nep-tra New Economics Papers
on Transition Economics
Issue of 2014‒12‒29
thirty-six papers chosen by
J. David Brown
United States Census Bureau

  1. China's R&D subsidies: Allocation and effectiveness By Boeing, Philipp
  2. Arctic Zone of the North-Eastern region of Russia: problems of demographic development By Svetlana Sukneva
  3. A DSGE Model of China By Dai, Li; Minford, Patrick; Zhou, Peng
  4. Rural Mortality from External Causes in Russian Regions By Tatiana Blinova
  5. Regional Transitions from Socialism to Entrepreneurship: Russia and Germany compared By Michael Fritsch; Alina Sorgner; Michael Wyrwich; Evguenii Zazdravnykh
  6. Revisit' the Silk Road: A Quasi-Experiment Approach Estimating the Effects of Railway Speed-Up Project on China-Central Asia Exports By Hangtian Xu
  7. Spatial evolution of economic activity in Russia: New economic geography perspective By Evgeniya Kolomak
  8. Types of Demographic and Economic Development of Russian Cities in Post-Soviet Period By Leonid Limonov; Albrecht Kauffmann
  9. Possibilities and prospects of tourism development in the Russian Arctic By Lubov Larchenko
  10. Banking reform, risk-taking, and earnings quality – Evidence from transition countries By Fang , Yiwei; Hasan, Iftekhar; Li , Lingxiang
  11. Housing allocations, imputed rents and inequality in urban China By Jeffrey Zax
  12. Suburban Development of St Petersburg: comparison of 2 subjects of Federation long-term visions By Leonid Limonov
  13. Endogenous FDI Spillovers from Japan to Russia and China with Spillover-Prevention Costs By Kiyoshi Matsubara
  14. Economic Returns to Speaking the Right Language(s)? Evidence from Kazakhstan's Shift in State Language and Language of Instruction By Aldashev, Alisher; Danzer, Alexander M.
  15. The persistence of real exchange rates in the Central and Eastern European countries By Ahmad Zubaidi Baharumshah; Siew-Voon Soon; Stilianos Fountas; Nurul Sima Md. Shariff
  16. The EU funding contribution to regional growth and regeneration in Romania. A Focus on the North-East Region By Daniela-Luminita Constantin; Zizi Goschin; Bogdan Ileanu; Raluca Mariana Grosu; Constanta Bodea
  17. Social economy and social enterprises in Poland: trends, challenges and obstacles By Anna Ciepielewska-Kowalik; Ewa Les
  18. Youth Unemployment in Italy and Russia: Aggregate Trends and the Role of Individual Determinants By Enrico MARELLI; Elena VAKULENKO
  19. Diagnosis of the Social and Economic Welfare of the Population for the Purposes of Regional Economic Policy By Vladimir Fesenko
  20. Do agglomeration forces bring productivity gains to manufacturing firms in Russian urban agglomerations? By Tatiana Ratnikova; Ksenia Gonchar
  21. Humanitarian cooperation as a factor in the strategic partnership between Altai Territory of Russia and Land Saxony-Anhalt of Germany By Natalie Iakovleva
  22. Segmentation and informality in Vietnam: A survey of the literature By Cling, Jean-Pierre; Razafindrakoto, Mireille; Roubaud, François
  23. The entrepreneurial performance of the Central and Eastern European regions By Balázs Páger
  24. Smart specialization and the manufacturing sector in the city regions of Hungary By Zsofia Vas; Imre Lengyel; Izabella Szakalne Kano
  25. Why do small Chinese firms list on the Frankfurt Stock Exchange? By Xu, Hongmei
  26. Enhancing the innovativeness of local production systems - Polish experiences By Mariusz E. Sokolowicz; Aleksandra Nowakowska; Zbigniew Przygodzki
  27. Matching higher education offer with labour market needs till 2020 - the case of Lodzkie region By Lukasz Arendt; Agnieszka Rzenca
  28. Revaluation of the labor theories and the Central-Eastern-European labor market trends By Katalin Lipták
  29. Geographies of transition: The political and geographical factors of agrarian change in Tajikistan By Hofman, Irna; Visser, Oane
  30. From local to regional competitive advantage (The case of Nikita´s Homestead in Olkhon island - Baikal) By Kamila Borsekova; Katarina Petrikova; Anna Vanova
  31. Otkhodnichestvo?s impact on small towns in Russia By Yana Zausaeva
  32. Methodological identification of opportunities for development of smart specialization in Pomorskie Voivodship in Poland By Dorota Kamrowska-Zaluska; Jacek Soltys
  33. Municipal reform in Ukraine as a tool to resolve internal contradictions By Ilya Raskin; Roman Amburtcev
  34. Youth Self-Employment in Households Receiving Remittances in Macedonia By Marjan Petreski; Nikica Mojsoska-Blazevski; Maja Ristovska; Edi Smokvarski
  35. Impact of crisis on regional development in Croatia By Irena Dokic; Ivana Rasic Bakaric; Zlatan Fröhlich
  36. The Effectiveness of Apprenticeship Training - a within track comparison of workplace-based and school-based vocational training in Hungary By Daniel Horn

  1. By: Boeing, Philipp
    Abstract: This study investigates the allocation of China's R&D subsidies and its effectiveness in stimulating firms' own R&D investments for the population of Chinese listed firms throughout the time period 2001 to 2006. For allocation, we find that firm participation is determined by prior grants, high quality inventions, and minority state-ownership. Provincial variation in China's transition towards a market-driven economy reveals that R&D subsidies are less often distributed by more market-oriented provincial governments and that China's innovation policy is more supportive of firms located in developed provinces. Considering effectiveness, we find that grants instantaneously crowd-out firms' own R&D investments but are neutral in later periods. In 2006, one public RMB reduces own R&D investments made by firms by half a RMB. For repeated recipients, high-tech firms, and minority state-owned firms grants have an insignificant effect.
    Keywords: R&D subsidies,economic transition,China,propensity score matching,difference-in-differences
    JEL: O38 O32
    Date: 2014
  2. By: Svetlana Sukneva
    Abstract: The author describes the features of the demographic development of the Arctic zone of the North-Eastern region of Russia. The Arctic zone of the North-Eastern region of Russia is one of the most extreme regions of the world. Territories located after the Arctic a circle are included in the Arctic zone. Residence of people on this territory is attended with the whole complex of problems from which we will consider only demographic features. The Arctic zone of the North-Eastern region of Russia includes the Chukotka Autonomous District and half of the territory of the Republic of Sakha (Yakutia). The main reason of population reduction is migration. The population of the Arctic zone travels to places beyond the Northeast and to the central areas of the Republic of Sakha (Yakutia). Reproduction in the region shows a positive trend of natural increase. Relatively high birth rate remains due to higher reproductive attitudes of the rural population. Indigenous peoples of the North predominantly live in rural areas of the Arctic zone. Positive dynamics fertility has been accompanied by negative processes in the demographic behavior of the population. The Arctic areas have the highest rates of illegitimate births and celibacy among indigenous peoples of the Republic of Sakha (Yakutia). The adverse trends were observed in the mortality of the Arctic region. In Russia, in recent years, mortality rates are currently falling. The high mortality rate is observed in the Arctic zone. The reason for this situation is the high level of mortality from external causes, which is one and a half to two times higher than the average rate within the Russian Federation. The solution of the demographic problems is possible only in interaction with the economic policy of the state and the changing socio-economic situation in the Arctic zone. Priority directions to improve the demographic situation in the Arctic should be to reduce mortality and improve active healthy living, migration managements, strengthen the family and increase fertility in marriage. Demographic processes have considerable inertia, so to improve the demographic situation is necessary to preserve the demographic potential of the region and to eliminate the negative trends in demographic processes prevailing in the Arctic zone.
    Keywords: Arctic zone of the North-Eastern region of Russia; region; demographic development; mortality; natural increase; migration;J110; J190; R230
    Date: 2014–11
  3. By: Dai, Li; Minford, Patrick; Zhou, Peng
    Abstract: We use available methods for testing macro models to evaluate a model of China over the period from Deng Xiaoping's reforms up until the crisis period. Bayesian ranking methods are heavily influenced by controversial priors on the degree of price/wage rigidity. When the overall models are tested by Likelihood or Indirect Inference methods, the New Keynesian model is rejected in favour of one with a fair-sized competitive product market sector. This model behaves quite a lot more 'flexibly' than the New Keynesian.
