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on Transition Economics |
| By: | Zelai Xu; Nong Zhu |
| Abstract: | This paper examines the evolution in size distribution of Chinese cities. Since the relaxation of restrictions on rural/urban migration in the 1980s, China has experienced rapid urban growth. However, cities of different sizes have experienced varying patterns of growth. We first describe the evolution of city size distribution in China by documenting the growth both of city size and of the number of existing cities. Then, focusing on the period from 1990-2000, we characterize the urban evolution trend with the Pareto law estimation, and examine the mobility of cities between different size groups with the Markov transition matrix. We also test the convergence hypothesis in the city population growth process. Our results suggest that, contrary to the expected dominance of large cities’ growth, Chinese city size distribution evened out over the 1990s, with small cities growing more rapidly than large cities. |
| Keywords: | City size distribution, Zipf’s law, Convergence, China., |
| Date: | 2014–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2014s-04&r=tra |
| By: | Amighini, Alessia (Università del Piemonte Orientale); Cozza, Claudio (Università di Trieste); Rabellotti, Roberta (Università di Pavia); Sanfilippo, Marco (European University Institute) |
| Abstract: | The empirical literature on China’s outward foreign direct investment (OFDI) mainly relies on aggregate data from official statistics, whose international reliability is currently a matter of concern, and that do not take account of some relevant features such as the industry breakdowns, ownership structures and modes of entry. A novel firm-level database (EMENDATA), compiled by matching data from several available sources, on various types of cross-border deals, and including information on group structure, enables new empirical analyses and provides new insights into the rapidly increasing presence of Chinese companies abroad. In this paper, exploring the potential of these data we offer an informative and comprehensive assessment of the geographical and specialization patterns of Chinese outward FDI into Europe and suggest new avenues for further research on this highly policy relevant issue. |
| Keywords: | China; FDI; firm-level data; MNEs |
| JEL: | F21 F23 |
| Date: | 2014–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2014_002&r=tra |
| By: | Peiwen Bai; Wenli Cheng |
| Abstract: | With the help of a simple model this paper formulates a hypothesis that a monetary expansion in the Chinese context of a segmented labor market has the effect of widening the wage gap between state and non-state workers. We argue that the reason for the increase in wage differential is that SOEs are in a privileged position to receive new money first which means the wage rate of SOE workers are raised first. It is only after the new money reaches the non-state sector via spending, does the wage rate of non-state workers rise with a delay and probably to a lesser extent. Our empirical analysis based on 10 sectors in China over the period 1990 to 2011 supports our hypothesis. |
| Keywords: | monetary expansion, labor market segmentation, wage differential between state and non-state workers in China |
| JEL: | E51 J31 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2014-01&r=tra |
| By: | Jens K. Perret (European Institute for International Economic Relations at the University of Wuppertal) |
| Abstract: | For many decades culture has been considered to have a significant impact on the productivity of people. This study observes for the Russian Federation, on the basis of the ARENA study by Sreda, the impact of the share of the most prominent religious groups on economic output as well as on regional innovativeness measured by patent grants from Rospatent. While some issues of causality remain, the analysis shows that standard deductions concerning the religions effect on growth from religious doctrines hold true for the regions oft he Russian Federation as well. The effects on regional patenting, however, are not as clear. |
| Keywords: | russian federation, religious values, economic growth, patenting, culture |
| JEL: | P24 R11 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:schdps:sdp14006&r=tra |
| By: | Wenli Cheng; Yongzheng Wu; CEMA; College of Mathematics and Computer Science, Hunan Normal University |
| Abstract: | This paper investigates income inequality in the post-reform Chinese economy of 1978 to 2011. We identify a Kuznets inverted-U relationship between economic development and overall income inequality and provide evidence to suggest that this relationship was driven by the process of urbanization. We demonstrate that, after controlling for urbanization, low productivity in agriculture relative to that of the economy as a whole (dualism) was a significant contributing factor to income inequality. Inflation and the expansion of higher education are also found to have had an effect of widening inequality, but the effect of education does not appear to be robust. |
| Keywords: | Kuznets curve, income inequality in China, Theil index, urbanisation, dualism |
| JEL: | O15 O53 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2014-12&r=tra |
| By: | Xiao Luo; Chor-Ching Goh; Nong Zhu |
