nep-tra New Economics Papers
on Transition Economics
Issue of 2014‒06‒02
23 papers chosen by
J. David Brown
IZA (Institute for the Study of Labor)

  1. Incentive Pay and Performance: Insider Econometrics in a Multi-Unit Firm By Bogaard, Hein; Svejnar, Jan
  2. Breaking out of poverty traps: Internal migration and interregional convergence in Russia By Guriev, Sergei; Vakulenko, Elena
  3. The nature of innovative activity and the protection of intellectual property: a post TRIPS perspective from Asia By Kamal Saggi; Difei Geng
  4. Was Stalin Necessary for Russia’s Economic Development? By Cheremukhin, Anton; Golosov, Mikhail; Guriev, Sergei; Tsyvinski, Aleh
  5. TRADE LIBERALIZATION AND LABOR SHARES IN CHINA By Fariha Kamal; Mary E. Lovely; Devashish Mitra
  6. Industrial Agglomeration in China: Case studies of the Chinese Silicon Valley and the coastal SEZ (Japanese) By KURITA Kyosuke
  7. Understanding Money Demand in the Transition from a Centrally Planned to a Market Economy By Delatte, Anne-Laure; Fouquau, Julien; Holz, Carsten
  8. Coresidency, Ethnicity, and Happiness of China's Rural Elders By Connelly, Rachel; Iannotti, Michael; Maurer-Fazio, Margaret; Zhang, Dandan
  9. Economic Reforms and Industrial Policy in a Panel of Chinese Cities By Alder, Simon; Shao, Lin; Zilibotti, Fabrizio
  10. Economic Transition and Private-Sector Labor Demand: Evidence from Urban China By Iyer, Lakshmi; Meng, Xin; Qian, Nancy; Zhao, Xiaoxue
  11. Optimal Exchange Rate Policy in a Growing Semi-Open Economy By Bacchetta, Philippe; Benhima, Kenza; Kalantzis, Yannick
  12. The Global Welfare Impact of China: Trade Integration and Technological Change By di Giovanni, Julian; Levchenko, Andrei A.; Zhang, Jing
  13. A DSGE Model of China By Dai, Li; Minford, Patrick; Zhou, Peng
  14. Душевой ВВП и производительность труда в России: было ли догоняющее развитие? By Zaytsev, Alexander
  15. Paths to a Reserve Currency: Internationalization of the Renminbi and Its Implications By Huang, Yiping; Wang, Daili; Fan, Gang
  16. The Benefits and Costs of Renminbi Internationalization By Zhang, Liqing; Tao, Kunyu
  17. When Does FDI Have Positive Spillovers? Evidence from 17 Transition Market Economies By Gorodnichenko, Yuriy; Svejnar, Jan; Terrell, Katherine
  18. Winners and Losers from a Commodities-for-Manufactures Trade Boom By Francisco Costa; Jason Garred; Joao Paulo Pessoa
  19. The One-Child Policy and Household Savings By Choukhmane, Taha; Coeurdacier, Nicolas; Jin, Keyu
  20. European enlargement and new frontiers of Central and Eastern Europe By Brie, Mircea
  21. Updating the poverty estimates in Serbia in the absence of micro data : a microsimulation approach By Cojocaru, Alexandru; Olivieri, Sergio
  22. Determinants of competitiveness of agriholdings and independent farms in Ukrainian arable production By Walther, Simon
  23. Utility maximising supply response: the case of perennial biomass plantations in Poland By P. Mathiou; Stelios Rozakis; Rafal Pudelko; A. Faber; A. Petsakos

  1. By: Bogaard, Hein; Svejnar, Jan
    Abstract: We exploit organizational reforms in a foreign-owned bank in Central-East Europe to study the implementation of modern HRM policies in an emerging market context. We have branch-level data and use our knowledge of the process that led to the adoption of the reforms to implement two estimators that address endogeneity bias in a complementary fashion: an IV approach and Generalized Propensity Score estimation. Our results show that some of the reforms had a positive impact on productivity, but they also underscore the risks of quantity-based incentives where quality is important.
    Keywords: Banking; Central and Eastern Europe; Endogeneity of HRM Policies; Foreign Ownership; Incentives; Insider Econometrics
    JEL: F23 G21 M52
    Date: 2014–01
  2. By: Guriev, Sergei; Vakulenko, Elena
    Abstract: We study barriers to labor mobility using panel data on gross region-to-region migration flows in Russia for 1995-2010. We find that barriers that hindered internal migration in 1990s have been generally eliminated by the end of 2000s. In 1990s many poor Russian regions were in poverty traps: potential migrants wanted to leave those regions but could not afford to finance the move. In 2000s (especially in late 2000s), these constraints were no longer binding. Overall economic growth and development of financial markets allowed even the poorest Russian regions to grow out of poverty traps resulting in convergence between Russian regions in 2000s.
