becomes more attractive (and vice versa). We test our theory using a survey of 1013 firms across 61 Russian regions. Exploiting substantial variation in political competition and concentration across Russia’s regions, we find that firms in politically competitive environments, where there is less concentration, are more likely to use business associations to influence their institutional environment. Using a survey of 315 business associations, we show that these effects may be explained by the variation of the willingness of regional decision-making officials to support more or less encompassing policies depending on local political environment
    Keywords: lobbying, democratic institutions, business associations, Russia
    JEL: D71 D72
    Date: 2013
  2. By: Sergey Kadochnikov; Anna Fedyunina
    Abstract: This study investigates the relationship between export structure and economic growth in Russian regions. We hypothesize that it is not industry variety per se but the variety of related industries located relatively close to each other in the product space that significantly contributes to economic growth in Russian regions. The empirical analysis presented in the paper confirms that the density of the product space around the products for which a region had a comparative advantage determined the economic development in Russian regions in the 2003-2008 period. We conclude that the presence of a local related variety of industries in a region is one of the most important regional factors in economic development.
    Keywords: export, economic growth, Russian regions
    JEL: F14 R11
    Date: 2013–12
  3. By: Chao, Caleb Fu-Cheng
    Abstract: The China telecom mobile business has grown fast during the past ten years. For example, China Mobil subscribers have increased from 13.68 million to reach 1.146 billion in March 2013; Mobile Internet subscribers grew by 13.94 million in March to reach a total of 817.39 million. The mobile teledensity (penetration rate) in 2012 rose to 82.6, up from 73.6 at the end of 2011. Digitalizing the signals of Audio/Video for TV is the first step for digital Mobile TV. There were four stages (2003-2015) for the implementation of China's audio/video digitalization. Stage one: major cities in the eastern coastal and western inland parts of China as well as provincial capitals in the centre of the nation by the end of 2005. The second stage aimed for the 2008 Beijing Olympic Games which included cities completed in the first stage. In the third stage, cities would be added in the middle and western areas. The fourth stage will end in 2015 when the whole country will be able to connect to digital cable. Analogue TV broadcasts will be terminated in 2015... --
    Keywords: China's Mobile TV Standard,Regulation,The Actor-Network Theory
    Date: 2013
  4. By: Julan Du (The Chinese University of Hong Kong and Hong Kong Institute for Monetary Research); Hongsheng Fang (Zhejiang University); Xiangrong Jin (Zhejiang University)
    Abstract: The Chinese government has been pursuing economic growth under the guidance of "growth is a hard principle". In the context of the Chinese political and economic governance system, local governments have employed the overtaking strategy (placing primary emphasis on the development of capital and technology-intensive industries) and the real estate development strategy to push for economic growth and fiscal revenue growth. This has led to a repressed labor share and an elevated capital and government share in primary and secondary income distribution structure. Using the empirical strategy of Acemoglu et al. (2003), we confirm that the development strategies have shaped an imbalanced consumption-investment structure through primary and secondary income distribution as well as other channels. It suggests that the Chinese government will be able to accomplish China's transition from an investment-led growth model to a consumption-based growth model only if it modifies its political and economic governance system and removes the distortions in development strategies.
    Keywords: Overtaking Strategy, Real Estate Development Strategy, Biased Income Distribution Structure, Consumption-Investment Imbalances
    JEL: E62 E65 H20 H77
    Date: 2013–11
  5. By: Ronald Inglehart (Higher School of Economics); Roberto Foa (Harvard University); Eduard Ponarin (Higher School of Economics); Christian Welzel (Center for the Study of Democracy, Leuphana University, Scharnhorststr.)
