nep-tra New Economics Papers
on All new papers
Issue of 2014‒09‒08
fifteen papers chosen by
J. David Brown
United States Census Bureau

  1. Why do Russian firms invest abroad? A firm level analysis By Anwar, Amar; Mughal, Mazhar
  2. The Effects Of Competition Policy: Merger Approval, Entry Barrier Removal, Antitrust Enforcement Compared By Svetlana B. Avdasheva; Dina V. Tsytsulina
  3. The Model Of Contemporary Marketing Practices (Cmp) In The Russian Market: Evidence From Empirical Research By Vera A. Rebiazina; Olga A. Tretyak
  4. The great housing boom of China By Chen, kaiji; Wen, Yi
  5. Barriers to the implementation of environmental policies at the local level in China By Kostka, Genia
  6. Tools Of Government For Support Of Sonpos In Russia: In Search Of Cross-Sector Cooperation In The Delivery Of Social Services By Vladimir B. Benevolenski
  7. One-Child Policy and the Rise of Man-Made Twins By Huang, Wei; Lei, Xiaoyan; Zhao, Yaohui
  8. Dependence of stock and commodity futures markets in China: implications for portfolio investment By Shawkat Hammoudeh; Duc Khuong Nguyen; Juan Carlos Reboredo; Xiaoqian Wen
  9. Social Exchange and Generalized Trust in China By Nee, Victor; Opper, Sonja; Holm, Hakan J.
  10. Strengthening Competition in Poland By Balázs Égert; Antoine Goujard
  11. Financial Development and Economic Growth: Evidence from Ten New EU Members By Caporale, Guglielmo Maria; Rault, Christophe; Sova, Robert; Sova, Anamaria
  12. Recording the ambiguity: the moral economy of debt books in a Russian small town By Ivan Pavlyutkin; Greg Yudin
  13. Firm performance and trade with low-income countries : Evidence from China By Schmerer, Hans-Jörg; Wang, Luhang
  14. Enhancing Competition and the Business Environment in Hungary By Alvaro Pina
  15. Corruption in Kazakhstan and the quality of governance By Satpayev, Dossim

  1. By: Anwar, Amar; Mughal, Mazhar
    Abstract: This study examines the motives for Russian outward foreign direct investments (OFDI) around the world. Using firm-level data for Russian firms, home and host country economic, geographical, cultural and institutional drivers of Russian OFDI are analyzed. Findings show that Russian OFDI seems to be motivated by both the push and the pull factors. Results suggest market-seeking to be the main motive behind Russian outward foreign direct investments, followed by resource and technology acquisition, while efficiency-seeking does not appear to be a major objective. Compared with the pre-crisis period, Russian firms have been seeking more foreign investments since 2008. The study helps better understand the economic, geographical, cultural and institutional factors that Russian transnational corporations consider while planning investments abroad.
    Keywords: Outward Foreign Direct Investment; 2008 financial crisis; Russia
    JEL: F23 G01 O53
    Date: 2014–06–24
  2. By: Svetlana B. Avdasheva (National Research University Higher School); Dina V. Tsytsulina (National Research University Higher School)
    Abstract: There is little evidence on the comparative effectiveness of different competition policy measures, especially in transition economies. This research represents the effort to expand the financial event study method for the assessment of different competition policy measures: merger control, antitrust investigations on abuse of dominance, and changes of import tariffs in the Russian ferrous and non-ferrous metals markets from 2007 to 2012. According to the reaction of financial market, mergers between Russian metal producers restrict competition and reduce consumer welfare. Antitrust investigations have a positive effect on stock prices of buyers of metal and no significant impact on the market valuation of target of investigation. Changes in import tariffs have a positive significant impact on the company stock prices. The sign of each effect allows the comparison of different measures of competition policy.
    Keywords: competition policy, event studies, Russia, metal markets
    JEL: L40 G14
    Date: 2014
  3. By: Vera A. Rebiazina (National Research University Higher School of Economics); Olga A. Tretyak (National Research University Higher School of Economics)
    Abstract: Previous research has shown that emerging markets represent a significant part of the world economy and are expanding their share. However, they are still not well examined in the marketing field. Russia is especially neglected in the academic discussion of overall marketing strategy. Previous research indicates that the model of “Contemporary marketing practices” (CMP) is commonly used as a classification scheme of marketing practices both in developed and developing markets. This article examines how “Contemporary marketing practices” (CMP) works in Russia and tests the CMP model in the Russian market to reveal what types of marketing practices (transactional marketing, database marketing, interactive marketing, network marketing and relationship marketing) are most often used by Russian companies. The article is based on a quantitative study of 329 Russian companies and includes a cluster analysis that shows that types of marketing practices are common for the Russian market. Empirical results of cluster analysis shows that basic marketing practices are widely found in emerging Russian market though their characteristics differ dramatically from those on developed markets.