    Keywords: internal migration; liquidity constraints; poverty traps
    JEL: J61 R23
    Date: 2013–10
  3. By: Kamal Saggi (Vanderbilt University); Difei Geng (Vanderbilt University)
    Abstract: This paper examines trends in innovative activity in several major Asian countries during 1997-2011 as measured by their filings and grants of various types of intellectual property (IP). By almost all measures, there has been a remarkable increase in innovative activity in China. In fact, in 2011 China accounted for roughly 25% of global patent applications. However, several indirect measures suggest that the quality of this newly created Chinese IP is not (yet) world class. For example, relative to residents of other major Asian countries and the United States, Chinese residents tend to file IP applications in foreign markets at a much lower rate. Similarly, the ratio of royalty payments earned by Chinese residents to the number of patents granted to them is fairly low by international standards. Finally, the ratio of patent to utility model applications (typically granted for relatively minor innovations) in China is also relatively small.
    Keywords: innovation, protection of intellectual property, patents, trademarks, industrial designs, TRIPS, Asia
    JEL: O3 O5
    Date: 2014–05–27
  4. By: Cheremukhin, Anton; Golosov, Mikhail; Guriev, Sergei; Tsyvinski, Aleh
    Abstract: This paper studies structural transformation of Soviet Russia in 1928-1940 from an agrarian to an industrial economy through the lens of a two-sector neoclassical growth model. We construct a large dataset that covers Soviet Russia during 1928-1940 and Tsarist Russia during 1885-1913. We use a two-sector growth model to compute sectoral TFPs as well as distortions and wedges in the capital, labor and product markets. We find that most wedges substantially increased in 1928-1935 and then fell in 1936-1940 relative to their 1885-1913 levels, while TFP remained generally below pre-WWI trends. Under the neoclassical growth model, projections of these estimated wedges imply that Stalin’s economic policies led to welfare loss of -24 percent of consumption in 1928-1940, but a +16 percent welfare gain after 1941. A representative consumer born at the start of Stalin’s policies in 1928 experiences a reduction in welfare of -1 percent of consumption, a number that does not take into account additional costs of political repression during this time period. We provide three additional counterfactuals: comparison with Japan, comparison with the New Economic Policy (NEP), and assuming alternative post-1940 growth scenarios.
    Keywords: industrialization; Japan; Russia; Stalin; unbalanced growth
    JEL: E6 N23 N24 O4 O41
    Date: 2013–09
  5. By: Fariha Kamal; Mary E. Lovely; Devashish Mitra
    Abstract: We estimate the extent to which firms responded to tariff reductions associated with China’s WTO entry by altering labor’s share of value. Firm-level regressions indicate that firms in industries subject to tariff cuts raised labor’s share relative to economy-wide trends, both through input choices and rent sharing. Labor’s share of value is an estimated 12 percent higher in 2007 than it would be if tariffs had remained at their 1998 levels. There is significant variation across firms: the impact is larger where market access is better and it is influenced by union presence and state ownership.
    Date: 2014–05
  6. By: KURITA Kyosuke
    Abstract: This paper verifies the policy impacts of introducing foreign capital to promote industrial development from the perspective of industrial agglomeration in China. There are two analyses; the first is on the high-tech industry in Zhongguancun, called the Chinese Silicon Valley, and the second focuses on the coastal special economic zone (SEZ) in China. From the results, the effects of industrial agglomeration policy are limited. Although these policies succeeded in attracting firms with high productivity to Zhongguancun and the coastal SEZ, the analyses show no significant effects of building the firms' networks and generating spillover effects to local firms.
    Date: 2014–05
  7. By: Delatte, Anne-Laure; Fouquau, Julien; Holz, Carsten
    Abstract: Fundamental changes in institutions during the transition from a centrally planned to a market economy present a formidable challenge to monetary policy decision makers. For the case of China, we examine the institutional changes in the monetary system during the process of transition and develop money demand functions that reflect these institutional changes. We consider seasonal unit roots and estimate long run, equilibrium money demand functions, explicitly taking into consideration the changes in the institutional characteristics of China's financial system. Using a newly compiled dataset that covers an unprecedented long time period of 1984-2010 at the quarterly frequency, we are able to draw conclusions on the transitions in households', firms', and aggregate money demand, on the role of the credit plan and interest rates, on the mechanisms of macroeconomic control during economic transition, and on theoretical questions in the development and money literature.
