nep-tra New Economics Papers
on Transition Economics
Issue of 2014‒06‒28
seventeen papers chosen by
J. David Brown
IZA (Institute for the Study of Labor)

  1. Did Post-Enlargement Labor Mobility Help the EU to Adjust During the Great Recession? The Case of Slovakia By Kahanec, Martin; Kureková, Lucia Mytna
  2. Foreign direct investment drivers and growth in Central and Eastern Europe in the aftermath of the 2007 global financial crisis By R. Jimborean; A. Kelber
  3. Data for Studying Earnings, the Distribution of Household Income and Poverty in China By Gustafsson, Björn Anders; Li, Shi; Sato, Hiroshi
  4. Who will feed China in the 21st century ? income growth and food demand and supply in China By Fukase, Emiko; Martin, Will
  5. Differences In The Use Of IT Infrastructure Among Business Enterprises Operating In The Visegrád Group Of Countries By Attila Jóczik; Péter Sasvári
  6. The Analysis of Population Aging Phenomena in Poland in Spatial Perspective By Justyna Wilk, Michal Bernard Pietrzak
  7. The Nexus between Antidumping Petitions and Exports during the Global Financial Crisis: Evidence on the People’s Republic of China By Lin, Faqin; Tang, Hsiao Chink; Wang, Lin
  8. Metropolitan areas in central Poland and their impact on migration flows By Michal Bernard Pietrzak, Justyna Wilk
  9. Odleg³osc ekonomiczna w modelowaniu zjawisk przestrzennych z wykorzystaniem modelu grawitacji By Michal Bernard Pietrzak, Justyna Wilk
  10. Extreme negative coexceedances in South Eastern European stock markets By Dragan Tevdovski
  11. A fiscal outlook for Poland: Update 2014. Background paper prepared for the World Bank's Country Economic Memorandum (CEM) for Poland By Jabłonowski, Janusz; Müller, Christoph
  12. Analysis of Informal Obstacles to Cross-Border Economic Activity in Kazakhstan and Uzbekistan By Vakulchuk, Roman; Irnazarov, Farrukh
  13. What Happened in Cyprus? The Economic Consequences of the Last Communist Government in Europe By Orphanides, Athanasios
  14. Determinants of Eco-innovation from a European-wide Perspective - an Analysis based on the Community Innovation Survey (CIS). By Jens Horbach
  15. Are children driving the gender wage gap? Comparative evidence from Poland and Hungary By Ewa Cukrowska; Anna Lovasz
  16. Poverty reduction and shared prosperity in Tajikistan : a diagnostic By Azevedo, Joao Pedro; Atamanov, Aziz; Rajabov, Alisher
  17. Falling Short: Intergovernmental Transfers in China By Yongzheng Liu; Jorge Martinez-Vazquez; Baoyun Qiao

  1. By: Kahanec, Martin (Central European University); Kureková, Lucia Mytna (Slovak Governance Institute)
    Abstract: This paper evaluates the mobility patterns of Slovaks into the rest of the European Union (EU) following Slovakia's EU accession in 2004 and through the Great Recession. Combining information from various data sources including the Slovak Labor Force Survey and conducting our own statistical analysis of selectivity into migration, we study whether and how migration responded to asymmetric economic shocks at home and abroad. We identify a number of shifts in the directionality and composition of migration flows in terms of the destinations, gender, age, educational attainment and occupation, reflecting changing labor market conditions in receiving countries and Slovakia. We show that besides the standard demographic factors, migration propensity was higher among the unemployed and from the more depressed regions of Slovakia. We conclude that labor migration has served as an important adjustment mechanism in the country and more generally in the EU labor market.
    Keywords: adjustment, EU enlargement, labor market, migration, Slovakia
    JEL: F22 J61
    Date: 2014–06
  2. By: R. Jimborean; A. Kelber
    Abstract: In the context of the recent deceleration of growth in emerging Europe, we reassess empirically the effect of foreign direct investment (FDI) inflows on economic growth in Central and Eastern European countries (CEECs) through an analysis carried out over the period 1993-2013. In a first step, we show that the main domestic determinants of FDI inflows are the market size, risk premia, unit labour costs, the openness, as well as progress in structural reforms (mainly related to privatisation process and banking sector) and institutional reforms (namely the lack of trade barriers, the ability for individuals to accumulate private property and progress in fighting corruption) in the host economy. Moreover, the macroeconomic conditions in the euro area also play an important role in explaining FDI flows to the region. In a second step, we analyse the impact of FDI inflows on economic growth. Our findings add to the strand of literature pointing out a positive effect of FDI inflows on growth. We consider the occurrence of the 2007 and 2011 crises and show their negative impact on the FDI - economic growth link, both crises reducing the positive impact of FDI on economic growth.
