nep-tra New Economics Papers
on Transition Economics
Issue of 2014‒11‒28
twenty papers chosen by
J. David Brown
United States Census Bureau

  1. The Free Movement of Workers in an Enlarged European Union: Institutional Underpinnings of Economic Adjustment By Kahanec, Martin; Pytlikova, Mariola; Zimmermann, Klaus F.
  2. Government Transfers, Work and Occupational Identity: Evidence from the Russian Old-Age Pension By Louise Grogan; Fraser Summerfield
  3. In Transit: The Well-Being of Migrants from Transition and Post-Transition Countries By Nikolova, Milena; Graham, Carol Lee
  4. Intangible Capital, Innovation, and Growth in China By Fleisher, Belton; McGuire, William; Smith, Adam; Zhou, Mi
  5. The new solutions of the CAP 2013+ to the challenges of the EU member states agriculture By Anonymous; Wigier, Marek; Dudek, Michał
  6. Asset recombination in international partnerships as a source of improved innovation capabilities in China By Collinson S.; Narula R.
  7. On Price Endogeneity in the Analysis of Food Demand in China By Hovhannisyan, Vardges; Bozic, Marin
  8. Impact of regional diversity on production potential: an example of Russia By Belyaeva, Maria; Hockmann, Heinrich; Koch, Friedrich
  9. Migration of Graduates within a Sequential Decision Framework: Evidence from Poland By Herbst, Mikolaj; Kaczmarczyk, Pawel; Wojcik, Piotr
  10. Overleveraging in the banking sector: Evidence from Europe By Schleer, Frauke; Semmler, Willi; Illner, Julian
  11. Green Growth (for China): A Literature Review By Ho, Mun; Wang, Zhongmin
  12. Catching up with the West? Europeanising rural policies in Hungary and Poland By Augustyn, Anna; Nemes, Gusztav
  13. Precautionary Saving of Chinese and U.S. Households By Horag Choi; Steven Lugauer; Nelson C. Mark
  14. The Current Status of the Hungarian Agri-Food Chains Related to Sustainability: Challenges and Barriers By Homolka, Fruzsina; Hegyi, Adrienn; Sebők, András
  15. Stimulating Shale Gas Development in China: A Comparison with the US Experience By Tian, Lei; Wang, Zhongmin; J. Krupnick, Alan; Liu, Xiaoli
  16. The Natural Resource Curse and Institutions in Post-Soviet Countries By Roman Horváth; Ayaz Zeynalov
  17. Политика модернизации сельского хозяйства РФ в рамках обязательств ВТО: К вопросу о нецелесообразности копирования Единой сельскохозяйственной политики ЕС By Petrick, Martin
  18. Migration, Local Off-farm Employment and Agricultural Production Efficiency: Evidence from China By Yang, Jin; Wang, Hui; Jin, Songqing; Chen, Kevin; Riedinger, Jeffrey; Peng, Chao
  19. Efektywnosc instytucjonalna krajow Unii Europejskiej w kontekscie globalnej gospodarki opartej na wiedzy By Adam P. Balcerzak; Michal Bernard Pietrzak
  20. Peer Effects on Childhood and Adolescent Obesity in China By Nie, Peng; Sousa-Poza, Alfonso; He, Xiaobo

  1. By: Kahanec, Martin (Central European University); Pytlikova, Mariola (VSB Technical University Ostrava); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: The eastern enlargements of the European Union (EU) and the extension of the free movement of workers to the new member states' citizens unleashed significant east-west migration flows in a labor market with more than half a billion people. Although many old member states applied transitional arrangements temporarily restricting the free movement of new member states' citizens, the need for adjustment became ever more important during the Great Recession, which affected EU member states unevenly. This chapter studies whether and how east-west migration flows in an enlarged EU responded to institutional and economic factors. We first develop a simple framework of adjustment through migration of workers between labor markets affected by asymmetric economic shocks. Using a new migration dataset and treating the EU enlargement and labor market openings towards the new EU members as a natural experiment allows us to estimate the effects of the EU accession and economic opportunities on migration. Applying the difference-in-differences and triple differences empirical modeling framework, we subsequently find that east-west migration flows in the EU responded positively to the EU entry and economic opportunities in receiving labor markets. However, this potential through which migration helped to ease the imbalances across EU labor markets was hampered by transitional arrangements, which negatively affected the flows of east-west migrants. We conclude that the free movement of workers is an asset that the EU needs to nurture as a means of adjusting to structural economic asymmetries as well as to short-run shocks across EU member states.