| Abstract: | This paper examines the growth performance and income inequality in eight Chinese provinces during the period of 1989-2004 using the China Health and Nutrition Survey data. It shows that income grew for all segments of the population, and as a result, poverty incidence has fallen. However, income growth has been uneven, most rapidly in coastal areas, and among the educated. A decomposition analysis based on household income determination suggests that income growth can largely be attributed to the increase in returns to education and to the shift of employment into secondary and tertiary sector. |
| Keywords: | Income growth, Inequality, Poverty, China, |
| JEL: | O15 O53 P36 |
| Date: | 2014–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2014s-03&r=tra |
| By: | Michael Alexeev (Indiana University (Bloomington); Russian Presidential Academy of National Economy and Public Administration); Andrey Chernyavskiy (National Research University Higher School of Economics) |
| Abstract: | We examine the impact of natural resources on economic growth in Russia’s regions since the introduction of the mineral tax in 2002. Using novel measures of natural resource rents produced in, but not necessarily appropriated by the regions (mineral tax collections), we demonstrate that mineral wealth has not significantly affected regional economic growth since 2002, although mineral-rich regions are significantly richer than the other regions. These results are contrary to the “resource curse” hypothesis. The absence of growth benefits to resource-endowed regions, however, is also at odds with the clearly beneficial impact of natural resources on the economic growth of t the country as a whole. We conclude that the Russian central government was successful in taxing away incremental regional resource rents during 2002-2011, but the regions preserved their pre-2002 benefits derived from mineral wealth. |
| Keywords: | natural resources, regional growth, taxation of minerals |
| JEL: | P28 R11 Q38 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:55/ec/2014&r=tra |
| By: | Nong Zhu; Cecile Batisse |
| Abstract: | The integration of rural migrants into the urban labor market has become an essential economic issue in today’s China. In the context of economic reforms, policies affecting migration in continental China have been redefined, which therefore greatly intensified the internal migration flows. Since the 1980s, the rural depopulation has been essentially linked to the migration of ming gong or “peasant-workers”, who continues to play a key role in the transition of China into a market economy. In this article, we study the integration of these rural migrants into the labor market in the Guangdong province using the original data from a 2006 survey of peasant-workers. Based on duration model estimation, the analysis focuses on the role of different characteristics, including personal, temporal (i.e. the course of employment mobility through time) and spatial (i.e. the role of place of origin) ones. Results show that migrants form a heterogeneous group in terms of personal characteristics and employability in the Pearl River delta. The insertion on the labor market of women, young and less qualified migrants is relatively easier. Geographical proximity also plays a favorable role. Finally, we examine the determinants of the wage in urban areas for peasant-workers integrating the increasingly segmented and fragmented labor market. La question de l’insertion sur le marché du travail urbain des migrants ruraux est aujourd’hui devenue essentielle en Chine. Dans un contexte de réformes économiques, les politiques migratoires en Chine continentale se sont redéfinies, intensifiant ainsi fortement les migrations internes. Depuis les années 1980, cet exode est pour l’essentiel celui des ming gong, c’est-à-dire littéralement des “paysans-ouvriers”, qui sont ainsi devenus un élément majeur de la transition de la Chine vers une économie de marché. Cet article étudie l’insertion de ces migrants ruraux sur le marché du travail de la province du Guangdong à partir d’une base de données originales issues d’une enquête sur les paysans-ouvriers, réalisée en 2006. A partir de modèles de durée, nous portons une attention particulière aux caractéristiques individuelles, temporelles (évolution de la mobilité dans l’emploi au cours du temps) et spatiales (rôle du lieu d’origine). Nos résultats montrent que les migrants forment un groupe hétérogène du point de vue de leurs caractéristiques individuelles et de leur employabilité dans le delta de la rivière des Perles. L’insertion sur le marché du travail des femmes, des jeunes et des peu qualifiés est facilitée. La proximité géographique du lieu de départ de la migration est également favorable. Nous examinons enfin les déterminants du salaire urbain des paysans-ouvriers qui s’insèrent sur un marché du travail de plus en plus segmenté et fragmenté. |
| Keywords: | peasant-workers, mobility, urban employment, wages, China, paysans-ouvriers, mobilité, emploi urbain, salaire, Chine |
| Date: | 2014–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2014s-07&r=tra |
| By: | Khaled Guesmi; Duc Khuong Nguyen |
| Abstract: | This article investigates the dynamics of regional financial integration and its determinants in an international setting. We test a conditional version of the international capital asset pricing model (ICAPM) accounting for the deviations from purchasing power parity (PPP) as well as temporal variations in both regional and local sources of risk. Using data from four major countries of the Southeast Europe (Czech Republic, Greece, Poland, and Romania), our results support the validity of ICAPM and indicate that the risk is internationally priced. Furthermore, we show that changes in the degree of regional stock market integration are explained principally by trade openness and the level of stock market development whatever the measure of currency risk. Finally, as expected, the degree of stock market integration varies considerably over time and from one market to another. As intense market integration induces both benefits and risks, our findings should have significant implications for economic policies and market regulations in emerging, frontier-emerging and transition countries, particularly for countries from the same region. |
