nep-tra New Economics Papers
on Transition Economics
Issue of 2015‒11‒01
58 papers chosen by
J. David Brown
United States Census Bureau

  1. Diagnosing Growth Constraints in Central Asia: The Case of the Kyrgyz Republic By Meerim Sydykova
  2. Entrepreneurship and transition in the European transition countries By László Szerb; William Trumbull
  3. Forming of the new ethnic image of St.Petersburg By Anton Krasnov; Dmitriy Zhitin
  4. Trends in inter-city inequalities in level of living in Russia By Anna Bufetova
  5. Interregional Differentiation of the Youth Unemployment Rate in Russia By Tatiana Blinova; Vladimir Markov; Victor Rusanovskiy
  6. Crisis and conversion of industrial port complex: the case of Gdansk (Poland) By Maria Lorek
  7. Role of SMEs in regional innovation systems in Russia By Vera Barinova; Stepan Zemtsov; Alla Sorokina
  8. Opportunities and benefits of local content requirement policy: case of Eastern Siberian oil and gas industry By Irina Semykina
  9. Regional convergence and economic development in the EU: the relation between national growth and regional disparities within the old and the new member states By Hans Kramar
  10. Determinants of machinery firms´ innovation activity - case study from the Czech Republic By Viktor Prokop; Jan Stejskal
  11. An Increase in the Retirement Age in China: The Regional Economic Effects By Nicolaas Groenewold; Anping Chen
  12. SME?s cluster identification in Russia By Vera Barinova; Stepan Zemtsov
  13. Cultural Values as Predictors of Positive or Negative Attitude Towards Innovation Among Representatives of Various Generations of Russian People By Vera A. Fedotova
  14. Measuring the effect of agricultural cooperatives on household income using PSM-DID : a case study of a rice-producing cooperative in China By Hoken, Hisatoshi; Su, Qun
  15. Transport Infrastructure, Urban Growth and Market Access in China By Nathaniel Baum-Snow; J. Vernon Henderson; Matthew Turner; Loren Brandt; Qinghua Zhang
  16. Central Bank Independence and Inflation in Transition Economies: A Comparative Meta-Analysis with Developed and Developing Economies By Iwasaki, Ichiro; Uegaki, Akira
  17. Contest as a method of exposure of the quality of municipal strategies By Boris Zhikharevich; Taras Pribyshin
  18. Conceptual Bases of Creation and Functioning of a Mega-Regulator of the Financial Market in Russia By Turbanov, Aleksandr; Oleg, Ivanov; Yudenkov, Yuri; Nikolay, Evstratenko; Mikitasov, Oleg
  19. Implementing Loan-To-Value and Debt-To-Income ratios: Learning from country experiences. The case of Poland By Beata Bierut,; Tomasz Chmielewski; Adam Głogowski,; Sławomir Zajączkowski; Andrzej Stopczyński
  20. Knowledge economy formation in Russian regions in 2000th By Stepan Zemtsov; Vyacheslav Baburin
  21. Commute time and subjective well-being in urban China By Nie, Peng; Sousa-Poza, Alfonso
  22. Effects of Cultural Diversity on Economic Performance in Russian Regions By Marina Nesena; Leonid Limonov
  23. Analysing spatial concentration of Hungarian knowledge intensive manufacturing sectors on city-region level 1996-2012 By Izabella Szakálné Kanó
  24. Wage and price setting behaviour of Lithuanian firms: survey-based evidence for 2008–2009 and 2010–2013 By Pesliakaite, Jurgita; Šiaudvytis, Tomas
  25. Dynamic Elasticities of Tax Revenue: Evidence from the Czech Republic By Tomas Havranek; Zuzana Irsova; Jiri Schwarz
  26. Spatial Aspects of Agent-Based Modeling of Large Economy By Larisa Melnikova; Victor Suslov; Alexander Tsyplakov; Naimdjon Ibragimov; Dmitry Domozhirov; Vitaly Kostin
  27. The Regional Effects of Macroeconomic Shocks in China By Anping Chen; Nicolaas Groenewold
  28. The Concept of the Federal Law on Public Administration in the Russian Federation By Yuzhakov, Vladimir Nikolaevich; Talapina, E. V.; Alexandrov, Oleg; Tikhomirov, Y. A.; Dobrolyubova, Elena
  29. Return-on-investment of public investments to systems which provide public services ? a case study By Simona Pichova; Jan Stejskal
  30. The Economic Effect of the EU Eastern Enlargement for Border Regions in the Old Member States By Pia Wassmann
  31. Economic slowdown in China: Current assessment and global implications By Gern, Klaus-Jürgen; Hauber, Philipp; Potjagailo, Galina
  32. Saving and loan associations vs. commercial banks in Estonia: Responses to the financial crisis By Egle Tafenau
  33. Dependence of spatial effects on the level of regional aggregation, weights matrix, and estimation method By Olga Demidova; Tatiana Bukina; Natalia Sverchkova
  34. The late turn-out of the Slovak star-up factories: locational and institutional factors By Oto Hudec; Marek Lavcak
  35. The role of SMEs in sustainable regional development and local business integration: The case of Lublin region (Poland) By Anna Arent; Matylda Bojar; Nelson Duarte; Francisco Diniz
  36. Provincial Public Expenditure in China: A Tale of Profligacy By Jean-Louis Combes; Mary-Françoise Renard; Sampawende Jules Tapsoba
  37. The size and determinants of fiscal multipliers in Western Balkans: comparing Croatia, Slovenia and Serbia By Milan Deskar Škrbić; Hrvoje Šimović
  38. The least innovative regions in Poland and in France in the process of smart specialisation By Anna Golejewska; Dorota Czy¿ewska
  39. Exploring the impacts of water resources on economic development in Beijing-Tianjin-Hebei Region By Xiaoxia Lin; Jinghua Sha; Jingjing Yan
  40. Head Office Assignment as a Determining Factor of Subsidiary Upgrading in the Clothing Industry in Albania By Jolta Kacani; Lucas Van Wunnik
  41. Essays on the Export Performance of Vietnam/Essais sur la Performance à l'Exportation du Vietnam By Hanh Vu Thi
  42. Influential factors of the Hungarian territorial income By Dora Szendi
  43. Urban-Rural Differences in Level of Various Forms of Trust in Hungary By Tamas Dusek; Eva Palmai
  44. Social Networks and Employment Performances: Evidence from Rural – Urban Migration in Vietnam By Dang, Duc Anh
  45. Are the children of uneducated farmers doubly disadvantaged ? farm, nonfarm and intergenerational educational mobility in rural China By Emran,M. Shahe; Sun,Yan - EAPCE
  46. " I Even Met Happy Gypsies " : Life Satisfaction of Roma Youth in the Balkans By Laetitia Duval; François-­charles Wolff
  47. The well-being of Russian cities: does location matter? By Vera Ivanova
  48. The Synergistic Effect of Public Procurement in the Economies of the Common Economic Space By Agapova, E.; Grinenko, A. V.; Lobov, Artem; Tatarnikov, A. S.
  49. A Spatial Analysis of Tourism Activity in Romania By Daniela-Luminita Constantin; Adriana Elena Dardala
  50. Determinants of new business formation in China: Regional evidence from a panel data model By Martin Borowiecki; Karl-Heinz Leitner
  51. Economic Role of Population Density By Yuri Yegorov
  52. The impact of firm financing constraints on R&D over the business cycle By Kadri Männasoo; Jaanika Meriküll
  53. Spatial Competition and Transport Infrastructure: The Case of Moscow Office Rental Market By Tatiana Mikhailova
  54. Long-lasting Labour Market Consequences of German Unification By Joachim Möller; Uwe Blien; Phan thi Hong Van; Stephan Brunow
  55. Exploring city social interaction ties in the big data era: Evidence based on location-based social media data from China By Wenjie Wu; Jianghao Wang
  56. Effect of the centrifugal and centripetal forces in core versus (semi)periphery in Central Europe countries By Martin Maris
  57. Effects of RoHs and REACH regulations on firm-level production and export, and the role of global value chains : the cases of Malaysia and Vietnam By Otsuki, Tsunehiro; Honda, Keiichiro; Michida, Etsuyo; Nabeshima, Kaoru; Ueki, Yasushi
  58. Environmental Spillovers from Foreign Direct Investment: Firm-level evidence from Vietnamese manufacturing (Japanese) By JINJI Naoto; TSURUMI Tetsuya

  1. By: Meerim Sydykova
    Abstract: The Kyrgyz Republic is a country with transition economy. Its growth performance is constantly one of the lowest compared to other CIS countries. Growth rates reduce due to strong political instability and high corruption level in the country. Despite being leading reformer in the region, the Kyrgyz Republic has not done enough to solve the key problems. The main objective of this paper is to identify the most problematic and binding constraints for economic growth in the Kyrgyz Republic. Growth Diagnostic approach proposed by Hausmann et al. (2005) is applied in order to identify the most binding constraints. The analysis is based on qualitative and quantitative data on economic indicators at national and international levels. The CIS countries such as Armenia, Azerbaijan, Georgia, Belarus, Kazakhstan, Moldova, Russia, Tajikistan, Turkmenistan and Uzbekistan were chosen as comparator group of countries. Data for this study were collected from the research, publications, reports of the National Bank of the Kyrgyz Republic, the National Statistical Committee of the Kyrgyz Republic as well as statistical data published by the World Bank, IMF?s World Economic Outlook, UNDATA, Economic Freedom network, Global economic Forum, the Heritage Foundation and etc.. Time period is from 2004 till 2013 years. The results of the study were used to identify the most problematic factors for economic growth of the country. The study indicates that the most binding constraints for economic growth in the Kyrgyz Republic are (a) widespread corruption, (b) weak property rights, (c) inefficient energy sector and (d) low quality of education system. The same results were confirmed by ADB studies that found corruption level is the highest compared to other CIS countries and it is the strongest obstacle for growth. Despite the fact that the Kyrgyz Republic is the second richest country in water resources, it faces number of problems such as low productivity, outdated equipment from Soviet Union era, shortage of qualified workers and low efficiency. Lack of qualified labor force and low quality of education system is also binding constraint for growth for The Kyrgyz Republic. The Kyrgyz Republic ranked the lowest in comparison with comparator countries on all indicators assessing the quality and quantity of educational system. This paper is organized as follows: section 2 provides literature review on Growth Diagnostic methodology, section 3 gives an overview of economic development of the Kyrgyz Republic, section 4 is an analytical part which provides analysis of the Kyrgyz Republic?s economy. The final part gives concluding remarks.
