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on Transition Economics |
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Issue of 2014‒03‒22
twenty-one papers chosen by J. David Brown IZA (Institute for the Study of Labor) |
| By: | Fernald, John G. (Federal Reserve Bank of San Francisco); Spiegel, Mark M. (Federal Reserve Bank of San Francisco); Swanson, Eric T. (Federal Reserve Bank of San Francisco) |
| Abstract: | We use a broad set of Chinese economic indicators and a dynamic factor model framework to estimate Chinese economic activity and inflation as latent variables. We incorporate these latent variables into a factor-augmented vector autoregression (FAVAR) to estimate the effects of Chinese monetary policy on the Chinese economy. A FAVAR approach is particularly well-suited to this analysis due to concerns about Chinese data quality, a lack of a long history for many series, and the rapid institutional and structural changes that China has undergone. We find that increases in bank reserve requirements reduce economic activity and inflation, consistent with previous studies. In contrast to much of the literature, however, we find that changes in Chinese interest rates also have substantial impacts on economic activity and inflation, while other measures of changes in credit conditions, such as shocks to M2 or lending levels, do not once other policy variables are taken into account. Overall, our results indicate that the monetary policy transmission channels in China have moved closer to those of Western market economies. |
| Keywords: | Measuring China’s economy; dynamic factor model; factor-augmented VAR; monetary policy |
| JEL: | C3 E4 E5 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2014-07&r=tra |
| By: | Nie, Peng (University of Hohenheim); Sousa-Poza, Alfonso (University of Hohenheim) |
| Abstract: | Using five waves from the China Health and Nutrition Survey (CHNS), we investigate the association between maternal employment and obesity in children aged 3–17 in both rural and urban China. Using BMI and waist circumference as measures for pediatric adiposity, we provide scant evidence for its relation to maternal employment. We also find no strong association between maternal employment and our measures for children's diet and physical activity. Our study also suggests that grandparenting could have beneficial effects on childhood obesity. |
| Keywords: | childhood obesity, maternal employment, China |
| JEL: | I12 J13 J22 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8030&r=tra |
| By: | Alexey Bessudnov (National Research University Higher School of Economics) |
| Abstract: | This paper looks at the effect of parental occupational status on their children’s occupational status and earnings in Russia. The analysis based on twelve surveys conducted from 1991 to 2011 (n=21,639) demonstrates a statistically significant effect of parental occupational status on respondents’ occupational status and earnings even after controlling for respondents’ education. Contrary to previous findings (Gerber and Hout 2004), the association between social origins and destinations did not strengthen over time. The size of the effect of parental status in Russia is similar to other European countries. A separate analysis shows that monetary returns on higher education increased in post-Soviet Russia, while returns on higher education in terms of occupational status decreased. |
| Keywords: | returns on education, social mobility, parental occupational status, ISEI, earnings |
| JEL: | I24 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:36/soc/2014&r=tra |
| By: | Yaya Li; Yongli Li; Yulin Zhao; Fang Wang |
| Abstract: | Industry evolution caused by various reasons, among which technology progress driving industry development has been approved, but with the new trend of industry convergence, inter-industry convergence also plays an increasing important role. This paper plans to probe the industry synergetic evolution mechanism based on industry convergence and technology progress. Firstly, we use self-organization method and Haken Model to establish synergetic evolution equations, select technology progress and industry convergence as the key variables of industry evolution system; then use patent licensing data of china's listed ICT companies to measure industry convergence rate and apply DEA Malmquist index method to calculate technology progress level; furthermore apply simultaneous equation estimation method to investigate the synergetic industry evolution process. From 2002 to 2012, China's ICT industry develops rapidly; it has the most obvious convergence and powerful technology progress compared with other industries. We choose china's listed ICT industry to make empirical analysis. Our main findings are: a) technology progress is the order parameter which dominates industry system evolution. Moreover, industry convergence is the control parameter which is influenced by technology progress; b) Development of technology progress is the core factor for causing evolution of industry system, and industry convergence is the outcome of technology progress; c) Especially, it is important that the dominated role of technology progress will be sustained, even though in the environment of convergence, companies also need focus on self-innovation, rather than only adapt to the new industry evolution trend. |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1403.4305&r=tra |