| Keywords: | ICAPM, market integration, exchange rate risk |
| JEL: | G12 F31 C32 |
| Date: | 2014–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-219&r=tra |
| By: | Nong Zhu; Xubei Luo |
| Abstract: | Large numbers of agricultural labor moved from the countryside to cities after the economic reforms in China. Migration and remittances play an important role in transforming the structure of rural household income. This paper examines the impact of rural-to-urban migration on rural poverty and inequality in a mountainous area of Hubei province using the data of a 2002 household survey. Since migration income is a potential substitute of farm income, we present counterfactual scenarios of what rural income, poverty, and inequality would have been in the absence of migration. Our results show that, by providing alternatives to households with lower marginal labor productivity in agriculture, migration leads to an increase in rural income. In contrast to many studies that suggest the increasing share of non-farm income in total income widens inequality, this paper offers support for the hypothesis that migration tends to have egalitarian effects on rural income for three reasons: (i) migration is rational self-selection – farmers with higher expected return in agricultural activities and/or in local non-farm activities choose to remain in countryside while those with higher expected return in urban non-farm sectors migrate; (ii) households facing binding constraints of land shortage are more likely to migrate; (iii) poorer households benefit disproportionately from migration. |
| Keywords: | Migration, poverty, inequality, China, |
| JEL: | D63 O15 Q12 |
| Date: | 2014–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2014s-08&r=tra |
| By: | Anastasiia V. Rassadovskaia; Andrey V. Aistov (National Research University Higher School of Economics) |
| Abstract: | The efficiency of social reforms in different countries mostly depends on the extent to which they can be accepted by the population. However, even if problems are similar, the reasons may differ, which can make it difficult to apply existing laws of one state to another. Bribery is a typical problem for developing countries as shown in the Corruption Perception Index (calculated by Transparency International) and recent research (Levin and Satarov, 2000) (Ilzetzki, 2011). Corruption can have roots in socialist regimes as in recently established political stability instable economic situation may lead to growth in crime. The main challenge within the scope of this project is to identify the relation between corruption perception and levels of trust in society and to distinguish the differences in factors affecting these characteristics. The research reveals that distrust matters a lot for the problem in Russia and suggests further examination of the dynamics of trust between post Soviet countries and European countries. |
| Keywords: | corruption perceptions, grassroots corruption, IV logit, Russia, RLMS, social capital |
| JEL: | C35 D73 P37 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:57/ec/2014&r=tra |
| By: | BLINOV, Sergey |
| Abstract: | For effective economic growth, intentional “creation” of unemployment is required to be followed up by its «elimination». From Okun’s law one can infer an interesting corollary: growing unemployment without reducing GDP increases the economy’s potential. This corollary can be proved theoretically (unlike Okun’s law which is an empirical law). There were two causes of the USSR’s economic slowdown on the eve of its breakup. One of them was a shortage of labor which is identical to lack of unemployment. However strange it may seem, but the economic problems of modern Russia have the same root cause. |
| Keywords: | employment; Okun’s law; economic growth; productivity |
| JEL: | E24 J01 J08 N14 |
| Date: | 2014–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55220&r=tra |
| By: | Vera Barinova (Gaidar Institute for Economic Policy); Vladimir Eremkin (RANEPA); Viacheslav Rybalkin (RANEPA) |
| Abstract: | The article deals with the key issues of creating innovation infrastructure in Russia and abroad. The authors focus on the “innovation brokers” as an intermediary institute for innovative agents. According to them, innovation brokers are able to fill in the gaps of the innovation infrastructure system, created by the governmental administrative measures. International practices of the countries, that are world economic and innovation development leaders (the USA, the Netherlands etc.), indicate the fact that innovation brokers can be rather effective in solving many problems of providing the infrastructural support to innovation companies. The paper provides guidance on the possible ways of involving innovation brokers in the Russian national innovation system as one of the main tools of providing the effective infrastructural support to innovation processes by greater “soft infrastructure” involvement (ICT-facilities, social, professional and organizational networks). |
| Keywords: | innovation brokers, national innovation system, regional development, high technology. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:gai:wpaper:0093&r=tra |