    Keywords: Chinese economy; cointegration; complementary hyopthesis; money demand; seasonal unit root
    JEL: C51 E41 O11 P24 P52
    Date: 2013–11
  8. By: Connelly, Rachel (Bowdoin College); Iannotti, Michael (Bates College); Maurer-Fazio, Margaret (Bates College); Zhang, Dandan (Peking University)
    Abstract: As China moves into the ranks of aged societies, coresidency of elders with their adult children has become an increasingly important policy concern. This article utilizes data from the 2000 Population Census of China and the 2011 Chinese Household Ethnicity Survey (CHES) to analyze coresidency patterns of rural elders in seven Chinese provinces with high concentrations of ethnic minority populations. We also explore one consequence of coresidency, reported happiness. We find that socioeconomic variables matter in the determination of coresidency in China in ways that are very similar to their roles in other countries. However, changes between 2000 and 2011 in the effects of age and widowhood show that coresidency decisions among rural elders provinces are transitioning from child-centric to parent-centric. Our analysis also reveals the large role cultural norms play in determining coresidency, as evidenced by differences across ethnic groups. The CHES data allow us to compare coresidency across ethnicity with respect to both individual and regional degrees of assimilation versus isolation. Elders who do not speak Mandarin have higher rates of coresidency than those who do. Additionally, those who live in counties with low rates of intermarriage and intergroup friendships are also more likely to coreside. In exploring the determinants of happiness, we find again that socioeconomic and demographic conditions matter, as does ethnicity. Controlling all else, coresidency increases the happiness of the elderly by about 28 percent. Moreover, the unobserved characteristics that drive coresidency are highly detrimental to the happiness of the elderly.
    Keywords: coresidency, happiness, ethnicity, Minzu, global life satisfaction, elders, living arrangements, China Household Ethnicity Survey, China
    JEL: D13 J12 J14 J15
    Date: 2014–05
  9. By: Alder, Simon; Shao, Lin; Zilibotti, Fabrizio
    Abstract: We estimate the effect on economic development of China's industrial policy, in particular, the establishment of Special Economic Zones (SEZ). We use data from a panel of 276 Chinese cities and prefectures from 1988 to 2010. Our difference-in-difference estimator exploits the variation in the establishment of SEZ across time and space. We find that the establishment of a state-level SEZ is associated with an increase in the level of GDP of about 20%, but not with a permanently steeper growth path. This finding is confirmed with alternative specifications and in a sub-sample of inland provinces, where the selection of cities to host the zones was based on administrative criteria. Decomposing the effect of SEZ on GDP into different channels shows that this worked mainly through the accumulation of physical capital, although there is some evidence of increasing productivity and human capital investments. Using light intensity as an alternative measure for economic activity confirms the positive effects of SEZ.
    Keywords: China; difference-in-difference; economic growth; economic reforms; industrial policy; investments; satellite light; special economic zones; total factor productivity
    JEL: H72 L52 O25 O38 O53 P21 R11
    Date: 2013–11
  10. By: Iyer, Lakshmi; Meng, Xin; Qian, Nancy; Zhao, Xiaoxue
    Abstract: This paper studies the policy determinants of economic transition and estimates the demand for labor in the infant private sector in urban China. We show that a reform that untied access to housing in urban areas from working for the state sector accounts for more than a quarter of the overall increase in labor supply to the private sector during 1986-2005. Using the reform to instrument for private-sector labor supply, we find that private-sector labor demand is very elastic. We provide suggestive evidence that the reform equalized wages across sectors and reduced private-sector rents.
    Keywords: Economic Transition; Labor Mobility; Structural Change
    JEL: J23 O12 P2 P26
    Date: 2014–01
  11. By: Bacchetta, Philippe; Benhima, Kenza; Kalantzis, Yannick
    Abstract: In this paper, we consider an alternative perspective to China's exchange rate policy. We study a semi-open economy where the private sector has no access to international capital markets but the central bank has full access. Moreover, we assume limited financial development generating a large demand for saving instruments by the private sector. We analyze the optimal exchange rate policy by modelling the central bank as a Ramsey planner. Our main result is that in a growth acceleration episode it is optimal to have an initial real depreciation of the currency combined with an accumulation of reserves, which is consistent with the Chinese experience. This depreciation is followed by an appreciation in the long run. We also show that the optimal exchange rate path is close to the one that would result in an economy with full capital mobility and no central bank intervention.