    Keywords: development economics; economic growth; growth diagnostic
    Date: 2015–10
  2. By: László Szerb; William Trumbull
    Abstract: Objectives: This paper aims to examine the transition process from the development and state of entrepreneurship in 15 former European socialist countries during 2006-2012. Our focus here is not on the full but on just one dimension of transition, entrepreneurship. While it is surely the case that certain transition tasks, like privatizing state-owned enterprises, remain unfinished, a perhaps more interesting question is whether the fundamental characteristics of these economies has changed to the point where starting and growing a new business in the former socialist countries is substantively different from starting and growing a new business elsewhere. Thus, we ask whether it is possible to discern differences with respect to entrepreneurship between the post-socialist countries of Europe and the non-post-socialist countries, controlling for level of economic development. Methodology: Unlike previous analyses that applied single activity related entrepreneurship measures like self-employment, or the GEM's TEA rate, we use a complex entrepreneurship measure, the Global Entrepreneurship and Development Index (GEDI). GEDI incorporates both individual and institutional factors of entrepreneurship in order to explain the role of entrepreneurship in economic development. The GEDI, with its three sub-indexes and fourteen pillars, is a particularly suitable tool for examining the level, the components, and the configuration of the National System of Entrepreneurship. Findings: Investigating the former transition countries, we can conclude that the overall level of entrepreneurship in the Central and Eastern European (CEE) countries fits their level of economic development. While the examined CEE countries have lower GEDI scores as well as institutional development than developed European innovation-driven economies; they possess slightly higher institutional and individual level of development than similarly developed efficiency-driven economies. We anticipated some kinds of characteristic differences between the former socialist and the efficiency-driven countries that would reveal that transition has not been completed. However, our results are more consistent with the conclusions that, while the post-socialist economies were qualitatively different twenty some years ago, those differences have vanished today with the exception of only one of the countries included in our analysis: Russia. Thus, these post-socialist countries (excepting Russia) are on a normal capitalist path with any differences being due to different levels of economic development rather than to having a different economic system. Originality/value: While our results imply that transition is over, there are some shared characteristics of the former socialist countries that most likely stem from their socialist heritage, such as the relatively low level of opportunity perception or cultural support. The results have important implications as they reinforce our argument that, rather than homogeneous entrepreneurship support policies, effective implementation of policies in CEE should fit the profile of the targeted territory.
    Keywords: Global Entrepreneurship and Development Index; Global Entrepreneurship Monitor;
    JEL: M13 O10 P20
    Date: 2015–10
  3. By: Anton Krasnov; Dmitriy Zhitin
    Abstract: Ethnic and migration processes in Russia after the collapse of The Soviet Union have significantly changed the ethnic composition of major Russian cities. On the one hand, we see continuing of assimilation of most national communities which historically lived in the largest Russian cities (Ukrainians, Belarusians, Tatars, Jews etc.). On the other hand, the increased influx of migrants from the Republic of former Soviet Union led to the formation of new large ethnic communities. The paper deals with the transformation of the ethnic population structure of Russian cities on the example of St. Petersburg. Although St. Petersburg has five million inhabitants and national minorities accounts less than 8 percent in the population, this figure is increasing. In contrast to the situation 25 years ago, today we can see the areas where the concentration of different ethnic diasporas is significantly different from the mean value of the city. Thus, there are quite clearly distinguished areas where the prevalence of a particular ethnic group is significant. But on the contrary, there are areas where some ethnic groups almost completely absent. Since St. Petersburg is observed as a combination of more than hundred municipalities, all patterns can be seen quite clearly in a spatial aspect. And the phenomenon of spatial heterogeneity of resettlement of ethnic groups in St. Petersburg is the subject of the paper. The article contains materials of the censuses of the Soviet and Russian periods. Also we used cartographic techniques and methods of mathematical statistics to calculate the indicators needed to describe the degree of localization of the various ethnic groups. In addition, the correlation analysis of the resettlement of various ethnic groups has done.
    Keywords: migrations; ethnic minorities; ethnic segregation; St.Petersburg
    JEL: J15
    Date: 2015–10
  4. By: Anna Bufetova
    Abstract: At the turn of XX-XXI centuries new trends emerged in the development of Russian cities which were closely related to changes in the institutional and socio-economic conditions in a transition economy. One of the most prominent phenomena in the post-Soviet urbanization processes is growth of inequality in the level of economic and social development of cities. Deepening of social and economic disparities between cities in the transition period has led to the fact that the level of inter-city inequality is significantly higher than disparities between subjects of the Russian Federation. Most studies of spatial disparities in levels of living in Russia refer to the period of the 1990s and concern the interregional inequalities. Inequality of levels of living between cities is much less explored. In our study we consider the results of the uneven development of Russian cities, trends in convergence or divergence of level of living between cities of different size, specialization and status. We study the dynamics of inter-city disparities for a number of characteristics of level of living. The study is fulfilled on the basis of data provided by FSSS of the RF for the period of 2001-2013 ãã. and covers about 170 cities of the RF with population over 100,000. In this work we attempt to assess the degree of inequality in level of living between cities both on the basis of separate social indices and synthetic integral indicator of level of living. Constructed synthetic indicator of level of living allows to classify cities according to level of living and to evaluate convergence trends between cities, between and within their groups. We obtain evidence for slight mitigation of inter-city inequality of level of living in the beginning of XXI. But between considered set of cities we observe groups that characterized by different dynamics of level of living. Analyzing these groups we identify factors that determine the spatial trends in inequality in levels of living. In addition to the analysis of primary data, we summarized secondary sources and works on the topic, official documents and analytical reports. On this basis we discuss the role of different factors that determine inequality in level of living between Russian cities (objective and subjective which refer to implemented socio-economic policy) and make forecast of inter-city convergence trends in level of living.
    Keywords: Level of living; inequality; cities; city size; regional capitals; convergence;
    JEL: I31 R11
    Date: 2015–10
  5. By: Tatiana Blinova; Vladimir Markov; Victor Rusanovskiy
    Abstract: The Russian labor market is not homogenous, representing a diversity of regional segments. The paper presents a statistical assessment of interregional differences in youth unemployment in Russia. The unemployment rate was decomposed into fundamental and cyclical components, which was essential for deeper understanding of the specificity of the youth labour market. We made a typology of the regions of RF according to similar trends of youth unemployment and an empirical analysis of the rates, dynamics and factors of unemployment among the young people aged 15-19 and 20-29 years for 77 regions of Russia between 2005 and 2013. We also analysed the response of the regional rates of youth unemployment to crises. For analysing the regional parameters of youth unemployment we employed economical-statistical methods. We identified the interregional differences in the youth labor market and the nature of their changes in the time of economic crisis. The statistical database for this study was the Rosstat data posted on the official website of the Federal State Statistics Service. We found that in the time of crisis the interregional differences in unemployment rates decreased and in the period of recovery growth they increased. For the 20-29-age group, the convergence was only observed between 2007 and 2009, while the other years of the period saw a divergence, which, according to the rates (the curve?s angle), was noticeably higher than that for the 15-19-age group. This can be a token of a higher economic activity of the young people aged 20-29 years. The convergence in the crisis years meant that the regions were converging to a higher unemployment rate. The divergence of the regional youth unemployment rates depicts the different rates of the recovery growth in the regions of Russia, as well as the unequal efficiency of the employment policies. The study was conducted at the Institute of Agrarian Problems of RAS with the financial support from the Russian Scientific Foundation (RSF), project # 14-18-02801.
    Keywords: Russian regions; youth unemployment; modeling; interregional differences
    JEL: C51 E24 J64
    Date: 2015–10
  6. By: Maria Lorek
    Abstract: The Interference of liberal principles and the reintroduction of a market economy have changed the structure and the organization of the productive system of centrally planned and administered countries (NOVE, 1981; ANDREFF, 2007). The new forms of industrial organization, which are the source of these transformations, give priority to territorial logics. In this context, studies on industrial districts, innovative environments, clusters? found renewed interest. However, the issue of local conversion by economic liberalization is still much unexplored in terms of impact on the organization of local actors and the development of innovation on the local level in the former centrally planned countries. The purpose of this paper is to highlight the strong links between the institutional and organizational decentralization and development of innovation on the local level. Our method of analysis is based on the idea that the change of public management after liberalization contributes to the convergence of public and private interests resulting in the emergence of an institutional agent composed of a network of actors. Collective action of these actors plays a vital role in the emergence and development of a potential innovation. To justify our approach, we combine the institutional approach and the evolutionary approach to explain the formation of the institutional agent and its involvement in the development of innovation on the local level. We apply this interpretative framework to the case of industrial port complex of Gdansk because of its economic history, the establishment of the new local economic policy (after 1989), the choice of local authorities, although significant growth of the high-tech sector and the absence of previous study on this issue. The study of institutional change in Gdansk is based on the literature review. The potential of innovation that is forged in parallel is studied on a double level first through a statistical analysis of Gdansk economy to provide an overview on all the initial conditions, then, through the study of data from surveys conducted by the National Statistical Office (GUS) to determine the weight of high-tech enterprises in Gdansk. The results show that the liberalization of exchange considerably affects the organization of local actors in Gdansk. The collective actions of public and private actors are not yet common but they encourage the development of innovation in Gdansk promoting: first, the accumulation of core assets, then the improvement of its scientific and technical potential and third the emergence of innovative high-tech companies. This study shows that the economy of Gdansk is being transformed all by emphasizing the articulation between the different actors of proximity, the local specific resources, and the reports developed on the market and non-market and the introduction of innovation.