| By: | Giulietti, Corrado (IZA); Wahba, Jackline (University of Southampton); Zenou, Yves (Stockholm University) |
| Abstract: | This paper studies the role of strong versus weak ties in the rural-to-urban migration decision in China. We first develop a network model that puts forward the different roles of weak and strong ties in helping workers to migrate to the city. We then use a unique longitudinal data that allows us to test our model by focusing on first-time migration. Strong ties are measured by the closest family contact, while weak ties are determined by the fraction of migrants from the village in which the individual resides. We address the endogeneity of the network formation in the migration decision. Our results indicate that both weak and strong ties matter in the migration decision process, although the impact of weak ties is higher than that of strong ties. We also show that one underestimates the effect of social networks on migration by not taking into account the strong ties in the mobility process. We finally find that weak and strong ties act as complements in the migration decision, which indicates that the interactive effect between weak and strong ties is particularly strong above a certain threshold of the size of weak ties. |
| Keywords: | social networks, internal migration, China |
| JEL: | O15 J61 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8089&r=tra |
| By: | Dimo Böhme |
| Abstract: | Public debate about energy relations between the EU and Russia is distorted. These distortions present considerable obstacles to the development of true partnership. At the core of the conflict is a struggle for resource rents between energy producing, energy consuming and transit countries. Supposed secondary aspects, however, are also of great importance. They comprise of geopolitics, market access, economic development and state sovereignty. The European Union, having engaged in energy market liberalisation, faces a widening gap between declining domestic resources and continuously growing energy demand. Diverse interests inside the EU prevent the definition of a coherent and respected energy policy. Russia, for its part, is no longer willing to subsidise its neighbouring economies by cheap energy exports. The Russian government engages in assertive policies pursuing Russian interests. In so far, it opts for a different globalisation approach, refusing the role of mere energy exporter. In view of the intensifying struggle for global resources, Russia, with its large energy potential, appears to be a very favourable option for European energy supplies, if not the best one. However, several outcomes of the strategic game between the two partners can be imagined. Engaging in non-cooperative strategies will in the end leave all stakeholders worse-off. The European Union should therefore concentrate on securing its partnership with Russia instead of damaging it. Stable cooperation would need the acceptance that the partner may pursue his own goals, which might be different from one’s own interests. The question is, how can a sustainable compromise be found? This thesis finds that a mix of continued dialogue, a tit for tat approach bolstered by an international institutional framework and increased integration efforts appears as a preferable solution. |
| Keywords: | EU, Russia, energy, gas, cooperation, resources |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:pot:pestud:03&r=tra |
| By: | Pavel V. Travkin (National Research University Higher School of Economics) |
| Abstract: | This paper investigates the wage return to job-related training using a difference-in-differences estimator to control for unmeasured differences in ability and measured differences in past wages as a proxy for ability and motivation. Estimates use data from the Russia Longitudinal Monitoring Survey from 2004 to 2011. As predicted, positive returns to training are identified, and the returns increase absolutely with the level of past wages, consistent with human capital and selection models. |
| Keywords: | returns to training, human capital, unobserved abilities, Russia. |
| JEL: | J24 J31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:56/ec/2014&r=tra |
| By: | Mario Holzner (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | A new database for the calculation of quarterly income inequality measures was established for 11 economies from Central, East and Southeast Europe for the period of 1st quarter 2000 to 4th quarter 2011. Based on the large panel of the acquired quarterly Gini coefficients an ‘Acemoglu-style’ causal inference analysis on the impact of the global financial crisis on economic growth and income inequality in transition economies was performed. The results suggest that at least in the short and medium run the growth model of transition economies switched to an industrial, export-led growth model as foreign capital flows dried up. While in the private sector wage dispersion further continued to increase during the boom just as during the economic break-down, the public sector acted inequality reducing both in the period of plenty as well as in the age of austerity. |
| Keywords: | Income inequality, economic growth, transition economies, economic crisis |
| JEL: | C36 C82 D63 F43 H12 P36 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:wii:bpaper:110&r=tra |
| By: | Alexander A. Yalbulganov (National Research University Higher School of Economics) |