    Keywords: China; Exchange rate policy; International reserves
    JEL: E58 F31 F41
    Date: 2013–09
  12. By: di Giovanni, Julian; Levchenko, Andrei A.; Zhang, Jing
    Abstract: This paper evaluates the global welfare impact of China's trade integration and technological change in a multi-country quantitative Ricardian-Heckscher-Ohlin model. We simulate two alternative growth scenarios: a "balanced" one in which China's productivity grows at the same rate in each sector, and an "unbalanced" one in which China's comparative disadvantage sectors catch up disproportionately faster to the world productivity frontier. Contrary to a well-known conjecture (Samuelson 2004), the large majority of countries experience significantly larger welfare gains when China's productivity growth is biased towards its comparative disadvantage sectors. This finding is driven by the inherently multilateral nature of world trade.
    Keywords: China; International Trade; Productivity growth
    JEL: F11 F43 O33 O47
    Date: 2013–10
  13. By: Dai, Li; Minford, Patrick (Cardiff Business School); Zhou, Peng (Cardiff Business School)
    Abstract: We use available methods for testing macro models to evaluate a model of China over the period from Deng Xiaoping’s reforms up until the crisis period. Bayesian ranking methods are heavily influenced by controversial priors on the degree of price/wage rigidity. When the overall models are tested by Likelihood or Indirect Inference methods, the New Keynesian model is rejected in favour of one with a fair-sized competitive product market sector. This model behaves quite a lot more ‘flexibly’ than the New Keynesian.
    Keywords: China; DSGE; Bayesian Inference; Indirect Inference
    JEL: C11 C15 C18 E27
    Date: 2014–05
  14. By: Zaytsev, Alexander
    Abstract: Using Russian data, it is showт that different assessment techniques of cathing-up development lead to opposite conclusions: according to current PPPs we have seen the cathing-up in per capita GDP during 1990-2012 period, but according to constant PPPs – we have not. It is argued that current PPPs give more reliable picture of comparative welfare (per capita GDP) dynamics rather than constant PPPs. The author shows that substitution effect explains more than the half of the Russia-US per capita GDP gap reduction in 2005-2012 period. Constant PPPs are preferred for comparisons of productivity dynamics. According to constant PPPs in 2012 Russia had bigger productivity gap (to US) than that in 1991 year.
    Keywords: catching-up, convergence, per capita GDP dynamics, productivity gap, PPP, international comparisons
    JEL: J24 N30 O47 O57
    Date: 2014–05–10
  15. By: Huang, Yiping (Asian Development Bank Institute); Wang, Daili (Asian Development Bank Institute); Fan, Gang (Asian Development Bank Institute)
    Abstract: In this paper we try to address the question of what could help make the renminbi (RMB) a reserve currency. In recent years, the authorities in the People's Republic of China (PRC) have made efforts to internationalize its currency through a two-track strategy: promotion of the use of the RMB in the settlement of cross-border trade and investment, and liberalization of the capital account. We find that if we use only the quantitative measures of the economy, the predicted share of the RMB in global reserves could reach 12%. However, if institutional and market variables are included, the predicted share comes down to around 2%, which is a more realistic prediction. By reviewing experiences of other reserve currencies, we propose a three-factor approach for the PRC authorities to promote the international role of the RMB: (i) increasing the opportunities of using RMB in the international community, which requires relatively rapid growth of the PRC economy and continuous liberalization of trade and investment; (ii) improving the ease of using RMB, which requires depth, sophistication, and liquidity of financial markets; and (iii) strengthening confidence of using RMB, which requires more transparent monetary policy making, a more independent legal system, and some political reforms. In general, we believe that the RMB's international role should increase in the coming years, but it will take a relatively long period before it plays the role of a global reserve currency.
    Keywords: RMB internationalization; reserve currency; anchor currency; capital account openness
    JEL: F30 F33 F36 F42
    Date: 2014–05–26
  16. By: Zhang, Liqing (Asian Development Bank Institute); Tao, Kunyu (Asian Development Bank Institute)
    Abstract: Despite the increasing recognition that the renminbi (RMB) may eventually become a key global currency, several important questions remain to be answered. This paper analyzes the benefits and costs of the RMB becoming an international currency. The benefits include reduced exchange risk, promotion of the development of the financial market, and expansion of firms in the People’s Republic of China. The costs include general costs, which complicate monetary policy and exchange rate policy, and several transitional risks. The study argues that the benefits of RMB internationalization should surpass the costs, particularly in the long run, and provides comprehensive policy choices for a sustainable process of RMB internationalization.
