nep-tra New Economics Papers
on Transition Economics
Issue of 2015‒03‒05
twelve papers chosen by
J. David Brown
United States Census Bureau

  1. Impacts of the World Trade Organization on Chinese Exports By WAKASUGI Ryuhei; ZHANG Hongyong
  2. Do Initial Conditions Matter? A comparative analysis of SME Development in Russia, Kazakhstan, and Uzbekistan By Kan, Viktoriya
  3. Multinational resilience or dispensable jobs? : German FDI and employment in the Czech Republic around the Great Recession By Eisermann, Merlind; Moritz, Michael; Stockinger, Bastian
  4. Influence network in Chinese stock market By Ya-Chun Gao; Yong Zeng; Shi-Min Cai
  5. Income-Related Children's Health Inequality and Health Achievement in China By Lu Chen; Ya Wu; Peter Coyte
  6. School Of Autocracy: Pensions And Labour Reforms Of The First Putin Administration By Ivan S. Grigoriev; Anna A. Dekalchuk
  7. Look For People, Not For Alpha: Mutual Funds Success And Managerial Intellectual Capital By Iuliia N. Naidenova; Petr A. Parshakov; Marina A. Zavertiaeva; Eduardo Tome
  8. Determinants of total factor productivity of Polish districts. The impact of territorial capital By Dorota Ciołek; Tomasz Brodzicki
  9. The Central European Manufacturin Core: What is Driving Regional Production Sharing? By Rober Stehrer; Roman Stöllinger
  10. Education in transition and job mismatch: Evidence from the skills survey in non-EU transition economies By Olga Kupets
  11. Shell Games: Are Chinese Reverse Merger Firms Inherently Toxic? By Lee, Charles M. C.; Li, Kevin K.; Zhang, Ran
  12. The long-term trends on Russian electricity market: comparison of empirical mode and wavelet decompositions By Afanasyev, Dmitriy; Fedorova, Elena

  1. By: WAKASUGI Ryuhei; ZHANG Hongyong
    Abstract: Chinese exports dramatically increased in the early 2000s as China reformed its economy to become more free and open via its entry into the World Trade Organization (WTO), which clearly affected the productivity and exports of Chinese firms. This paper, using firm-level panel data from the Chinese electric machinery, electronics equipment, and telecommunications equipment industries, confirms that after the entry into the WTO, the export decision of Chinese firms was accelerated by a rise in productivity that was not uniform among the ownership structures. By disaggregating the firms into three groups—private domestic firms (PDFs), state-owned enterprises (SOEs), and foreign invested enterprises (FIEs)—our empirical estimation reveals that the economic reform via the entry into the WTO had a "productivity effect" on Chinese exports which commonly enhanced firms' exports according to their productivity levels, but had an asymmetric "ownership effect" on their exports among the three groups, which was less favorable for exports of SOEs in comparison with that of FIEs and PDFs.
    Date: 2015–02
  2. By: Kan, Viktoriya
    Abstract: This paper considers the economic factors behind major differences that emerged in the extent of development of SMEs in Russia, Kazakhstan, and Uzbekistan during the transition period. Taking into account problems of the Soviet-type centrally planned economic system as its initial conditions and using primary sources including laws and regulations, as well as data sources including the national statistical agencies for each country, the paper analyzes the determinants of development trends for SMEs across these three countries. Special attention is paid to macroeconomic factors such as the initial level of development of cooperatives, the impact of transition policies on business activity, the initial level of industrialization, and some demographic factors related to both demand- and supply-side determinants of entrepreneurship that are implicated in either inhibiting or promoting SME development during the transition period in each country.
    Date: 2015–02
  3. By: Eisermann, Merlind (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Moritz, Michael (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Stockinger, Bastian (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: This article investigates the employment development of Czech-based firms in German ownership in the years around the Great Recession of 2008/2009. The intense involvement of German firms in the economy of the neighboring country via foreign direct investment (FDI) raises the question whether under the conditions of a historically deep global downturn, Czech employees in multinational companies were confronted with an increased volatility of their jobs. Using a unique firm-level dataset, we contrast the affiliates of German investors with purely Czech-owned enterprises. Our findings indicate that in the years before the crisis, firms with German capital exhibited a noticeably more positive employment development. The results from the year 2008 onwards give reason to the conclusion that German-owned firms played a stabilizing role for the Czech labor market during the recession.
    JEL: F23 J21 G01
    Date: 2015–03–02
  4. By: Ya-Chun Gao; Yong Zeng; Shi-Min Cai
    Abstract: In a stock market, the price fluctuations are interactive, that is, one listed company can influence others. In this paper, we seek to study the influence relationships among listed companies by constructing a directed network on the basis of Chinese stock market. This influence network shows distinct topological properties, particularly, a few large companies that can lead the tendency of stock market are recognized. Furthermore, by analyzing the subnetworks of listed companies distributed in several significant economic sectors, it is found that the influence relationships are totally different from one economic sector to another, of which three types of connectivity as well as hub-like listed companies are identified. In addition, the rankings of listed companies obtained from the centrality metrics of influence network are compared with that according to the assets, which gives inspiration to uncover and understand the importance of listed companies in the stock market. These empirical results are meaningful in providing these topological properties of Chinese stock market and economic sectors as well as revealing the interactively influence relationships among listed companies.