    Keywords: foreign direct investment; Central and Eastern Europe.
    JEL: F21 O52 P33
    Date: 2014
  3. By: Gustafsson, Björn Anders (University of Gothenburg); Li, Shi (Beijing Normal University); Sato, Hiroshi (Hitotsubashi University)
    Abstract: This paper discusses data used in publishing statistics on earnings, the distribution of household income and poverty in China by the National Bureau of Statistics (NBS) which is widely used by policy makers, international agencies and researchers. Unlike many other countries, China until recently had a dual system of household surveys - one rural and one urban. This has had consequences for providing official data on wages, income and poverty which we discuss along with other challenges. Since the end of the 1980s, researchers have been active in the construction of large databases aimed at mapping earnings, household income and poverty, and we present seven of these in the paper.
    Keywords: earnings, income, inequality, poverty, data, China, National Bureau of Statistics
    JEL: C83 D31 I32 P36
    Date: 2014–06
  4. By: Fukase, Emiko; Martin, Will
    Abstract: This paper uses resource-based cereal equivalent measures to explore the evolution of China's demand and supply for food. Although demand for food calories is probably close to its peak level in China, the ongoing dietary shift to animal-based foods, induced by income growth, is likely to impose considerable pressure on agricultural resources. Estimating the relationship between income growth and food demand with data from a wide range of countries, China's demand growth appears to have been broadly similar to the global trend. On the supply side, output of food depends strongly on the productivity growth associated with income growth and on the country's agricultural land endowment, with China appearing to be an out-performer. The analyses of income-consumption-production dynamics suggest that China's current income level falls in the range where consumption growth outstrips production growth, but that the gap is likely to begin to decline as China's population growth and dietary transition slow down. Continued agricultural productivity growth through further investment in research and development, and expansion in farm size and increased mechanization, as well as sustainable management of agricultural resources, are vital for ensuring that it is primarily China that will feed China in the 21st century.
    Keywords: Food&Beverage Industry,Economic Theory&Research,Rural Development Knowledge&Information Systems,Livestock and Animal Husbandry,Regional Economic Development
    Date: 2014–06–01
  5. By: Attila Jóczik; Péter Sasvári
    Abstract: The aim of using information technology and information systems is to improve the efficiency and effectiveness of economic activities. Examined by their size categories, the enterprises operating in the Visegrád group of countries produce different average added value, which can also be detected in their use of IT infrastructure. In comparison to their Visegrád peers, micro-enterprises in Slovakia, small-sized businesses in Poland, medium-sized enterprises in the Czech Republic and corporations in Hungary produced the highest added value on average, which is closely related to the usage of IT infrastructure in those countries. It also follows that various business information systems can be found at the small- and mediumsized enterprises in the Czech Republic and Poland in the largest proportion. These systems were applied by Hungarian and Slovakian small- and medium-sized enterprises at the lowest frequency rate. Personnel responsible for the operation of IT functions at micro- and smallsized enterprises vary from country to country, an employee working at a lower position was entrusted with this task in the Czech Republic and Slovakia, while IT managers in Hungary and external specialists in Poland were in charge of the operation of IT infrastructure. Corporations tended to entrust IT managers with this task in each of the studied countries. --
    Keywords: IT Infrastructure,Visegrád Group Of Countries,Hungary,the Czeh Republic,Slovakia,Poland
    JEL: M13 M15
    Date: 2014–05–09
  6. By: Justyna Wilk, Michal Bernard Pietrzak (Wroc³aw University of Economics, Nicolaus Copernicus University, Poland)
    Abstract: The processes of socio-economic development are continuously accompanied by the process of population aging. It is seen as a growing of the percentage share of people aged 65 and over in the general population. It covers the majority of European Union countries and also refers to Poland. The objective of the paper is to analyze the population aging phenomenon in spatial perspective. The study was carried out for 66 subregions (NUTS 3) and covered the period 1995-2012. Poland is characterized by a strong spatial diversification regarding the senior citizens share and its growth rate, and also determinants exerting impact on the demographic aging processes. The demographically youngest and slowest aging population lives in south-eastern and also central Poland. The most intensive population aging processes are seen in the selected subregions of south-western Poland. Here, we observe extremely low fertility, demographically old working-age population and also significant migration outflow of younger people.