    Abstract: This article analyzes the decline of subjective well-being and a sense of national self-esteem among the Russian people that was linked with the collapse of the communist economic, political and social systems in the 1990s—and a subsequent recovery of subjective well-being that began more recently. Subjective well-being is closely linked with economic development, democracy and physical health. The people of rich countries tend show higher levels than those of poor countries, but already in 1982, the Russia people ranked lower on happiness and life satisfaction than the people of much poorer countries such as Nigeria or India; external signs of this malaise were rising alcoholism and declining male life expectancy. But after the collapse of the Soviet Union, subjective well-being in Russia fell to levels never seen before, reaching a low point in 1995 when most Russians described themselves as unhappy and dissatisfied with their lives as a whole. Since 2000, this trend has been reversing itself, but in 2011 Russia still ranked slightly lower than its level in 1981
    Keywords: World Values Survey, Russia, happiness, subjective well-being
    JEL: E11
    Date: 2013
  6. By: Cvijanović, Drago; Subić, Jonel; Andrei, Jean
    Abstract: International Scientific Conference „SUSTAINABLE AGRICULTURE AND RURAL DEVELOPMENT IN TERMS OF THE REPUBLIC OF SERBIA STRATEGIC GOALS REALIZATION WITHIN THE DANUBE REGION -achieving regional competitiveness“, which was held in period 5-7th December 2013 in Topola, the Republic of Serbia, through number of presented papers mainly provides an overview of results of scientific research on the integrated and interdisciplinary project no. III 46006 „SUSTAINABLE AGRICULTURE AND RURAL DEVELOPMENT IN TERMS OF THE REPUBLIC OF SERBIA STRATEGIC GOALS REALIZATION WITHIN THE DANUBE REGION“. International Scientific Conference „SUSTAINABLE AGRICULTURE AND RURAL DEVELOPMENT IN TERMS OF THE REPUBLIC OF SERBIA STRATEGIC GOALS REALIZATION WITHIN THE DANUBE REGION - achieving regional competitiveness“, gathered number of scientific workers and experts from many countries. Besides the authors from Serbia in Thematic Proceedings are also presented the papers of authors from Bosnia and Herzegovina, Macedonia, Romania, Russia, Moldova, Slovakia, Ukraine, Germany, the Netherlands, Japan and Austria. After all 92 papers were positively reviewed by the reviewers and presented on the International Scientific Conference, they were published in the Thematic Proceedings. Proceedings publisher was Institute of Agricultural Economics Belgrade, together with 34 eminent scientific-educational institutions from Serbia and abroad. In the Plenary Section were presented 3 papers which gave significant contributions to International Scientific Conference. Rest of the papers are systematized in 3 thematic sections: IKNOWLEDGE ECONOMY AND HUMAN CAPITAL IN THE FUNCTION OF IMPROVING REGIONAL COMPETITIVENESS (45 papers); II BIOREGIONALISM AND PERMACULTURE AS A CONCEPTS OF CONSERVATION OF ECOLOGICAL SPECIFICITIES OF RURAL AREAS (27 papers); III THE CONSTRUCTION OF AGRO-REGIONAL IDENTITY THROUGH INSTITUTIONAL REFORM (17 papers).
    Keywords: Agriculture, sustainable agriculture, rural development, strategic goals, Danube region, regional competitiveness
    JEL: A3 M0 O5 Q0 Q01
    Date: 2013–12–03
  7. By: Paola Subacchi (Asian Development Bank Institute (ADBI))
    Abstract: As all eyes are on the strategy and policy measures of the People’s Republic of China (PRC) to push the international use of the yuan, this paper turns to the internationalization of the Japanese yen and compares it with what the PRC is doing. There are some fundamental differences in the regional context and in the pattern of regional integration, and these distinguish the PRC’s current strategy from the Japanese experience in the 1980s. The yen’s development as an international currency, and the comparison with the PRC’s strategy, highlight the importance of regional integration as a way to overcome network externalities and market inertia. Using an analytical framework that assesses both the range of different roles (the scope) and geographical scale (the domain) of a currency in the global market, the paper suggests that economic fundamentals alone, albeit essential, are not sufficient to warrant a fully fledged scope and global domain of the currency. The paper concludes by suggesting that in the next decade the PRC yuan will become Asia’s leading currency due to the PRC’s deep economic integration in the region, and that the Japanese yen’s function as an international asset and store of value can be further enhanced if Tokyo’s competitiveness as a leading international financial center is improved.
