nep-tra New Economics Papers
on Transition Economics
Issue of 2015‒05‒22
twenty-one papers chosen by
J. David Brown
United States Census Bureau

  1. Сравнение институциональной структуры банковских систем России и Китая By Vernikov, Andrei
  2. Economic Transition and Labour Market Dynamics in China: An Interpretative Survey of the ‘Turning Point’ Debate By Prema-chandra Athukorala; Zheng Wei
  3. Declining trust in growing China: A dilemma between growth and socio-economic damage By Dai, Shuanping; Elsner, Wolfram
  4. Exchange Rate Pass-Through in an Emerging Market: The Case of the Czech Republic By Jan Hájek; Roman Horváth
  5. Fiscal Decentralization, Rural Industrialization, and Undocumented Labor Mobility in Rural China (1982-87) By Chen, Yiu Por (Vincent)
  6. Linkages of Macroeconomic Indicators of Competitiveness on the Example of Export and Transformational Performance in Selected Countries of the Visegrad Group Plus By Jan Nevima; Ingrid Majerová
  7. Effects of the Qms ISO 9000 Certification on Russian Manufacturing Companies By Veronika Vynaryk; Aoife Hanley
  8. How Has the Global Financial Crisis Affected Syndicated Loan Terms in Emerging Markets?: Evidence from China By Guglielmo Maria Caporale; Suman Lodh; Monomita Nandy
  9. CEI: a new indicator measuring City Commercial Credit Risk initiated in China By Ruonan Lin; Yi Gu
  10. R&D tax incentives in industry: empirical study among small and medium electronics manufacturing enterprises By Nina Bockova
  11. The Effect of Income on Trust: the Evidence from 2009 Crisis in Russia By Maxim Ananiev; Sergei Guriev
  12. Take-off, Persistence, and Sustainability : The Demographic Factor of Chinese Growth By Cai Fang, Lu Yang
  13. Regional specialisation as an endogenous factor in the development of Poland’s provinces By Dorota Milek; Paulina Nowak
  14. How You Export Matters: Export Mode, Learning and Productivity in China By Xue Bai; Kala Krishna; Hong Ma
  15. Small and medium enterprises and the support policy of local government By Mieczyslaw Adamowicz; Aldona Machla
  16. Współpraca transgraniczna małych i średnich przedsiębiorstw jako czynnik rozwoju regionalnego. Na przykładzie podregionu białostocko-suwalskiego i podregionu krośnieńsko-przemyskiego w Polsce, obwodu zakarpackiego na Ukrainie oraz obwodu Grodzieńskiego na Białorusi By Klimczuk, Andrzej; Klimczuk-Kochańska, Magdalena; Plawgo, Bogusław
  17. The Impact of Globalization on CO2 Emissions in China By Shahbaz, Muhammad; Khan, Saleheen; Ali, Amjad; Bhattacharya, Mita
  18. Перспективы развития федерального фонда обязательного медицинского страхования By Angelika, Lavrinenko
  19. A Narrative Indicator of Monetary Conditions in China By Sun, Rongrong
  20. Institutions and Poverty: A Critical Comment Based on Evolving Currents and Debates By Asongu, Simplice; Kodila-Tedika, Oasis
  21. Strengthening Skill use and School-to-work Transitions in the Czech Republic By Sónia Araújo; Petr Maleček

  1. By: Vernikov, Andrei
    Abstract: We use statistical data for the period 2000-2013 to compare the macro-level architecture and institutional features of the banking systems in China and Russia. Both countries have a hierarchical multi-tier banking system headed by a few core state-controlled banks that combine commercial activities with the activity of a development institution. We highlight selected aspects of the Chinese experience such as: conservatism in approving new banking licences; parallel evolution of various types of banking institutions operating in different market niches; care about systemically important institutions; enhancement of competition without a free market access for foreign banks; relevance of commercial bank loans for the fixed assets investment performed by non-financial companies.
