nep-tra New Economics Papers
on Transition Economics
Issue of 2014‒07‒05
eleven papers chosen by
J. David Brown
IZA (Institute for the Study of Labor)

  1. Productivity, Exporting and Financial Constraints of Chinese SMEs By Johannes Van Biesebroeck
  2. Current Problems in the Development of the Banking System of the Russian Federation By Alexey Vedev; Sergey Drobyshevsky; Mikhail Khromov; Sergey Sinelnikov-Murylev
  3. The Quasi-Markets Of Social Services: The Competitiveness Of Russian Nonprofit Organizations Against For-Profit Organizations And Public Providers By Svetlana Suslova
  4. Restructuring China’s Research Institutes: Impacts on China’s Research Orientation and Productivity By Daniel L.Tortorice; Gary H. Jefferson; Renai Jiang
  5. All Quiet on the Eastern Front? Disruption Scenarios of Russian Natural Gas Supply to Europe By Philipp M. Richter; Franziska Holz
  6. Oil Price Uncertainty and Sectoral Stock Returns in China: A Time-Varying Approach By Guglielmo Maria Caporale; Faek Menla Ali; Nicola Spagnolo
  7. Exchange Rate Pass-through in Russia By Yuri Ponomarev; Pavel Trunin; Alexei Uluykaev
  8. Breaking the Unbreakable Union: Nationalism, Trade Disintegration and the Soviet Economic Collapse By Marvin Suesse
  9. The Nexus between Labour Wages and Property Rents in the Greater China Area By Chong, Terence Tai Leung; Shui, Kenny Chi Wai; Wong, Vivian H
  10. Financial Development and Employment: Evidence from Transition Countries By Dorothea Schäfer; Susan Steiner
  11. Reviving Social Economy in Romania – between emerging social enterprises in all sectors, surviving communist coops, and subsidiaries of globalization actors By Cristina BARNA; Ancuta VAMEsU

  1. By: Johannes Van Biesebroeck
    Abstract: While many studies explain the correlation between firm-level productivity and export status entirely by better firms self-selecting into exporting, a few studies find evidence of reverse causation. Especially in developing or ransition economies, exporters seem to improve performance after they start selling internationally. We provide evidence that the realization of scale conomies is one possible explanation for such a learning-by-exporting effect. Exporting enables small firms to expand output and exploit all scale economies that the production technology allows. With access to finance problems and weak contract enforcement at home, domestic expansion of SMEs is constrained by the necessity of awarding trade credit to new clients. We show that small firms with a lot of outstanding trade credit expand sales the most following export market entry. This is especially true if they operate in industries with higher scale economies or if they are located in provinces with weaker institutions. The same type of firms also enjoy the largest productivity gains immediately following export market entry.
    Keywords: Integration & Trade, SME, Productivity, Investment, SMEs, Export market entry, Small firms, Export market, New exporters, Trade credit
    Date: 2014–04
  2. By: Alexey Vedev (Gaidar Institute for Economic Policy); Sergey Drobyshevsky (Gaidar Institute for Economic Policy); Mikhail Khromov (Gaidar Institute for Economic Policy); Sergey Sinelnikov-Murylev (Russian Foreign Trade Academy)
    Abstract: In 2013 the situation in the banking sector of the RF underwent major changes. On the one hand, the volume indicators of the banking sector continued to grow, although more slowly than before. However, this growth was mainly due to aggressive behaviour of the banks in the consumer lending market, despite actions by the Bank of Russia aimed at reducing the attractiveness to the banks of such loans. On the other hand, there was an increased imbalance in the banking sector related to the non-uniform distribution of liquid funds, the outflow of customers from small and medium-sized banks to larger ones (principally to banks with government participation in their capital). This last factor was strengthened by the Bank of Russia’s efforts to rehabilitate the banking sector by withdrawing the licences of a significant number of banks, including those working in the market of private deposits. Within the framework of this policy of the Bank of Russia, aimed at reducing the number of banks and terminating the activities of any banks violating prudential standards, one should note the necessity for a more integrated approach to the reform of the sector, including measures aimed at increasing capitalisation, and the formation of an institute of systemically important banks with a reduction in the proportion of banks with government participation.
    Keywords: Russian Economy, banking sector, central bank.