    Keywords: migration policy, difference-in-differences, EU eastern enlargement, free movement of workers, transitional arrangements, determinants of migration, Great Recession, natural experiment
    JEL: F22 J61 J68
    Date: 2014–09
  2. By: Louise Grogan (African School of Economics (Bénin) and Dept. of Economics and Finance, University of Guelph (Canada)); Fraser Summerfield (Department of Economics and CELMR, University of Aberdeen (UK); The Rimini Centre for Economic Analysis (RCEA), Italy)
    Abstract: This paper examines how the receipt of the age-determined Russian state pension impacts the incomes, working hours, self-reported wellbeing, self-employed home production, and health behaviors of individuals. Household panel data spanning 2006-2011 is employed. Regression discontinuity estimators with individual fixed effects identify the causal impact of attaining state pension age on these outcomes. Attaining pension age has large negative causal impacts on market work hours, but also important positive effects on the self-employment output of women, and negative effects on the non-monetized home production activities of men. No positive impacts are found on any subjective measures of wellbeing or economic security. The results are reconciled by augmenting the standard labor supply theory of Gronau (1977) with new ideas about occupational identities first outlined in Akerlof and Kranton (2000).
    Date: 2014–11
  3. By: Nikolova, Milena (IZA); Graham, Carol Lee (Brookings Institution)
    Abstract: The extant literature has focused on migration's consequences for the receiving countries. In this paper, we ask a different but important question: how much do migrants gain from moving to another country? Using Gallup World Poll data and a methodology combining statistical matching with difference-in-differences, we assess migration's effects on the well-being of migrants from transition economies. We contribute to the literature by showing that in addition to increasing household income, migration enhances subjective well-being and satisfaction with freedom. The results are robust to sensitivity checks. Understanding the causal effects of migration on perceived and actual well-being is crucial for an informed public policy debate and has direct implications for social cohesion and integration policy.
    Keywords: migration, transition economies, subjective well-being
    JEL: F22 I31 J61 O15
    Date: 2014–10
  4. By: Fleisher, Belton; McGuire, William; Smith, Adam; Zhou, Mi
    Abstract: We study the relationship between industry-level investments in intangible capital (IC) and three key economic indicators in China. We find that investments in IC are productivity-enhancing among Chinese enterprises—more so in domestically owned than in foreign invested enterprises. Consistent with other research, we find that China’s IC generates new patents, but fewer than in major industrialized economies. Among domestically owned enterprises, we find that IC growth has been associated with increasing export-competitiveness, while among foreign invested enterprises, it has been oriented more toward improving domestic sales.