    Keywords: China; Russia; banks; government
    JEL: G21 G28 P34 P52
    Date: 2014–11–01
  2. By: Prema-chandra Athukorala; Zheng Wei
    Abstract: Has the Chinese economy approached the ‘Lewisian turning point’ that marks the ending of the initial phase of industrial transformation fueled by surplus labour? In this paper we undertake an interpretative survey of the literature on this issue, in the context of China’s labour market conditions prior to the reforms and structural change of the past three decades. The available evidence is mixed, and our assessment makes a strong case for probing institutional constraints to labour mobility from an economy-wide perspective, going beyond the confines of the rural economy.
    Keywords: China, Lewis model, Surplus labour, economic transition
    JEL: O15 O14 O53 J30
    Date: 2015
  3. By: Dai, Shuanping; Elsner, Wolfram
    Abstract: Declining general trust has become a serious social issue in China in recent years. This paper attempts to understand and analyze this social phenomenon from a social interaction perspective. Based on a repeated prisoners´ dilemma game on networks, it finds that the evolution of general trust is dependent on changes of the social interaction structure, and the increases of both social and spatial distance may explain a decrease of the levels of cooperation and general trust. In addition, we find that the traditional Chinese family and clan networks culture has an ambiguous effect on general trust, and simple reactive social "homing behavior" might be critical for China´s future economic development. In order to recover the general trust level, a major strategic option for China, and for fast growing countries in economic transition in general, is to (re-)develop appropriate network structures and properties, as our model indicates.
    Keywords: economic transition,growth and development,migration,trust,games on networks,China
    JEL: B52 C72 D01 D02 D30 E24 O17 O43 O53 P21 Z10
    Date: 2015
  4. By: Jan Hájek (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic); Roman Horváth (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic; Institute for East and Southeast European Studies, Regensburg, Germany)
    Abstract: We examine exchange rate pass-through, or how domestic prices respond to exchange rate shocks, in the Czech Republic from 1998 to 2013 by employing vector autoregression models. Using the aggregate consumer price index and its sub-components, we find that the degree of passthrough is incomplete except for food prices. The peak response occurs between 9 and 13 months after the exchange rate shock. The long-term pass-through is approximately 50% at the aggregate level. The degree of pass-through is greater for tradables than for non-tradables. The results also suggest that the exchange rate pass-through becomes slower but more complete during the financial crisis experienced in period considered.
    Keywords: exchange rate pass-through, Czech Republic, inflation, vector autoregression
    JEL: E31 E52 E58 F31
    Date: 2015–04
  5. By: Chen, Yiu Por (Vincent) (City University of Hong Kong)
    Abstract: This paper explores the relationship between fiscal decentralization, which gave greater rural industrialization and fiscal authority to local governments, and the emergence of rural-rural undocumented inter-provincial labor migration during China's initial reform period. A Heckman model is employed to correct for the zero observation problems and to consistently estimate the labor mobility with a modified gravity equation. Given the institutional barriers, the fiscal decentralization has two contending effects on labor market integration: Local economic development promotes labor mobility, but local public goods crowding restrains the inflow of labor at the destination. The crowding effect is stronger at lower levels of government.
    Keywords: fiscal decentralization, local economic development, local public goods, rural labor mobility
    JEL: H30 J61 J68 D72
    Date: 2015–04
  6. By: Jan Nevima (Departament of Economics and Public Administration, School of Business Administration, Silesian University); Ingrid Majerová (Departament of Economics and Public Administration, School of Business Administration, Silesian University)
    Abstract: Export performance and transformational performance are some of indicators for measuring outputs through which macroeconomic competitiveness is reported. The first one shows the productivity of the export and the second one value added in foreign trade. This paper deals with the relationship of them in three selected countries – Czech Republic, Poland and Austria during the period 1995-2010. These countries belong to the members of Visegrad Group plus and are examined for two reasons: the first is geographic proximity and the second is the heterogeneous size, which plays important role. While the Czech Republic and Austria belongs to the small economies whose openness should be large (and research results should therefore be similar), Poland is ranked to the economies of medium size with an expected lower level of openness. It is considered that increasing productivity of foreign trade tend to increasing its value added and thus contribute to improvement of macroeconomic competitiveness. The observations were being proven by using the correlation and regression analysis. The positive relationship between export and transformational performance was found in all analyzed