| By: | Wu, Alfred M.; Ramesh, M. |
| Abstract: | The extent to which social protection programs in general and targeted programs in particular actually alleviate poverty has been a central issue in development debates for decades. The objective of this paper is to contribute to the debate by empirically examining the poverty-alleviation effects of one of the largest targeted programs in the world: the Minimum Living Standard Assistance (MLSA) or Dibao in China. Using newly available data on MLSA spending and a unique panel survey dataset covering the 1993-2009 period, this research investigates the impact of the MLSA on poverty alleviation. The analyses using fixed- and random- effects logit models and hierarchical liner models offer insights that go beyond the existing studies on the subject. Findings from the study confirm that targeted social protection programs are an effective tool for reducing poverty. |
| Keywords: | Dibao, poverty, public assistance, development policy, China |
| JEL: | I32 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:54358&r=tra |
| By: | Csizmazia, Roland Attila |
| Abstract: | Although the economic transition started in the early of 1990s, Hungary had a pioneer role in introducing the two-tier banking system within the former Soviet Eastern Block. The modernization of the banking system was unexpectedly far-reaching as Western banks were allowed to participate in the market. The Hungarian banking system was widely government run before the first commercial bank was opened by the National Bank of Hungary and five foreign commercial banks were established in 1979. The pioneer role was maintained even during the transition years when foreign-owned commercial banks could establish their subsidiaries. This paper attempts to examine the performance of the Hungarian banking sector once foreign investments occurred, and its functions as well as its stability in the transition period before the implementation of the Basel II Accord. It also reveals the doubts policy makers had about the Basel II Accord and its affect on the lending behavior of banks. |
| Keywords: | Basel II; Hungary; privatization; foreign ownership; banking stability; pro-cyclicity |
| JEL: | G21 G28 |
| Date: | 2014–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:54343&r=tra |
| By: | Liu, Gordon G. (Peking University); Kwon, Ohyun (University of Wisconsin-Madison); Xue, Xindong (Zhongnan University of Economics and Law); Fleisher, Belton M. (Ohio State University) |
| Abstract: | The impact of socio-economic status on health has been widely recognized, but the independent impact of social status alone on health remains inconclusive. We approach this challenge by exploiting a natural experiment in which subjects undergo a shift in their social status without considerable economic impact. We gather data on 4190 scientists who were either nominated for or successfully elected to the Chinese Academy of Science or of Engineering. Being elected as an academician in China is a boost in social status (vice-ministerial level) with negligible economic impact (US$30 monthly before 2009). After correcting for two sources of bias: 1) Some potential academicians decease too young to be elected, leading to immortal-time bias in favor of academicians and 2) the endogenous relationship between health and social status, we find that the enhanced social status of becoming an academician leads to approximately 1.2-years longer life. |
| Keywords: | social status, health, academician, China |
| JEL: | I12 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8010&r=tra |
| By: | Kuroiwa, Ikuo |
| Abstract: | This study focuses on the technological intensity of China's exports. It first introduces the method of decomposing gross exports by using the Asian international input–output tables. The empirical results indicate that the technological intensity of Chinese exports has been significantly overestimated due to its high dependency on import content, especially in high-technology exports, an area highly dominated by the electronic and electrical equipment sector. Furthermore, a significant portion of value added embodied in China's high-technology exports comes from services and high-technology manufacturers in neighboring economies, such as Japan, South Korea, and Taiwan. |
| Keywords: | China, International trade, Exports, Industrial structure, Industrial technology, International economic integration, Input-output tables, Technology, Production networks, Value added trade |
| JEL: | C67 F13 F15 O39 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper449&r=tra |