    Keywords: the internationalization of the Japanese yen, the internationalization of the Chinese yuan, China, Japan, Currency Internationalization, International currency
    JEL: E42 E44 F33
    Date: 2013–12
  8. By: Sergey Shishkin (National Research University Higher School of Economics); Alexandra Burdyak (Russian Presidential Academy of National Economy and Public Administration); Elena Potapchik (National Research University Higher School of Economics,)
    Abstract: The opportunity for patient choice in the health care system in CIS countries was created by the partial destruction of the referral system and the development of paid medical services. The data of two population surveys conducted in Russia in 2009 and 2011 show that patient choice of medical facility and physician is taking place in the post-Semashko health care system, and it is not restricted to the area of paid medical services. However for the majority of population the choice of medical facility and physician is not a necessity. Part of reason for patient choice is caused by the failure of the patient referral system to ensure the necessary treatment. For some Russian citizens, the choice of health care provider is a means to obtain better quality care, and in this respect the enhancement of patient choice is leading to the improved efficiency of the emerging health care system.
    Keywords: health care, Semashko system, patient choice, Russia
    JEL: I10 I11
    Date: 2013
  9. By: Liberda, Barbara; Peczkowski, Marek
    Abstract: In this paper we examine the mobility of Polish households with regard to saving rates during the years 2007-2010 and compare it with the households’ saving mobility during the years 1997-2000. The analysis for 2007-2010 is based on the household budget panel data from three panels of 15,000 of Polish households selected by authors for years 2007-2008, 2008-2009 and 2009-2010 from the Household Budget Surveys. We use the Markov mobility matrix and estimate the long-term ergodic distribution of households according to the saving rates. Our results show that the long term households’ distribution reveals a tendency towards polarization of households with regard to saving rates. Comparing the results for 2007-2010 with the authors’ previous research on the households’ saving mobility for a decade earlier during 1997-2000, we prove that between the years 1997-2000 and 2007-2010 the long term change in the distribution of households was asymmetrical toward the highest saving rate groups. This helps to explain why Polish households could maintain positive and rising savings during the highly uncertain period of the financial crisis in 2007-2010.
    Keywords: household, saving, distribution, mobility, Markov matrix, polarization
    JEL: D12 D19
    Date: 2013
  10. By: Baldi, Guido; Sadovskis, Vairis; Šipilova, Viktorija
    Abstract: Over the last years, microloans to small and medium-sized enterprises have grown in significance in many countries of Central and Eastern Europe. Empirical evidence on the economic and social impact of microfinance is, however, scant. In trying to shed more light on this important issue, this paper uses a case study and analyzes the economic impacts of the microloan programme of the Latvian development bank Hipoteku Banka. We analyse a dataset provided by the Hipoteku Banka and use economic indicators of Latvia and its regions as comparisons. We find that the firms that were granted a loan from Hipoteku Banka on average considerably increased their employment during the loan period. In addition, a survey was carried among the clients of the bank. The survey results imply that the microloan program made a clear contribution to supporting existing firms and establishing new businesses, although the impact varies across sectors of economic activity.
    Keywords: Microcredit, Employment, Economic Growth
    JEL: D31 O11 O12
    Date: 2014–01
  11. By: Tatiana Kossova (National Research University Higher School of Economics); Elena Kossova (National Research University Higher School of Economics); Maria Sheluntcova (National Research University Higher School of Economics)
    Abstract: This paper aims to reveal the relationship between rate of time preferences (RTP) and healthy lifestyles of Russians. This rate shows individual preferences for the distribution of consumption over time. We examine such healthy and unhealthy behavior as smoking, drinking alcohol, doing physical exercise and having medical check-ups. The research is based on data from a survey which was conducted by the Yuri Levada Analytical Center in 2011. Our findings suggest that the RTP along with such factors as age, gender, marital status, income, health status and employment status influence the lifestyle of Russians
    Keywords: rate of time preferences, individual discount rate, healthy lifestyle, smoking, drinking, physical exercises, medical check-ups, Russia
    JEL: D9 I1
    Date: 2013
  12. By: Fung, Ka Wai Terence; Wan, Wilson
    Abstract: This paper attempts to examine the impact of merger and acquisition on Value at Risk (VaR) of China Eastern Airline. The VaR is estimated for the whole sample and pre-merger periods by three methods: RiskMetrics , AR-GARCH and Generalized Extreme Value (GEV). The regression-based model reports the highest VaR followed by RiskMetrics and GEV. All models report a low VaR after the 11 June, 2009 merger, indicating a negative impact of merger and acquisition on VaR.