    Keywords: Bayesian Inference; China; DSGE; Indirect Inference
    JEL: C11 C15 C18 E27
    Date: 2014–11
  4. By: Tatiana Blinova
    Abstract: Rural Mortality from External Causes in Russian Regions Tatiana Blinova ? Doctor of Economics, Professor, Deputy Director on Science of the Institute of Agrarian Problems of the Russian Academy of Sciences (RAS). Svetlana Bylina ? Scientific Researcher. Institute of Agrarian Problems of the RAS Victor Rusanovskiy ? Doctor of Economics, Professor, Saratov State Socio-Economic University Abstract. The paper addresses the factors that affect the reduction of rural mortality from external causes in the regions of RF of different types and contains an estimation of the degree of their impact. We made a quantitative analysis and built models of the factors and determinants of the existing interregional differences in the pattern of rural mortality from external causes of death (road traffic accidents of all kinds, accidental alcohol poisoning, murder and suicide). The paper presents the results of the study of the dynamics and pattern of external causes of rural mortality with the use of Rosstat's data for Russian regions (2000-2012), and describes the nosological, gender and regional profile of rural mortality from external causes. We also identified the social problem, which is a steadily high rate of mortality from external causes in a certain group of regions. We found that the impact of federal social policies on the reduction of rural mortality from external causes is asymmetric in the regions of different types. On the basis of our cluster analysis we developed taxonomy of Russian regions according to the pattern of external causes of rural mortality, formed seven groups of Russian regions and characterized them. The hypotheses were statistically tested by making a correlation, regression and factor analyses. We estimated the regression models that had been constructed for Russia in general and for two types of regions (with the highest and the lowest mortality from external causes) separately and included economic, social and behavioral explanatory variables, which made it possible to identify the determinants of rural mortality from external causes and describe their spatial combinations. The results of the analysis and modeling of spatial differences in the pattern of external causes of rural mortality can be used when developing regional programs for reducing mortality from external causes of death. This study is supported by the Russian Foundation for Basic Research (project # 12-06-00012). JEL Classification: R1, J1, I1 Keywords: Russian regions, rural population, mortality, external causes, taxonomy, regression analysis, regional data, determinants, social policy
    Keywords: Russian regions; rural population; mortality; external causes; taxonomy; regression analysis; regional data; determinants; social policy R1; J1; I1
    Date: 2014–11
  5. By: Michael Fritsch; Alina Sorgner; Michael Wyrwich; Evguenii Zazdravnykh
    Abstract: We investigate the personal- and regional-level determinants of entrepreneurial activities in East Germany and Russia in the process of transition to a market-type economy. In this comparison entrepreneurship in West Germany is used as a benchmark. Whereas East Germany has experienced?after 40 years of socialism?a shock-like-transformation towards a market economy, Russia was under socialistic regime for a period of about 70 years, and its economic development after the breakdown of the Soviet Union diverged from the development in East Germany. Hence, one can expect substantial differences in the level of entrepreneurship and determinants of the decision to be self-employed in these two countries and their regions. While a number of studies indicate that East Germany has now largely overcome its socialistic legacy with regard to entrepreneurial activities (Fritsch et al., 2013,2014),the developments in Russia are still largely unclear. There are some cross-country comparisons of the overall level of entrepreneurial activity that include Russia (Djankov,et al.,2005, 2006; Ageev,et al.,1995; Aidis,et al.,2008). There is, however,hardly evidence on the dynamics of entrepreneurship in detail and with comparison to other post-socialist countries. We conduct micro-data panel analyses for Germany and Russia that cover the time period from shortly after German reunification until recently. The analysis for Germany is based on the Socio-Economic Panel(SOEP), a national representative survey of German households containing detailed information about people's socio-economic and psychological characteristics. Data for Russia comes from the Russia Longitudinal Monitoring Survey(RLMS) which is comparable to Germany's SOEP. For detailed regional analysis in Russia, we additionally use the Overall Monitoring of Living Conditions(OMLC) data set. We find several differences with regard to entrepreneurial activities between East- and West Germany and Russia. While the level of entrepreneurship in East Germany has achieved the West German level of about 12 percent 15 years after the German reunification, the self-employment rate in Russia is still very low at about 4 percent. In all countries under inspection there is substantial variation of the level of self-employment across regions. With regard to the individual-level determinants of self-employment,we observe several differences between Germany and Russia. While age does not seem to play a significant role for the probability of being an entrepreneur in Russia,this relationship has a statistically significant reversed u-shape in Germany. Moreover, entrepreneurs in Germany are more likely to be low- and high-educated,in comparison to employees,whereas in Russia we observe a positive and linear relationship between formal education and the probability of entrepreneurship. Furthermore, Russian entrepreneurs tend to work in occupations that do not correspond with their field of education, thus, indicating necessity-driven nature of entrepreneurship in Russia. Nonetheless, Russian and German entrepreneurs are similar in that they are more likely to be married and men.
    Keywords: entrepreneurship; new business formation; transformation; regional development; East Germany; Russia
    JEL: L26 O11
    Date: 2014–11
  6. By: Hangtian Xu
    Abstract: China's main railway line linking east and west was speeded-up in Oct. 21, 2000, which improves freight efficiency between eastern China and Xinjiang (the hub of China and Central Asia). This paper tests the impact of exogenous domestic accessibility variation on export. By employing a transaction-level customs database, empirical results find benefited exporters (use rail freight) increase the export value to Central Asia by around 30% compared with exporters use other freight modes, and exporters use rail freight but enjoy limited speeded-up mileage. The speed-up effect is due to mixed channels: net export creation, export diversion in freight modes and exporters. Increase in export value of related exporters is exerted by export expansion of existing exporters but not entry of new exporters. This paper also finds exports of medium value products benefit most from speed-up, which are more sensitive to shipping efficiency than low and high value products. Overall, speed-up effect on regional development of Xinjiang is two-fold. It weakens the function of Xinjiang as the hub, but promotes its export in other international markets by better accessibility to coast.
    Keywords: Domestic transport costs; China-Central Asia; Export; Firm-level; Transport infrastructure
    Date: 2014–11
  7. By: Evgeniya Kolomak
    Abstract: We study the dynamics of inter-regional economic disparities for a number of development characteristics, test the hypothesis of the new economic geography and connect the results with the prediction of the bell curve describing spatial concentration over time. The results of our analysis suggest that the concentration of economic activity continues in Russia and that the pace of the interregional divergence is rather high. These findings bring us to the conclusion that the country rests at the left side of the bell-shaped relationship between interaction costs and spatial distribution. Both the western and eastern regions experience centripetal tendencies; however, despite predictions, no essential redistribution of the production factors and outputs from the East to the West is revealed. In other words, first nature (the East's natural resources and raw materials, which are highly valued in the global market) is balanced by second nature (the West's better infrastructure and large markets). The significant factors in spatial concentration and total productivity growth are density, the size of and access to markets and the diversity of the economy. Insensitivity to the diversification is specific to the eastern regions of Russia. There are also sectorial peculiarities: population density and proximity to markets negatively influences; due to the immobility of supply. External markets have no significant effect on construction. Due to fierce competition, sectorial specialization decreases both productivity and the rate of concentration. These results of the estimates are in accordance with the predictions of the new economic geography. One of the practical ideas suggested by this analysis is the conclusion that in the near future, we will observe further concentration of economic activity and interregional divergence in Russia. The forces behind the agglomeration economy and regional disparities are market-based (increasing returns to scale and imperfect competition), and they are beginning to play a major role in the country in the transition and in the post-transition period. Despite the active regional policy and the massive redistribution efforts undertaken by the central government, regional disparities continue to grow. The new economic geography theory describes the mechanisms of agglomeration and provides suggestions for the pro-dispersion forces to countervail centripetal tendencies. Translated into the language of the practical recommendations, they include essential improvement of transport and communication infrastructure, radical decreases in trade cost and the elimination of regional institutional barriers, as well as an active social policy supporting lagging regions.