    Keywords: population aging, socio-economic development, spatial approach, taxonomic analysis, regression analysis
    JEL: C38 C51 J11
    Date: 2014–03
  7. By: Lin, Faqin (School of International Trade and Economics); Tang, Hsiao Chink (Asian Development Bank); Wang, Lin (Institute of Economics of the Chinese Academy of Social Sciences)
    Abstract: This paper quantifies how the People’s Republic of China’s (PRC) export volume to its major trading partners during the global financial crisis affects the antidumping (AD) petitions filed by the trading partners against the PRC. Focusing on the AD petitions at the Harmonized System (HS) Code 8-digit level and the PRC’s exports at the HS 2-digit level, we construct three instrument variables at the same HS level for export volume. These instruments—documents required, time taken, and container charges incurred for goods traded across borders—represent trade costs obtained from the World Bank’s Doing Business Project. We find rising exports from the PRC lead to rising AD petitions against the country. Instrumental variable estimates indicate that a 1 percentage point rise in the PRC’s export volume raises the number of AD petitions against the country by about 0.3 percentage point, and the probability of receiving AD petitions by 3.6 %. These estimates are about 10 times larger than those found in ordinary least square regressions. Their quantitative significance underlines why it is important to consider the issue of export endogeneity in the estimation. Moreover, it highlights the failure of the current trade statistics to account for the true value-added of traded goods, and how this has particularly disadvantaged the PRC, given its position as the factory of the world.
    Keywords: International trade; antidumping; instrument variable; People’s Republic of China
    JEL: F13 F14 F59
    Date: 2014–05–01
  8. By: Michal Bernard Pietrzak, Justyna Wilk (Nicolaus Copernicus University, Wroc³aw University of Economics, Poland)
    Abstract: The objective of the paper is to identify subregions (NUTS 3) of the central part of Poland pretending to metropolitan areas, as well as to study their impact on the domestic migration flows. Their social and economic situations in 2008 were determined on the basis of the composite measure values. Their participation in the domestic migration flows in the period 2008-2010, considering the directions, range and intensity of flows, was also examined. Only Warsaw is the completely shaped metropolitan area in Poland. The city demonstrates the highest economic potential and therefore the strongest migration flows and dependences with other subregions. The cities of Poznañ and £ódŸ and also the Bydgosko-Toruñski subregion can be recognized as developing metropolitan areas. These subregions represent significant economic centres; however migration flows related to them demonstrate mainly regional importance.
    Keywords: metropolitan areas, migration flows, economic development, central Poland
    JEL: J11 O11 R11 R23
    Date: 2014–03
  9. By: Michal Bernard Pietrzak, Justyna Wilk (Nicolaus Copernicus University, Wroc³aw University of Economics, Poland)
    Abstract: The paper discusses the issue of an economic distance and its significance in modeling phenomena occurring in regional space. Economic distances between regions were deter-mined and their influence on internal migration flows in Poland in the period 2000-2010 was examined. The period before Poland’s accession to the EU, as well as two periods re-ferring to the changes in economic trend and the intensity of domestic migrations, was considered. The economic distance is one of the most significant determinants of internal migration flows. In comparison to the geographical distance, it undergoes changes in time and space. Furthermore it affects the intensity of flows between regions in the opposite di-rection. Higher economic distance results in more intensive interactions between regions.