| By: | Anna Rybiñska (Institute of Statistics and Demography, Warsaw School of Economics) |
| Abstract: | Postponing motherhood is a widespread phenomenon across developed countries however only few studies look into late motherhood in post-socialist countries, especially on a micro-scale. In this study, I look at the context of the first childbirth in Poland in the midst of the political transformation of 1989. Employing sequence analysis I reconstructed life trajectories of women who experienced the transition to adulthood during the late 1980's and the early 1990's and have just recently completed their fertility histories. Individual data from the 2011 GGS-PL and the 2011 FAMWELL Survey were used. Comparing paths of their lives, I searched for differences in terms of educational, professional and conjugal careers between women who gave birth before the age of 30 and after the age of 35. The results show how various life careers crisscross over the life course leading women to late motherhood. |
| Keywords: | late motherhood, fertility postponement, sequence analysis, life course, Poland |
| JEL: | J13 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:isd:wpaper:65&r=tra |
| By: | Petreski, Marjan |
| Abstract: | The objective of this paper is to test the exchange rate regime – growth nexus in transition economies by looking if and how some inherent characteristics of the transition process might have affected the de-facto classifications of exchange rate regimes. 28 transition countries of Central and Eastern Europe and the Commonwealth of Independent States are investigated over 1991-2007 and three de facto classifications of exchange rate regimes are considered. As usual in the empirical literature, initially, the exchange rate regime effect on growth differs across classifications. However, further investigation suggests that the three classifications usually disagree around some inherent characteristics of the transition process, like the higher trade openness of the countries, the episodes of high inflation and the bank system reform and interest rate liberalization. Results indicate that high inflation likely determined disagreement in early transition, while trade openness and interest rate liberalization in late transition. After classifications have been cleaned of the disagreeing points, the final results, corrected for the potential selectivity bias, suggest that both pegs and intermediate regimes of all three classifications significantly outperform floats in terms of economic growth, the average effect being slightly lower for pegs. |
| Keywords: | exchange rate regime classifications; economic growth; transition economies |
| JEL: | E42 F31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:54473&r=tra |
| By: | Enrico Botta (IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy) |
| Abstract: | The purpose of this paper is to provide relevant insights to policy makers interested in developing a green innovative industry. In order to shed lights on the process of building a competitive green industry, the paper leverages the conceptual framework of innovation systems. Therefore, the first paragraph reviews the theory of innovation system, explaining the reason behind the choice to use a sectoral approach. The second paragraph exploits the industry life cycle perspective to describe the evolution of the wind turbine technology. Then, within the next two paragraphs the key constituting elements of the Chinese and Danish systems are described. Finally, building on our understanding of the evolution of the wind turbine technology and of the configuration of the two sectoral innovation systems, the differences and similarities between the two cases are discussed and the key conclusions from the perspective of a policy maker are presented. Our main argument is that the stage of technological evolution together with the maturity of the domestic sector is one of the main explanatory variables that allows to understand which functions (and how) should be activated by the policies aiming at developing a green SIS. |
| Keywords: | Sectoral innovation system, Green growth, Renewable energy, Wind turbines industry, Denmark, China |
| JEL: | O30 O25 Q48 |
| URL: | http://d.repec.org/n?u=RePEc:bcu:iefewp:iefewp53&r=tra |