    Keywords: regional disparities; economic geography; empirical estimates; Russia;
    JEL: R12 O18
    Date: 2014–11
  8. By: Leonid Limonov; Albrecht Kauffmann
    Abstract: Types of Demographic and Economic Development of Russian Cities in Post-Soviet Period Albrecht Kauffmann, Halle Institute for Economic Research (IWH), Germany Leonid Limonov, Higher School of Economics-St.Petersburg, International Centre for Social and Economic Research «Leontief Centre», Russia Key-words: Urban Systems, Typology, Cluster Analysis, City Size, Balance of Migration, Labor Market, Economic Activity, Poverty Trap, Principle Components. JEL codes: R12, R15, R23 For long time, the applicability of economic theories of cities, urbanisation and urban development as well to Russian cities was hampered by the lack of data beyond population figures. Since 1990, some contributions of Richard Rowland with regard to urban development in Russia referred to certain classes of cities (metropolitan cities, rapidly growing cities, declining cities or secret cities). However, with the exception of secret cities (ZATO), these classifications are derived from purely size characteristics, and are rather descriptive. Also Mykhnenko and Turok (2008) analyse only population figures of 150 East European cities, among them 56 Russian cities. Kauffmann (2010) analyses growth rates of population of about 3000 Russian cities and urban settlements between 1993 and 2004 with regard to the predictions of a certain class of New Economic Geography models. But, since 2004, data for cities with more than 100000 inhabitants (and for some smaller cities with regional capital function, as well) are published by ROSSTAT annually in "Regiony Rossii vol. 3". Applying data from this source, a cluster analysis has been undertaken, where indicators with regard to demography, labour market and geography of 156 cities are included into the variable set. The outcome are 15 clusters that may be well interpreted by principal components. The aim of this cluster analysis is to provide impulses for drawing on theories which may explain Russian urban development. Among principal components 2 most important are natural resources and labor endowment (Eigen Values are 6.2 and 3.2 respectfully). Smaller input in urban dynamics is provided by population change characteristics (Eigen Value is 1.8), the place of the city in urban system hierarchy (1.1) and by the poverty trap situation (0.9). Agglomeration economy has only a weak influence on Russian cities dynamics (Eigen Value is 0.8), it can be identified in cities with more than 1 mln population, in cities of Moscow Metropolitan Region and in principal cities of the Centre and the South of European Russia.
    Keywords: Urban Systems; Typology; Cluster Analysis; City Size; Balance of Migration; Labor Market; Economic Activity; Poverty Trap; Principle Components.
    JEL: R12 R15 R23
    Date: 2014–11
  9. By: Lubov Larchenko
    Abstract: Abstract. The article deals with necessity and possibility of tourism industry development as the leading sector of territorial specialization of Arctic regions. The problems are considered and strategic directions are defined for the formation and development of the tourism industry in the Arctic regions of Russia. Analysis of foreign experience in tourism development in the Arctic Regions allows to claim that it could be a powerful instrument in the economic development of Russia's Far North regions. In addition, tourist and recreational potential of Russian regions is much richer and more diverse than foreign one, including due to the enormous extension of the zone of Arctic Circle. The interest to Arctic tourism has been increasing in recent decades. This is due to several reasons. Among them are following: glut by traditional types of tourism, growth of amateurs of extreme tourism, the growing popularity of exclusive tours, including trips to the North Pole. Natural-resource potential, historical and cultural heritage, including ethnic and cultural potentials are at the heart of the tourism and recreation potential of Russian Arctic regions. High yield of northern tours, arctic growing demand for tourist products, a significant tourist potential of Russia's northern regions are favorable preconditions for increasing guest flow. The major problems that prevent fuller development of the tourist potential of the Russian Arctic are: ? very limited spacious composition of inbound tourism that doesn't correspond potential polar regions; ? Arctic regions are not remarkable to wide tourist community; ? Process control system of formation and development of the local tourism industry is badly developed in Arctic regions. Problem solving in the Arctic tourism industry is possible with the help of development and implementation of appropriate strategic directions and activities in the tourism sector. The most significant are: ? development promotion of priority species for the Arctic tourism, improvement of traditional and development of new tourism products; ? assistance in promotion of Arctic tourism products to the international and home markets; ? promotion of tourism infrastructure development; ? development of international and interregional cooperation; ? investment and financial provision of the process of formation and development of the tourism industry. Implementation of the above strategy formation and development of the tourism industry of the Russian Arctic regions will promote tourism industry development in these areas as one of the leading (budget-) territorial branches of specialization.
    Keywords: Arctic; travel services; Natural-resource potential; strategy formation and development of the tourism industry;
    JEL: R11
    Date: 2014–11
  10. By: Fang , Yiwei (BOFIT); Hasan, Iftekhar (BOFIT); Li , Lingxiang (BOFIT)
    Abstract: The dynamic banking reforms of Central and Eastern Europe (CEE) following the collapse of the Soviet Union provide an ideal research setting for examining the causal effect of institutional development on financial reporting. Using five earnings quality measures, we consistently find that banking reform improves accounting quality and reduces earnings management incentives in the 16 transition countries considered. The results strongly hold in our within-country and difference-in-difference models, as well as in non-parametric analyses. We also find supporting evidence for the notion that excessive risk-taking of banks impairs earnings quality. As a result, banking reform improves earnings quality partially through its ability to curb risk-taking behavior.
    Keywords: earnings management; earnings quality; institutional development; bank risk-taking
    JEL: E50 G15 G18 G38 M41 M48
    Date: 2014–12–02
  11. By: Jeffrey Zax
    Abstract: This paper demonstrates that subsidized housing substantially increased inequality among urban Chinese residents in 1988 and 1995. Regressions for 1995 rental units impute estimated market rents in 1988 and 1995 for all dwelling units. In both years, these imputed values exceeded actual rents by a factor of more than ten. Estimated true household income, the sum of imputed net estimated market rent and total reported income, exceeded total reported income by approximately 23% in 1995. The Gini coefficient for true household income in 1988 was probably in the vicinity of .250, more than 20 % greater than the coefficient of .206 for total reported income. The Gini coefficient for 1995 was probably around .310, 11.1% greater than the reported value of .279. The contribution of imputed rents to inequality is much less in recent years, as urban housing has become more commodified. Consequently, the increase in urban inequality over the past 25 years has been less than that estimated on the basis of money incomes alone.
    JEL: D31 O15 O18 P36 R21
    Date: 2014–11
  12. By: Leonid Limonov
    Abstract: Suburban Development of St Petersburg: comparison of 2 subjects of Federation long-term visions Leonid Limonov, Higher School of Economics-St.Petersburg, International Centre for Social and Economic Research «Leontief Centre», Russia Key-words: Regional Development, Metropolitan Area, Environment, Suburban, Inequality, City Size, Inner City, Municipalities, Intergovernmental Relations. JEL codes: R11, R12, H77 The paper is devoted to problems of ensuring balanced and sustainable development of a very specific and important metropolitan region of the Russian Federation ? the region of St Petersburg and surrounding it Leningrad Oblast. St.Petersburg (City) and Leningrad Oblast (Region) are both constituent entities of the Russian Federation and part of North-West Federal District. The City and the Region are connected with each other by thousands of various relationships: historical, cultural, socio-demographic, economic, labor, transport and administrative. For a long period of time, the City and the Region were part of a single administrative-territorial entity and had common governance bodies that applied a common approach to their development. With the collapse of the Soviet Union in late 1991 the system that ensured consistent management of the development of the City and Region was destroyed. However, no system was created that could be used to coordinate the development of the City and the Region. In the last two decades, problems between the City and the Region arise increasingly often, many of which cannot be solved on the basis of agreed positions of both parties. In 2012-2013 both Leningrad Region and St Petersburg developed their long-term vision documents: Leningrad Region ? a Concept of Social and Economic Development till 2025 and St Petersburg ? a Strategy-2030. The paper is considering main provisions of these documents and key problems which needs a coordinated approach: 1) relocation of industrial enterprises from the city centre to the region 2) relocation of the part of logistical and transportation operations from St Petersburg to Leningrad Region 3) development of Greater St Petersburg See Port facilities 4) coordinated development of recreational zones 5) transformation of gardening cooperatives ("sadovodstva") into regular settlements (municipalities) with all necessary infrustructure 6) development and financing a system of suburban public transport 7) environmental issues, including solid waste treatment 8) mass housing construction in the region at the border of St Petersburg etc. On the basis of the analysis of statistics and international best practices recommendations are formulated to improve the efficiency of the governance of the region, paying special attention to St Petersburg Metropolitan Area, which includes a number of municipalities, located in Leningrad Oblast.