    Keywords: marketing, marketing practices, Contemporary marketing practices (CMP), emerging markets, Russia.
    JEL: M31
    Date: 2014
  4. By: Chen, kaiji (Economics Department, Emory University.); Wen, Yi (Federal Reserve Bank of St. Louis)
    Abstract: This paper provides a theory to explain the paradoxical features of the great housing boom in China —the persistently faster-than-GDP housing price growth, exceptionally high capital returns, and excessive vacancy rates. The expectation that high capital returns driven mainly by resource reallocation are not sustainable in the long run can induce the very productive entrepreneurs to speculate in housing during economic transition. This creates a self-fulfilling growing housing bubble, which can create severe resource misallocation. A calibrated version of the theory accounts quantitatively for both the growth dynamics of house prices and other salient features of the recent Chinese experience.
    Keywords: Housing Bubble; Resource Misallocation; Chinese Economy; Development; Economic Transition.
    JEL: E22 E23 O11 O16 P23 P24 R31
    Date: 2014–08–22
  5. By: Kostka, Genia
    Abstract: China's national leaders have recently made a priority of changing lanes from a pollution-intensive, growth-at-any-cost model to a resource-efficient and sustainable one. The immense challenges of rapid urbanization are one aspect of the problem. Central-local government relations are another source of challenges, since the central government's green agenda does not always find willing followers at lower levels. This paper identifies barriers to a more comprehensive implementation of environmental policies at the local level in China's urban areas and suggests ways to reduce or remove them. The research focuses particularly on the reasons for the gap between national plans and policy outcomes. Although environmental goals and policies at the national level are quite ambitious and comprehensive, insufficient and inconsistent local level implementation can hold back significant improvements in urban environmental quality. By analyzing local institutional and behavioral obstacles and by highlighting best-practice examples from China and elsewhere, the paper outlines options that can be used at the national and local levels to close the local"environmental implementation gap."The findings emphasize the need to create additional incentives and increase local implementation capacities.
    Keywords: Environmental Economics&Policies,Transport Economics Policy&Planning,Climate Change Mitigation and Green House Gases,Climate Change Economics,Public Sector Management and Reform
    Date: 2014–08–01
  6. By: Vladimir B. Benevolenski (National Research University Higher School of Economics)
    Abstract: This paper discusses the set of tools of government enacted in 2009–2013 in Russia to provide support to socially oriented nonprofit organizations (SONPOs). The discussion evaluates the new tools within the context of international comparisons. In particular the comparisons concern the definition of SONPOs as a subpopulation of the nonprofit sector, the economic dimension of the tool kit and the combination of the support measures as a means to foster cross-sector cooperation in the delivery of social services. Worldwide cross-sector partnership in the delivery of social services is used by governments to engage the resources of civic organizations in the implementation of social policy. NPOs quite readily accept government support and espouse participatory approaches considering such approaches as instrumental in pursuit of their social missions. In Russia this approach is considered a serious policy innovation since government policy to date vis-a-vis the nonprofit sector could be described as either indifferent or predominantly restrictive. The conceptual framework employed for our discussion is based on the explanation of the role played by nonprofit organizations and of the motivation for cooperation between the state and NPOs in the supply of public goods provided by the theory of “market / government / voluntary failure” and on the tools of government approach developed by Salamon. We first consider the legal definition of the subsector of SONPOs, and then investigate the newly introduced tools of government support featuring data on the scope of Russian federal government support for SONPOs. Our discussion focuses on international comparisons, showing substantial similarity to government tool kits employed to support NPOs elsewhere in the world.
    Keywords: government regulation; nonprofit sector; public administration; public-private partnership; Russia; social policy; socially oriented NPO.