    JEL: E58 G21 G28
    Date: 2014
  3. By: Svetlana Suslova (National Research University Higher School of Economics)
    Abstract: This paper explores the competitive bidding process in eight regions of Russia where local governments entered into. The bidding documents have been analyzed in terms of the type of provider ownership, public or private, levels of nonprofit activity, and nonprofit competitiveness. The findings indicate considerable discrepancies between the numbers of competitive tenders for social services in the regions in question. The types of social services that local governments procure vary significantly from region to region. It is suggested that these differences are an essential factor in nonprofit participation. The most active nonprofit involvement is found in regions where procured services are that which the nonprofits usually produce. The results reveal a substantial lack of competition in Russian social service quasi-markets. In many cases, nonprofit organizations can be competitive in terms of competitive bidding in Russia; however, this result raises questions about the quality of social services procured by local and regional authorities
    Keywords: social service delivery, nonprofit organizations, social services quasi-markets, nonprofit competitiveness
    JEL: H57 L31 L33
    Date: 2014
  4. By: Daniel L.Tortorice (International Business School, Brandeis University); Gary H. Jefferson (International Business School, Brandeis University); Renai Jiang (Xi'an Jiaotong University)
    Abstract: This paper evaluates the impact of the Chinese government’s initiative begun in 1999 to restructure the country’s approximately 3,500 research institutes. The paper reviews the evolution of China’s research sector over the period 1995 to 2010, identifying certain issues that are analyzed using a panel of sample research institutes. The econometric analysis is based on a balanced sample of these institutes, both converted and unconverted, spanning 1998, the year prior to the restructuring initiative, to 2005. In order to control for potential endogeneity and selection bias, the paper employs various econometric methods to evaluate the impact of the restructuring program on the performance of these institutes. We find that the restructuring program appears to have achieved its fundamental goals, that is, shifting the relevant resources toward a more commercial mission for the converted S&T enterprises and a more researchoriented mission, involving the use of government grants, for the non-profit research institutes. The results show modest gains in the efficiency of patent production, but given the lengthy gestation period, a longer duration is needed to assess how the patent production of China’s research institutes will adapt to the shift in their missions and reassignment of government resources.
    Keywords: Technological Innovation, R&D, Invention, Research Policy
    JEL: O31 O32 O33
    Date: 2014–05
  5. By: Philipp M. Richter; Franziska Holz
    Abstract: The Russian-Ukrainian crisis has revitalized the European concerns of supply disruptions of natural gas as experienced in 2006 and 2009. However, the European supply situation, regulation and infrastructure have changed since: imports aremore diversified, EU member states better connected and a common regulation on the security of supply has been introduced. Nevertheless, several East European countries are highly dependent on Russian natural gas. This paper investigates different Russian natural gas export disruptions scenarios and analyses short- and long-term reactions to ensure a sufficient supply of natural gas within Europe. We use the Global Gas Model (GGM), a large-scale mixed complementarity representation of the natural gas sector with a high-level of technical granularity with respect to storage and transportation infrastructure. We find that most of the EU member states are not severely affected by a complete drop out of Russian exports. Removing infrastructure bottlenecks within the EU should still be prioritized in order to secure a sufficient natural gas supply for all EU member states.
    Keywords: natural gas trade, Russia, Europe, security of supply, infrastructure investment, equilibrium modelling
    JEL: Q34 Q37 Q41 C61 L95
    Date: 2014
  6. By: Guglielmo Maria Caporale; Faek Menla Ali; Nicola Spagnolo
    Abstract: This paper investigates the time-varying impact of oil price uncertainty on stock prices in China using weekly data on ten sectoral indices over the period January 1997-Febraury 2014. The estimation of a bivariate VAR-GARCH-in-mean model suggests that oil price volatility affects stock returns positively during periods characterised by demand-side shocks in all cases except the Consumer Services, Financials, and Oil and Gas sectors. The latter two sectors are found to exhibit a negative response to oil price uncertainty during periods with supply-side shocks instead. By contrast, the impact of oil price uncertainty appears to be insignificant during periods with precautionary demand shocks.
    Keywords: China, Oil price uncertainty, Sectoral stock returns
    JEL: C32 Q43
    Date: 2014
  7. By: Yuri Ponomarev (Gaidar Institute for Economic Policy); Pavel Trunin (Gaidar Institute for Economic Policy); Alexei Uluykaev (Ministry of Economic Development)
    Abstract: In The article provides estimates of short-run and medium-run exchange rate pass-through into domestic prices in Russia during the period of 2000–2012 using vector error correction model. Exchange rate pass-through asymmetry estimates, its assessments on different sub-periods and exchange rate volatility effect on pass-through are also provided.