    Keywords: institutional agent; transition; conversion; innovation; Gdansk
    JEL: R11 P21 P25
    Date: 2015–10
  7. By: Vera Barinova; Stepan Zemtsov; Alla Sorokina
    Abstract: SMEs play an important role in the development of regional innovative systems because of their potential to accept new technologies and show fast growing rates. There is an interdependence between emergence of fast growing SMEs (?gazelles?) and innovative development of regions. High level of regional innovative development creates a fertile environment for increasing the number of fast growing companies, while we assume that large number of ?gazelles? creates a favourable environment for the dissemination of innovations in regions via spillover effect (NESTA Business growth and innovation, 2009). Fast-growing companies may contribute more than 50% to GDP growth (Europe INNOVA Gazelles Innovation Panel, 2008). There are several works, that explain growth of firms as a stochastic phenomenon (Gibrat, 1929), or as a combination of endogenous (Penrose, 1955) and exogenous factors (Delmar, Davidsson, Gartner, 2003). In our work we assume that regional innovation performance (as a share of RnD personnel in employment, share RnD expenditures in gross regional product, etc.) may be a significant factor because of knowledge spillover effects (Audretsch, Feldman, 2004), affecting more competitive firms. There were no works on Russian regional data that could prove it. The article analyses a variety of endogenous (intra-firm) and exogenous (regional) factors, which determine the share of fast-growing firms in Russian regions. The analysed firms were fast-growing manufacturing SMEs during post-crisis period (2009-2012), the main focus was on the determinants of the companies? share in total number of manufacturing firms in a region. The dataset was collected from SPARK (Professional market and company analysis system), and consists of information about income, owners, location, industry and several financial indicators. Regional factors, according to Russian Federal State Statistical service, include research and development indicators (such as RnD expenditures, RnD employees, etc.), urbanization rate, human capital, investment climate, etc. There are 419 manufacturing fast-growing companies (?gazelles?) from 9220 companies in database, which is approximately 5%. Econometric analyses demonstrates a strong correlation between the share of high-growth companies in regions and indicators of regional innovation performance: number of researchers per 10 000 people, the number of PCT applications per economically active population, the share of employees with higher education in the total number of population in economically active age, and the number of applications for inventions submitted to the Russian Patent Bureau by national applicants per the economically active population. Determined factors could be used for elaborating recommendations for implementation of industrial policy in Russia.
    Keywords: SME; Russian regions; regional innovation systems
    JEL: L25 O31
    Date: 2015–10
  8. By: Irina Semykina
    Abstract: This paper explores the regional economic impact of mineral resource endowment and offers specific inputs to the debate on the local content requirement (LCR) policy, gaining urgency in modern economic and political environment. Focusing on the experience of the Eastern Siberia the paper examines the way national companies operate in the newly developing oil and gas provinces of Russia. The analysis of key economic indices shows that the existing approach based on rent-seeking strategy doesn?t allow having any significant benefits from resource endowment in the regions. The key idea is that the establishment of completely new industry has to affect regional economic development, budget revenues dynamics, and employment, to influence the related industries and services in the region. Such benefits are of great importance especially for the Eastern Siberian regions which had been endured the alarming depopulation and deindustrialization processes since the collapse of Soviet Union in 1991. Oil and gas production is capital intensive industry, but at the same time involves quite limited number of employees. Equipment and machinery producing industries, as well as oil and gas related services and engineering, on the contrary can be referred to the highly skilled and labor intensive sectors. Moreover linkages between oil and gas industry and other local industries can impact regional economic growth through investments and creating value added activities in equipment and materials. Nowadays Russian national oil and gas companies don?t have a clear local content strategy, it?s mainly addressed as part of the ?corporate social responsibility agenda?. The paper provides the review of the LCR policy which has been widely used in some countries with similar industry pattern like Norway, Brazil and Malaysia. The conducted analysis let to form possible scenarios and evaluate the dynamics of regional economic development depending on the scale of LCR policy. The developed approach based on statistical modeling allows assessing both direct and indirect (via intersectoral relations) effects of LCR policy. The obtained results allow to conclude that the implementation of LCR policy lead to the growth of real income per capita and the job creation in the region which give the opportunity to reverse the population decrease trend. The development of equipment and services suppliers for oil and gas industry by ripple effects can boost socio-economic development and diversify regional economics. The paper also dwells on some pitfalls and risks accompanying LCR policy and considers crucial points of introducing this kind of policy for local and federal government.
    Keywords: regional economics; oil&gas resources; local content requirement policy; Siberia
    JEL: O20 Q32 R11 R58
    Date: 2015–10
  9. By: Hans Kramar
    Abstract: While European integration has substantially contributed to economic convergence between the member states of the EU, the diverging development of highly developed metropolitan regions and lagging rural areas has become a growing challenge especially for the new member states in Central and Eastern Europe. In this context the paper inquires to which degree the process of economic restructuring and catching-up in European countries was accompanied by increasing spatial disparities. Although a lot of research implicitly assumes that economically growing countries tend to face a trend towards increasing spatial inequalities, the question, whether there is a direct relation between total economic growth and spatial divergence, has not been answered sufficiently yet. The empirical investigation of regional and national GDP data confirms the trend towards economic convergence on a national scale between 2000 and 2011, mainly caused by the rapid growth of the most lagging countries. On a regional scale, however, the process of convergence was much slower and almost came to an end after the beginning of the global economic crises in 2008. The reason for these diverging results can be found in the change of disparities within the countries: While regional inequalities largely remained unchanged in the majority of the old member states, the gap between rich and poor regions widened in most countries which accessed the EU since 2004. This trend, however, slowed down or even reversed after 2008, which seems to confirm the assumption that economic growth intensifies spatial divergence. A detailed analysis of the correlation between national growth rates and the change of regional disparities, however, indicates that growing divergence in the new member states can hardly be explained by the speed of total economic growth, but rather has to be attributed to other specific conditions there. A reflection on the mechanisms of agglomeration economies suggests three arguments for the strong diverging effect of the catching-up processes in the new member states, which await to be tested empirically in future research.
    Keywords: regional disparities; convergence; cohesion policy
    JEL: O R
    Date: 2015–10
  10. By: Viktor Prokop; Jan Stejskal
    Abstract: Innovative activities have been considered mandatory for surviving in a dynamic market environment, inter alia in the machinery industry. Nothing has received as much attention as innovation, which has been pinpointed as the fundamental driving force for economic growth and welfare as well as a key factor in competitiveness. Therefore, innovation growth is seen as a mechanism to influence economic growth, and therefore firms capable of increasing their innovation potential benefit from further increasing competitive advantage and economic growth. However, innovations do not arise within one company in isolation. Today, in the so-called knowledge economy, innovation ? more than most other economic activities ? depends on new economic knowledge, which is perceived to be the basic ingredient of the innovative process. It follows that the increased complexity of knowledge processes influences firms, because organizations need to be able to respond to the growing demand for improved innovation, mainly in the mentioned machinery industry which is trapped by cost and innovation pressure. Thus, innovative units as well as local institutions and individuals have to interact with each other and with their external environment because collaboration with suppliers, customers and competitors enables a firm to deepen its existing technological competence. Moreover, collaboration with research organizations helps a firm broaden its technological knowledge and firms can acquire new scientific knowledge to benefit their product or process innovations by interacting formally and informally with universities and research institutes. The aim of this paper is the identification and evaluation of specific important determinants of innovative activities that influence the economic growth of enterprises in the machinery industry in the Czech Republic by using own multiple regression models. Selected determinants of innovative activities are (i) total turnover, (ii) R&D expenditures, acquisition of external knowledge and total innovation expenditure, (iii) significant market, (iv) membership of a group of enterprises, (v) implementation of innovated goods, (vi) public financial support. For the data analysis we used a harmonized questionnaire of EU Member States from the Community Innovation Survey that was carried out in the Czech Republic for the period 2010 ? 2012. In total, the analysis was performed on data of 284 Czech enterprises from the machinery industry with at least 10 employees. We can say that the greatest influence on the dependent variable was analyzed in determinants of the market supported by the government, and support by EU funds. Results show that there are large numbers of factors that affect the innovation activity, but their significance are marginal.
    Keywords: innovation; innovative collaboration; knowledge economy; machinery industry
    JEL: D83 O32 R11 R59
    Date: 2015–10
  11. By: Nicolaas Groenewold; Anping Chen
    Abstract: China?s pension system is in need of comprehensive reform in that it is fragmented in its coverage and significantly under-funded. Attempts to improve the coverage will likely exacerbate the financial strains. Thus it is urgent to improve the financial sustainability of the system and one policy which has been proposed is to increase the retirement age. There have been similar proposals in many other countries and they are in line with improved health and life-expectancy. In China?s case the partial coverage of the system is related to industry structure with much the best coverage being for government and SOE employees. Since this structure differs considerably across the regions in China, it is likely that a change in retirement age will have significantly different effects across China?s regions. Inter-regional disparities are already very substantial in China and it will be important to know whether changes in pension arrangements will widen or narrow these disparities. It is the object of the research reported in this paper to throw light on this question. We construct a small theoretical model of two regions (coast and interior) having some Chinese characteristics. We distinguish between an informal sector in which workers have no pension coverage and a formal sector in which some workers are covered. In addition we distinguish between skilled and unskilled workers. There are two levels of government: a central government and two regional governments. Behaviour is based on utility maximisation by households and profit-maximisation by firms, with governments being exogenous. The model is solved numerically with parameter values based on recent Chinese data. Within this framework we model the effects of various shocks to the retirement age, the initial effects of which are changes in the labour supplied by skilled households. In the base case we find that in the short run an equi-proportionate increase in the retirement age in the two regions elicits substantially different labour supply responses in the two regions. These differences flow through to relative wage changes, output changes and, eventually, welfare changes. Effects through the budgets of the two regional governments are also important transmission channels. We find that welfare increases in both regions, with the improvement being substantially greater in the interior than in the coast, reflecting the greater relative importance of SOE and government employment in inland provinces. In the long run skilled labour is allowed to migrate from one region to another with the result that inter-regional differences are generally ameliorated.