    Keywords: macroeconomic competitiveness, export performance, transformational performance, comparison, correlation, regression analysis
    JEL: F14 O11 O57
    Date: 2015–05–08
  7. By: Veronika Vynaryk (National Research University Higher School of Economics); Aoife Hanley (Christian-Albrechts-University)
    Abstract: Here is an analysis of the effect of the ISO 9000 certification on the economical results of Russian companies through the use of the propensity score matching (PSM) method, a method which had proven itself reliable at dealing with the selection problems that were highly likely to arise in this research. Informational dataset is built on the basis of a sample of the Industrial companies competitiveness monitoring project, conducted in 2009 by the Institute for Industrial and Market Studies at HSE. The empirical study methodology is given: hypothesis, informational dataset and model of effects evaluation. The main finding of the paper is that holding the ISO 9001 certificate by a Russian manufacturing company stimulates its profitability and reduces costs, but does not lead to sales and asset turnover rises
    Keywords: quality management system, ISO 9000 certification effect, manufacturing companies
    JEL: C31 L15 P23
    Date: 2015
  8. By: Guglielmo Maria Caporale; Suman Lodh; Monomita Nandy
    Abstract: This paper examines the impact of the recent global financial crisis on the cost of debt capital (syndicated loans) in a leading emerging market, namely China, using difference-in-differences and GARCH approaches. Before the crisis China adopted banking reforms allowing entry of foreign banks and more domestic participation in the syndicated loan market. As a result, during the crisis the volume of syndicated loans grew steadily, in contrast to other countries. In addition, the amount of foreign syndicated loans decreased and average maturity increased compared to the precrisis period. Our findings provide useful information to policy makers to devise effective responses to financial crises.
    Keywords: Loan Spread, Loan Amount, Loan Maturity, China, Financial Crisis
    JEL: G21 G32 P34
    Date: 2015
  9. By: Ruonan Lin; Yi Gu
    Abstract: Aiming at quantifying and evaluating the regional commercial environment along with the level of economic development among cities in mainland China, the concept of China City Commercial Environment Credit Index(CEI) was first introduced and established in 2010. In this manuscript, a historical review and detailed introduction of CEI is included, followed by statistical studies. In particular, an independent statistical cross-check for the existing CEI-2012 is performed and significant factors that play the most in influential roles are discussed.
    Date: 2015–05
  10. By: Nina Bockova (Brno University of Technology)
    Abstract: The paper deals with the topic of direct and indirect support for research and development and its use in small and medium-sized enterprises operating in the electronic industry. The Czech Republic is the geographic segment to be explored. A chapter on theoretical issues is followed by a description of the current situation in the Czech Republic and abroad and access to legal support for research and development in the business sector. Primary data collected from a survey are analysed in the analytical part. Some small and medium-sized enterprises of chosen group of manufacturing industry focus on research and development performed by they own means and they searched the possibility of financing the research from various sources. The initiative of these enterprises increase considerably their competitiveness in the global market and they realize the necessity of the innovation policy in the strategic management of the business, but still they do not make full use of all available supports in research and development from public sources and instruments of fiscal policy, which allows the legislation of the Czech Republic.
    Keywords: small & medium-size enterprises, R&D tax deductible, own research and development, Czech Republic
    JEL: E61 H29 D92
    Date: 2015–05
  11. By: Maxim Ananiev (UCLA); Sergei Guriev (Département d'économie)
    Abstract: This paper draws on a natural experiment to identify the relationship between income and trust. We use a unique panel dataset on Russia where GDP experienced an 8 percent drop in 2009. The effect of the crisis had been very uneven among Russian regions because of their differences in industrial structure inherited from the Soviet times. We find that the regions that specialize in producing capital goods, as well as those depending on oil and gas, had a more substantial income decline during the crisis. The variation in the industrial structure allows creating an instrument for the change in income. After instrumenting average regional income, we find that the effect of income on generalized social trust (the share of respondents saying that most people can be trusted) is statistically and economically significant. Controlling for conventional determinants of trust, we show that 10 percent decrease in income is associated with 5 percentage point decrease in trust. Given that the average level of trust in Russia is 25%, this magnitude is substantial. We also find that post-crisis economic recovery did not restore pre-crisis trust level. Trust recovered only in those regions where the 2009 decline in trust was small. In the regions with the large decline in trust during the crisis, trust in 2014 was still 10 percentage points below its pre-crisis level.