    Keywords: renminbi internationalization; financial development; transitional risks; international monetary system
    JEL: F31 F36 F42
    Date: 2014–05–23
  17. By: Gorodnichenko, Yuriy; Svejnar, Jan; Terrell, Katherine
    Abstract: We use rich firm-level data and national input-output tables from 17 countries over the 2002-2005 period to test new and existing hypotheses about the impact of foreign direct investment (FDI) on the efficiency of domestic firms in the host country (i.e., spillovers). We document that backward linkages have a consistently positive effect on productivity of domestic firms while horizontal and forward linkages show no consistent effect. We also examine how the strength of spillovers varies by sector, FDI source, business environment (corruption, red tape, level of development), firm’s distance to the technological frontier, education of workers, and other firm- and country-specific characteristics.
    Keywords: efficiency; FDI; spillovers; transition economies
    JEL: F23 M16 O16 P23
    Date: 2014–02
  18. By: Francisco Costa; Jason Garred; Joao Paulo Pessoa
    Abstract: A recent boom in commodities-for-manufactures trade between China and other developing countries has led to much concern about the losers from rising import competition in manufacturing, but little attention on the winners from growing Chinese demand for commodities. Using census data for Brazil, we find that local labour markets more affected by Chinese import competition experienced slower growth in manufacturing wages and in-migration rates between 2000 and 2010, and greater rises in local wage inequality. However, in locations benefiting from rising Chinese demand, we observe higher wage growth, lower takeup of cash transfers and positive effects on job quality.
    Keywords: China, trade, commodities-for manufactures, wages, employment, informality
    JEL: F14 F16 O17 Q17
    Date: 2014–05
  19. By: Choukhmane, Taha; Coeurdacier, Nicolas; Jin, Keyu
    Abstract: We ask how much the advent of the `one child policy' can explain the sharp rise in China's household saving rate. In a life-cycle model with endogenous fertility, intergenerational transfers and human capital accumulation, we show a macroeconomic and a microeconomic channel through which restrictions in fertility raise aggregate saving. The macro-channel operates through a shift in the composition of demographics and income across generations. The micro-channel alters saving behaviour and education decisions at the individual level. A main objective is to quantify these various channels in the data. Exploiting the birth of twins as an identification strategy, we provide direct empirical evidence on the micro-channel and show its quantitative relevance in accounting for the rise in the household saving rate since the inception of the policy in 1980. Our quantitative OLG model can explain from a third to at most 60% of the rise in aggregate saving rate; equally important is its implied shift in the level and shape of the age-saving profile consistent with micro-level estimates from the data.
    Keywords: Fertility; Intergenerational transfers; Life Cycle Consumption/Savings
    JEL: D10 D91 E21
    Date: 2013–10
  20. By: Brie, Mircea
    Abstract: The borders of Central and Eastern Europe (CEE) today are the result of a complex process conducted decades after the fall of communist regimes in this part of Europe. With the opening towards the west, with the change of political and economic regimes came the implementation of democratic reforms of CEE societies and this led to the beginning of a complex integration process. The latter is undoubtedly associated with profound changes in the form and role of borders between states and the new Western partners. The old barriers open, the borders become increasingly soft. Old movement restrictions are removed. The main idea of the integration process is not to settle barriers, but to attenuate them. From this perspective, internal borders become more and more inclusive and less visible. Security and border traffic control are transferred to external borders that become more and more exclusive, more restrictive if we respect the logic above. Such a theory is valid up to a point. Internal borders do not simply become more open, more inclusive; there is an integration process taking place in steps. The EU external border greatly expanded eastward, and in this context the old borders have become simple internal borders. Associated to an integration process, we find a process of dilution to the disappearance of internal borders with the Schengen space integration (old borders remain expressions of sovereignty, the national limits no longer serve to separate people, goods and capital).