    Keywords: economic distance, regional development, gravity model, internal migrations
    JEL: C21 J11 O11 O15 R11 R23
    Date: 2014–03
  10. By: Dragan Tevdovski (University Ss. Cyril and Methodius and CREATES)
    Abstract: The aim of this paper is to analyze the financial integration of the South Eastern Europe (SEE) stock markets. We use a multinomial logistic regression to analyze how persistence, asset class and volatility effects are related with negative coexceedances in SEE markets. We find evidence in favor of the continuation hypothesis in SEE stock markets. However, the factors associated with the coexceedances differ between the EU member countries from SEE and EU accession countries from SEE stock markets. The EU member countries are more dependent from the signals from major EU economies, while the accession countries are mainly influenced by the signals from the region.
    Keywords: financial market integration, co-movement, stock markets, emerging markets, South Eastern Europe
    JEL: C25 F36 G15
    Date: 2014–06–24
  11. By: Jabłonowski, Janusz; Müller, Christoph
    Abstract: Poland faces one of the most rapidly ageing population in Europe. The old age dependency ratio is expected to triple until 2060. Against this background, our paper examines the sustainability of Polish public finances and its isolated subsystems. We consider the profound recent reforms including the transfer of 2nd pillar pension obligations to the general government in 2014. Furthermore, we extend our previous computations (Jablonowski et al., 2011) by using data from household budget surveys as well as large pension contributors' and tax payers' databases. Our results show that the pension reforms enacted since 2011 improve the long-term stability of public finances. A risk for fiscal sustainability represents, however, the public health care system which may be severely challenged by the ageing process and a continuing excess cost growth. We assess a number of health reforms including co-payments and a shift to tax financing which have the potential to stabilize the public health care system. --
    JEL: H50 H55 H60 H68 J10 H3
    Date: 2014
  12. By: Vakulchuk, Roman (Norwegian Institute of International Affairs (NUPI)); Irnazarov, Farrukh (Central Asian Development Institute (CADI))
    Abstract: The barriers to trade in developing countries constitute one of the major obstacles to economic development and growth. This study aims at addressing the issues surrounding the prevalence of informal trade barriers in Kazakhstan and Uzbekistan. While it appears to be logical that the strongest economies of Central Asia should increase trade volume with neighboring countries, in reality the potential for intensifying cross-border trade is barely being realized. This paper attempts to shed light on trade barriers in key industries in both countries, including manufacturing, transport, and agriculture. As can be seen from this study, these industries experience different types of restrictions and varying degrees of state intervention in Kazakhstan and Uzbekistan. The paper places special emphasis on informal barriers and the tools companies use to overcome those barriers. The paper is based on a survey of a total of 108 companies in both countries and the output of a roundtable discussion in Kazakhstan with representatives of companies and other experts in the above-mentioned industries.
    Keywords: Kazakhstan; Uzbekistan; trade; formal and informal barriers; cross-border activity
    JEL: D80 F10 F20 L10 L20
    Date: 2014–05–01
  13. By: Orphanides, Athanasios
    Abstract: This paper reviews developments in the Cypriot economy following the introduction of the euro on 1 January 2008 and leading to the economic collapse of the island five years later. The main cause of the collapse is identi?ed with the election of a communist government in February 2008, within two months of the introduction of the euro, and its subsequent choices for action and inaction on economic policy matters. The government allowed a rapid deterioration of public finances, and despite repeated warnings, damaged the country’s creditworthiness and lost market access in May 2011. The destruction of the island’s largest power station in July 2011 subsequently threw the economy into recession. Together with the intensification of the euro area crisis in the summer and fall of 2011, these events weakened the banking system which was vulnerable due to its exposure in Greece. Rather than deal with its ?scal crisis, the government secured a loan from the Russian government that allowed it to postpone action until after the February 2013 election. Rather than protect the banking system, losses were imposed on banks and a campaign against them was coordinated and used as a platform by the communist party for the February 2013 election. The strategy succeeded in delaying resolution of the crisis and avoiding short-term political cost for the communist party before the election, but also in precipitating a catastrophe right after the election. --
    Keywords: Cyprus,euro area,crisis,sovereign debt,populism.