    Keywords: Intangible capital, technology, economic growth, intellectual property, Asia, China, International Development, International Relations/Trade, Production Economics, O31, O33, O34, O43, P33,
    Date: 2014
  5. By: Anonymous; Wigier, Marek; Dudek, Michał
    Abstract: Global food market – new conditions for national sectors. Flexible adaptation of farms to the requirements of the CAP in the new financial perspective after 2014. Phenomena occurring in agriculture of the EU Central and Eastern European countries after 2004 and conclusions for the future. Programming Process of Rural Development Measures 2014-2020 in Austria. Situation in the Czech agriculture after 9 years of EU accession – a research position to strategic challenges for a future policy after 2013. The new CAP reform: an analysis of impacts at the sub-national level. The case of Tuscany. The state and insurance in agriculture– implications for the CAP 2013+. Foreign exchange hedge. Sustainable development of family farming in Poland. The political aspect. Socio-economic view of the contemporary situation in the Czech agriculture and countryside. Institutions acting for rural development – future challenges. Development of biofuels production and food security – Implications for economic policy. Innovation opportunities in Hungarian agriculture and rural development. Analysis of the actual indicators of competitiveness in the Serbian agricultural sector. Alignment of agricultural and rural development policy in the Western Balkans with the European acquis: cases of Bosnia, Montenegro and Serbia. Competitiveness of Ukrainian foodstuff. Problems and perspectives of sustainable development in Belarusian Agriculture. The Hungarian horticulture sector: analysis of outdoor and greenhouse farms. Review of some agrostatistical indicators that characterize Bulgarian vegetable production in the context of Common Agricultural Policy. The new solutions
    Keywords: food market, CAP, rural development, agriculture, food security, economic policy, food market, countryside, Europe, Agricultural and Food Policy, Food Security and Poverty, International Relations/Trade,
    Date: 2013
  6. By: Collinson S.; Narula R. (UNU-MERIT)
    Abstract: This paper examines how multinational enterprises MNEs and local partners, including suppliers, customers and competitors in China, improve their innovation capabilities through collaboration. We analyse this collaboration as a three-way interaction between the ownership-specific O advantages or firm-specific assets FSAs of the MNE subsidiary, the FSAs of the local partner, and the location-specific assets of the host location. Our propositions are examined through a survey of 320 firms, supplemented with 30 in-depth case studies. We find that the recombination of asset-type Oa FSAs and transaction-type Ot FSAs from both partners leads to new innovation-related ownership advantages, or recombinant advantages. The study reveals important patterns of reciprocal transfer, sharing and integration for different asset categories tacit, codified and different forms of FSA and explicitly links these to different innovation performance outcomes. Ot FSAs, in the form of access to local suppliers, customers or government networks are particularly important for reducing the liability of foreignness for MNEs.
    Keywords: Multinational Firms; International Business; Globalization: Policy; Management of Technological Innovation and R&D;
    JEL: F23 O32
    Date: 2014
  7. By: Hovhannisyan, Vardges; Bozic, Marin
    Abstract: Price endogeneity has been ignored in previous analyses of food demand in China. We examine agricultural input price data from the China National Bureau of Statistics and use reduced-form price equations to account for price endogeneity in this setting. Applying our unique econometric approach to the analysis of provincial-level food demand in China, we find strong statistical evidence of price endogeneity. Models that ignore price endogeneity result in substantially biased elasticities and misleading estimates of future food demand in China.
    Keywords: Consumer welfare, expenditure endogeneity, food demand in China, Generalized Quadratic AIDS, price endogeneity., Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Q11, Q13, Q17,
    Date: 2014–05–24
  8. By: Belyaeva, Maria; Hockmann, Heinrich; Koch, Friedrich
    Abstract: Russia is often considered the most prominent country to become a leader on the world grain market. However, several issues slow down Russia’s agricultural progress, for example: a lack of infrastructure and investments, unequal regional development, and inefficient use of production technologies. This study therefore examines the grain production potential of Russian regions by employing a modified approach to stochastic frontier analysis that allows us to include not only production technologies, but also indicators of country’s heterogeneity and diversity among regions. Obtained results indicate that climate conditions in combination with the level of human and institutional development, and infrastructure have significant effect on the production structure of regions and therefore should not be neglected while assessing regional policies and production potential.