    JEL: H83
    Date: 2014
  7. By: Huang, Wei (Harvard University); Lei, Xiaoyan (Peking University); Zhao, Yaohui (Peking University)
    Abstract: This paper investigates how people respond to the distorted incentives of One-Child Policy by examining its impact on twin births in China. The analysis using population census data shows that the One-Child Policy accounts for more than one-third of the increase in twin births since the 1970s. Further investigation finds that the One-Child Policy is associated with a larger birth gap of twins with prior births and greater height difference between twins. These findings suggest that the increase in twin births can partly be explained by parents registering single children as twins in order to avoid the policy violation punishment.
    Keywords: twins, one-child policy, China
    JEL: J08 J11 J13
    Date: 2014–08
  8. By: Shawkat Hammoudeh; Duc Khuong Nguyen; Juan Carlos Reboredo; Xiaoqian Wen
    Abstract: In this article, we examine the recent trends in dependence structure between the fast-growing commodity markets and the stock markets in China in order to draw implications for portfolio investment. We address this issue by using copula functions that allow for measuring both average and tail dependence. Our results provide evidence of small and positive correlations between these markets, suggesting that commodity futures are a desirable asset class for portfolio diversification. By comparing the market risks of alternative portfolio strategies, we show that Chinese investors can take advantage of commodity futures to obtain risk diversification and downside risk reduction benefits.
    Keywords: China; commodity futures; equity markets; co-movement; copulas; portfolio risk management.
    JEL: C52 G11 G15
    Date: 2014–08–29
  9. By: Nee, Victor (Department of Sociology, Cornell University); Opper, Sonja (Department of Economics, Lund University); Holm, Hakan J. (Department of Economics, Lund University)
    Abstract: This paper examines how social relations and norms contribute to the emergence of generalized trust in economic action. Our core proposition is that the more positive the local social exchange relationship, the greater an actor’s propensity to place trust in strangers. Our research design integrates behavioral measures elicited by incentivized experimental trust games with survey data using a random sample of 540 founding CEOs of manufacturing firms in the Yangzi delta region of China. Our analysis shows that characteristics of repeated social exchange—depth, prosociality and control—are positively associated with an economic actor’s proclivity for generalized trust. Founder CEOs with deeper and more valued exchange relations are more likely to trust strangers. Likewise, we find robust evidence of a positive association between beliefs in the effectiveness of community social control and trust in strangers.
    Keywords: Generalized Trust; Networks; Social Exchange; Norms; CEOs
    JEL: C90 D85 L26
    Date: 2014–08–21
  10. By: Balázs Égert; Antoine Goujard
    Abstract: Poland’s productivity has grown strongly over the past decade, and efforts to reduce the regulatory burden have been significant. Despite impressive progress, product market regulation remains more burdensome than in most OECD countries, partly due to the importance of red tape and the level of state involvement in the economy. Further reduction in red tape and pursuing privatisation in competitive markets would increase competitive pressures and ensure neutrality, notably in public procurement processes. Economic rents in many sectors seem high, as stringent entry regulations, regulatory barriers and inefficient bankruptcy procedures induce significant resource misallocation. A welcome deregulation of professional services is ongoing, and the government plans to further ease firm registrations and reform bankruptcy procedures. The independence of the sector regulators in network industries and the powers of the Competition Authority can still be enhanced, as the reform efforts in these sectors remain patchy. The dominant positions of the incumbents and the failure of network sector regulators to introduce a level playing field in order to secure third-party access to the sectoral infrastructure and allow new entry in the competitive segments are another main issue. The advantages of being considered a farmer are also slowing the consolidation process in the agricultural sector. This Working Paper relates to the 2014 OECD Economic Survey of Poland ( Renforcer la concurrence en Pologne La productivité de la Pologne a fortement augmenté au cours des dix dernières années et les efforts déployés pour réduire le poids de la réglementation ont été significatifs. Malgré des progrès impressionnants, la réglementation des marchés de produits demeure plus pesante que dans la plupart des autres pays de l'OCDE, ce qui tient en partie à l'importance des formalités administratives et à l'ampleur de l'intervention de l'État dans l'économie. De nouvelles mesures de réduction des formalités administratives et de privatisation sur les marchés concurrentiels accentueraient les pressions de la concurrence et assureraient la neutralité concurrentielle, notamment dans le cadre de la passation des marchés publics. De nombreux secteurs semblent se caractériser par des rentes économiques élevées, dans la mesure où des règles d'entrée rigoureuses, des obstacles réglementaires et des procédures de faillite inefficaces faussent sensiblement l'affectation des ressources. Une déréglementation bienvenue des services professionnels est en cours, et le gouvernement projette d'assouplir encore les procédures d'immatriculation des entreprises ainsi que de réformer les procédures de faillite. L'indépendance des autorités de régulation sectorielles dans les industries de réseau et les prérogatives de l'Autorité de la concurrence peuvent être encore renforcées, étant donné que les efforts de réforme déployés à cet égard demeurent fragmentaires. Un autre problème essentiel tient aux positions dominantes occupées par les opérateurs historiques et au fait que les autorités de régulation sectorielles n'aient pas instauré des règles du jeu équitables, garantissant l'accès des tiers aux infrastructures sectorielles et permettant l'entrée de nouveaux acteurs sur les segments concurrentiels. Les avantages associés au statut d'agriculteur ralentissent par ailleurs le processus de regroupement des exploitations dans le secteur agricole. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la Pologne 2014 ( ique-pologne.htm).