| Abstract: | The creation of the EurAsEC Customs Union and Russia’s ascension into the WTO has led to a radical change in Russia’s anti-dumping legislation. Anti-dumping regulation ceased to fall under national jurisdiction and was transferred to the Eurasian Economic Commission, a supranational regulator. This article analyzes the new anti-dumping legislation of the EurAsEC Customs Union, anti-dumping procedures, their principles, participants, and main stages, as well as the legal treatment of information used in the anti-dumping regulation. |
| Keywords: | EurAsEC, customs union, anti-dumping measures, anti-dumping duty |
| JEL: | F15 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:35/law/2014&r=tra |
| By: | Arseniy Khitrov (National Research University Higher School of Economics) |
| Abstract: | Studies of representations of the police are important because they affect what people think about the police as an organization, what people expect from day-to-day interactions with police officers, and how police officers themselves work in the media-saturated context of contemporary Western societies. This study is based on an approach, which does not strictly separate studies of the police as an organization from studies of how the police are represented. In this paper, I formulate a methodological framework for analysing representations of societal and state institutions in TV series, and I use this framework to then answer the question of how the police are represented in contemporary police TV series in Russia. This paper based on a single-case semiotic study of a popular Russian TV series called Glukhar’. I consider the show’s social and cultural contexts as well as its symbolic structures, such as visual and audial elements and its narrative. I develop a narrative model of the show, argue that the most prominent motif of the show is justification of the police’s illegal actions, and finally build a typology of these justifications. I propose a detailed analysis of two types of justifications and ultimately conclude that the TV show represents the police estranged from the state but not from society. Finally, I argue that my methodological framework can be applied to other TV series in studies, which address representations of societal and state institutions. |
| Keywords: | representation, police, TV, series, legitimacy, Russia, crime, drama |
| JEL: | Z |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:41hum2014&r=tra |
| By: | Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | In the analysis short- and medium term effects of the crisis on household income levels by deciles and on overall inequality and poverty measures are described for the period 2008 to 2011 for Bulgaria and Romania. For the subsequent period of 2011 to 2015 we apply household stress tests. Both parts of the analysis are based on EU SILC microdata. Different transmission channels like changes in the labour market structure, subsequent but also independent income effects are depicted, but also the effect of adaptions in the fiscal and social policies of the countries. The analysis shows that relative poverty rose during the economic crisis in Bulgaria in the year 2008 up to 2011, effected not only by a substantial loss in employment, but also by a weak system of social welfare incapable to cushion the effects of the output loss. A further slight rise of poverty rates is estimated for the period up to 2015. In Romania both average income levels but also income inequality and relative poverty declined in the years 2008 to 2011. This is due to the relatively shallow decline in employment during the immediate crisis years and the effects of the introduced austerity measures. The Romanian government has cut progressively public pensions. As in Bulgaria dwindling remittances from relatives working abroad had detrimental effects on household incomes particularly in the lower deciles. The stress tests show that in the period of 2011 to 2015 also in Romania relative poverty will remain persistent. Both Bulgaria and Romania will most probably remain those two EU countries with the highest rates of relative income poverty. |
| Keywords: | Income inequality, income poverty, household analysis, stress tests, transition economies, economic crisis |
| JEL: | D63 H12 P36 R20 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:wii:bpaper:111&r=tra |
| By: | Petrick, Martin; Gramzow, Andreas; Oshakbaev, Dauren; Wandel, Jürgen |
| Abstract: | Kazakhstan is now widely regarded as a key player on world agricultural markets, with considerable export potential in the wheat, beef and dairy sectors. Based on unique farm-level data, we offer new insights into the constraints that hamper further economic growth and provide an assessment of the Kazakhstani government's agricultural development strategy. Most managers in the farm survey doubt that agricultural investments deliver a sufficiently reliable return required for credit funding and thus do not take loans. In the cattle sector, there are significant problems in year-round fodder supply. The value chains for beef and dairy are bifurcated into an import-dependent chain for industrially processed products serving urban consumers, and a local chain of raw products serving rural consumers and urban bazaars. The government's modernisation strategy focuses on providing subsidised capital, but underestimates the knowledge and incentive problems inherent to such measures. The government should rather provide impartial and reliable public services to the sector, ensuring that the weakest links in food chain development are identified and private entrepreneurs are incentivised to strengthen them. Our evidence suggests that a bundle of measures designed to improve the local institutional environment of agriculture is more important than massive state funding of certain production lines. -- |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iamopb:15&r=tra |