    Keywords: Production Economics,
    Date: 2014–05–19
  9. By: Herbst, Mikolaj (Warsaw University); Kaczmarczyk, Pawel (Warsaw University); Wojcik, Piotr (Warsaw University)
    Abstract: According to the economic literature human capital is a critical growth factor. This is why migration of individuals well endowed with human capital is subject of interest for both academics and policymakers. The aim of this paper is to identify main drivers of highly skilled migration within Poland. Following the findings of earlier studies, we argue that the spatial mobility of individuals should not be considered in terms of one-time displacement, but rather as a sequence of migration decisions within certain time period. We assume that the propensity to migrate depends on factors to be interpreted in terms of aspirations and capabilities and, additionally, the importance of those factors can change during the education process and in the life course. Applying multinomial logit modelling on the unique database on Polish graduates we find that all tested migration strategies can be explained both in terms of capacities to aspire and capacities to realize, whereas repeat migration is driven particularly by characteristics related to level of aspirations and return migration - by low capacities to realize the migration projects.
    Keywords: high skilled migration, graduates, sequential decision framework, capacity to aspire, capacity to realize
    JEL: I25 J24 J61 J62
    Date: 2014–10
  10. By: Schleer, Frauke; Semmler, Willi; Illner, Julian
    Abstract: Overleveraging of the banking sector has been considered as one of the main causes of the 2007-09 financial crisis and the subsequent great recession. It was also of major concern for the subsequent BIS regulatory policies resulting in Basel III and its request for higher capital requirements. It has now become highly relevant for the planned European banking union. Overleveraging of the banking sector exposes the financial sector and the macroeconomy to vulnerabilities, but also, as critics state, seems to constrain credit flows to the private sector. We present here a measure of overleveraging, defined as the difference of actual and sustainable debt, conduct an empirical study on overleveraging for 40 banks in Europe, and study the vulnerabilities and credit contractions that can arise subsequently. Before the year 2004 overleveraging has not been a serious problem as leverage was on a sustainable level. However, in the run-up to the financial crisis, actual and optimal debt ran apart and the banking sector began to suffer from overleveraging. We use a nonlinear Vector STAR model to evaluate the hypothesis that periods of increasing debt levels are accompanied by more severe credit constraints than periods of low leveraging. We demonstrate this for country groups across Europe.
    Keywords: Overleveraging,banking sector,Vector STAR,real economy,credit flows,regime switch
    JEL: C61 E32 G01
    Date: 2014
  11. By: Ho, Mun (Resources for the Future); Wang, Zhongmin (Resources for the Future)
    Abstract: This paper has two purposes. The first is to review the emerging literature on green growth, with a focus on the origin and meaning of the concept, as well as the justifications for and criticisms of the concept. The general idea of taking into account the impact of economic growth policies on the environment is not very controversial, but the possibility of simultaneously achieving conventional GDP growth and environmental protection is debated. The second purpose is to consider how China might move on to a green growth path. We summarize a sizable literature that traces China’s rapid economic growth and the associated environmental problems to its unique and fundamental institutions, and discuss the implications of this on how China might grow more sustainably.
    Keywords: green growth, economic development, environmental protection, China
    Date: 2014–08–07
  12. By: Augustyn, Anna; Nemes, Gusztav
    Keywords: Agricultural and Food Policy,
    Date: 2014–05–19
  13. By: Horag Choi; Steven Lugauer; Nelson C. Mark
    Abstract: We employ a model of precautionary saving to study why household saving rates are so high in China and so low in the US. The use of recursive preferences gives a convenient decomposition of saving into precautionary and non precautionary components. This decomposition indicates that over 80 percent of China's saving rate and nearly all of the US saving arises from the precautionary motive. The difference in the income growth rate between China and the US is vastly more important for explaining saving rate differences than differences in income risk. We estimate the preference parameters and find that Chinese and US households are more similar in their attitude toward risk than in their intertemporal substitutability of consumption.