    Keywords: Regional Development; Metropolitan Area; Environment; Suburban; Inequality; City Size; Inner City; Municipalities; Intergovernmental Relations.
    JEL: R11 R12 H77
    Date: 2014–11
  13. By: Kiyoshi Matsubara
    Abstract: This paper explores the role of FDI-spillover prevention costs in the strategic choice for a MNE of a developed country such as Japan about whether it perform FDI to an emerging economy such as Russia and China and about a degree of FDI spillovers that it allows. After discussing the exogenous spillover case in a duopoly model, this paper shows that with a quadratic prevention cost function, the MNE may choose a positive level of spillovers lower than the benchmark exogenous level, and also shows how endogenizing spillovers affect the home firmÂfs decision on plant location. In the m-FDI-host-country firm case, the effects of the number of FDI-host country firms on the level of spillovers and the cutoff value of trade cost are not always monotonic.
    Keywords: FDI; Endogenous Spillovers; Spillover-prevention Costs;
    JEL: F12 F23 O33
    Date: 2014–11
  14. By: Aldashev, Alisher (Kazakh-British Technical University of Almaty); Danzer, Alexander M. (University of Munich)
    Abstract: This paper investigates the economic returns to language skills and bilingualism. The analysis is staged in Kazakhstan, a multi-ethnic country with complex ethnic settlement patterns that has switched its official state language from Russian to Kazakh. Using two newly assembled data sets, we find negative returns to speaking Kazakh and a negative effect of bilingualism on earnings while Russian was the official state language in the 1990s. Surprisingly, the Kazakh language continues to yield a negative wage premium 13 years after it has been made official state language. While we do neither find evidence for an ethnically segmented labor market nor for reverse causality, the low economic value of the Kazakh language can be explained by the comparatively poor quality of schools with Kazakh as language of instruction. Based on PISA data, we illustrate that scholastic achievements are substantially lower for pupils taught in Kazakh, despite the official support for the titular language. Our results suggest that switching the official state language without appropriate investments in school resources is unlikely to cure the economic disadvantage of a previously marginalized language.
    Keywords: bilingualism, returns to language skills, wage premium, language policy, language of instruction
    JEL: J24 I21 P23 O15
    Date: 2014–11
  15. By: Ahmad Zubaidi Baharumshah; Siew-Voon Soon; Stilianos Fountas (Department of Economics, University of Macedonia); Nurul Sima Md. Shariff
    Abstract: This paper investigates the mean reversion in real exchange rates for Central and Eastern European countries. In contrast to previous studies, we use the local-persistent model to measure the half-life. We find that the adjustment to purchasing power parity is more rapid after accounting for structural breaks, taking less than 18 months to be cut in half. The empirical evidence shows that there is no clear-cut difference in the speed of adjustment to shocks between the transition economies and the larger member countries of the European Union. The narrow confidence intervals for the half-lives that accord with the standard sticky-price models provide strong support for purchasing power parity. The purchasing power parity puzzle does not seem to hold in these transition countries. The practical implication of our findings is that the transition countries have successfully adopted trade policies that mimic those of the European Union, with a view to alignment in readiness for European Union membership..
    Keywords: half-lives; local persistence; structural breaks; real exchange rate; PPP puzzle; transition economies.
    JEL: C0 F21 F36
    Date: 2014–11
  16. By: Daniela-Luminita Constantin; Zizi Goschin; Bogdan Ileanu; Raluca Mariana Grosu; Constanta Bodea
    Abstract: Romania's communist regime used forced industrialization and urbanization policies as a solution for speeding-up the pace of development in the lagging areas, which resulted in reducing regional disparities. However, after 1989 there areas were the first that suffered the hardships of economic restructuring, the economic and social discrepancies at territorial level recording an important increase. The accession to the EU has created good opportunities for the economic regeneration of the lagging regions provided the European funds allocated to them be absorbed and employed in an effective and efficient manner. Based on these overall considerations this paper proposes a case study in the North-East region of Romania. This region, with the lowest GDP/capita in the country has an absorption rate higher than the Regional Operational Programme's national average and a commendable expertise in the implementation of the regional development projects. The research has investigated to what extent these promising results reflect the objectives of the strategy outlined in the programme documents of the 2007-2013 financial exercise, aiming at a balanced territorial development. The significance of the case study is twofold: on the one hand it offers a spotlight on a very sensitive area of Romania in terms of regional development level; on the other hand it discusses the added value, strategic quality and administrative capacity which have made it possible to record results above the average in the implementation process. In line with the regional problem and the identified needs and strengths, the enterprise support has been chosen as the policy heading for this study. There is a clear continuity between the priority axes and key areas of intervention focusing on enterprise support in the ROP 2007-2013 and the enhancement of the SME competitiveness in the Cohesion Policy for 2014-2020, as one of the key areas for economic growth and job creation. The desk research ? with inquiries into the most important programming documents and result reports relating to the ROP in Romania and, in particular in the North-East region, plus the large volume of data analysis ? have been accompanied by interviews with the persons involved in the implementation process ? from local authorities to experts and beneficiaries at national, regional and county level. The research has been undertaken under the auspices of the EU ? FP7 GRINCOH project.
    JEL: R11 R28 R38 R58
    Date: 2014–11
  17. By: Anna Ciepielewska-Kowalik; Ewa Les
    Abstract: This paper presents the definitional discourse on the Polish social economy organizations and social enterprises in the milieu of academic experts and practitioners, analyzes their competitive advantages, identifies major challenges and barriers and provides some key recommendations on how social economy organizations and social enterprises can be supported in Poland. With an eye on early childhood education & care services we outline the performance and impact of social enterprises in this policy area and implications for academic understanding of social enterprise. The analysis is based on quantitative and qualitative studies conducted in the years 2011-2013. It describes the scale, specificity and socio-economic potential of social enterprises in childcare. The national and local policy towards social enterprises, as well as their role in fostering private regulation schemes in childcare policy are also examined in this paper. Social economy and social enterprise are new terms in Poland. They have emerged after the 1989 from the concepts of third sector and co-operatives. In Poland the concept of social enterprise has received initial recognition among government officials, professionals, academics and the third sector due to EU programs on social inclusion and economic reintegration such as EQUAL and Human Capital. Social enterprises are understood as a subtype of the third sector and as a new development within this sector covering existing organizations as well as its new types (Le¶, Kolin 2009). Most recent Polish studies argue, however, that there is not yet a common definition of social enterprise. Polish social enterprises consist of a plurality of organizational forms that have developed between the market and the state, but also with a close relation with the public sector. In Poland the majority of social enterprises, which consist a minority of the social economy, consist of work integration, service oriented and local development oriented organizations. This development within third sector organizations towards more economic activities contributed to their more entrepreneurial position, particularly the production of social services for groups with special needs (children, disabled, on-parent families, older persons), production of local services (agrotourism, social tourism, recreational parks) as well as the promotion of alternative modes of employment generation primarily for those workers who could not or did not want to find a job at the traditional labour market. Social enterprises in Poland address new (central and local) social policy challenges induced by public budgets constrains, harsh social welfare reforms and growing diversification of social needs.
    Keywords: social economy; social enterprise; early childhood education & care; social services; work integration
    Date: 2014–11
  18. By: Enrico MARELLI; Elena VAKULENKO
    Abstract: Youth unemployment is a troublesome problem in many European countries. In the first part of the paper, we consider the aggregate trends in some EU countries and in Russia; we especially investigate the recent period after the global crisis and Great Recession. We then consider the different types of determinants, including macroeconomic conditions, structural determinants, labour market institutions and regulations. However, the focus of our analysis is on the role played by individual and family determinants such as age, gender, education level, marital status, health, household income, housing condition. The econometric part of the paper makes use of Eurostat micro-level data EU-SILC for Italy and RLMS-HSE data set for Russia. We consider a Heckman probit model to estimate the unemployment risk of young people in the period 2004-2011. Our main research question is to explain the probability of being unemployed for young people in terms of their personal characteristics and compare these outcomes with results for the same model for adult people. We take also into account some macro variables, such as living in urban areas or the regional unemployment rate. The results are of interest, since the two countries have quite different labor market institutions, besides having different levels of youth unemployment. However, most of the explanatory variables act in the same direction in both countries and it is interesting to compare the relative size of such effects (that we measure through the “average partial effectsâ€).