| By: | Vasily Astrov (The Vienna Institute for International Economic Studies, wiiw); Rumen Dobrinsky (The Vienna Institute for International Economic Studies, wiiw); Vladimir Gligorov (The Vienna Institute for International Economic Studies, wiiw); Doris Hanzl-Weiss (The Vienna Institute for International Economic Studies, wiiw); Peter Havlik (The Vienna Institute for International Economic Studies, wiiw); Mario Holzner (The Vienna Institute for International Economic Studies, wiiw); Gabor Hunya (The Vienna Institute for International Economic Studies, wiiw); Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw); Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw); Leon Podkaminer (The Vienna Institute for International Economic Studies, wiiw); Sandor Richter (The Vienna Institute for International Economic Studies, wiiw); Hermine Vidovic (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | The Vienna Institute for International Economic Studies (wiiw) expects GDP in Central, East and Southeast Europe (CESEE) to pick up speed and grow on average by 2-3% over the forecast period 2014-2016 a major driving force rooted in an upward reversal of public and private investment. The question remains, however, whether investment-led growth in the CESEE countries is merely a statistical base effect of a few replacement investments or an indication of a profound paradigmatic shift. Increasing evidence suggests the latter for a number of reasons. During the ongoing economic crisis, public investment was severely reduced. However, in times of extreme uncertainty, the private sector is hesitant to invest. Hence, the public sector has to take the lead. It seems that the time for action has now come. This holds especially true for the New Member States, where towards the end of the previous year additional efforts were made to raise the absorption rate of the funds allocated within the context of the EU multiannual financial framework for 2007-2013 that was about to come to a close. Over the remaining disbursement period of the biennium 2014-2015 substantially higher amounts of EU-funded investment are to be expected. Given that, in practically all cases, national co-financing is also required, CESEE public capital investment will increase, with private investors likely following in its slipstream. Apart from a number of transport infrastructure projects, a host of thermal power plant projects are in the pipeline, as are several major investments in the construction and expansion of nuclear power plants across the region. Apart from public and semi-public infrastructure investment initiatives that have the potential to spur subsequent private investment, improving growth prospects in the euro area, the CESEE economies’ main trading partner, are likely to encourage export industries in the region to modernise and increase their capital stock. This should help avert a lapse into a deflationary spiral and foster a shift towards better equilibrium with lower unemployment rates over the medium term. However, substantial downward risks include possible effects from the current Russia-Ukraine conflict; in particular the interruption of energy supplies, potential trade embargoes or additional interest rate risk premia. All this could adversely affect investment-led growth in CESEE. |
| Keywords: | Central and East European new EU Member States, Southeast Europe, financial crisis, Balkans, Russia, Ukraine, Kazakhstan, Turkey, economic forecasts, employment, foreign trade, competitiveness, debt, deleveraging, exchange rates, fiscal consolidation |
| JEL: | C33 C50 E20 E29 F34 G01 G18 O52 O57 P24 P27 P33 P52 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:wii:fpaper:fc:spring&r=tra |
| By: | Andrzej Cieślik (Faculty of Economic Sciences University of Warsaw); Jan Jakub Michałek (Faculty of Economic Sciences University of Warsaw) |
| Abstract: | There are many studies aiming at estimation of aggregate trade effects of the euro adoption by the old EU countries, which are based on the gravity model. In contrast to the existing literature we investigate whether the adoption of the common currency increases the export activity of individual firms. In particular, we refer to the new strand in the trade theory, based on the Melitz (2003) model, in which propensity to export depends on productivity and costs of exporting. There are many empirical studies, based on firm level data, showing the relevance of the Melitz (2003) model. Most of those studies demonstrate that export performance positively depends on firms’ characteristics, but they do not take into account the impact of the common currency on the cost of exporting. There are only few studies analyzing implications of euro adoption for firms’ exports of “old EU” members. In our empirical paper we use the firm level data basis set up by the EBRD and the World Bank. Using the probit model we analyze whether the accession of Slovenia and Slovakia to the Eurozone did increase the firms’ propensity to export in those countries. |
| JEL: | F12 F14 F33 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:nbp:nbpmis:173&r=tra |
| By: | Di Cosmo, Valeria; Hyland, Marie; Llop Llop, Maria |