| By: | Sato, Hitoshi; Zhu, Lianming |
| Abstract: | International production fragmentation has been a global trend for decades, becoming especially important in Asia where the manufacturing process is fragmented into stages and dispersed around the region. This paper examines the effects of input and output tariff reductions on labor demand elasticities at the firm level. For this purpose, we consider a simple heterogenous firm model in which firms are allowed to export their products and to use imported intermediate inputs. The model predicts that only productive firms can use imported intermediate inputs (outsourcing) and tend to have larger constant-output labor demand elasticities. Input tariff reductions would lower the factor shares of labor for these productive firms and raise conditional labor demand elasticities further. We test these empirical predictions, constructing Chinese firm-level panel data over the 2000--2006 period. Controlling for potential tariff endogeneity by instruments, our empirical studies generally support these predictions. |
| Keywords: | China, Tariff, International trade, Labor market, Labor demand elasticities, Tariff reductions, Intermediate inputs |
| JEL: | F14 F16 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper463&r=tra |
| By: | Jirí Vecerník; Martina Mysíková |
| Abstract: | This paper contributes to the debate about the impact of the transition to subjective well-being. After reviewing the relevant literature the authors draw on the surveys of the European Values Study between 1991 and 2008 to describe the trends in life satisfaction in 13 "Western" and 11 "Eastern" countries. The analysis finds that life satisfaction levels in transition countries have come to approach those in the West: the "rather unhappy" 1990s were followed by the "rather happy" 2000s. The correlation between life satisfaction and GDP reflects this process of convergence: the two separate lines in 1991 merge to become a single continuum later on. The characteristics of respondents are however more important than GDP, and a regression of life satisfactions with basic demographic and stratification variables shows their reinforcing effect in both Eastern and Western countries. As a result, the explained variance of life satisfaction was increasing. The findings of other surveys reporting on developments of attitudes since 2008 vary but are far from proving a uniform negative impact of economic recession on life satisfaction. The paper concludes by suggesting that various surveys have to be compared in order to obtain more reliable information on the development and factors of subjective well-being. |
| Date: | 2014–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2014:i:467&r=tra |
| By: | Bagayev, Igor; Najman, Boris |
| Abstract: | In this paper we provide original findings on the impact of local financial development (LFD) on manufacturing firms' energy intensity in European and Central Asian (ECA) post communist countries. We implement the two-step method of Guiso et al. (2004) in order to build a lagged measure of financial development at the local level. The paper is the first to use this methodology to assess local financial development in the ECA region and to test its effect on firm-level energy demand. According to related literature, our findings also show that firm size matters. But we also provide a new insight about the non-linear effect of financial development depending on the scope of the financial market. We show that while energy consumption of small businesses is more affected by local financial markets, large firms are more sensitive to countrywide financial in-depth. Overall, this paper provides econometric evidence for a financial access explanation of the "energy efficiency gap". Improving financing opportunities should increase firms’ energy efficiency. Moreover, focus on local conditions and small firms should be an important feature of active energy-saving financial policies. |
| Keywords: | Energy Intensity, Local Financial Development, Firm Size, ECA Region |
| JEL: | D22 P28 Q4 |
| Date: | 2014–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55193&r=tra |
| By: | Orsolya Csortos (Magyar Nemzeti Bank (the central bank of Hungary)); Zoltán Szalai (Magyar Nemzeti Bank (the central bank of Hungary)) |
| Abstract: | In this paper we apply the Early Warning System methodology to ten Central and Eastern European Countries to find useful sets of indicators which could predict macroeconomic and financial imbalances. We argue that finding such indicators is crucial in the current monetary policy framework because significant imbalances could build up without any sign of risk to price stability. We examine the stylised behaviour of the most important macroeconomic variables over the business cycle and select the most preferred indicator variables. Our methodology consists of choosing the most useful combination of variables in terms of false alarms and misses, taken as given the preferences of the decision maker in terms of committng various types of errors. We find, that a certain combination of the global financial variable, the real exchange rate, capital flows and credit is a plausible signal macroeconomic imbalances. The results suggest that although the above indicators should not be used mechanically, they could usefully complement analytical tools available to modern central banks. |
| Keywords: | early warning indicators, signalling approach, macroeconomic stability, financial stability, monetary policy strategy |