    Keywords: youth unemployment, individual determinants of unemployment, regional unemployment, Heckman Probit.
    JEL: J64
    Date: 2014–09–01
  19. By: Vladimir Fesenko
    Abstract: Current situation in the Russian economy in the modern period that is reflected in the 'mirror' of the official statistics shows a substantial differentiation of economic and social characteristics of the Russian regions. Largely this situation is based on the current pre-crisis trends of social and economic development, as well as existing opportunities of regional economies self-development to overcome the consequences of the global economic crisis. Region social development is determined by the system of key-figures (indicators), among which there are the indicators characterizing the population size and population structure, and living standards of the population. The demographic situation in the Southern Federal District, which includes the Volgograd region, is characterized by the fact that during the recent years, the region's population has remained almost unchanged, but for the Volgograd region this indicator has stable negative dynamics. Unemployment rate in the Volgograd region was 1% in December 2013. The main indicator of the living standards (standard of well-being) of the population is the individual income. Volgograd region takes the third place among the regions of the Southern Federal District according to this indicator, being slightly behind the Rostov region and considerably behind the Krasnodar Krai. Volgograd region is also behind in such an important part of personal incomes as the amount of average monthly nominal accrued wages of the working population of all the largest developed regions of the Southern Federal District. Thus, the scope and structure of average income of the regions' population, the territorial constituents of the Southern Federal District, is unequal. Such a territorial disparity of income is determined by the level of economic development of the regions, the main determining factor of which is the size of the GRP, including GRP per capita. According to these indicators, the Volgograd region takes a leading position among the regions of the Southern Federal District. The analysis of population well-being social and economic indicators suggests that for the Volgograd region in comparison with other, primarily the largest SFD regions it is harder to overcome the consequences of the economic crisis and in the context of a macro-regional issue currently has a rating that does not correspond to the real potential of development.
    Keywords: Region Social Development Social and Economic Well-being of the Population; Indicators of Social and Economic Well-being; code - R 130.
    Date: 2014–11
  20. By: Tatiana Ratnikova; Ksenia Gonchar
    Abstract: The difficulties of agglomeration effects estimation are caused by the problem of unobserved features of heterogeneous cities, industries, enterprises and even employees, related to both the dependent variable (enterprise-level labor productivity) and the specific characteristics of agglomerations. The selection of an enterprise for the analysis of agglomeration effect may result in identification errors, given that an enterprise located in an urban community in a densely populated Western region of Russia will be observationally equivalent to an enterprise in the Siberian rarefied space in terms of its external scale economy if their sizes, specialization, political status and other urban characteristics correspond. We consider that our subject of analysis is nested in several external environments, i.e., that the enterprise is located within a city, that the city is located within a region, and that it is likely that these environments, similar by nature, would work differently, modified in turn by the nature of the enterprise. Another form of self-selection, the exit of less productive firms driven out by intense competition in urban agglomerations, can hardly be disregarded. This form of self-selection is controlled in our research with help of truncated regressions. Therefore, at the regional level of analysis, a measure of the region's involvement in international trade (exports plus imports as a percentage share of the Gross Regional Product (GRP)) is included in regression and then it is analyzing to what extent the power of urban agglomeration effects depend on the location within the region opened to trade and competition. The results suggest that plants in urban agglomerations enjoy 17-21% higher labor productivity. Productivity gained from urban agglomeration is the highest in towns with populations of 100,000 to 250,000 people. This benefit arises as a result of urbanization and external scale economy. Localization and clustering in the city is not associated with higher labor productivity. While regional own-industry clustering satisfactorily explains the productivity premium, suggesting that efficient clustering requires a scale economy larger than only a city. Another result: the urban agglomeration benefit is statistic significant in the firms with middle labor productivity and is absent in high- and low- productive firms. JEL classification: R10, R12, D24 Key words: productivity, city, urban, agglomeration
    Date: 2014–11
  21. By: Natalie Iakovleva
    Abstract: The main idia of the article is to describe the humanitarian relations of the Altai region and the federal Land of Saxony- Angalt. The item is to represent the difference of the meaning of such words as «humanitarian» and « humanitarian relations». The problem is that there are some differences in understanding of this type of cooperation. In European Union, «humanitarian collaboration» mean protection of human rights, the provision of emergency relief (food supply, rehabilitation of health services, mine soils etc.). But in Russia «humanitarian cooperation» and «humanitarian collaboration» has the same meaning and covers an area of cultural relations, inter-civilizational, civil society dialogue and relations with compatriots abroad. In this case it can play a «soft power» between the Germany and Russian cooperation and regional relations. In the development of regional cooperation between some Germany federal Lands and regions in Russia, author gives us example of such communication and describes the humanitarian relations between the Altai region and the federal Land of Saxony- Angalt. There is a German national region in Altai, which has its own territory, low and budget. People there can choose the school and language of education: Germany or Russian. So, in this article author wants to describe how to make strong political and economic relationship which is basic on cultural and humanitarian communication. The author give us brief information about the history of the in the Altai region, it's participation in joint projects with Germany, learning Germany language as a home language at the local and regional levels in German national region. For the regional development in Russia, existence of a common culture, ethnicity and friendly relations makes cooperation easier and beneficial. It's an example for other regions how to lead international activities and how to make the Regional economic growth up. Actually, this type of cooperation is one of the areas paradiplomacy and for today is a new phenomenon in Russia. And the example of the relations of the Altai region and the federal Land of Saxony- Angalt is an example of paradiplomacy in Europe and America. In this case, author gives us the meaning of such communication in Russia.
    Keywords: G_B; £ _õ
    Date: 2014–11
  22. By: Cling, Jean-Pierre; Razafindrakoto, Mireille; Roubaud, François
    Abstract: Labour market segmentation is usually defined as the division of the labour markets into separate submarkets or segments, distinguished by different characteristics and behavioural rules (incomes, contracts, etc.). The economic debate on the segmentation issue has been focusing in developed countries, and especially in Europe, on contractual segmentation and dualism. However, in developing countries such as Vietnam which is the focus of this study, wage work is marginal and the approach to labour market segmentation is necessarily slightly different. Indeed, most workers are engaged in the informal economy and many of them are self-employed in their own household business. Starting with an analysis of the main characteristics of the national labour market, this paper presents a survey of the literature on informality and labour market segmentation in Vietnam (section 2). Section 3 describes the institutional background related to firm registration and social protection in Vietnam, and analyses the reasons for informality in relationship with the institutional framework. Section 4 describes the reforms being put in place and employment strategies related to the informal economy. Policy recommendations are proposed in the last section.
    Keywords: Informel; marché du travail; Informality; Labour market; segmentation; Vietnam;
    JEL: J24 J31 O17
    Date: 2014–11
  23. By: Balázs Páger
    Abstract: The theoretical concepts about entrepreneurship have changed since the last three decades. It has become one of the most crucial factors in the economic processes. These changes in the theories about entrepreneurships have been supported by the shift in the whole economic environment. If we look the comparison of the managed economy and the entrepreneurial economy (Audretsch and Thurik 2001), it can be seen clearly those shifts which contributed to become entrepreneurship an important factor in the economic development. Entrepreneurships are embedded in that socio-economic environment, where they continue their economic activity. The entrepreneurship is influenced by those negative and positive factors (for example other institutions and actors, connections, externalities) which can be attributed to regional factors. It can be assumed that the regional context of the institutional and individual factors has a crucial role in the entrepreneurial performance of a given territory. If the definition of entrepreneurship has been looked, it can be observed that entrepreneurship is a multi-dimensional concept. This multi-dimensional character would require a complex view and measure of entrepreneurship. The Global Entrepreneurship and Development Index (GEDI) is a measure of entrepreneurship based on a system view (Ãcs et al 2013). Its methodology has been applied for the regional measurement of entrepreneurial performance which is called Regional Entrepreneurship and Development Index (REDI) (Szerb et al 2014). The REDI components, so-called pillars, have two components, and consequently two types of variables reflecting to the parts of the individual and institutional context of entrepreneurship. This paper focuses on the entrepreneurial performance of Central and Eastern European (CEE) regions which have been measured by the REDI. The performances of the CEE countries are compared with other European regions and they have been analysed on their own as well. It can be observed that CEE regions have relatively poor entrepreneurial performance amongst the European regions. As the regions' performance were compared to one another it can be observed that there are some factors which are weak not only on the regional but on the national level as well. One of the most important characters in the CEE regions is the high difference between the capital city and the other regions. It could mean that the economic weight and the entrepreneurial performance of the non-capital regions are relatively small.