    Date: 2015–03
  5. By: Lu Chen; Ya Wu; Peter Coyte
    Abstract: This study assessed income-related health inequality and health achievement in children in China, and additionally, examined province-level variations in health achievement. Longitudinal data on 19,801 children under 18 years of age were derived from the China Health and Nutrition Survey. Income-related health inequality and health achievement were measured by the Health Concentration and Health Achievement Indices, respectively. Panel data with a fixed effect multiple regression model was employed to examine province-level variations in health achievement. A growing trend was towards greater health inequality among Chinese children over the last two decades. Although health achievement was getting better over time, the pro-rich inequality component has lessened the associated gain in achievement. Health achievement was positively impacted by middle school enrollments, the urbanization rate, inflation-adjusted per capita gross domestic product, and per capita public health spending. This study has provided evidence that average health status of Chinese children has improved, but inequality has widened. Widening inequality slowed the growth in health achievement for children over time. There were wide variations in health achievement throughout China.
    Keywords: child health inequality, concentration index, health achievement
    JEL: D63 I14 J13
    Date: 2015–02
  6. By: Ivan S. Grigoriev (National Research University Higher School of Economics); Anna A. Dekalchuk (National Research University Higher School of Economics)
    Abstract: The early 2000s marked a surge in uncertainty in Russian politics caused by the succession crisis and the profound political turnover it triggered. This uncertainty could resolve in a number of ways, each leading to a different political development. We trace the actual way out of this uncertainty and suggest that the major factor to condition the further regime trajectory was the way reforms were conducted. The article questions the teleological approach that sees government as knowingly and purposefully building autocracy, and contributes to the tradition emphasizing the plurality of possible regime developments (Golosov 2011) and the role of contingency therein (Hale 2004) by providing a more systematic treatment of such contingency. We use insights from basic coordination game theory and cognitive institutionalism to show how local reform practices become accepted as a trusted way of interaction by political actors and stick with the regime in a path dependent manner. This intuition is substantiated with a case-study of pensions and labour reforms. Course of these reforms determined the major features of the Putin regime, such as building up a single party of power, crowding out the political market, opposition decay, and informal institutionalisation
    Keywords: autocratic learning; policy feedback; uncertainty; labour reform; pensions reform; Putin's Russia.
    JEL: H55 J58
    Date: 2015
  7. By: Iuliia N. Naidenova (National Research University Higher School); Petr A. Parshakov (National Research University Higher School); Marina A. Zavertiaeva (National Research University Higher School); Eduardo Tome (Universidade Europeia)
    Abstract: This is the first paper to explore which characteristics of Russian fund managers are connected with a higher abnormal return (measured by Jensen’s alpha) and risk (beta) for mutual funds. While only some fund managers publish biographic sketches we use the Heckman procedure to control for self-selection issues. The results support the idea that individual characteristics indicate the possibility to earn abnormal alpha. The relationship between both fund performance measures and manager experience has inverted U-shape. The results can be used as a simple screening system that helps to choose a mutual fund to invest in without sophisticated calculations
    Keywords: Russia, equity funds, individual intellectual capital, Jensen’s alpha
    JEL: J24 G11 G23 M50
    Date: 2015
  8. By: Dorota Ciołek (Institute for Development, Sopot, Poland; University of Gdansk, Faculty of Economics, Department of Macroeconomics, Gdańsk, Poland); Tomasz Brodzicki (University of Gdansk, Faculty of Economics; Institute for Development)
    Abstract: In contrast to most previous analyzes in the present study we have adopted a highly spatially disaggregated NUTS-4 level, or districts, which is particularly relevant for analysis of spatial and territorial interactions and relationships. At this level of aggregation presence of various externalities and spillovers in development processes can be detected. Territorial capital, as a specific carrier concept of territorial cohesion is significantly different from the classical factors of production. We thus can assume that the territorial capital does not affect directly the production, but indirectly through the impact on TFP. The analysis uses different specifications of an econometric model with TFP as the dependent variable. We attempt to identify potential interactions between spatial districts. This requires, however, determination of the value of GDP per capita of Polish districts and, secondly, estimation of TFP for counties. The results are very interesting and to a large extent in line with theoretical postulates. On the basis of in-depth discussion of the results obtained we have developed a series of recommendations for economic policy. The paper uses the results of the project financed by the Polish National Science Centre “Concept of the territorial cohesion in cohesion policy. Implications for Economic Growth" (no. 2012/05/B/HS4/04212).