    Keywords: social capital; trust; business cycle
    JEL: O10 P10
    Date: 2014–12
  12. By: Cai Fang, Lu Yang
    Abstract: With the reduction of the working-age population and the increase of the population dependency ratio as the main characteristics of the demographic dividend having disappeared, China’s potential growth rate decreases. And our results suggest that demographic dividend contributed to nearly one forth of the economic growth in China in the past three decades, while TFP growth explains another one third with the remainder mainly due to capital accumulation, explaining nearly half. China’s potential growth rate will slow down—from nearly 10 per cent in the past 30 years to 7.5 per cent on average during 2011-2015—due to the diminished demographic dividend, but reform measures are conductive to clearing the institutional barriers to the supply of factors and productivity, thereby slowing the declining trend of potential growth rate. The aggregate reform dividend (e.g., relax family planning policy, postpone the retirement age, improvement of education and training, tax cut, and improvement of TFP) could reach to 1-2 percentage points on average during 2016-2050.
    Keywords: potential growth rate, Demographic dividend, reform dividend, total factor productivity
    JEL: O47 J21 C53
    Date: 2015–04
  13. By: Dorota Milek (Kielce University of Technology); Paulina Nowak (Kielce University of Technology)
    Abstract: Regional and local development results from a complex interaction of many factors, including the development policy. Development priorities, contained in the strategic documents such as regional innovation strategies, emphasise building up the region’s competitive advantage by identifying and developing regional specialisations. Regions need to identify their strengths and weaknesses and they have to rely strongly on innovation to develop. The aim of the paper is to undertake a diagnostic assessment of the specialisations of Poland’s provinces, and also to validate that, in the context of the regional innovation policy, on the example of the swietokrzyskie province. The paper employs the Krugman dissimilarity index, which is computed on the basis of a comparison of a given region’s economic structure with average structure of other regions.
    Keywords: economic development of the country, regional innovation policy, regional specialisation, Krugman index
    JEL: A11 B16
    Date: 2015–05
  14. By: Xue Bai; Kala Krishna; Hong Ma
    Abstract: This paper shows that how firms export (directly or indirectly via intermediaries) matters. We develop and estimate a dynamic discrete choice model that allows learning-by-exporting on the cost and demand side as well as sunk/fixed costs to differ by export mode. We find that demand and productivity evolve more favorably under direct exporting, though the fixed/sunk costs of this option are higher. Our results suggest that had China not liberalized its direct trading rights when it joined the WTO, its exports and export participation would have been 30 and 37 percent lower respectively.
    JEL: F13 F14 L1
    Date: 2015–05
  15. By: Mieczyslaw Adamowicz (Pope John Paul II State School of Higher Education in Biala Podlaska); Aldona Machla (Warsaw University of Life Sciences)
    Abstract: Subjects of research are small and medium enterprises in local scales of Pultusk town and community and policy of local authorities related to SME sector. The main task of research is an avaluation, in random sample of enterpreneurs, of the SME support system and instruments used by local authorities. Results of empirical survey were suttled in subject literature analysis and presented by comparing to the national charakteristics of MSE sector and its structure in Poland, and linking these to general suport policy by central and lokal governments.