    Keywords: entrepreneurship; regional development; CEE regions;
    JEL: L26 O18
    Date: 2014–11
  24. By: Zsofia Vas; Imre Lengyel; Izabella Szakalne Kano
    Abstract: By today smart specialization has become a crucial part of the growth strategy of the European Union. Smart specialization is an innovative approach for the economic transformation of regions, a complex development strategy that builds on the unique characteristics and values of regions, and contributes to increasing the competitiveness of regions. The basis of Smart Specialization Strategy (S3) is identifying the competitive advantages of regions, including the identification of all economic activities that have determining weight, show growth and stand out due to their innovation capacity and performance in a region. In traded sectors capable of dynamic development, enterprises are able to continuously expand their production and satisfy substantial local and extra-regional demand. In Hungary a significant part of the traded sector consists of the manufacturing sector. The manufacturing sector is one of the determining scopes of economic activities, which provides a considerable proportion of the Gross National Product, and involves economic activities that are associated with consumer expenditures, persons employed, exports and a substantial part of technological innovations. The present study aims to prove the significance of the manufacturing sector in the city regions of Hungary. Given that place-based policies place a particular emphasis on the spatiality of economic activities, we examine the spatial distribution of the manufacturing sector by means of employment location quotient (LQ). The study centres on 13 sub-sections distinguished in the manufacturing sector and the analysis of their geographical concentration in the Hungarian city regions at the time of and following the accession to the European Union. The results show which activities in the manufacturing sector are worth specializing in by the city regions and whose support contributes to the further development of the regions.
    Keywords: specialization; city regions; manufacturing industries; Hungary
    JEL: O14 R12
    Date: 2014–11
  25. By: Xu, Hongmei
    Abstract: Recently, Chinese firms have become more active in attempting to go public on the Frankfurt Stock Exchange (FWB). This paper uses multivaria te probit analysis to test the motivations of Chinese firms to list on the FWB. In general, Chinese firms are driven by the following motivations. Firstly, they pursue relatively more stringent listing standards and closer monitoring than the Hong Kong Growth Enterprise Market (GEM) and the London Alternative Investment Market (AIM) provide. Secondly, they are motivated by emerging needs for external financing. Moreover, this paper also examines the post-issue performance of Chinese listings on the FWB. It turns out that Chinese firms listed on the FWB show bad operating performance as well as bad stock performance. However, these are no exceptions since many Chinese firms listed on other foreign stock exchanges also underperform the market average.
    Abstract: In letzter Zeit ist zu beobachten, dass chinesische Unternehmen vermehrt einen Börsengang an der Frankfurter Wertpapierbörse (FWB) anstreben. Dieser Artikel prüft mittels multivariaten Probit-Analysen, mit welcher Motivation chinesische Firmen den Börsengang in Frankfurt anstreben. Im Allgemeinen sind chinesische Firmen durch die folgenden Aspekte motiviert. Erstens herrschen an der Frankfurter Wertpapierbörse strengere Zulassungsregeln und eine sorgfältigere Überwachung als am Growth Enterprise Market (GEM) in Hong Kong oder am Alternative Investment Market (AIM) in London. Zweitens werden chinesische Unternehmen für einen Börsengang in Frankfurt durch neuen Bedarf an externer Finanzierung motiviert. Außerdem untersucht dieser Artikel auch den Erfolg chinesischer Börsennotierungen an der FWB nach dem Börsengang. Dabei stellt sich heraus, dass chinesische Firmen, die an der FWB notiert sind, nicht nur im operativen Geschäft, sondern auch bei der Kursentwicklung schlecht abschneiden. Dies ist jedoch nicht außergewöhnlich, da die Wirtschaftsleistung vieler chinesischer Unternehmen, die an ausländischen Börsen notiert sind, ebenfalls unter dem jeweiligen Marktdurchschnitt liegt.
    JEL: F23 F31 G10 G15 M20 M40
    Date: 2014
  26. By: Mariusz E. Sokolowicz; Aleksandra Nowakowska; Zbigniew Przygodzki
    Abstract: Interest in territorial forms of organisation of production is currently at its peak, both among researchers striving to describe and explain various phenomena and among practitioners - representatives of authorities, entrepreneurs or experts involved in developing the idea. On this basis, the concept of so called local production systems (LPS) is being more and more popular among regional scientists as well as regional and industrial policy makers. LPS are usually defined as systems of businesses centred in geographical proximity around one core industrial activity, maintaining relations among themselves and with their territorial socio-cultural environment, and are considered as one of the key territorial form of organization of production, which can efficiently contribute to the regional development and regional innovativeness. Among policy makers of most of the European countries, local production systems are usually considered as conceptual equivalent of the notion of cluster, while the latter, together with cluster supporting policy, is treated as of one the most important forms of enhancing the innovativeness of economies on the local and regional level. Also in the case of Poland, clusters as a form of local production systems, represent a very important part of the economy, triggering endogenous development potential. However, the level of innovativeness of Polish clusters is a difficult subject to clear assessment. Innovation commitment of clusters in Poland largely varies and depends mainly on the structure of their membership, development stage, industry and regions of activity. However, for the last 5 years Polish cluster supporting policy has developed a valuable tool for monitoring the situation in this area, which is benchmarking of clusters. The aim of the paper is to present the level of innovativeness of Polish local production systems, based on the benchmarking results', with the emphasis of the dynamic aspect of this phenomena. Together with the review of the instruments of supporting innovativeness of LPS in Poland, these results gives an answer about both positive trends concerning the innovativeness of Polish economy and negative aspects, listed as main challenges and dilemmas of Polish regional policy for the next years.