    JEL: E21 F4
    Date: 2014–09
  14. By: Homolka, Fruzsina; Hegyi, Adrienn; Sebők, András
    Abstract: The aim of this study was to identify challenges and barriers related to sustainability issues within the Hungarian agri-food sector. Within the SALSA EU FP7 project a survey was carried out which helped to evaluate the current status of the Hungarian food supply chains related to sustainability challenges. The specific issues, which have to be considered, is the use of soy products and ingredients containing soy products in food, the consumer concerns about the use of GMO, and the sustainability of the soy and beef supply chains. In Hungary the general interest related to the sustainability issues is still lower than within the North-West European countries. The results of the survey will be delivered in the presentation and discussed several topics according to the status of the Hungarian agri-food chains members’ awareness related to the “Triple Bottom Line”.
    Keywords: sustainability, GMO, supply chain, stakeholders, awareness, Agribusiness, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Health Economics and Policy, Industrial Organization,
    Date: 2013–09
  15. By: Tian, Lei; Wang, Zhongmin (Resources for the Future); J. Krupnick, Alan (Resources for the Future); Liu, Xiaoli
    Abstract: In this paper, we use the US shale gas experience to shed light on how China might overcome the innovation problem inherent in exploring and developing shale gas plays with complex geology. We separate shale gas development into two stages, an innovation stage and a scaling-up stage, with the first presenting a much bigger challenge than the latter. Our analysis suggests that China’s national oil companies offer the best hope for overcoming the innovation problem. China’s policy of opening shale gas development to new entrants is a market-oriented reform that can be justified on various grounds, but the new entrants will not play a major role in overcoming the innovation problem even though they may help scale up production later on.
    Keywords: shale gas, innovation, China
    Date: 2014–07–16
  16. By: Roman Horváth (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic; IOS, Regensburg); Ayaz Zeynalov (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic)
    Abstract: We examine the effect of natural resource exports on economic performance during the 1996-2011 period in the 15 independent countries that formerly comprised the Soviet Union. These countries were a largely homogeneous group with respect to social and institutional context; however, these countries began to demonstrate marked differences from one another with respect to these factors during the transition, which has resulted in unique cross-section and time variation. Using several panel regression models that address the endogeneity and clustering issues, our results suggest that natural resources crowd out manufacturing sector unless the quality of domestic institutions is sufficiently high.
    Keywords: natural resource curse, institutions, manufacturing, post-Soviet countries
    JEL: O11 O13 Q30
    Date: 2014–08
  17. By: Petrick, Martin
    Abstract: Сегодня одна из важнейших программных задач российского правительства заключается в том, чтобы придать свежий импульс развитию агропромышленного комплекса, не нарушая обязательств, связанных с членством во Всемирной торговой организации (ВТО). Согласно Государственной программе развития сельского хозяйства, одним из главных средств поддержки агропромышленного комплекса является льготное кредитование животноводства, которому в 2013–2020 гг. отведена роль основного получателя субсидий на компенсацию ставок по инвестиционным кредитам. Эти выплаты считают несовместимыми с обязательствами зеленой корзины ВТО, в то время как аналогичные механизмы действуют в рамках Единой сельскохозяйственной политики ЕС (ЕСХП). Российскому правительству, возможно, не составит труда доказать совместимость субсидий с требованиями зеленой корзины, но руководствоваться ЕСХП в вопросах программных реформ, на наш взгляд, нецелесообразно. Структурно-программные компоненты ЕСХП, судя по имеющимся данным, не оправдали надежд, не обеспечив эффективного решения ни одной из целого ряда поставленных задач. Опираясь на данные по Восточной Германии, в данном аналитическом материале утверждается, что реформа институциональной среды сельского хозяйства является по меньшей мере таким же важным условием его успешной модернизации, как и щедрое финансирование.