    Keywords: Poland, productivity, growth, competition, regulation, réglementation, croissance, Pologne, productivité, concurrence
    JEL: F43 L1 L3 L4 L5 O3 O43
    Date: 2014–06–04
  11. By: Caporale, Guglielmo Maria (Brunel University); Rault, Christophe (University of Orléans); Sova, Robert (CREST & University of Paris 1 Panthéon-Sorbonne); Sova, Anamaria (E.B.R.C. Bucharest)
    Abstract: This paper reviews the main features of the banking and financial sector in ten new EU members, and then examines the relationship between financial development and economic growth in these countries by estimating a dynamic panel model over the period 1994-2007. The evidence suggests that the stock and credit markets are still underdeveloped in these economies, and that their contribution to economic growth is limited owing to a lack of financial depth. By contrast, a more efficient banking sector is found to have accelerated growth.
    Keywords: financial development, economic growth, transition economies
    JEL: E44 E58 F36 P26
    Date: 2014–08
  12. By: Ivan Pavlyutkin (National Research University Higher School of Economics); Greg Yudin (National Research University Higher School of Economics)
    Abstract: In this paper we draw upon important distinctions suggested by classics of anthropology in order to develop a theoretical approach to the phenomenon of debt. Building on the opposition be-tween the logic of the gift and that of the market, we elucidate moral tensions that call debt rela-tions into being. However, instead of reducing debt to either of these rival principles, we inter-pret it as a combination of both that allows for mediating between them in a highly ambiguous moral context. Using evidence from a small Russian town, we analyse how interest-free debt functions within face-to-face interactions in local shops and how it structures the ordinary lives of shopkeepers, salespeople and consumers in the community. We discuss a moral situation that turns the fram-ing of everyday purchases into a problem and demonstrate how a material device — a debt book — enters into a transaction in order to resolve it. A debt book turns out to be a specific graphic technology, a destructive device that subverts both marketization and communitarian aid by sus-pending the framing of interaction. In the resulting atmosphere of ambiguity, debts become an object of strategic manipulation for the members of community that demands good negotiation skills and use of moral arguments. Although the constitution of debt economy is highly dependent on the dynamics of marketization and economization, it can in fact accommodate very different moral regimes.
    Keywords: debt, gift, market, framing, moral economy, post-socialism.