    Keywords: China; pension system; retirement age; regional impacts
    JEL: R10 R23 R28 H70 H75
    Date: 2015–10
  12. By: Vera Barinova; Stepan Zemtsov
    Abstract: Russia inherited pattern of economic activity location from the Soviet Union, where the main forms of industry organization were territorial-production complexes (TPC) - networks of industrial organizations united by a single technological process or the chain of raw materials processing. In a market economy in the 90s, economic ties within the TPC were destroyed, leading to a drop in the level of production, fragmentation of large enterprises and the formation of a set of independent and often competing firms. Some scientists believe that this situation over the last 20 years could serve as a necessary foundation for the formation of industrial clusters (in interpretation of modern regional science). Today, interest in clusters in Russia rises again due to the need to find new mechanisms to support production and innovation in a stagnant economy. Ministry of Economic Development of Russia has developed a project to support the pilot territorial innovative clusters by providing funding for infrastructure formation. The selection of cluster initiatives was based on applications from regional governments, interested in attracting of additional investment. Most of the clusters, formed in Russia, are not in innovative sectors, as shown by studies of the Russian Cluster Observatory. But a lot of potential clusters in Russia is not formed due to the high level of distrust between firms, due to lack of understanding of the potential benefits, etc., although these clusters can develop due to geographical proximity (high concentration) of firms. The aim of our work is to identify clusters as areas of geographical concentration of small and medium businesses (SME). We also wanted to check whether the existing cluster initiatives correspond to the concentration of economic activity and whether there is potential for increasing the cluster initiatives. In our work, we use the analysis based on the localization index, but on three geographical levels for verification reasons: regions, districts and cities. Most of the data were collected from RUSLANA database, consisting information of Russian firms. After identifying a high degree of localization of a particular industry or a group of industries, we analyze the location of enterprises, based on distance-oriented methods in specific regions or between regions. The result is a map of the high concentration and localization of small and medium businesses in certain areas in a number of industries. The authors confirmed the existence of traditional and well-known clusters and identified previously unknown concentration of firms that did not declare their interaction. In the last step, the authors conducted field research - a survey of firms in areas of concentration, where clusters today are not formed, for determining the reasons for the lack of interaction.
    Keywords: cluster identification; localization; SME; Russian regions
    JEL: C19 L70 R12
    Date: 2015–10
  13. By: Vera A. Fedotova (National Research University Higher School of Economics)
    Abstract: In the course of the last few years, the Russian society has been going through a stage of political, cultural and economic transformations that bring changes into the lifestyle, attitudes, and worldview of Russian citizens. The process of development has embraced not only science and technology, but also the social and cultural aspects of life. The contemporary image of Russia is in many ways defined by its younger generation that grew up within new economic, social and political standards. Young people’s values, attitudes and aspirations differ from those of the adult generation of Russians, since the last years have been marked by transformations inside the country, as well as by some global changes. The paper demonstrates the results of a study which aimed to identify the relationship between individual values and attitude towards innovation. 380 respondents, young and adult representatives of the Russian population, took part in the research. The respondents belonged to the younger generation (under 25 years old) or to the adult generation (over 45 years old). The principal instrument used was the method of questionnaires. The methodic inventory consists of three main blocks oriented to the study of the following constructs: the PVQ-R method of measuring individual values (Schwartz et al., 2011) and the method of “Self-assessment of innovative qualities of a personality” (Lebedeva, Tatarko, 2009).The goal of the research is to reveal the age differences in values and attitudes towards innovation, and to find out which values determine positive or negative attitude towards innovations among representatives of different generations of Russians. The younger generation values " Self-Direction Thought", "Stimulation", "Achievement", " Power Dominance" stimulate the adoption of innovations.
    Keywords: cultural values, values of individual level, innovation, attitude towards innovative
    JEL: A13
    Date: 2015
  14. By: Hoken, Hisatoshi; Su, Qun
    Abstract: Agricultural cooperatives in China, known as Farmers' Professional Cooperatives (FPCs), are becoming popular and have been intensely promoted by the Chinese government to improve the economic welfare of small farmers. However, very few studies on Chinese agricultural cooperatives have measured the benefits to farmers who participate in FPCs after controlling for time-invariant attributes of farmers. This paper investigates the treatment effect of participation in a rice-producing cooperative in suburban China using propensity score matching (PSM) and difference-in-differences (DID) method. Estimated results show that no significant difference is observed between participants and non-participants of the cooperative in terms of net income from rice production when controlling for the difference in farmers' rice incomes before the treatment. In addition, there is no significant heterogeneity of the treatment effects between large and small farmers, although the probability of participation in the cooperative is significantly higher when the size of cultivated rice farmland is greater. These results indicate that the benefits of the cooperative appear to be overestimated considering the vigorous policy supports for FPCs from the Chinese government.
    Keywords: China, Agricultural Cooperative, Agricultural Economies, Farm Household, Treatment Effect, PSM, DID
    JEL: O13 Q12 Q13
    Date: 2015–10
  15. By: Nathaniel Baum-Snow; J. Vernon Henderson; Matthew Turner; Loren Brandt; Qinghua Zhang
    Abstract: This paper quantifies the causal effects of various types of investments in the road and railroad networks on economic growth in Chinese cities and regions. We separate out the influences of changes in access to markets that have come through better inter-regional and international transport links from the more direct effects of transport infrastructure on city level productivity, which may operate through various channels. We find strong evidence that improved integration with nearby markets significantly promoted local growth in China since 1990. In particular, expansions of road infrastructure leading to a 10 percent increase in economic activity within a six hours' travel time led to an estimated 1.4 percent more rapid prefecture GDP growth and 1.1 percent more rapid prefecture city GDP growth. Expansions of road infrastructure leading to a 10 percent increase in population within six hours caused an estimated 1.6 percent increase in prefecture GDP growth and an imprecisely estimated 1.3 percent increase in prefecture city GDP growth. Estimated causal effects of more theoretically grounded measures of market access on local growth are consistent with these effects of more reduced form market potential measures. While we find that improved regional integration promoted local GDP growth in China, we find no significant effects of regional integration on prefecture or city population growth. Instead, we find evidence that improved access to international ports promoted population growth. A 10 percent decline in travel time to an international port caused a 0.6 to 0.7 percent increase in prefecture and city population growth. The context of severe migration restrictions in many cities and policies promoting foreign investment in other cities is important for interpreting these results. Our investigation of the effects of highways and railroads serving prefecture cities is less conclusive. While point estimates tend to be positive, they are generally imprecise. This study innovates on the existing literature about the effects of reduced domestic trade costs on local growth in several ways. First, we consider both highways and railroads. Second we primarily examine cities, rather than rural counties or small towns. Third we examine the effects of transport infrastructure on the growth and redistribution output and population simultaneously, rather than on inferred income or the output of specific commodities. Finally, we examine the responses to various measures of the composition of output in the regions surrounding cities in various distance and travel time bands. Critical to this evaluation is the use of pseudo-random variation in the allocation of transport networks to cities and their surrounding regions.
    Keywords: transportation; market access
    JEL: R12
    Date: 2015–10
  16. By: Iwasaki, Ichiro; Uegaki, Akira
    Abstract: This paper aims to evaluate the central bank reforms in Central and Eastern Europe and the former Soviet countries through a comparative meta-analysis between studies of transition economies and those of other developed and developing economies that empirically examined the effect of central bank independence (CBI) on inflation. The results of a meta-synthesis using a total of 282 estimates collected from existing literature indicates that both transition and non-transition studies have successfully identified a negative relationship between CBI and inflation. Moreover, our meta-regression analysis suggested that the choice of estimator, inflation variable type, degree of freedom, and quality level of the study strongly affected the empirical results concerning transition economies. We also found that no significant difference exists between the two types of studies in terms of both effect size and statistical significance so long as we control for the degree of freedom and quality level of the study, implying that the socioeconomic setting of the society has so substantially developed in transition economies that the relation between CBI and its disinflation effect is observed in the same way as in non-transition economies.
    Keywords: central bank independence, inflation, transition economies, Central and Eastern Europe, former Soviet Union, meta-analysis, publication selection bias
    JEL: E31 E58 G18 P24 P34
    Date: 2015–08
  17. By: Boris Zhikharevich; Taras Pribyshin
    Abstract: Objectives. Find the answer to the question ?What are the qualities of a ?good? municipal strategy of socio-economic development??. Methods. In order to reach a consensus about the quality of municipal strategy it was proposed to use the Contest of the urban strategies, which was held in the cities in Russia with population over 100.000 people. The contest resulted in division of the participants in 3 groups: winners: Orsk, Samara, Cherepovets; finalists: Vologda, Irkutsk, Kaliningrad, Novoshakhtinsk; semifinalists: Bryansk, Krasnoyarsk, Sochi, Tambov, Ulan-Ude. The contest created three sources to define a good strategy: feedback from the jury; analysis of strategies of the winners; feedback from mayors of the finalist cities. Results. 1. Analysis of the feedback from the jury gives us the following list of successful strategy characteristics: Frequently occurring: ? Existence of monitoring system and established implementation mechanism ? Ambitiousness correlative with the city scale and implementation mechanism ? Existence of title projects Less frequently occurring: Involvement of the head of the city and the whole community; Human-oriented; Focus on specific projects etc. 2. The content of all the strategies was coded with the special code developed by Leontiev?s Center to formalize the comparison of the leading and outsiders strategies. Common features of leading strategies: -ambitiousness -complexity (big number of declared and elaborated routes) -active use of title projects -attention to economical diversification issues -usage of institutional and constitutional economic support -special attention to educational and cultural development -special attention to implementation via mechanisms of civil autonomy and effectiveness of local authorities 3. Leading cities mayors stated that a good strategy is the one which is: Cooperative ? a strategy elaborated collectively leading to consolidation of local community and key authorities; Independent ? a strategy elaborated by the local community with no governmental influence, irrespective; Deliberative - a strategy elaborated by the local community considering its own interests; Ambitious - a strategy elaborated to reveal the potential of local resources and inspired by enthusiasm of locals; Realistic ? a strategy based on adequate situation analysis and establishing achievable goals and purposes; Realizable ? a strategy provided with an elaborated mechanism of implementation; when goals and purposes are being ambitious but provided with clear instruments of resource mobilization, performance control and results overview; Stable ? a strategy that does not change dramatically despite radical changes or possible power shifts. The prevalent opinion in Russia in 2014 is: a good municipal strategy is supposed to be ambitious, provided with an elaborated mechanism of implementation and monitoring, focusing on title projects, developed under control of city head in cooperation with key participants of urban development which is clear and approved by local community.