    JEL: D72 E32 E65 F34 H12 H63
    Date: 2014
  14. By: Jens Horbach (University of Applied Sciences, Augsburg.)
    Abstract: Eco-innovations lead to less environmental impacts or to a reduction of energy use and are therefore crucial for climate protection. Recently, the determinants of eco-innovation activities have been widely explored for single countries but there is still a lack of country comparisons mainly because of data restrictions. In 2009, a special module on eco-innovation has been included in the Community Innovation Survey (CIS) allowing a comparison of the determinants of eco-innovation in 19 different European countries. Our analysis especially focuses on Eastern European transformation countries because the determinants of eco- innovation in these countries have not yet been systematically analyzed. Concerning the introduction of eco-innovation, the econometric analysis shows that regulation activities seem to be more important for Eastern European countries. This is especially the case for 'traditional fields'such as air, noise, soil, water, recycling or dangerous substances. Except energy saving measures, environmentally related subsidies seem to be quantitatively more important for the Eastern European countries pointing to the lower financial performance of the respective firms. Furthermore, Eastern European countries are more relying on competitors and external R&D as information sources indicating a technology transfer from West to East.
    Keywords: eco-innovation, probit models, country analysis.
    JEL: Q55 O33 C25
    Date: 2014–04
  15. By: Ewa Cukrowska (Faculty of Economic Sciences, University of Warsaw); Anna Lovasz (Institute of Economics, Centre for Economic and Regional Studies of the Hungarian Academy of Sciences, and Eotvos Lorand University)
    Abstract: The paper examines how much children and responsibilities related with them contribute towards the divergence of men’s and women’s wages, and consequently, to the formation of the gender wage gap. To derive the relative contribution of gender specific wage inequalities caused by the parenthood to the overall gender wage gap, we provide a modification of standard Oaxaca-Blinder decomposition method. Contrary to our expectations, the findings show that most of the gender wage inequality is due to the positive wage gap between men who do and do not have children and not due to the wage penalty incurred by mothers.
    Keywords: Gender Wage Gap, Family Gap, Motherhood Penalty, Wage Gap Decomposition
    JEL: J13 J22
    Date: 2014
  16. By: Azevedo, Joao Pedro; Atamanov, Aziz; Rajabov, Alisher
    Abstract: Tajikistan was one of the fastest growing countries in the Europe and Central Asia region during the last decade. The economic growth was widely shared by the population and as a result poverty (measured by the national poverty line) declined from 73 percent in 2003 to 47 percent in 2009 accompanied by falling inequality. Consumption growth of the bottom 40 percent of the population -- a measure of shared prosperity proposed by the World Bank- was positive, pointing out that the growth was shared among the less well off. This work presents a diagnostic of shared prosperity and poverty reduction in Tajikistan during 2003-2009. The paper also focuses on quantifying the main drivers of poverty reduction, shared prosperity, and intra-generational mobility (class transitions). Some of the mechanisms of poverty reduction are explored in detail. Finally, main impediments to inter-generational mobility are discussed.
    Keywords: Rural Poverty Reduction,Regional Economic Development,Achieving Shared Growth,Population Policies
    Date: 2014–06–01
  17. By: Yongzheng Liu (School of Finance Renmin, University of China); Jorge Martinez-Vazquez (International Center for Public Policy. Andrew Young School of Policy Studies, Georgia State University); Baoyun Qiao (China Academy of Public Finance and Policy, Central University of Finance and Economics)
    Abstract: The main objective of the paper is to propose a framework in which fiscal health conditions can be assessed and the main determinants affecting fiscal health can be identified, inspite of severe data constraints. The paper draws on big urban agglomerations in India as well as smaller cities as a sample and attempts to identify the difference, if any, in the main determinants for variations in fiscal health conditions across different size classes of cities. To compensate for the lack of statistical rigor in the estimations of expenditure needs and revenue capacities, we propose a framework which analyses the ratio of expenditure needs to revenue capacity by fitting an econometric model. It is a two-step method, in the first stage we estimate the expenditure need and revenue capacity separately by simple methods discussed above. In the second stage we take the ratio of expenditure need and revenue capacity as an indicator of financial performance of a ULB and fit an econometric model to explain the performance of ULBs on the basis of factors which are likely to affect the performance of the ULBs. We find that the role of the higher tiers of the government is important in bigger and smaller size class of cities in their financial management. However, for bigger cities we find that the own source revenues can also play an important role in bringing down the fiscal ratio. In the smaller ULBs the role of the demand indicators is not that prominent but the cost indicators play a relatively prominent role. In case of bigger agglomerations, the demand indicators are more prominent than the cost indicators.
    Date: 2014–05–27

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