| Abstract: | The Water Framework Directive (WFD) defines common objectives for water resources throughout the European Union (EU). Given this general approach to water preservation and water policy, the objective of this paper is to analyse whether common patterns of water consumption exist within Europe. In particular, our study uses two methods to reveal the reasons behind sectoral water use in all EU countries. The first method is based on an accounting indicator that calculates the water intensity of an economy as the sum of sectoral water intensities. The second method is a subsystem inputâ€output model that divides total water use into different income channels within the production system. The application uses data for the years 2005 and 2009 on water consumption in the production system of the 27 countries of the EU. From our analysis it emerges that EU countries are characterized by very different patterns of water consumption. In particular water consumption by the agriculture sector is extremely high in Central/Eastern Europe, relative to the rest of Europe. In most countries, the water used by the fuel, power and water sector is consumed to satisfy domestic final demand. However, our analysis shows that for some countries exports from this sector are an important driver of water consumption. Focusing on the agricultural sector, the decomposition analysis suggests that water usage in Mediterranean countries is mainly driven by final demand for, and exports of, agricultural products. In Central/Eastern Europe domestic final demand is the main driver of water consumption, but in this region the proportion of water use driven by demand for exports is increasing over time. Given these heterogeneous water consumption patterns, our analysis suggests that Mediterranean and Central/Eastern European countries should adopt specific water policies in order to achieve efficient levels of water consumption in the European Union. JEL codes: N5; C67 Keywords: Water use, Subsystem input–output model; Water intensity, European Union. |
| Keywords: | Aigua -- Consum, Anàlisi d'entrada/sortida, Unió Europea, Països de la, 33 - Economia, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:urv:wpaper:2072/225298&r=tra |
| By: | Małgorzata Pawłowska (Narodowy Bank Polski and Warsaw School of Economics); Dobromil Serwa (Narodowy Bank Polski and Warsaw School of Economics); Sławomir Zajączkowski (Narodowy Bank Polski) |
| Abstract: | In this study we analyze how funding liquidity shocks affecting large international banks were transmitted to Polish subsidiaries and branches of these banks in recent years. We investigate differences in the effects of liquidity shocks on banks owned by both Polish and foreign institutions. All Polish banks reacted to liquidity shocks after Lehman Brothers failure; however, only Polish subsidiaries and branches of foreign parent banks adjusted their funding after liquidity shocks had taken place during the sovereign debt crisis of the Eurozone. Mortgage lending in foreign currencies was also affected by liquidity shocks during the crisis. Our results suggest that the intragroup links between banking institutions can serve both as an important channel for international transmission of liquidity shocks and as a stabilizing mechanism during liquidity crises. |
| Keywords: | liquidity shocks, international transmission, parent banks, affiliate banks, Poland |
| JEL: | E44 F34 G32 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:nbp:nbpmis:172&r=tra |
| By: | Khieu Van, Hoang |
| Abstract: | This study empirically examines the nexus among budget deficit, money supply and inflation by using a monthly data set from January 1995 to December 2012 and a SVAR model with five endogenous variables, inflation, money growth, budget deficit growth, real GDP growth and interest rate. Since real GDP and budget deficit are unavailable on the monthly basis, we interpolate those series using Chow and Lin’s (1971) annualized approach from their annual series. Overall, we found that money growth has positive effects on inflation while budget deficit growth has no impact on money growth and therefore inflation. In addition, budget deficit is autonomous from shocks to other variables. The estimation results also reveal that the State Bank of Vietnam implemented tightening monetary policy in response to positive shocks to inflation by reducing money growth but the response was relatively slow because it took three months for the monetary authority to fully react to such shocks. Finally, interest rate was not an effective instrument for fighting inflation but it was significantly and positively influenced by inflation. |
| Keywords: | Inflation; Money Growth; Budget Deficit; Structural Vector Auto-regressive Model. |
| JEL: | E31 E58 E61 |
| Date: | 2014–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:54488&r=tra |
| By: | Dabalen, Andrew; Parinduri, Rasyad; Paul, Saumik |
| Abstract: | This paper examines the association between the intensity, timing, and persistence of personal history of mobility on individual support for redistribution. Using both rounds of the Life in Transition Survey, the paper builds measures of downward mobility for about 57,000 individuals from 27 countries in Eastern Europe and Central Asia. The analysis finds that more intensive, recent, and persistent downward mobility increases support for redistribution more. A number of extensions and checks are done by, among others, taking into account systematic bias in perceived mobility experience, considering an alternative definition of redistributive preferences, and exploring the severity of omitted variable bias problems. Overall, the results are robust. |