    Keywords: Value at Risk, merger and acquisition, GARCH
    JEL: G11 G3 G34
    Date: 2013
  13. By: Manfred Spiesberger (ZSI); Marion Mienert (DLR); Jörn Sonnenburg (DLR); Karel Haegeman (European Commission – JRC-IPTS); Oguz Ozkan (TUBITAK); Alexander Sokolov (HSE); Natalya Veselitskaya (HSE); Gorazd Weiss (ZSI); Andreas Kahle (DLR); Klaus Schuch (ZSI); Ilter Haliloglu (TUBITAK); Irina Kuklina (ICISTE); Elisabetta Marinelli (European Commission – JRC-IPTS); Maria Balashova (ICISTE)
    Abstract: This Working Document outlines development perspectives for cooperation in research, technology and innovation (RTI) between the EU, its Member States (MS), countries associated to the EU’s FP7 (AC), and Russia. The Working Document has been prepared in the framework of the ERA.Net RUS project and is based on a comprehensive foresight exercise implemented over the years 2010-2013 and on analysis of ongoing RTI cooperation. In-depth discussions among the ERA.Net RUS and ERA.Net RUS Plus consortiums and Funding Parties, and in the frame of expert workshops with policy makers and analysts provided essential input. Furthermore, results of other related projects (such as BILAT-RUS, BILAT-RUS Advanced, ACCESSRU, etc.) have been studied. The paper proposes a vision on enhancing the cooperation between EU MS/AC and Russia overall, as well as a specific follow-up vision for the ERA.Net RUS and ERA.Net RUS Plus projects.
    Keywords: European research and innovation policy, Innovation Union, ERAWATCH, European Research Area, Policy Mixes, Transnational and International Cooperation, NETWATCH, ERA Nets, Foresight, Joint programming of research, Researchers, Universities
    Date: 2013–12
  14. By: Freeman, Alan
    Abstract: This paper was presented to the May 2013 conference of the PostGLobalization Initiative ( in response to a request from the organizers to present suggestions for the policies required to get out of the economic crisis which opened in 2007, and their implications for the Russian economy and government. Drawing on materials from the ‘Key Trends in Globalization’ website (, the paper analyzes growth in four types of country typified by the EU, the USA, India, and China. The fastest growth has been registered in China, which has followed a policy of expansionary money with strong banking controls, combined with an investment-led stimulus. Strong growth has also however been registered by countries that apply a subset of these policies, for example India, which has strong capital controls and a significant – and frequently understated – state presence in the economy. Growth is also weakest in those countries, such as the EU economies and Britain, where governments and banks specifically rule out and impede both the expansion of government spending, and state investment of any shape or form. The paper shows that it is these economic policies that produce growth, and neither some special characteristics unique to particular countries, such as their political systems or wage régimes, nor some pre-ordained new hegemonic order which decrees that the BRICS must rise because it simply happens to be their turn. Least of all can economic success be attributed to the adoption of neoliberal market policies. The specific combinations that brings the most growth invariably involve direct public involvement in investment, whose collapse is the primary and most deep-seated underlying cause of the present protracted crisis. Particularly effective – and, the paper argues, essential in the medium to long term – are policies oriented towards human development. These produce an immediate increase in consumer demand as illustrated by the effect of Brazil’s poverty-elimination policies; most decisively, however, they make possible the consolidation of the resultant surge in consumer demand, whose effect will be shortlived if unaccompanied by developmental measures, on the basis of a parallel and stable increase in investment demand and productive capacity – which requires bringing into being the type of workforce that is required to make use of leading-edge technology. On the other hand, industrial development in the modern economy depends critically on human development, precisely because of modern technology, which is ever more dependent on the specifically human contribution of skilled and creative labour. Human and industrial development, in the modern world, therefore march hand in hand. Such policies, contrary to established neoliberal dogma, require the direct involvement of the national state in both human and industrial development. Any country can develop such policies – taking into account national specificities of course – whether or not it shares China’s particularities. Policies of this type are particularly relevant to countries such as Russia and South Africa which run the