    Keywords: regional development, estimation of GDP per capita, TFP determinants, territorial capital, spatial econometrics
    JEL: O40 O47 R11 R12 C31
    Date: 2015–01
  9. By: Rober Stehrer; Roman Stöllinger
    Abstract: There is evidence that Europe’s manufacturing activity is increasingly concentrated in a Central European (CE) core which the IMF in a recent publication also refers to as the German-Central European supply chain. This CE manufacturing core is dominated by Germany and in addition comprises Austria and the four Visegrád countries (the Czech Republic, Slovakia, Hungary and Poland). The case of Austria is particularly interesting because it is neither the primary technology leader within the country group, nor is it an offshoring destination and therefore takes an intermediate position. This study provides further empirical evidence for the growing concentration of European industrial production in the CE manufacturing core and explores in detail the structure and development of the regional supply chains over the period 1995-2011. This includes an analysis of the impact of international production integration on the value added share of manufacturing in the economy. The econometric results point towards differentiated effects for the members of the CE manufacturing core and the remaining EU Member States. Focusing on value added generated by the manufacturing sector, the industries which build the backbone of this regional manufacturing cluster are identified. Finally, the report investigates which factors are conducive to the intensification of international production sharing. In line with the notion of a production-investment-services nexus, it is found that (inward) FDI in the manufacturing sector is associated with higher degrees of production integration. Again, the econometric evidence suggests that some of the factors explaining international production sharing, such as the level of export sophistication, have differentiated effects for the members of the CE manufacturing core as compared to the other EU countries.
    Keywords: European manufacturing, production integration, global value chains, structural change
    JEL: F14 F15 L16
    Date: 2015–02
  10. By: Olga Kupets (Associate Professor, Department of Economics, National University of “Kyiv-Mohyla Academy”)
    Abstract: This paper explores the incidence and determinants of education‐job vertical mismatch in four non-EU transition economies, namely Armenia, Georgia, Macedonia and Ukraine. It uses cross‐section data from the recent World Bank’s Skills toward Employment and Productivity (STEP) surveys of working-age urban population and applies several methods of measuring the incidence of education‐job mismatch. The particular interest is to examine whether the young generation that acquired education in modern economic environment is different from the older generation that studied before or shortly after the onset of transition, and whether overeducated and undereducated workers are different from those who are well-matched in terms of cognitive and non-cognitive skills. Our study shows that although workers from the older pre-transition cohort have relatively higher incidence of overeducation in Georgia and Armenia and lower incidence of overeducation in Ukraine and Macedonia as compared to younger workers from the transition cohort, the effect of cohort and age is rarely significant when other important characteristics are taken into account. Overeducated individuals seem to possess a relatively worse bundle of skills than workers who are adequately matched to their jobs in terms of formal education, undereducated individuals often perform better than well-matched workers, but the differences are not always significant.
    Date: 2015–02
  11. By: Lee, Charles M. C. (Stanford University); Li, Kevin K. (University of Toronto); Zhang, Ran (Peking University)
    Abstract: We examine the financial health and performance of reverse mergers (RMs) that became active on U.S. stock markets between 2001 and 2010, particularly those from China (around 85% of all foreign RMs). As a group, RMs are small, early-stage companies that typically trade over-the-counter. Chinese RMs (CRMs), however, tend to be more mature and less speculative than either their U.S. counterparts or a group of exchange-industry-size matched firms. Collectively, CRMs outperformed their matched peers from inception through the end of 2011, even after including most of the firms accused of accounting fraud. CRMs that receive private-equity (PIPE) financing from sophisticated investors perform particularly well. Overall, despite the negative publicity (some from short sellers), we find little evidence that CRMs are inherently toxic investments. Our results shed light on the risk-performance trade-off for CRMs, as well as the delicate balance between credibility and access in well-functioning markets.
    JEL: G34 M41 N20
    Date: 2014–03
  12. By: Afanasyev, Dmitriy; Fedorova, Elena
    Abstract: The problem of trend-cyclic component filtering from price time-series arises in many commodity market studies, including those of wholesale electricity market. The long-term component filtering is an important part of price analysis since incorrect determination of this component may result in substantial risk underestimation, distorted expectations of both consumers and power generating companies, as well as financial losses. A great strand of literature on this topic proposes quite a lot of approaches and procedures for solving this problem, but all of them suffer from two principal flaws: (1) inability to deal with non-stationary and nonlinear processes; (2) assumption of an "a priori", knowledge of the phenomenon being studied. The complete ensemble empirical mode decomposition with adaptive noise (CEEMDAN) allows to effectively overcome these flaws and is expected to produce more adequate results as compared to other methods. In order to check this, we compare the performance of CEEMDAN with the ordinary EMD and yet another well-known approach - the wavelet-decomposition, with an example of the Russian day-ahead electricity market (price zones Europe-Ural and Siberia). Our results shows that the CEEMDAN is much more effective than the standard EMD and is comparable with the wavelet-decomposition (in terms of trend estimation error). At the same time, we found that there are some real data problems with the criterion of the number of low-frequency modes that are included into trend.
    Keywords: electricity market, trend-cyclic component, complete ensemble empirical mode decomposition with adaptive noise (CEEMDAN), wavelet-decomposition
    JEL: C14 C63 C90 L94
    Date: 2015–02–24

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