| JEL: | E32 E37 E44 E58 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:mnb:wpaper:2014/2&r=tra |
| By: | Harrison, Mark (Department of Economics and CAGE, University of Warwick Centre for Russian and East European Studies, University of Birmingham); Zaksauskienė, Inga (Vilnius University) |
| Abstract: | We provide the first thick description of the KGB’s counter-intelligence function in the Soviet command economy. Based on documentation from Lithuania, the paper considers KGB goals and resources in relation to the supervision of science, industry, and transport; the screening of business personnel; the management of economic emergencies; and the design of economic reforms. In contrast to a western market regulator, the role of the KGB was to enforce secrecy, monopoly, and discrimination. As in the western market context, regulation could give rise to perverse incentives with unintended consequences. Most important of these may have been adverse selection in the market for talent. There is no evidence that the KGB was interested in the costs of its regulation or in mitigating the negative consequences. |
| Keywords: | communism, command economy, discrimination, information, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:170&r=tra |
| By: | Ito, Hiro (Asian Development Bank Institute); Chinn, Menzie (Asian Development Bank Institute) |
| Abstract: | This study investigates the determinants of currency choice for trade invoicing in a cross-country context while focusing on the link between capital account liberalization and its impact on the use of the renminbi (RMB). The authors find that while countries with more developed financial markets tend to invoice less in the US dollar, countries with more open capital accounts tend to invoice in either the euro or their home currency. These results indicate that financial development and financial openness are among the keys to challenging the US dollar dominance in general, and to internationalizing the RMB for the People’s Republic of China (PRC). The model also suggests that the share of the RMB in export invoicing should have been higher than the actually observed share of less than 10%. The underperformance of RMB export invoicing can be attributed to the inertia in the choice of currency for trade invoicing; once a currency is used for trade invoicing or settlements, it becomes difficult for traders to switch from one currency to another. This same phenomenon was also observed in the cases of the Japanese yen and the euro at their inceptions as international currencies. The model predicts that the share of RMB invoicing for the PRC’s exports will rise to above 25% in 2015 and above 30% in 2018, whether or not the PRC implements drastic financial liberalization. As the near future path of RMB use is also expected to be inertial, these forecasts are probably at the upper end of the actual path of RMB export invoicing. |
| Keywords: | RMB internationalization; capital account liberalization; US dollar; export invoicing; currency invoicing; settlement currency |
| JEL: | F32 F41 |
| Date: | 2014–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0473&r=tra |
| By: | Martin Pospisil; Jiri Schwarz |
| Abstract: | In this paper we use balance-sheet data and information on bankruptcy to study the relationship between investment, financial constraints, and bankruptcy in a post-transition country. Our data constitute a dynamic panel and cover the period 2006–2011, which also allows us to study the impact of the 2008 crisis on Czech companies. Using investment–cash flow sensitivity to analyze financial constraints we find there is robust evidence that cash flow and the level of debt have a positive and significant impact on the investment rate. By taking a closer look at individual subsamples we reveal that the existence of financial constraints, proxied by investment–cash flow sensitivity, is evident mainly after 2008 and in small and medium-sized enterprises. At the same time, we do not uncover any evidence that firms going bankrupt during our observed period faced more severe financial constraints. Moreover, companies going bankrupt had significantly higher levels of external debt and bank loans, which indicates that they may have been, in fact, less constrained than others. |
| Keywords: | Bankruptcy, cash flow, credit rationing, financial constraints, investment, post-transition economy |
| JEL: | D22 D92 E22 G32 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2014/01&r=tra |
| By: | Kim, Byung Yeon; Shida, Yoshisada |
| Abstract: | We measure the informal economy and shortages of consumer goods in the Soviet republics from 1965 to 1989 to estimate the relationships of these two variables. We use fixed-effect model and instrument variable approach and find that the informal economy and shortages reinforce each other. Results indicate that the Soviet central planning system is difficult to sustain in the long run. A substantial heterogeneity across the Soviet republics exists not only in the extent of the informal economy and shortages, but also in the associations of the two variables. |
| Keywords: | shortages, informal economy, Soviet republics |
| JEL: | P21 P27 P36 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:hit:rrcwps:43&r=tra |
| By: | Gerasimenko Valentina (Department of Economics, Lomonosov Moscow State University); Ochkovskaya Marina (Department of Economics, Lomonosov Moscow State University); Rybalko Maria (Department of Economics, Lomonosov Moscow State University) |