risk, in an era of resource shortage accompanied by wild fluctuations of commodity prices, of subordination to a narrow, destructive and unstable development of their extractive industries, leaving them at the mercy of countries which retain command of the production of high-tech goods. Such policies will succeed all the more, to the extent that those countries who are carrying them out co-ordinate with each other on the basis of mutual justice and equality, to establish financial, material, and trading institutions that afford genuine economic independence. The decisive reason that such independent national policies are required is that the crisis, above all in the so-called ‘advanced’ economies – better now named the ‘no-longer-developing’ or NLD economies – has deep-seated origins in the long-run fall in the rate of profit, and no immediate or automatic recovery can be expected. This has led to a rise in parasitic sectors rooted in extractivist and financial capital, which have shown themselves capable of inflicting great damage on developing economies, if not prevented from so doing. The paper finishes with an evaluation of the specific policies best suited to the BRICS and more generally ‘Southern’ or emerging economies, arguing for a policy of ‘combined development’ focused on developing and applying the most advanced technologies available in the world today, combined with an industrial policy whose centre is human development – forging and nurturing a talented and creative workforce with the high levels of education and skills required to make modern technology effective - instead of passing through some mythical ‘stage of development’ requiring a focus on mineral wealth or low wages.
    Keywords: Crisis; Development; Growth; Inequality; State; Culture; Environment; Technology; Creativity; investment’ BRICS; Russia
    JEL: O10 N0
    Date: 2013–04–20
  15. By: Hayakawa, Kazunobu; Yang, Chih-Hai
    Abstract: The literature has revealed the positive impacts of free trade agreements (FTAs) on export prices by employing product-level trade data. This paper empirically examines the impacts of FTAs on import prices at the firm level. We focus on firm-level imports in China from ASEAN countries by employing China’s firm-product-level trade data. As a result, controlling for firm characteristics and product characteristics, we could not find significantly positive impacts of an FTA’s entry into force on import prices of FTA eligible products. Instead, we found a significant increase in import quantities of FTA eligible products. Thus, at the firm level, the gains from FTAs for exporters may be the increase in export quantities rather than the rise in export prices.
    Keywords: China, Southeast Asia, International trade, Free Trade Agreement (FTA), Imports, Prices, FTA utilization
    JEL: F10 F13 F15
    Date: 2013–12
  16. By: Martin Lábaj (University of Economics in Bratislava, Faculty of National Economy, Department of Economic Policy); Peter Silaniè (University of Economics in Bratislava, Faculty of National Economy, Department of Economic Policy); Christoph Weiss
    Abstract: The present paper provides first empirical evidence on the effects of entry on market conduct for a transition economy. We estimate size thresholds required to support different numbers of firms for seven retail and professional service industries in a large number of distinct geographic markets in Slovakia. Our results suggest a differential impact of entry on market conduct: while market conduct is unaffected by entry in the north-western parts of Slovakia, competition tends to kick in slowly in most professions in the south-east. This latter region suffers from infrastructure bottlenecks and competitors require a larger increase in the number of customers to come in.
    Keywords: entry thresholds, competition, Slovakia, cross section, geographic markets
    JEL: L22 D22 M13 R11
    Date: 2013–01–31
  17. By: Neda Trifković (Department of Food and Resource Economics, University of Copenhagen)
    Abstract: This paper explores the interaction between food standards and vertical coordination in the Vietnamese pangasius sector. For farmers and processors alike, the adoption of standards is motivated by a desire to improve market access by ensuring high quality supply. Instead of encouraging the application of standards and contract farming, processing companies prefer to vertically integrate primary production largely due to concerns over the stable supply of pangasius with satisfactory quality and safety attributes. These tendencies increase the market dominance of industrial farming and worsen the position of small household farms.
    Keywords: food standards, motivation, vertical coordination, pangasius, Vietnam
    Date: 2014–01

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