    Abstract: How to revitalise the agricultural sector under the commitments of membership in the World Trade Organisation (WTO) has emerged as a major policy challenge for the Russian government. According to the current State Programme for the Development of Agriculture, a key support channel is via concessional credits to the livestock sector, which was singled out as the largest recipient of interest subsidies in 2013 - 2020. Currently, these payments are not considered green box compatible under WTO commitments, whereas similar measures within the EU's Common Agricultural Policy (CAP) are. While the Russian government may face little difficulty in dressing up its investment subsidies to make them look like green box compatible, the CAP is regarded here as a poor guide for policy reform. The available evidence shows that structural policy elements of the CAP were inefficient in reaching any of the manifold goals they were hoped to achieve. Drawing on the example of East Germany, it is argued that reforms of the institutional environment of agriculture are at least as important for successful agricultural modernisation as the generous availability of funding.
    Date: 2014
  18. By: Yang, Jin; Wang, Hui; Jin, Songqing; Chen, Kevin; Riedinger, Jeffrey; Peng, Chao
    Abstract: This paper studies the effect of local off-farm employment and migration on rural households’ technical efficiency of crop production using a five-year panel dataset from more than 2,000 households in five Chinese provinces. While there is not much debate about the positive contribution of migration and local off-farm employment to China’s economy, there is an increasing concern about the potential negative effects of moving labor away from agriculture on China’s future food security. This is a critical issue as maintaining self-sufficiency in grain production will be critical for China to feed its huge population in the future. Several papers have studied the impact of migration on production and yield with mixed results. But the impact of migration on technical efficiency is rarely studied. Methodologically, we incorporate the correlated randomeffects approach into the standard stochastic production frontier model to control for unobservable that are correlated with migration and off-farm employment decisions and technical efficiency. The most consistent result that emerged from our econometric analysis is that neither migration nor local off-farm employment has a negative effect on the technical efficiency of grain production, which does not support the widespread notion that vast-scale labor migration could negatively affect China’s future food security.
    Keywords: migration, local off-farm, agriculture, efficiency, China, Community/Rural/Urban Development, Food Security and Poverty, Productivity Analysis, D24, O12, O13,
    Date: 2014–07
  19. By: Adam P. Balcerzak (Nicolaus Copernicus University, Poland); Michal Bernard Pietrzak
    Abstract: The article is devoted to measuring the effectiveness of institutional systems of European Union countries in terms of their relevance to the requirements of the global knowledge-based economy. The theoretical analysis is based on the framework of new institutional economics with special consideration to economics of transaction costs. There are two main aims of the article. The main aim of the paper is to evaluate the progress obtained by Poland and the rest of so called New Member States of the European Union in the years 2000-2010 in the context of institutional reforms that can lead to decreasing of transaction costs and are up to requirements of global knowledge-based economy. The second aim of the paper is the evaluation of influence of the last crisis of the year 2008 on the institutional reforms in “old” Europe. The realisation of that aims was possible due to application of TOPSIS method for the analysis of institutional effectiveness of European Union members states in the years 2000-2010. The empirical research is based on the data from Fraser Institute database for Economic Freedom.
    Keywords: institutional economics, effectiveness of institutional system, TOPSIS method, global knowledge-based economy, European Union
    JEL: D02 O1 C38
    Date: 2014–11
  20. By: Nie, Peng (University of Hohenheim); Sousa-Poza, Alfonso (University of Hohenheim); He, Xiaobo (University of Adelaide)
    Abstract: Using data from the China Health and Nutrition Survey (CHNS), this study analyzes peer effects on obesity in a sample of 3- to 18-year-old children and adolescents in China. Even after a rich set of covariates and unobserved individual heterogeneity are controlled for, it is evident that such peer effects do indeed exist. These effects are stronger in rural areas, among individuals at the upper end of the BMI distribution, and especially among females. All else being equal, female adolescents whose peers have a higher BMI are less likely to consider themselves overweight, suggesting that peer effects may be working through changed societal bodyweight norms.
    Keywords: peer effects, children and adolescents, BMI, China
    JEL: I10 I15 J13 C14
    Date: 2014–10

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