    Keywords: Municipal strategic planning; strategies; socio-economic develjpment
    JEL: R11
    Date: 2015–10
  18. By: Turbanov, Aleksandr (Russian presidental academy of national economy and public administration (RANEPA)); Oleg, Ivanov (Russian presidental academy of national economy and public administration (RANEPA)); Yudenkov, Yuri (Russian presidental academy of national economy and public administration (RANEPA)); Nikolay, Evstratenko (Russian presidental academy of national economy and public administration (RANEPA)); Mikitasov, Oleg (Russian presidental academy of national economy and public administration (RANEPA))
    Abstract: Transferring powers to the Bank of Russia supervision and regulation of financial markets is a significant structural transformation of the organizational management of the Russian financial system, the answer to the challenges of the phenomena generated by the global crisis of 2008-2009. The paper considers the system of economic, organizational and legal relations developing between the single body of financial market regulation, the various segments of the market and financial organizations, as well as other public authorities. Also analyzed the basic principles, models and approaches, which underlie the common activity of regulation and supervision in the financial market.
    Keywords: bank of Russia, financial market, financial system
    Date: 2015–08–09
  19. By: Beata Bierut,; Tomasz Chmielewski; Adam Głogowski,; Sławomir Zajączkowski; Andrzej Stopczyński
    Abstract: Starting from the mid-2000s, Poland experienced a period of rapid growth in mortgage lending, with banks offering foreign-currency, high-LTV housing loans, which exposed the sector to rising credit risk and funding challenges. Later, a surge in consumer lending led to a threat of rising credit risk in this segment. These supervisory challenges were addressed through three main instruments: guidelines related to the assessment of a borrower’s creditworthiness as well as LTV and DTI limits. The regulation has been successful from both microprudential and financial stability perspectives, as it has contributed to better risk management by banks and to the reduction of FX mortgage lending.
    Keywords: financial stability, macroprudential policy, loan-to-value ratios, debt-service-to -income ratios, house prices, credit growth.
    JEL: E44 E58 G21 G28
    Date: 2015
  20. By: Stepan Zemtsov; Vyacheslav Baburin
    Abstract: ?Knowledge economy? as a concept describes a stage of socio-economic development, when knowledge become a major growth factor. In modern economy, it can be associated with processes of knowledge acquiring, creation and dissemination; its main agents are educational, scientific organizations and innovative business. In conditions of oil prices falling and sanctions, it is important to identify the Russian regions, where knowledge economy is forming, as new areas of growth. Another aim was to estimate whether economic growth of 2000s promote knowledge economy formation. We used methodology of World Bank with some modifications according to available statistics. The Russian knowledge economy index (RKEI) consisted of four blocks: the level of economic development (GRP growth rate and GRP per capita), education and human capital (number of students per capita and the average number of education years for employees), science and innovation (number of researchers and PCT-applications per capita) and information infrastructure (number of cell phones and computers with Internet access per capita). Since the performance of education and science are relatively stable for the Russian regions, characteristics of GRP and information infrastructure, which grew throughout the 2000s, hold the largest share in the variation of the RKEI. We used calculation of the average rank index (measured from to 10), according to the formula: Ri = 10*(Rlow / R), where Ri is a desired figure, Rlow is a number of regions with a lower rank, R is the total number of regions. The calculation was carried out for the whole period from 1998 to 2012 to review the dynamics. The highest level of the RKEI in 1998 (in descending order) was observed in Moscow (6.5) and St. Petersburg (5.9), Tomsk (4.5), Moscow (4.5), Samara (3.6), Khabarovsk (3.48), Primorsky (3.4) and Novosibirsk (3.3) regions; in 2012 the leaders were St. Petersburg (8.8), Moscow (8.7), Tomsk (8.3), Samara (8.1) regions, Tatarstan (8) and Novosibirsk (7.95) region. The areas with the most diversified economy are among the leaders; monospecialized regions (agriculture, mining) are among the laggards. The RKEI increased for all regions during the period, especially for low rank regions (<4: the North Caucasus and the Far East). Voronezh and Tyumen regions, Tatarstan and Bashkortostan have the highest RKEI growth rates (2012/1998) among high rank regions (>5). These regions established more innovative infrastructure and form a better investment climate. All regions have experienced the negative effects of the crisis in 2009, especially Moscow agglomeration. As a result, Moscow gave the leadership in the RKEI to St. Petersburg in 2010 and Moscow region left the top ten leading regions in 2011. The methodology allows us to track the RKEI framework for every region via the radar chart to identify problem areas and competitive advantages.
    Keywords: knowledge economy; index; Russian regions; education; human capital; information
    JEL: O31 O47 R11 R58
    Date: 2015–10
  21. By: Nie, Peng; Sousa-Poza, Alfonso
    Abstract: Using data from the 2010 China Family Panel Studies, this study investigates the association between commute time and subjective well-being in a sample of 16- to 65-year-old employees in urban China. We find evidence that a longer commute time is associated with lower levels of both life satisfaction and happiness, especially when the commute times are extreme (≥ 1 hour per day). A multiple mediation analysis further indicates that the relation between commute time and happiness is partially mediated by time spent on daily activities, particularly sleeping. We calculate the amount of income necessary to compensate an employee's loss in well-being at approximately 82 yuan per hour of commute time, implying that, in urban China, the annual loss of well-being amounts to around 10 billion yuan.
    Keywords: commute time,life satisfaction,happiness,urban China
    JEL: I31 J30 J33 R41
    Date: 2015
  22. By: Marina Nesena; Leonid Limonov
    Abstract: Cultural diversity in modern Russian society is determined, first, by the composition of the ethnic and cultural space, sometimes historically rooted in the distant past, and, second, by migration. Given the spatial characteristics of Russia, cultural diversity of cities and regions is driven not only by international, but also by internal migration. When studying the topic of cultural diversity, economic researchers are primarily interested in assessing its effects on economic performance. Over the past decades, the topic has been explored by a wide range of researchers. ?Is a culturally diversified community more successful than a homogenous one?? is one of the major questions addressed in such research. Conclusions from theoretical models offered by M. Berliant and M. Fujita with respect to the impact of cultural diversity on economic growth and its role in the creation of new knowledge suggest that productivity of knowledge creation in a region with a homogeneous culture is lower than where cultures are diverse and R&D workers are heterogeneous. The empirical literature on effects of cultural diversity offers both positive and negative evidence. The authors of this study aim to explore the cultural diversity of Russia and assess its economic value. This paper presents the first outcomes of the study. To assess cultural diversity the Simpson?s index was used. Empirical research was conducted using an open system of cities modeled by G. Ottoviano and G. Peri in which ?diversity? has impact on both performance of firms and satisfaction of customer needs through localized externalities. Preliminary evaluation of correlation between growth of income, wages and increase in the share of foreign migrants, and the share of non-native population shows that regardless of the characteristics of a region, significant correlation is only observed between growth of income, wages and share of international migration. Econometric estimation of the theoretical model used regressions of wages and rent. Per capita income and average monthly wage were alternately used as dependent variables in the regression of income. Explanatory variables were indices reflecting cultural diversity: the Simpson?s index based on country of origin, the Simpson?s index among foreign migrants and the share of foreign migrants in the population of a region. Control variables in the regressions were a set of standard control variables used in regressions of income and growth [Temple.1999; Bellini et al. 2009] that reflect differences between regions in human capital, the share of agricultural employment in total employment in the region, population density and market potential of the region.
    Keywords: Cultural diversity; migration; productivity; regional economy
    JEL: O4 R1
    Date: 2015–10
  23. By: Izabella Szakálné Kanó
    Abstract: It seems to be widely accepted that regional development extensively depends on two types of agglomeration economies. On the first hand there are urbanization economies, namely regions with diverse economic environment, these provide firms with opportunities to grow and improve their technologies. On the second hand there are localization economies, which mean regions gaining from specialization because firms enjoy presence of suppliers, specialized labor and knowledge spillover among co-located partners. This is especially important in case of knowledge intensive industries. Knowledge-intensive industries have attracted a great attention nowadays in researches because of its contribution to the development of knowledge driven economy. They generate positive effects on the regional economy and have increasingly high importance in less developed regions, like Hungary. The identification of spatial distribution, the geographical co-location of knowledge-intensive economic activities is substantial to define potential leading industrial branches in regions. Our argument is closely connected to the recent emphasis of European Union on smart specialization. Several different methods can be found in the literature measuring the specialization of regions and the concentration of industries. These two phenomena build two scopes of localization economies, the geographical and the sectorial ones. Our paper addresses the spatial distribution of Hungarian manufacturing industries computing raw concentration index EG G and spatial concentration index EG ?? proposed by Ellison and Glaeser (1994) as measures of internal and external economies of scale. Computations are based on the number of employees for a 17 years period covering early stage of Hungarian transition economy, the EU access and the economic crisis (1996-2012). Our investigation is based on two different types of territorial units: city-regions and subregions (LAU 1 level. In order to apply regional development strategies in regions, one has to consider nodal regions, i.e. functional regions established from labour commuting zones with a powerful centre: the 23 city-regions. Labour commuting zones often extend beyond the borders of subregions (175), but latter are still well applicable for investigation of concentration. Based on our calculations we compared 1. measured spatial concentration of knowledge intensive industries and that of non-knowledge intensive ones. 2. measured spatial concentration based on city regions and subregions. 3. measured spatial concentration of NACE 2-digits and NACE 4digits industries by computation of co-agglomeration index (EG ??) We also investigated change of employment, firms and average firm size of industries over time. Our preliminary results indicate emphasized geographical concentration of knowledge intensive industries compared to non-knowledge intensive ones. The vast majority of cases, this concentration arises from the external economies of scale and it is even more present in case of city-regions than in case of subregions.