    JEL: Z13
    Date: 2014
  13. By: Schmerer, Hans-Jörg (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Wang, Luhang
    Abstract: "Do firms in developing countries shift trade towards developed economies as a result of high economic growth? The matched customs-manufacturing firm data used in this study confront this hypothesized link with empirical evidence. Our analysis reveals a rising low-income country trade share around and after China's accession to the World Trade Organization. Based on this stylized fact, we analyze the link between firm characteristics and trade with low-income countries. We find evidence for sequential sorting into different export-modes according to firm-productivity: i) only the most productive firms export to low-income countries, ii) exporting to low-income countries is mostly coupled to exporting to high-income countries, and iii) firms that switch to export to markets with higher potential are younger than firms that switch to export to both high- and low-income markets. Moreover, we find that firms tend to start exporting through specialization on high-income markets before diversifying to both type of markets." (Author's abstract, IAB-Doku) ((en))
    Keywords: Export, Außenhandelsverflechtung, Entwicklungsländer, Industrieländer, China
    JEL: F1 O1
    Date: 2014–08–19
  14. By: Alvaro Pina
    Abstract: Over the past decade, the growth potential of the Hungarian economy has declined substantially. Trend productivity has ceased to increase, and investment has fallen to historically low levels. To an important extent, the explanation lies in a business environment characterised by high administrative burdens, regulatory volatility, barriers to growth of small and medium-sized enterprises (SMEs) and entrepreneurship, and limited competition in major non-tradable sectors, problems which have sometimes become worse in recent years. Under these conditions, many SMEs find it hard to leave semi-informality and grow. Large multinational firms operating in manufacturing often have supplier networks weakly anchored in Hungary, while those in the non-tradable sectors sometimes face little competitive pressure; in both cases, positive spillovers to the domestic economy remain limited. Steps should be taken both at the economy-wide level and in specific sectors to increase investment and restore productivity growth. Such measures must include fostering greater regulatory stability, inter alia by reducing the flow of new regulation and improving its quality, not least in taxation. Investor confidence would benefit from promoting trust and transparency in public institutions. Apart from vigorous competition enforcement across the economy, it is essential to remove sector-specific obstacles to competition, such as barriers to entry of different types, lock-in effects and distortive regulated prices, in retail, professional services, energy, and telecommunications. This Working Paper relates to the 2014 OECD Economic Survey of Hungary ( Renforcer la concurrence et améliorer le climat des affaires en Hongrie Le potentiel de croissance de l’économie hongroise a considérablement diminué au cours de la dernière décennie. La productivité tendancielle ne s’améliore plus et l’investissement est tombé à des niveaux historiquement bas. La raison de cette situation tient dans une large mesure à un environnement économique général caractérisé par des charges administratives élevées, une réglementation instable, des obstacles à la croissance des petites et moyennes entreprises (PME) et à l’entrepreneuriat, et une concurrence limitée dans les principaux secteurs non exportateurs, problèmes qui se sont en partie aggravés ces dernières années. Dans ces conditions, il est difficile pour beaucoup de PME de sortir de la situation semi-informelle dans laquelle elles se trouvent et de se développer. Quant aux grandes entreprises multinationales, celles qui sont présentes dans le secteur manufacturier ont souvent des réseaux de fournisseurs faiblement implantés en Hongrie, tandis que les autres, dans les secteurs non exportateurs, sont largement à l’abri des pressions de la concurrence ; dans un cas comme dans l’autre, par conséquent, les retombées positives de leurs activités sur l’économie nationale demeurent limitées. Des mesures générales et sectorielles s’imposent pour accroître l’investissement et rétablir la croissance de la productivité. Il est indispensable en particulier de promouvoir une plus grande stabilité réglementaire, notamment en réduisant le nombre de réglementations nouvelles et en améliorant leur qualité, surtout dans le domaine de la fiscalité. Une transparence accrue et une plus grande confiance dans les institutions publiques seraient en outre propices à l’investissement. Il est essentiel non seulement de veiller à ce que le droit de la concurrence soit vigoureusement appliqué de façon générale, mais aussi d’éliminer tout ce qui fait obstacle à la concurrence au niveau sectoriel, notamment les différentes formes de barrières à l’entrée, les effets de verrouillage et les distorsions induites par les prix réglementés dans le commerce de détail, les services professionnels, l’énergie et les télécommunications. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la Hongrie, 2014 ( ique-hongrie.htm).
    Keywords: SMEs, competition enforcement, regulated prices, special taxes, business environment, productivity, Hungary, administrative burdens, institutional quality, barriers to entry, PME, productivité, concurrence, qualité institutionnelle, prix réglementés, Hongrie, barrières à l'entrée, charges administratives
    JEL: H2 K2 L4 L8 L9
    Date: 2014–06–04
  15. By: Satpayev, Dossim
    Abstract: In Kazakhstan, uncover of numerous corruption scandals involving government officials has become almost a normal feature of life. Behind the high-profile acts of waging a battle against corruption, however, is a serious and systemic phenomenon. The most endemic form of corruption is the various transfers of funds in the state structures and national companies which remain opaque and thus unaccounted for. There are questions about the volumes and spending of revenues earned from natural resources, and there is no independent monitoring and control of the flow of funds in national oil and gas companies. The main actors involved in the shadow economy are state officials and informal pressure groups, who distribute resources among themselves, and accumulate wealth by way of legalising informal incomes or obtaining official business using connections. While important decision making is carried out among the close circles of the elite, formal institutions remain weak and ineffective.
    Keywords: Kazakhstan, Corruption, Economic conditions, Politics, Shadow economy, Informal networks, Informal pressure groups
    JEL: D73 E26
    Date: 2014–08

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