| Keywords: | Housing&Human Habitats,Roads&Highways,Teaching and Learning,Science Education,Scientific Research&Science Parks |
| Date: | 2014–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6803&r=tra |
| By: | Claudiu Tiberiu Albulescu (CRIEF); Dominique Pepin (CRIEF); Aviral Kumar Tiwari |
| Abstract: | This study applies old and new generations of panel unit root tests to test the validity of long-run real interest rate parity (RIP) hypothesis for ten Central and Eastern European Countries (CEECs) with respect to the Euro area and an average of the CEECs' real interest rates, respectively. When the panel unit root tests are carried out with respect to the Euro area rate, we confirm the results of previous studies which support the RIP hypothesis. Nevertheless, when the test is performed using the average of the CEECs' rate, our results are mitigated, revealing that the hypothesis of CEECs' interest rates convergence cannot be taken for granted. From a robustness analysis perspective, our findings indicate that the RIP hypothesis for CEECs should be considered with cautions, being sensitive to the benchmark. |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1403.3627&r=tra |
| By: | Ubarevičienė, Rūta (Lithuanian Social Research Centre); van Ham, Maarten (Delft University of Technology); Burneika, Donatas (Lithuanian Social Research Centre) |
| Abstract: | Shrinking populations have been gaining increasing attention, especially in post-socialist East and Central European countries. While most studies focus on the population decline of capital cities and their regions, much less is known about the spatial dimension of population decline on the national level. Lithuania is one of the countries which have experienced very high levels of population decline in the last decades. This study uses Lithuanian Census data from the years 2001 and 2011 to get insight into the geography of population change for the whole country. The results show a sharp population decline in Lithuania of 17.2% between 1989 and 2011, with the decrease being more intense during the second decade of the period. The population dropped in most areas, including the main cities, but increased in the regions surrounding these cities. The predictive models show a clear geographical dimension of population decline, but also reveal that population composition and investments play a role in the process of decline. |
| Keywords: | post-socialist transition, shrinking regions, population decline, suburbanization, Lithuania |
| JEL: | J11 J61 P20 R23 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8026&r=tra |
| By: | Gao-Feng Gu; Xiong Xiong; Wei Zhang; Yong-Jie Zhang; Wei-Xing Zhou |
| Abstract: | Order cancellation process plays a crucial role in the dynamics of price formation in order-driven stock markets and is important in the construction and validation of computational finance models. Based on the order flow data of 18 liquid stocks traded on the Shenzhen Stock Exchange in 2003, we investigate the empirical statistical properties of inter-cancellation durations in units of events defined as the waiting times between two consecutive cancellations. The inter-cancellation durations for both buy and sell orders of all the stocks favor a $q$-exponential distribution when the maximum likelihood estimation method is adopted; In contrast, both cancelled buy orders of 6 stocks and cancelled sell orders of 3 stocks prefer Weibull distribution when the nonlinear least-square estimation is used. Applying detrended fluctuation analysis (DFA), centered detrending moving average (CDMA) and multifractal detrended fluctuation analysis (MF-DFA) methods, we unveil that the inter-cancellation duration time series process long memory and multifractal nature for both buy and sell cancellations of all the stocks. Our findings show that order cancellation processes exhibit long-range correlated bursty behaviors and are thus not Poissonian. |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1403.3478&r=tra |
| By: | Cuong Le Van; Anh Ngoc Nguyen; Ngoc-Minh Nguyen |
| Abstract: | We study the impact of social capital in both simple theoretical and em- pirical model with the main assumption is the price of physical capital is a decreasing function of social capital. In our theoretical model, there exists a critical value such that ffrm will not invest in social capital if its saving is lower than the critical value and otherwise. Moreover, the output depends positively and non-linearly on the social capital. Our empirical model that captures the impact of physical capital, human capital, and social capital using the database from Survey of Small and Medium Scale Manufactur- ing Enterprises (SMEs) in Vietnam 2011, conffrms the conclusions of the theoretical model. |
| Keywords: | Social Capital, Optimal Growth Classification-JEL : Z1, E2, O00 |
| Date: | 2014–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-109&r=tra |