    Keywords: specialization; geographic concentration; manufacturing industries; economic crisis
    JEL: O14 R12
    Date: 2015–10
  24. By: Pesliakaite, Jurgita; Šiaudvytis, Tomas
    Abstract: This paper gives a broad descriptive overview on wage and price setting behaviour of Lithuanian firms during the last episode of the economic crisis in 2008–2009 and in the post¬-crisis period of 2010–2013. The evidence provided in this paper is based on the firm¬¬-level data from the third wave of the Wage Dynamic Network (WDN3) survey ¬— the joint research project of the European Union (EU) countries launched within the European System of Central Banks (ESCB). Wage and price setting strategies of Lithuanian firms were evaluated by relating firms’ decision-making to the macroeconomic, financial and institutional environment under which the firms are operating. The preliminary conclusion drawn in this paper is that both wages and prices show rather high degree of flexibility in Lithuania. Low wage rigidity should primarily be attributable to labour market institutions — low collective wage bargaining coverage and completely decentralised wage setting process. Easing of employment protection laws during the last episode of economic downturn might also have contributed to the increased wage flexibility in the after-crisis period.
    Keywords: WDN survey; labour market; wage setting behaviour; price setting behaviour; Lithuania
    JEL: J0 J00 J3 J30
    Date: 2015
  25. By: Tomas Havranek (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic; Czech National Bank); Zuzana Irsova; Jiri Schwarz (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic)
    Abstract: Key parameters for the modeling of public finances are tax revenue elasticities with respect to tax bases. Yet the existing studies estimating these elasticities for emerging countries disregard the effects of tax reforms on tax revenue, which renders their estimates inconsistent. We use a unique data set from the Czech Republic to account for the effects of reforms and estimate both short- and long-run tax revenue elasticities. Our results suggest that the long-run elasticities are 1.4 for wage tax, 0.9 for value added tax, and 1.7 for profit tax. The adjustment process for value added tax is fast, but for the remaining two categories it is important to distinguish between the short- and long-run elasticities: the initial response of revenue to changes in the bases is weak. In the case of wage tax it takes half a year for the elasticity to surpass unity.
    Keywords: Tax revenue, tax base, elasticity, error correction models
    JEL: H24 H25 H27
    Date: 2015–10
  26. By: Larisa Melnikova; Victor Suslov; Alexander Tsyplakov; Naimdjon Ibragimov; Dmitry Domozhirov; Vitaly Kostin
    Abstract: The paper presents a pilot version of spatial agent-based model simulating the national economy of Russia. The model is supposed to be used for evaluation the effects of industrial and spatial policies. The object of modeling is multi-regional economic space of Russia in its interaction with foreign market. The space is physical; locations of agents are defined by geographical coordinates. The basic hypothesis is that decisions of agents on microeconomic level lead to spatial changes on macroeconomic level. We consider Arrow-Debreu model with Leontief technologies as a microeconomic prototype of our model. Theoretical construction of the model, referred to models of stochastically converging equilibrium. The basic features of the model presented are the following. We explicitly account for space, consideringr interactions between trading agents located in physical space. Moreover, the model is compatible and exchanges information with an existent multiregional input-output model that uses the identical. There are agents of the following types: firms, households, commodity markets, labour market and foreign markets. Agents take decisions on the base of microeconomic models under bounded rationality with the account of transportation costs. Geographical pattern of the model is referred to the stylized map of Russia. Distance is measured as a length of the shortest arc between 2 points on the Earth with their coordinates of longitude and latitude. Initialization of the model uses some elements of geo-informational approach as well as informational exchange with multiregional input-output model. Agents are located on the map on the base of geographical coordinates of cities, real data on demography and statistical performance of economic activities. . Statistical performance is collected mostly across macro-regions and activities and is visualized by graphs. The model is realized on ?Lua? programming language. Spatial pattern of interactions among agents is created by two-part transport tariff: the first part is proportional to the amount of commodities and the second part is proportional to the distance between 2 agents and to the amount of deliveries. In the report we illustrate the algorithm of trade between households with the account of transportation costs. The geographic structure of commodity flows is analyzed. The report also presents some results of the experiments accomplished. We studied the influence of transportation costs on the convergence of prices to the state of quasi-equilibrium. Experiments demonstrated that the Law of One-Price is not observed. Prices converge to clusters within regions, which reflect the impact of differences in industrial pattern of regions. The prospects of future development of the model are discussed.
    Keywords: Spatial agent-based model; multi-industrial economy; transportation costs
    JEL: C63 R1 D58
    Date: 2015–10
  27. By: Anping Chen; Nicolaas Groenewold
    Abstract: The extent and persistence of the inequality of regional output is an important policy issue in China and its sources have been the subject of considerable empirical research. Yet we have relatively little empirical knowledge of the effects on the regional distribution of output of shocks to national macroeconomic variables such as GDP and investment. This is an important gap in the empirical literature since much government macroeconomic policy seeks to influence GDP using instruments such as investment expenditure. It is likely that such national shocks will have differential regional impacts and so affect the regional output distribution. Policy-makers need to know the sign, size and timing of such effects before making policy decisions at the national level. We simulate the effects of aggregate shocks on individual provinces¡¯ GDP within the framework of a vector autoregressive (VAR) model restricted in a manner following Lastrapes (Economics Letters, 2005). We use annual data from 1953 to 2012 to estimate the model which includes 28 of China¡¯s provinces and simulate the effects on provincial outputs of shocks to aggregate output and investment. We find great diversity of effects across the provinces with discernible geographic patterns. There is evidence that output shocks benefit coastal provinces with developed industrial structure, export-exposure and less reliance on SOEs; the opposite is found for the effects of an investment shock and we conjecture that this is likely to have been the result of the strong bias in central government investment policy in favour of the interior provinces during a substantial part of our sample period.
    Keywords: regional output distribution; regional disparities; economic growth; China
    JEL: E61 R50 O53
    Date: 2015–10
  28. By: Yuzhakov, Vladimir Nikolaevich (Russian presidental academy of national economy and public administration (RANEPA)); Talapina, E. V. (Russian presidental academy of national economy and public administration (RANEPA)); Alexandrov, Oleg (Russian presidental academy of national economy and public administration (RANEPA)); Tikhomirov, Y. A. (Russian presidental academy of national economy and public administration (RANEPA)); Dobrolyubova, Elena (Russian presidental academy of national economy and public administration (RANEPA))
    Abstract: The concept of the federal law "On the fundamentals of public administration in the Russian Federation" is based on the study of Russian and foreign legislation and legal doctrine, and aimed at improving the systems of legal regulation of the Russian government, the creation of legal conditions for effective and efficient public administration.
    Keywords: legislation, legal doctrine, legal regulation, federal law, Russia
    Date: 2015–05–20
  29. By: Simona Pichova; Jan Stejskal
    Abstract: In recent years there have been frequent efforts to analyse the systems for providing public production and propose to increase the productivity and find alternative service-delivery mechanisms based on public-choice assumptions and perspectives. It is used an approach New public services, which is oriented and accountable to the citizens, aimed at ensuring maximum well-being of a new approach to public production. It highlights the changing role of the public sector - from service delivery role into the policy development. It is necessary to solve a major problem. Public administrators have long struggled with how to measure outcomes of public programs because the performance measurement tools have traditionally neglected. The article presents the information about return-on-investment analysis and it build on the results of the project focused on the ROI analysis in municipal libraries in the Czech Republic. The data was obtained from the biggest public library of Czech Republic ? from Municipal Library of Prague (MLP). The survey was conducted in year 2012 as a qualitative and representative through an online questionnaire where was addressed 11,397 randomly selected readers of MLP. The return on the survey was 20 %, after the data file cleaning the basic set consists a 2227 of respondents. The calculation of the ROI value is performed by using the calculation of cost/benefit analysis. Input data - costs for providing of evaluated portfolio of the public services - into the cost/benefit analysis were obtained from MLP. These financial resources in the form of cost of the MLP are public investments because they come from the public budgets of the regional level. The result of the study presented in this paper is a calculating ROI for public investment. The methodology for ROI calculating of the public services systems is a very valuable tool for regional providers of public services and their investments. Through their assistance, regional providers can better orientate themselves when spending money and can make better decisions as to which services they will provide and to what extent. For the analysed library, it was found that its operation and provision of a selected range of library services is generally effective, but the rate of effectiveness is relatively low, approaching a value of one. Analysed library has a range of services what was defined which in turn are not effective. The methodology also monitors the extent to which individual services are used and economically evaluated by the consumers themselves. This data can be used both for the management of each library and their owners and regional donors. This was the first research of this type in this branch of the public sector with a high degree of representativeness, which has been implemented in Central and Eastern Europe.
    Keywords: public investments; public services; return-on-investment analysis; library
    JEL: H72 H41 D61
    Date: 2015–10
  30. By: Pia Wassmann
    Abstract: The paper evaluates the impact of the EU Eastern enlargement 2004 on the economic performance of border regions located at the frontier to the new member states in the East. These regions were assumed to be particularly affected by the enlargement because of their geographic proximity to the new member states. Effects are identified by applying a synthetic control method that generates the counterfactual situation, i.e. the hypothetical economic performance of the border regions had the EU Eastern enlargement not taken place. Results show that, overall, the EU Eastern enlargement 2004 had no statistically significant effect on the economic performance of border regions. However, when considering each border region individually, it becomes evident that heterogeneous treatment effects are at play: While the German border regions have predominantly profited from the EU enlargement, for the Italian region, the effect is negative. This heterogeneity seems to be driven by differences in the initial state of regional development as well as in regional import volumes.