    Keywords: Small and Medium Enterprises Sector, support policy for SME, Pultusk town and community, development factors and barriers for SME
    JEL: A11
    Date: 2015–05
  16. By: Klimczuk, Andrzej; Klimczuk-Kochańska, Magdalena; Plawgo, Bogusław
    Abstract: Polish Abstract: W niniejszej publikacji zawarto wyniki przeprowadzonych badań przedsiębiorstw oraz eksperckie analizy na temat wpływu współpracy transgranicznej na konkurencyjność małych i średnich przedsiębiorstw, a przez to wzmocnienie procesów rozwojowych w regionach peryferyjnych. Badania były prowadzone w ramach projektu „Rozwój transgra-nicznej współpracy gospodarczej Podregionu białostocko-suwalskiego i Obwodu grodzieńskiego na Białorusi oraz Podregionu krośnieńsko-przemyskiego i Obwodu Zakarpackiego na Ukrainie" współfinansowanego ze środków Unii Europejskiej w ramach Programu Współpracy Transgranicznej Polska-Białoruś-Ukraina 2007-2013. Projekt był realizowany przez Białostocką Fundację Kształcenia Kadr we współpracy z Partnerem z Białorusi, Państwowym Uniwersytetem im. Janki Kupały w Grodnie oraz z Partnerem z Ukrainy, Fundacją Rozwoju Współpracy Transgranicznej z Użhorodu. English Abstract: This publication contains the results of the research companies and expert analysis on the impact of cross-border cooperation on the competitiveness of small and medium-sized enterprises, thereby strengthening development processes in the peripheral regions. The research was conducted within the framework of the project "Development of cross-border economic co-operation subregion Bialystok-Suwalki and Grodno region of Belarus and subregion Przemysl and Krosno with Transcarpathian Oblast in Ukraine" co-financed by the European Union under the Cross-Border Cooperation Programme Poland-Belarus-Ukraine 2007-2013. Bialystok Personnel Training Foundation implemented the project in cooperation with a partner from Belarus State University in Grodno and partner of Ukraine, Foundation for the Development of Cross-Border Cooperation of Uzhhorod.
    Keywords: cross-border cooperation, peripheral regions, regional development, regional policy
    JEL: F23 P48 R58
    Date: 2015
  17. By: Shahbaz, Muhammad; Khan, Saleheen; Ali, Amjad; Bhattacharya, Mita
    Abstract: This paper examines the Environmental Kuznets Curve (EKC) hypothesis for China in the presence of globalization. We have applied Bayer and Hanck combined cointegration test as well as the ARDL bounds testing approach to cointegration by accommodating structural breaks in the series. The causal relationship among the variables is investigated by applying the VECM causality framework. The study covers the period of 1970-2012. The results confirm the presence of cointegration among the variables. Furthermore, the EKC hypothesis is valid in China both in short-and-long runs. Coal consumption increases CO2 emissions significantly. The overall index and sub-indices of globalization indicate that globalization in China is decreasing CO2 emissions. The causality results reveal that economic growth causes CO2 emissions confirming the existence of the EKC hypothesis. The feedback effect exists between coal consumption and CO2 emissions. CO2 emissions Granger causes globalization (social, economic and political).
    Keywords: China, Coal Consumption, Globalization, CO2 emissions
    JEL: A1 A10
    Date: 2015–01–01
  18. By: Angelika, Lavrinenko
    Abstract: Due to the deterioration of the Russian economy on the background of instability in the ruble exchange rate and the fall in oil prices, according to the anti-crisis plan, the decision was made on the annual budget spending cuts. Despite the fact that within the framework of the plan expenditure on social services, including health sector should remain at the same level, in practice, there are some changes, in which the author is important to understand.
    Keywords: Mandatory Medical Insurance, Federal Mandatory Health Insurance Fund, anti-crisis plan, Health
    JEL: H40
    Date: 2015–02–08
  19. By: Sun, Rongrong
    Abstract: In this paper, we apply the narrative approach, studying the PBC's historical records, to infer policy-makers' intentions and thereby build a time series of monetary policy indicator. We show that our narrative policy indicator is informative about economic activity. Changes in it reflect the PBC's responses to its perceptions of economic conditions. It is a good indicator of monetary policy actions. Finally, we show that compared to monetary aggregates, changes in interest rates and the required reserve ratio are more associated with changes in monetary policy, as measured by our narrative indicator, but only to a limited degree. None of them alone can be a good proxy of policy indicator.
    Keywords: the narrative-based policy indicator, quantitative policy measures, VAR, predictive power
    JEL: E52 E58
    Date: 2015
  20. By: Asongu, Simplice; Kodila-Tedika, Oasis
    Abstract: Tebaldi & Mohan (2010, JDS) have established an empirical nexus between institutions and monetary poverty. We first, reflect their findings in light of recent development models, debates and currents in post-2010 literature. We then re-examine their results with a non-monetary and multidimensional poverty indicator first published in 2010. Our findings confirm the negative relationship and the nexus disappears with control for average income. Hence, confirming the conclusions of the underlying study that institutions could have an indirect effect on multidimensional poverty. In other words, the poverty eradication effect of institutions is through income-average as opposed to income-inequality. We discuss the confirmed findings in light of implications to: (1) debates over preferences in economic rights; (2) China’s development/outlook; (3) the Chinese model versus sustainable development; (4) the Fosu conjectures; (5) Piketty’s & Kuznets’ celebrated literatures and (6) future research to ascertain the inequality mechanism.