    Keywords: local production systems; regional innovativeness; regional innovation policy; benchmarking
    JEL: O25 O R10
    Date: 2014–11
  27. By: Lukasz Arendt; Agnieszka Rzenca
    Abstract: Transformation to post-industrial or knowledge-based economies causes changes in the structure of labour markets with growing demand on highly-qualified workforce. In XXI century human capital has become one of the most important production factors determining competitiveness and innovativeness of countries and regions. Creation of adequate stock of human capital requires smart investments. Therefore the higher education system, which is supposed to supply people with high-level skills and knowledge, plays crucial role in this process. The paper focuses on the linkage between higher education offer and labour market needs in the regional perspective. The goal of this paper is to analyse the extent to which higher education is able to response to demand-driven changes on the Polish labour market, especially in the Lodzkie region, till 2020. We use the newest employment forecast data to 2020 to present the development patterns of the labour demand in Poland and in the Lodzkie region. The analysis of data seems to confirm, that shifts in the sectoral and occupational structure of employment will follow the path consistent with the hypothesis of the skill-biased technical change. This implies growing demand on skills, and thus growing importance of the ability of higher education system to meet this challenge in coming years. We elaborate on the reforms of the Polish system of higher education that have been introduced since 1990ties. The main focus is put on the two groups of determinants - external, like the Bologna process, and introduction of the European Qualifications Framework, and internal - those, which are related to the specific socio-economic drivers at national and regional level. This analysis takes into account the outcomes of the recent debate, that emphasizes the linkage between higher education and labour market - it is generally acknowledged, that higher education should support labour market by adapting curricula and learning environment to the contemporary needs of the demand-side of this market. To assess this issues, we present unique data collected within primary research study carried out in the Lodzkie region (especially calculations of HRSTE and description of structure of education offer in the field of science and technology). We propose actions and recommendations to cope with the problem of matching higher education outcomes with the labour market needs. Keywords: labour market, human capital, higher education, education profile, labour demand forecasts
    JEL: I23 I25 J23 J24
    Date: 2014–11
  28. By: Katalin Lipták
    Abstract: Abstract The author assumes that globalization and its regional and local impacts have an important role in nowadays' economics. Paradoxically, challenges arising from the unification of the world have made the necessity for regional and local answers stronger. The transformation of the labor market calls for the revaluation of the notion of labor; it puts the issue of employment in another perspective. The solution for globally existing lack of employment is more and more frequently sought focusing on sustainability and social inclusion at regional and local levels. This study consists of three main themes: (1) An overview is given about the main findings of the economic theories associated with employment and labor / paid work; reinterpretation of the concept of labor is also provided, divided into pre-industrial, industrial and post-industrial periods, which the author aligns with the periods of the economic thought. The author interprets globalization as a factor influencing the transition between industrial and post-industrial periods; and she elaborately introduces its economic-social and labor market impacts. Among the potential alternatives of employment of the future, this thesis investigates the atypical forms of employment, public employment and social (solidarity) economy. (2) Central-Eastern European countries and regions are analyzed, as the territorial unit of the research, from labor market and employment aspects. Afterwards, the author evaluates the employment situation in this region. (3) Afterwards, she contributes suggestions to the criteria of creating a more efficient regional employment policy. The aim of this research was analysed the regional labor market situation by the Central-Eastern European countries and regions, in particular by the North Hungarian region and was gave some proposals for a possible, efficient regional employment policy. Key words: regional disparities, labor market JEL code: J21 - Labor force and employment; R23 - Regional labor markets; population „This research was realized in the frames of TÃMOP 4.2.4. A/2-11-1-2012-0001. National Excellence Program - Elaborating and operating an inland student and researcher personal support system convergence program. The project was subsidized by the European Union and co-financed by the European Social Fund."
    Keywords: regional disparities; labor market
    JEL: J21 R23
    Date: 2014–11
  29. By: Hofman, Irna; Visser, Oane
    Abstract: After more than two decades of agrarian change in Tajikistan, farming structures seem to crystallise. The first signs towards farm individualisation were observed only around 2000, which were the result of significant pressure from outside, when the post-conflict state was highly susceptible to pressure from multilateral institutions. Over time, striking differences in agrarian structures have emerged nation-wide; from highly fragmented, autonomous farms, to elite-controlled large-scale cotton farming. In this paper we analyse and describe the Tajik path of reform, and locate the Tajik case amongst the other reformers in the CIS. We use a political economy and geographical approach to understand the way in which different geographies of transition have emerged in the aftermath of the Soviet collapse. Particular pathways of reform are conditioned by geographical factors, in which in turn, a local political economy comes into play that further shapes the emergence of particular farm models over time.
    Abstract: Nach mehr als zwei Jahrzehnten der postsowjetischen Transformation in Tadschikistan scheinen sich (verschiedene) Strukturen in der Landwirtschaft heraus zu kristallisieren. Die ersten Anzeichen in Richtung einer Individualisierung waren erst im Jahr 2000 zu erkennen. Dies geschah vor allem aufgrund erheblichen Druckes von außen, als der Post-Konflikt-Staat anfällig war für den Druck von multilateralen Institutionen. Im Laufe der Zeit entstanden landesweit markante Unterschiede in den Agrarstrukturen. Diese reichen von stark fragmentierten, autonomen Betrieben, bis hin zu Eliten-gesteuerte Großbetrieben in der Baumwollproduktion. In diesem Beitrag analysieren und beschreiben wir den tadschikischen Weg der Reformen und vergleichen den tadschikischen Fall mit anderen postsowjetischen Ländern. Wir verwenden einen politisch-ökonomischen sowie einen geographischen Ansatz, um die Art und Weise von Landreform und Agrartransformation zu verstehen. Der Verlauf der Reformen ist bedingt durch geographische Faktoren. Hier entwickeln sich wiederum lokale politische Ökonomien, die weitere Formen von bestimmten Bauernbetrieben prägen.
    Keywords: agrarian change,political economy,former Soviet Union,Central Asia,Agrartransformation,politische Ökonomie,ehemalige Sowjetunion,Zentralasien
    JEL: Q10 Q15 Z1
    Date: 2014
  30. By: Kamila Borsekova; Katarina Petrikova; Anna Vanova
    Abstract: Paper deals with the issue of a competitive advantage on the local level, its specifics, factors and a process of its creation, exploitation and building by using unique empirical case study. Through the theoretical knowledge, empirical research results and case study we want to point out how building a competitive advantage on the local level influences the development of the region and building of a strong competitive advantage on the regional level. The main aim of the paper is to define the process of identification, creation, building and exploitation of the local competitive advantage based on internal resources and cooperation and its influence on building the strong regional competitive advantage. The aim of the paper is fulfilled through processing wide theoretical knowledge supported by own empirical research results and an attractive case study. In the first part of the paper the theoretical knowledge about competitive advantage on the local level is processed. There are several theoretical approaches to a competitive advantage. As two basic approaches can be considered a market-based approach to the competitive advantage and a competitive advantage based on resources. A compromise between these two approaches offers demand orientated approach based on marketing places principles. A theoretical part of the paper is supported by the results of own empirical research aimed on identification and exploitation a competitive advantage on the regional and local level, its factors and their importance. The second part of the paper is dedicated to the methodology and results of own empirical research. The empirical research was realized through questionnaire survey by the Delphi method with an expert group consisting of domestic and foreign experts dealing with the issue of competitiveness and a competitive advantage. The third part of the paper summarizes practical implications of theoretical knowledge and empirical research results on the example of creating unique local production system located on the island Olkhon in lake Baikal. A basis for this local competitive advantage creates an excellent location on the island Olkhon inside the Baikal lake near the sacred place for Buryats. This uniqueness together with experienced and skilled human resources, developing and building of cooperation with the local suppliers and great reputation among the travelers from all over the world create strong inimitable competitive advantage. Even this competitive advantage is on the local level; it develops positively the whole island and helps to create the strong regional competitive advantage. The empirical case study is based on own experience gained during the research stay in Siberian Russia. The end of the paper includes conclusions, recommendation and inspiration for a practical exploitation of knowledge and experience contained in the paper.
    Keywords: competitive advantage; internal resources; uniqueness; location; cooperation
    Date: 2014–11
  31. By: Yana Zausaeva
    Abstract: Historically otkhodnichestvo in Russia was designed as the temporary departure of peasants from their permanent residences in villages to earn money in regions where industry and agriculture were well developed. Preconditions for the development of this phenomenon included rural overpopulation and inability to provide sustenance for peasants' households only through local agricultural activities and homecrafts. Nowadays otkhodnichestvo can be defined as employment outside home municipality, forced by the lack of jobs or by the low level of wages in places of otlhodniks' permanent residence, where they return on a regular periodic basis. Expert estimates of the number of otkhodniks in nowadays Russia vary from 3 million to 15 million households. Such a large-scale phenomenon as otkhodnichestvo (despite its "invisibility" to the state) causes a heavy impact on the quality characteristics of different levels of societies serving as objects of public administration and subjects of local government. But neither the federal level of power nor the regional one fully comprehend the significance of the phenomenon. Sometimes it goes the other way round for the local government, which is the closest one to people: municipalities could be divided into two groups of those who detect otkhodniks and those who don't. But even in those cases when local governments are able to notice otkhodniks it, in fact, cannot be said that otkhodniks are under permanent scrutiny of municipal administrations as they are still mainly on their own. Research into the present day interaction between otkhodnichestvo and viability of municipalities is far from being complete and exhaustive. This paper outlines the interconnection between contemporary otkhodnichestvo and some political, economic and socio-cultural processes at the local level. Influence of otkhodnichestvo on the political and economic life and socio-cultural processes at the local level is of ambivalent nature, which does not allow to unambiguously evaluate if the impact brought on by it is functional or dysfunctional for municipalities. Development of otkhodnichestvo is caused by complex socio-economic reasons and it entails complex implications for the municipalities, to which the phenomenon is immanent. This paper consists of 3 sections, which describe political, economical and socio-cultural relevance of otkhodnichestvo to small towns which are at some level exposed to the phenomenon. The paper draws on various examples of this incoherent impact on small towns, situated in the non-black earth zone regions, where otkhodnichestvo was historically developed.