    Keywords: exchange rate pass-through, asymmetry of exchange rate pass-through, exchange rate volatility, inflation, monetary policy, vector error correction model. exchange rate pass-through, asymmetry of exchange rate pass-through, exchange rate volatility, inflation, monetary policy, vector error correction model.
    JEL: C32 E31 E52 F31 F41
    Date: 2014
  8. By: Marvin Suesse (Humboldt-Universität zu Berlin)
    Abstract: The breakup of the Soviet Union provides evidence for the detrimental effects of secessionist conflict on domestic integration and economic growth. This paper shows that the increased likelihood of secessions by the Union’s member republics in the late 1980s strongly reduced internal Union trade. Economic disintegration thus proceeded along internal borders and preceded the Soviet Union’s official dissolution. This helps to explain the severity of the output fall in the late Soviet period. Methodologically, these results stem from an empirical gravity framework, which is derived from first principles by a game-theoretic modeling of Soviet internal trade. Exogenous variation in nationalist agendas, namely the desire to preserve national languages, is used to preclude endogeneity running from trade patterns to secession.
    Keywords: Nationalism; secession; economic disintegration; output fall; Soviet Union; transition economies
    JEL: F52 N14 P20
    Date: 2014–07
  9. By: Chong, Terence Tai Leung; Shui, Kenny Chi Wai; Wong, Vivian H
    Abstract: Tse and Chan (2003) investigated the relationship between property sales price and the value of commuting time without accounting for the fact that property sales price is subject to the inherent limitation of containing speculative elements. A better measure to use for such a study would be the rent paid by the genuine end-user of the property. This paper examines how equilibrium rents in different locations within Greater China are determined by the time value, or the shadow wage, of an individual. Using the rental information, we provide a first estimated ratio of time values for individuals in Hong Kong, Shanghai and Taipei. Our results show that the shadow wage ratio of the households in Hong Kong, Shanghai and Taipei is about 2.25: 1: 1.61.
    Keywords: Shadow wage; Property rental price; Central business district.
    JEL: J30 R30
    Date: 2014
  10. By: Dorothea Schäfer; Susan Steiner
    Abstract: This paper studies the association between a country's level of financial development and firms' employment growth. We employ an incomplete contract model for evaluating this association. The model proposes that a high level of financial development affects the employment of firms with low managerial capital negatively, while firms with high managerial capital benefit from a more developed financial system. We test this proposition with data from the Business Environment and Enterprise Performance Survey covering transition countries in Eastern Europe and Central Asia. We use firm size as a proxy for managerial capital. Our findings confirm a non-linear effect of financial development on firm employment. Specifically, the smallest firms' edge in employment growth over large firms is dampened when the level of financial development is higher, especially in countries at medium levels of financial development.
    Keywords: Financial development, employment, financial constraints, transition
    JEL: G20 G28 G30 J30
    Date: 2014
  11. By: Cristina BARNA (Institute of Social Economy (CSDF), Bucharest, Romania); Ancuta VAMEsU (Institute of Social Economy (CSDF), Bucharest, Romania)
    Abstract: Social economy could be considered a response to the current eco-socio-economic crisis, in fact the first crisis of the globalization era. Developing social economy could mean sustainable, largely non-exportable jobs, social inclusion, improvement of local social services, and territorial cohesion. Maybe the tensions between “global” and “local” show a new wave of globalization system whose pre-condition is a sustainable territorial development. Romania in particular has faced a fast-paced transition from a closed society and economy to a country acting in a global market, including an open, global labor market. This meant dramatic changes in property regime and work, employment conditions, a context in which solutions from the top did no longer work and generated a framework for new organizational and entrepreneurial forms of social economy to play a role. Can institutions of the social economy create the path towards territorial, locally-based development in Romania? Could these territories become anchors in the context of the structural changes we live, for a real “globalization with human face” and for the ambitious objectives to be reached by 2020 by Europe in the five main areas: employment, innovation, climate change, education and poverty? We face a paradigm shift in a changing Europe, we have to unlock the potential of social enterprises – the emerging types, but also the past surviving coops
    Keywords: social economy, social enterprise, cooperative, territorial development, globalization, Romania
    JEL: L30 L31
    Date: 2014–07

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