    Keywords: poverty; institutions
    JEL: I32 O11 O17 O43 P14 P16
    Date: 2014–12
  21. By: Sónia Araújo; Petr Maleček
    Abstract: The education system has reacted slowly to changes in labour market needs, leading to an increasing number of school leavers without sufficient qualification. In addition, declining PISA scores and a rising share of low achievers are raising concerns about the quality of the future labour force. These factors play a role in the stalled income convergence process. Indeed, practices such as early tracking, streaming and low transferability between academic tracks hamper employability, human capital accumulation and social mobility. In the vocational education and training system, resources continue to be allocated on a historical basis. A more endogenous adjustment of the system to better align students’ qualifications with labour market needs requires active participation of social partners, students and education institutions. The rapid expansion of tertiary education without a corresponding increase in resources has led to fears about declining quality. Quality in tertiary education can be fostered by modifying the accreditation system, introducing student fees, strengthening the links with the private sector and foreign research networks and publicising information on labour market outcomes by field of study and higher education institution. Measures to better balance family and work lives can improve career options for women and therefore reduce the current tensions between having children and full time labour market participation of younger women. This could also ease the coming labour shortages associated with population ageing. This Working Paper relates to the 2014 OECD Economic Review of the Czech Republic (<P>Renforcer l'utilisation des compétences et faciliter le passage de l'ecole à la vie active dans la République Tchèque<BR>Le système éducatif a réagi lentement aux changements des besoins du marché du travail, ce qui a conduit à une augmentation du nombre de jeunes quittant l'enseignement sans qualification suffisante. En outre, la baisse des résultats PISA et la proportion croissante d’élèves avec une faible performance soulèvent des inquiétudes quant à la qualité de la main-d'oeuvre future. Ces facteurs jouent un rôle dans le processus stagnant de convergence des revenus. En effet, des pratiques telles que l'orientation précoce des élèves, le regroupement par aptitude et l’insuffisance de passerelles entre les voies scolaires entravent l'employabilité, l'accumulation de capital humain et la mobilité sociale. Dans le système d'enseignement et formation professionnels, les ressources continuent d'être allouées sur une base historique. Un ajustement plus endogène du système afin de mieux harmoniser les qualifications des étudiants avec les besoins du marché du travail exige la participation active des partenaires sociaux, des étudiants et des établissements d’enseignement. L'expansion rapide de l'enseignement supérieur sans l’augmentation correspondante des ressources a conduit à des craintes de baisse de la qualité. La qualité dans l'enseignement supérieur peut être favorisée par la modification du système d'accréditation, l'introduction de frais de scolarité, le renforcement des liens avec le secteur privé et les réseaux de recherche étrangers et la publication d’informations sur le marché du travail par domaine d'études et établissement d'enseignement supérieur. Des mesures pour trouver un meilleur équilibre entre la vie de famille et le travail peuvent améliorer les options de carrière pour les femmes et réduire les tensions actuelles entre le choix d'avoir des enfants et la participation à temps pleins au marché du travail des jeunes femmes. Ceci pourrait également soulager la pénurie de main-d'oeuvre à venir liée au vieillissement de la population. Ce document de travail se rapporte à l'Étude Économique de l'OCDE de la République Tchèque 2014 ( ique-republique-tcheque.htm).
    Keywords: tertiary education, Czech Republic, PISA, skills, early childhood education and care, labour market, youth unemployment, vocational education and training, female labour market participation, participation au marché du travail des femmes, compétences, chômage des jeunes, enseignement et formation professionnelle, éducation et accueil des jeunes enfants, PISA, enseignement supérieur, marché du travail, République tchèque
    JEL: I20 I23 I24 I28 J21 J24
    Date: 2015–05–06

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