    Keywords: Demand and Supply of Labor; otkhodniks; local government; self-organization; active population; rental population; political participation; loss of taxes; labor substitution
    JEL: J20
    Date: 2014–11
  32. By: Dorota Kamrowska-Zaluska; Jacek Soltys
    Abstract: Smart specialization as a concept plays a more and more important role in development of the regions. David, Foray and Hall point it, as an important instrument for creating a strategy for the development of innovation at the state and regional level as well as for defining and building the knowledge-based economy. This term is present in a number of strategic development documents in the European Union, including Europe 2020, published by the European Commission in 2010. It implies the need for countries and regions to specialize as well as focus development of innovation in areas that are consistent with their endogenous potentials. This paper presents the method as well as results of the studies undertaken to define the smart specialization of Pomerania, which is one of two Polish voivodeships with access to the Baltic Sea. Its main settlement node is the emerging metropolitan area of Gdansk - the fourth largest in Poland. Part of this research was project Identification of Smart Specialization in Pomerania Voivodeship - Technological Convergence, commissioned by the Regional Government. Technological convergence was defined as phenomenon of the use of technologies from different industries for the creation of a new specialization in order to gain a competitive advantage. The aim of the project was to analyze and evaluate the economic potential of the Voivodeship, indicating possible areas of cooperation between representatives of different industries. It was assumed that the process of identifying smart specialization would be a bottom-up approach. Regional Government invited all actors to build a partnership. They worked on identifying potentials then building on this analysis, developed a common strategy for the development of technological and functional smart specialization. Analytical and diagnostic processes included: desk research, expert studies, individual in-depth interviews, focus group interviews, workshops and the Delphi study, SWOT analysis. The result is an aid for all stakeholders to identify opportunities and specify areas of development of smart specializations for the Voivodship. The method of identification of the priorities and implementation of the actions for the development of smart specializations assumes that the process itself should be flexible, meaning that adopted priorities and allocation of resources need to be reviewed and modified if such need occurs. The authors also present their recommendation to enhance this method; propose its modification and expansion to include e.g. conduct the Competitive Position Analysis of Porter's Five Forces.
    Keywords: smart specialization; technological convergence; Pomeranian Voivodeship; regional knowledge-based development; innovation strategy; O2; O3; O38
    Date: 2014–11
  33. By: Ilya Raskin; Roman Amburtcev
    Abstract: Sharp conflict between the government and the opposition, as well as between different regions of Ukraine in the recent past has led to tragic consequences. The resolution of existing in Ukraine, and the underlying conflict, regional differences, according to the authors, is possible if the country stays unified. The reform of state and municipal government, based on the principles of decentralization and deconcentration of power and fiscal powers can be the key to resolving contradictions. The modern theory of state and municipal government usually considers local government through the prism of concepts such as decentralization and deconcentration of state power. Deconcentration and decentralization have a number of common features, being 'two different types of movement authority to the local level' . At the same time, there are a lot of important differences between them. 'Deconcentration - said J. Wedel - this is only management technique, which by itself is not equivalent to the development of democracy, because it keeps the entire administration at the disposal of the central government or its representatives'.Deconcentration reforms have 'management, not a political sense: geographically the managerial apparatus is close to the citizens, but there are no powers conferred on themâ?Â. During decentralization the authorities from the government as an entity legal go to â??another entity legal which is the local management team - a municipality or department, or government agency', while at the same time, decentralization of power does not mean turning to federalism. As noted by J. Wedel, if decentralization 'leads to public entities - other than the State - these public entities are purely administrative and do not have a legislative or judicial power'. Simultaneously, the project concept contain a reverse approach, according to which at the level of regions and districts the state executive authorities is saved and appointed by and accountable to the President of Ukraine. Implementing the governmental local policy, these bodies are part of deconcentration of authority. The concept of reform presents a position, according to which the state administration will have the right to cancel the decisions of local authorities, and only then apply to the courts to establish the illicit nature of canceled orders. This practice, according to the experts, is a mechanism for the actual subordination of local government to the territorial public administrations. Thus, the concept of reform simultaneously contains multidirectional movement - to strong municipalities and municipalities, built in the vertical state. This uncertainty is the most significant risk because a potential increase of conflicts of such a system will lead to its malfunction.
    Keywords: Municipal; government; conflict; reform;
    JEL: H11
    Date: 2014–11
  34. By: Marjan Petreski; Nikica Mojsoska-Blazevski; Maja Ristovska; Edi Smokvarski
    Abstract: The objective of this study is to investigate whether youth in households receiving remittances in Macedonia have a higher probability of establishing their own business. In addition, we investigated whether the effect of remittances on youth labour supply is homogenous across the genders and across ethnic and rural/urban divides. We used the DotM 2008 Remittance Survey and the instrumental variables approach to address the potential endogeneity of remittances with respect to the self-employment status. Two instrumental variables were used which affect remittances, but not the decision to be self-employed, except through remittances: a non-economic motive to migrate, and the existence of migrants’ network. Moreover, we overcome some of the deficiencies of the IV estimation by applying the Roodman’s conditional mixed-process (CMP) estimator. Results robustly suggest that youth in households which receive remittances have considerably larger probability of establishing their own business, ranging between 28% and 33%, compared to their non-youth non-receiving counterparts. The main policy recommendation is that the Macedonian government should start devising a strategy for channelling remitted money into more productive use, especially converting those funds into jobs for youth.
    Keywords: remittances, migration, self-employment, Macedonia
    JEL: F24 J21
    Date: 2014
  35. By: Irena Dokic; Ivana Rasic Bakaric; Zlatan Fröhlich
    Abstract: The economic crisis has affected the EU regions very differently over the last five years, depending on the region's strengths or weaknesses, its sectoral structure and the response of national and regional governments. In some countries, downturns can lead to narrower interregional disparities, while in some can trigger regional divergence. Previous empirical studies indicate that there is a tendency for regional disparities to grow during recessions, and diminish in the period of economic growth (Dunford and Parron, 1994; Evans and MacCormic, 1994, Audas and Mackay, 1997). Although the reduction of regional disparities represents one of the priorities of EU regional policy and of Croatian regional policy, regional disparities within the Croatia are still significant. The current economic crisis that has emerged in the Croatian economy has already an enormous negative effect on several national and regional development indicators like GDP per capita, unemployment, and productivity. Some areas are coping with structural changes such as de-industrialization. In line with that the main aim of the paper is to find out if regional imbalances within Croatia have been more exposed by the current crises? This paper analyses the disparities between economic developments of Croatian counties before the crisis (before 2009) in comparison with the recession period. The analysis focuses on regional development index and other available socio-economic indicators (GDP per capita, unemployment rate). Obtained results can serve as a ground for improvements in Croatian regional economic policy. Keywords: economic crisis, regional disparities, convergence and divergence
    JEL: R11 R58
    Date: 2014–11
  36. By: Daniel Horn (Institute of Economics, Center for Economic and Regional Studies, Hungarian Academy of Sciences and ELTE, Department of Economics)
    Abstract: Although apprenticeship training has been praised for its effectiveness in smoothing the school-to-work transition of non-college bound students, most studies rely on cross country or cross track comparisons. This study compares apprenticeship training students with non-apprentices within educational track using a rich database and a unique set of observable individual level characteristics as well as local labor market fixed effects to control for the potential selection bias. The results show that there are no significant differences in employment chances between apprentices and non-apprentices within just a year after graduation. Although, in small subsamples of the population, significant differences can be found, these are most likely due unobserved heterogeneity. However, even if these observed differences are unbiased, they are more likely due to the superior screening of the larger firms rather than their superior training.
    Keywords: apprenticeship training, employment, screening, school-to-work transition, panel data
    JEL: J08 I21 I24 J24
    Date: 2014–08

This nep-tra issue is ©2014 by J. David Brown. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.