    Keywords: Europa; frontiers; enlargement; European Union; NATO; Euro; Shengen; identity; culture; Europeanism; good neighbourhood; crossborder cooperation
    JEL: F53 F55
    Date: 2014
  21. By: Cojocaru, Alexandru; Olivieri, Sergio
    Abstract: The continued poverty impact of the financial crisis in Serbia is difficult to establish beyond 2010 because of the lack of survey data. This paper tackles this difficulty. It uses a micro-simulation approach that accounts for a key pathway of the financial crisis in Serbia, the labor market. The results suggest a further increase in poverty in 2011 on account of a continued deterioration of the labor market indicators and despite a recovering gross domestic product. In order to evaluate the forecast, the model is applied to generate forecasts for previous years (2009 and 2010), which are compared with realized poverty estimates. The micro-simulation model performs well in predicting poverty dynamics during 2009-10 and less so during 2008-09. The accuracy of the predictions improves when the response of the social protection system is accounted for.
    Keywords: Rural Poverty Reduction,Inequality,Economic Theory&Research,Poverty Impact Evaluation,Services&Transfers to Poor
    Date: 2014–05–01
  22. By: Walther, Simon
    Abstract: Agriholdings are large horizontally and/or vertically integrated corporate farming businesses which are characterized by having multiple operations under a central management. This organizational form has been developing in Kazakhstan, Russia and Ukraine since the late 1990s and has since then gained a considerable market share, especially in arable production. Ukraine is one of the three countries in which the development of agriholdings was very pronounced. While the competition for arable land in Ukraine has been weak so far, it is expected to increase in the future. In order to be able to assess whether agriholdings or independent farms will then be more competitive on the land market also under changing conditions, (a) competitive advantages and disadvantages of the two organizational forms in Ukrainian arable production are identified in this thesis, (b) their impact on competitiveness is quantified, and (c) likely future adaptations of both organizational forms in order to maintain or increase their competitiveness are explored. -- Agrarholdings sind große horizontal und/oder vertikal integrierte Agrarunternehmen, die sich dadurch auszeichnen, dass sie mehrere landwirtschaftliche Produktionseinheiten unter einer zentralen Verwaltung haben. Diese Organisationsform hat sich in Kasachstan, Russland und der Ukraine seit den späten 1990er-Jahren entwickelt und hat seitdem insbesondere im Ackerbau einen erheblichen Marktanteil erreicht. Die Ukraine ist eines dieser drei Länder, in dem die Entwicklung von Agrarholdings besonders ausgeprägt vonstatten ging. Wenngleich der Wettbewerb um Ackerland in der Ukraine bisher schwach ausgeprägt war, wird erwartet, dass dieser in der Zukunft zunehmen wird. Um einschätzen zu können, ob dann Agrarholdings oder Einzelbetriebe auch unter sich ändernden Bedingungen eine höhere Wettbewerbsfähigkeit auf dem Landmarkt besitzen werden, werden in dieser Arbeit (a) Wettbewerbsvor- und -nachteile der beiden Organisationsformen im ukrainischen Ackerbau identifiziert, (b) deren Auswirkungen auf die Wettbewerbsfähigkeit quantifiziert und (c) Zukunftsanpassungen, die beide Organisationsformen wahrscheinlich unternehmen werden, um ihre Wettbewerbsfähigkeit zu erhalten oder zu verbessern, untersucht.
    Date: 2014
  23. By: P. Mathiou (Department of Agricultural Economics and Development Agricultural University of Athens, Greece); Stelios Rozakis (Department of Agricultural Economics and Rural Development, Agricultural University of Athens, Iera Odos 75, Athens 11855, Greece); Rafal Pudelko ("Department of Agrometeorology and Applied Informatics, Institute of Soil Sciences and Plant Cultivation (IUNG), State Research Institute, Czartoryskich 8, 24-100 Pulawy, Poland"); A. Faber ("Department of Agrometeorology and Applied Informatics, Institute of Soil Sciences and Plant Cultivation (IUNG), State Research Institute, Czartoryskich 8, 24-100 Pulawy, Poland"); A. Petsakos (Economie Publique, Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2), Institut National de la Recherche Agronomique (INRA), France)
    Abstract: Governments extensively use price support instruments to the energy industry combined with direct support for cultivating perennial crops to promote conversion of solid biomass to energy, in order to meet the goals of energy independence and mitigation of the greenhouse effect. In this paper, focusing on less fertile land classes in Poland, biomass supply is determined for a range of hypothetical prices and policy scenarios using bottom-up sector modelling. Risk-neutral and risk-averse farm-based models are run for examining willow and miscanthus adoption by Polish farmers at the municipal level.
    Keywords: Willow, Miscanthus, Mathematical Programming, Utility Function, Biomass Supply, Spatial allocation
    JEL: C6 Q16 Q41
    Date: 2014

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