    Keywords: EU Enlargement; Border Regions; Economic Integration; Synthetic Control Method
    JEL: F15 R10 R11
    Date: 2015–10
  31. By: Gern, Klaus-Jürgen; Hauber, Philipp; Potjagailo, Galina
    Abstract: After three decades of double digit growth the Chinese economy has become the second largest economy in the world and the most important contributor to global growth. However, in recent years the Chinese economy has slowed substantially. While official numbers for GDP growth report output growth that is still in line with the government's - downwardly adjusted - growth target, alternative indicators of economic activity suggest an even stronger deceleration. In addition, the huge level of debt piled up in recent years in combination with a correction in property prices and - more recently - equity prices have raised fears of a financial meltdown. Against this backdrop, in this note we discuss the current state of the Chinese economy and the risks for the global economy associated with a "hard landing", a sudden pronounced drop in growth rates.
    Date: 2015
  32. By: Egle Tafenau
    Abstract: The aim of the paper is to analyze the development of the Estonian credit and saving market, especially considering the sector of households and non-financial corporations, in order to reveal the potential of saving and loan association (SLA) to enhance the economic and social development outside of the main economic centers of Estonia. We show that the SLAs and commercial banks have developed differently during the latest years, with cut-backs in the amount of issued loans by the commercial banks, while the SLAs have increased their corresponding activity. The period of analysis is 2004-2014, as the data for the SLAs is only available since 2004. Moreover, the period covers the pre-crisis period of loan boom triggered by the commercial banks, as well as the crisis itself. We rely on the data of the Bank of Estonia. Unfortunately, only consolidated data is available, such that it is not possible to analyze the regional distribution of the issued loans. The developments in the loans issued by the financial institutions as well as deposits with them are discussed in the context of changed legal environment and general economic situation. Though the share of loans issued by the SLAs is still tiny in Estonia, it cannot be concluded that their total contribution to the economic development of rural areas is significant. However, in light of the recent fast growth in the deposits and loans by the SLAs, their relevance is expected to increase in the future. This is especially the case if they manage to take over the niche left by the commercial banks that have closed down their offices in small towns.
    Keywords: Saving and loan associations; transition economies; financial crisis
    JEL: G21 R10
    Date: 2015–10
  33. By: Olga Demidova; Tatiana Bukina; Natalia Sverchkova
    Abstract: Researchers have repeatedly noted that the results in spatial-econometric studies depend significantly on the level of regional aggregation (Jacobs-Crisioni et al., 2014; Kang et al., 2014, Baltagi, Li, 2014). Currently, hierarchical models can contribute a lot to the studies of spatial effects since they take into account nested structure of regions (Dong, Harris, 2014). In addition, some studies say that econometric results also depend on the choice of the weights matrix W and the estimation method used (Elhorst, Vega, 2013; Kukenova, 2008). In different studies Monte-Carlo method with specially generated data is used to justify the selection of models or estimation method and to test the goodness-of-fit criteria (Kukenova, 2008, Piras, 2012). There are not so many studies that use real data. In this work we try to fill this gap by using different models for economic growth in the Russian regions. The data for 75 Russian regions within the period between 2005 and 2011years are used. We also include two levels of data aggregation: into 12 economic regions and into 8 federal districts. We are testing three main hypotheses: H1: The estimation results of spatial-econometric models depend on the level of regional aggregation. H2: The estimation results of spatial-econometric models depend on the choice of the method of estimation. H3: The estimation results of spatial-econometric models depend on the choice of the weighs matrix. To test these hypotheses SAR models are estimated with and without hierarchical regional structure. As a dependent variable in these models we use the GRP growth in analyzing spatial units. As the spatial weighs matrix we use the binary contiguity matrix, matrix of boundaries lengths and matrix of inverse distance between the capitals of the regions by road. Methods of estimation used are ML, difference GMM and system GMM. According to the results obtained from estimated models we get the empirical support for the first and second hypotheses. This means that the level of regional aggregation and the choice of estimation method significantly influence the results of spatial analysis. Our third hypothesis has been rejected for the vast majority of cases, except for those, where system GMM and difference GMM provide different results in the significance level of the coefficients in accordance to the weights matrix used. Thus, obtained results provided by the data on Russian regions largely confirm the findings of the articles cited above (Elhorst, 2013), (Kukenova, 2008), (Piras, 2012), and other studies related to the importance of choosing the right level of aggregation, model specification and estimation method when working with spatial data. However, all of estimated models show the stable positive spatial effect at any level of aggregation, any specification and estimation method used.
    Keywords: spatial effects; aggregation; weights matrix; Russian regions; economic growth
    JEL: R11 C21
    Date: 2015–10
  34. By: Oto Hudec; Marek Lavcak
    Abstract: In recent years, start-ups and creative industries economy have recorded an extraordinary expansion. The geography of start-up and creative industries is often coincident with the factors of agglomeration economies and networking assets together with talent inherence and managerial culture, which are supposed to be similar for both appearances.In Slovakia, the government has recognized its interest in the agenda of start-ups and creative industries only recently (2013), but the private and non-profit sector has predicted this trend three years before, when in Bratislava, the capital of Slovakia, the first major co-working spaces with an integrated approach to education and support of innovative business emerged. A support in the second largest city Ko?ice started institutionally only in 2014, in the premises of its Technical University. The start-up ecosystems in both cities have different focus, size, evolutionary qualities and culture, as their birth and fast growth was influenced by existing different regional innovation system and attracted rather different groups of young people. The comparison of both start-up and art scenes in its early phase, only marginally touched by the public incentives, gives a possibility to study the start-up ecosystems in their uncontaminated form, based mostly on the interviews of the start-up owners, gurus, venture capitalists, enthusiasts and observers.
    Keywords: start-up; creative industries; regional diversity; development; entrepreneurship
    JEL: O R
    Date: 2015–10
  35. By: Anna Arent; Matylda Bojar; Nelson Duarte; Francisco Diniz
    Abstract: This paper analyses the role of SMEs in regional development, focusing the particular case of This paper analyses the role of SMEs in regional development, focusing the particular case of Lublin Region in Poland. By using a questionnaire presented to firms that are operating in manufacturing and construction sectors were analysed several issues related to firms themselves, and their sustainability strategies. The sustainability strategy was measured through the combination of the three main perspectives in sustainable development: Economic, Social, and Environmental. This study aims, in a first stage, to analyse entrepreneurs? view of their role in local and regional development, by the adoption of sustainability strategies at the three identified levels. After that, it will also be explored the relation between sustainable development and other variables such as: business local integration, firm age, number of years in the actual location, or firm legal form. As mentioned, the methodology adopted was the questionnaire, in order to get entrepreneurs opinion. In order to guarantee a valid sample, and considering the number of firms operating in this region, it was calculated the number of a valid sample, and due to the results obtained after a pilot study it was identified a valid sample of 44 questionnaires. However, due to the number of firms operating in the manufacturing and construction businesses (above 34.000) it was decided to collect some more questionnaires. At the end 314 questionnaires answered by managers from SMEs operating the in region of Lublin, acting the in the manufacturing and construction sectors, were accepted for this analysis. As main results it was identified that the major concern of entrepreneurs is related to the economic perspective. The second most important perspective was the environmental and at last the social one. In general the results were very positive. Most of firms present a proactive attitude towards to sustainable development, arguing that they adopt sustainability strategies (Economic, Social, and Environmental) at their management policies and strategies. However it was noticed that while older firms (above 10 years old) present greater concern with social and environmental issues, younger firms, are focusing in the economic perspective.
    Keywords: SMEs; Sustainable Development; Local/Regional Development
    JEL: M10 O14 O18 O44
    Date: 2015–10
  36. By: Jean-Louis Combes (CERDI - Centre d'études et de recherches sur le developpement international - CNRS - Université d'Auvergne - Clermont-Ferrand I); Mary-Françoise Renard (CERDI - Centre d'études et de recherches sur le developpement international - CNRS - Université d'Auvergne - Clermont-Ferrand I); Sampawende Jules Tapsoba (FMI - Fonds monétaire international - FMI [FMI])
    Abstract: This paper examines the cyclicality of provincial expenditure in China during the period 1978-2013. We assess whether provincial expenditure has been pro-cyclical using panel data for our analysis. Profligacy is found to be a regular feature of provincial fiscal policy. This profligacy occurs both in good and bad times and has markedly increased since 1994 with the increased autonomy of provinces. We further find that the profligacy bias is mitigated when financial constraints are relaxed, the remaining political life of the governor is long, government efficiency is strong, corruption incidence is low, and governments are large.
    Keywords: China,Fiscal cyclicality,regional growth
    Date: 2015–10–19
  37. By: Milan Deskar Škrbić (Erste & Steiermarkische bank); Hrvoje Šimović (Faculty of Economics and Business, University of Zagreb)
    Abstract: When estimating the size of fiscal multipliers one has to take into consideration various structural characteristics of economies which, directly or indirectly, affect the transmission from government stimuli to economic activity. Thus, in this paper we use a ‘bucket approach’ to determination of the size of fiscal multipliers, which enables us to make presumptions on the size of fiscal multipliers, given the structural characteristics of selected Western Balkan economies – Croatia, Slovenia and Serbia. After this ‘non-empirical’ approach we use structural VAR framework to test our hypothesis derived from the ‘bucket approach’. Our results confirmed the hypotheses on the relative size of the multipliers between these three peer countries, with Croatia having the highest spending multiplier and Slovenia the lowest one.