| Abstract: | This paper demonstrates the importance of a high perceived quality for brands and delves into ways for strengthening it, as well as examining the global trends which affect a consumers’ decision, particularly in the Russia. Taking into account these trends, the authors study the factors behind a positive effect on the brands’ perception in Russia and present ways to transform the high actual quality in the perceived one. The findings from different groups analyses carried out on female and young (students) consumers show the specific of global trends implementation in Russia. In addition, the analyses confirm the efficiency of ways for strengthening the perceived quality of brands. |
| Keywords: | Brand, brand reputation, brands perception, actual quality, perceived quality, global trends, consumers |
| JEL: | M31 M37 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:upa:wpaper:0007&r=tra |
| By: | Mehdi Mili; Jean-Michel Sahut |
| Abstract: | Abstract. This paper focuses on the transmission of bank liquidity shocks in loan and deposit in emerging markets. First, we attempt to identify the factors that affect the credit strategy of foreign banks in emerging countries. Second, we test whether depositors do exert market discipline on foreign subsidiaries. Combining between financial variables of subsidiaries, their parent banks, and macroeconomic variables of host and home countries, we investigate the factors that are likely to impact the depositors’ behaviour. Our empirical approach is based on a Partial Least Squares-Path model, through which we can identify the causal relationships between the various groups of variables. Our results show that foreign bank lending is determined by the specific financial variables of the parent bank as well as macroeconomic variables of the country of origin. This means that the foreign subsidiary’s strategy credit is centrally managed at the parent bank and that subsidiaries’ credit supply depends primarily on the financial situation of its parent bank. Finally, we evidence market discipline as applied to foreign subsidiaries in emerging countries. We demonstrate that market discipline is strongly affected by the specific characteristics of the subsidiary. |
| Keywords: | foreign banks, credit supply, market discipline, emerging countries. |
| JEL: | F15 F34 G21 |
| Date: | 2014–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-210&r=tra |
| By: | Aliyev, Khatai |
| Abstract: | World Trade Organization (WTO) is the largest trade organization which is supposed to open the international trade for the benefit of all countries through liberalization or removing impediments over trade. It may directly impact import and export and indirectly other macroeconomic variables. In this context, Azerbaijan’s accession process to WTO has been subject to many discussions in terms of what impacts are expected for the economy in case of the accession. This thesis attempts to do an empirical analysis of the expected macroeconomic impacts of the membership on Azerbaijan economy through application of VAR model. In this thesis, central question is what overall macroeconomic impact is expected for Azerbaijan’s economy if Azerbaijan join to WTO. In this context, I hypothesize that macroeconomic impact of the membership over Azerbaijan economy is expected to be negative. To test my hypothesis, I benefit from the membership experience of Georgia and Armenia and use VAR model to estimate time series data for Georgia and Armenia individually, and panel data consisted of Georgia, Armenia and Azerbaijan’s time series data. After all, I conclude that WTO membership increases import much more than export. However, the research fails to find enough evidence to say that overall impact of WTO membership is statistically significant. After taking Azerbaijan’s economic characteristics into consideration, the research concludes that overall macroeconomic impact of WTO membership is expected to be negative for Azerbaijan. |
| Keywords: | Azerbaijan, WTO membership, Macroeconomic impacts, VAR model |
| JEL: | F13 F14 F55 |
| Date: | 2014–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55096&r=tra |
| By: | Dubovyk Tetyana |
| Abstract: | This paper studies the macroeconomic performance of Ukraine since 1991. During last twenty years, Ukraine experienced three episodes of prolonged recessions. The project uses business cycle accounting methodology developed by Chari et al. (2007) to identify driving forces behind economic downturns and growth episodes experienced in recent years. Ukrainian government needs to develop policies for sustainable growth. The research project studies this issue in two dimensions. First, the analysis within a general equilibrium framework identifies distortions which are the most harmful to the economic growth and will help to design future policies. Secondly, the wedges estimated from the data take into account not only legislatively declared taxes, for example, labor income taxes, but also incorporate institutional distortions in the labor market such as hiring and firing costs, expenditures associated with regulations’ compliance. We also estimate the contribution of each wedge to each crisis episode and to subsequent recovery. |
| JEL: | E3 O4 O5 P2 |
| Date: | 2014–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:eer:wpalle:14/05e&r=tra |
| By: | Ralitsa Petrova Hiteva (SPRU, University of Sussex, UK); Tomas Maltby (Politics, School of Social Sciences, University of Manchester, Oxford Road, Manchester, M13 9PL, UK,) |
| Keywords: | Bulgarian energy policy, EU energy policy, Overgas, Bulgargaz, Bulgartransgaz, natural gas intermediaries, EU energy market liberalisation |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2014-07&r=tra |