    Keywords: fiscal multipliers, Western Balkans, bucket approach, structural VAR
    JEL: E62 C32 H20 H30 H50
    Date: 2015–10–29
  38. By: Anna Golejewska; Dorota Czy¿ewska
    Abstract: The notion of smart specialisation is an important framework in the structural funding period 2014-2020. Although the original academic concept of this policy was sectorally oriented and focused on the productivity gap between the EU and the US, it is increasingly applied to regional innovation context [OECD 2013; Foray, David, Hall 2009; McCann, Ortega-Argiles 2013; Camagni, Capello 2013]. Regions are recognized as a relevant level of innovation policies given the weight of agglomeration economies. Smart policies build the knowledge-based development potential of any region, strong or weak, high-tech or low-tech. According to smart specialisation approach, those regions which are not leaders in any of the major science and technology areas, should follow the rule: not to do everything in science, technology and innovation and to promote actions making their knowledge base unique and superior to others. The progress of identifying regional smart specialisations is diverse in selected Polish and French regions. The empirical analysis has shown that there is not great difference in the selection methods of smart specialisations implemented by catching-up regions in Poland and the best performing developed regions in France [Czy¿ewska, Golejewska 2014]. The main objective of the paper is to assess the advancement of the least innovative Polish and French regions in the process of smart specialisation. In order to achieve the main objective of the paper, the following detailed objectives are expected to be met: - presentation of the economic fundamentals of smart specialisation; - presentation of literature review of challenges for the least developed regions in Europe; - selection of the least innovative Polish and French regions on the basis of four indicators: GDP per capita, population aged 25-64 with tertiary education attainment, R&D expenditure and patent applications to the EPO. - assessment of the advancement of the smart specialisation process in selected regions with reference to their economic, social and innovation potential. As research methods, the authors used descriptive analysis, analysis of strategic documents, case studies analysis and statistical analysis. The statistical analysis is based on Eurostat Regional Statistics. The lack of actual and comparable regional data for the whole group of regions caused the choice of the year 2011, as the reference year. In case of patent applications the last analyzed year was the year 2010. It is expected that the research results concerning the advancement of the smart specialisation process in selected regions under analysis will give recommendations for regional authorities of Polish and French regions in terms of the smart specialisation elaboration and monitoring.
    Keywords: national and regional smart specialisation; innovation policy; France; Poland
    JEL: R58 L52
    Date: 2015–10
  39. By: Xiaoxia Lin; Jinghua Sha; Jingjing Yan
    Abstract: Abstract: Beijing-Tianjin-Hebei region is one of the most developed areas in China with a most rapid rate of economic growth. It is also a well-known region suffering great water scarcity. The water resources per capita is 118.60m³, 99.46 m³, 240.57 m³ respectively in Beijing, Tianjin and Hebei in 2013, all below 500 m³ that is defined as absolute scarcity by the United Nations. Water resources scarcity restricts the economic growth of the region at large and may account to the economic gaps between the three cities/ provinces. Economic growth in return aggravates its water shortage. The coordinated development of Beijing-Tianjin-Hebei region has been emphasized in recent years by the central government and means of solving regional problems and promoting its coordinated development need to be put forward. This study investigates the impacts of water resources factors on the regional economic growth to explore the direct influential factors of water resources, using panel data collected from 2004 to 2013. The main results show that: (1) the share of water for agricultural use and annual domestic water use per capita are statistically significant to the regional GDP per capita, with coefficients of 0.86 and 0.32 and (2) thus the impact of water resources on regional economic development is attributable to regional water use structure and domestic water use efficiency. Integrated regional governance of water resources, especially regional policies towards efficient water use and enhanced economic structure optimizing would be effective options for governments to propel the sustainable development of the region.
    Keywords: water resources;regional economic development;Beijing-Tianjin-Hebei Region
    JEL: R11
    Date: 2015–10
  40. By: Jolta Kacani; Lucas Van Wunnik
    Abstract: In this paper we try to analyze the impact of head office assignment of a multinational enterprise (MNE) towards the upgrading path of its subsidiaries in host economies. In our analysis we follow a case study methodology based on the extensive field work in two Italian clothing manufacturing subsidiaries located in Albania. Our first case study is Shqiperia Trikot sh.p.k a subsidiary of Cotonella S.p.A and the second case is Valcuvia Alba sh.p.k a subsidiary of Valcuvia s.r.l. These subsidiaries have in common the products they manufacture (underwear), the nationality of enterprises they represent (Italian), and the host economy in which they are located (fiscal regime, legal environment, macroeconomic indicators). However, the two subsidiaries differ in the level of responsibilities assigned by respective head offices. By comparing the different head office assignment strategies of the two Italian enterprises towards their subsidiaries in Albania we try to draw useful lessons on the different levels of upgrading the two subsidiaries have achieved over the last twenty years. We start our analysis by introducing the activity of the two Italian enterprises including international clients, suppliers of raw materials, portfolio of products, and the main reasons that induced them to locate production in Albania. What follows is our analysis on the two kinds of subsidiary upgrading. We look into upgrading in the complexity of activities realized in the subsidiary (process, product, functional) and the level of embeddedness (linkages with local suppliers and local employment in management positions) experienced by Shqiperia Trikot sh.p.k and Valcuvia Alba sh.p.k since their establishment in Albania in the early 1990s. In parallel, we analyze the level of investments in operating facilities, manufacturing technology, and trainining of the employees occuring in each subsidiary as necessary instruments for upgrading. Our findings indicate that subsidiary upgrading is encouraged when head office assignment allows subsidiaries to participate in complex activities like research and development, design, and brand promotion that have traditionally characterized the head office activity. Facing the same market conditions while operating in Albania, manufacturing of similar goods, and having head offices located in the north of Italy the two subsidiaries reached a different upgrading level due to the contrasting head office assignment strategies towards them: Cotonella S.p.A oriented by a strong cooperation and partnership transformed Shqiperia Trikot sh.p.k, into one of the most technologically advanced clothing manufacturing company in Albania. On the other hand, the head office assignment strategy of Valcuvia S.r.l guided by an ongoing control of the operational activity has limited upgrading of its only subsidiary, Valcuvia Alba sh.p.k.
    Keywords: foreign direct investment; subsidiary upgrading; regional development; clothing
    JEL: F21 F23
    Date: 2015–10
  41. By: Hanh Vu Thi
    Abstract: Trade liberalization and international economic integration are major and important issues especially to developing countries including Vietnam. They have provided the country with many opportunities such as foreign investment projects from developed countries, an increase in the State budget through taxation on exports and imports, the higher level of employment, which have all contributed to improving the standard living of the people. Since the country's Reform (Doi Moi) in 1986, trade liberalization has brought about an increase export value from 0.78 billion USD in 1986 to more than 72 billion USD in 2010 which accounted for an average of 70% increase to the GDP of Vietnam. Moreover, Vietnamese firms are becoming increasingly aware of the importance of innovation and this is becoming the main driver for Vietnam's deeper participation in regional and global economic integration organization such as ASEAN and WTO. Exports play an important role in Vietnam’s international trade, helping to increase the national revenue and to improve the position of Vietnamese firms in the global value chain. Such an improvement of Vietnam's position in the global value chain means being higher in the chain rather than carrying out simple processing at the low-end. If the production factors which include labor, capital, and fixed assets are analyzed in relation to firms' exports, plausible assessments of Vietnamese firms' contributions to the global chain can be determined. It should be also noted that the country's trade policy reform has affected the structure of Vietnam's exports during periods, has been subject to the effect of the volatile world's trading market and the effect of an emerging giant exporter such as China. However, Vietnam's exports are facing some problems on international trade market for various reasons. Firstly, the export structure continues to be mainly based on primary and labor-intensive products such as the agricultural, forestry, fishery and footwear sectors. Secondly, low value added and labor intensive products account for a large proportion of the total exports since almost all economic sectors of Vietnam are involved in the assembly and simple processing stage of the global value chain. We hope this dissertation can help to constitute a reliable basis for formulating export trade policy. Firstly, there is a need for greater efforts from Vietnamese government to implement social economic structural reform with a special focus on SOEs, in order to strengthen investors' confidence. Secondly, there is also a need to encourage the shift away from labor-intensive export products toward capital-intensive products with special emphasis on innovation in particular through research and development activities of firms. The dissertation studies export trade of a single country namely Vietnam. It is an empirical study, which tests both macro and micro determinants of Vietnamese export trade. Particularly, the dissertation uses export trade data at country and firm level to test hypotheses for each determinant including firm and sector effects. We have extracted a dataset on Vietnam's export trade for the 1997-2009 period via WITS of the World Bank. For firm's gravity model, we used export data of firms from VCO for the 2006-2010 period. We analyzed determinants of firms' exports by combining firms' export data and the data of footwear, rice and wood and wood products firms' characteristics for the year 2008. Since firms' export intensity strictly lies in the unit interval, we transformed it into the type of logit then attempted with the OLS and quantile regression methods. Our dissertation mainly focuses on certain external factors of Vietnamese exports at macro and micro levels and analyzes some important determinants of exporting firms in three sectors namely footwear, rice and wood and wood products. Relevant findings based on empirical analysis serve to suggest policy implications and firms' managerial practices. In general, wealthier nations are preferred destination market for Vietnamese exports because of their higher purchasing power. The government of Vietnam therefore tries to negotiate proactively and conclude trade agreement as well as memorandum of understanding with such countries as these measures facilitate trade for local firms. However, rice firms in particular do not necessarily consider country with the large economy to be their destination market. In fact, there are several reasons for firms to enter international market and to sign contracts such as to improve their net profits, to expand their market share or to develop potential market. Regarding determinants of Vietnamese exporting firms, higher wages reduce a firms' propensity to export in general which significantly affects wood and wood products and footwear firms. Although, in some cases, increasing wages somewhat improve worker's productivity thus increasing export revenue, in other cases for economic reasons, higher wages can not be afforded by employers for manual workers in manufacturing sectors where skilled labor is not essential. Investing in high-tech production technology does not necessarily increase growth in the value of Vietnamese firms' exports in three sectors mentioned. Although, state-owned firms have been granted preferential or priority treatment by the Government, they appears to be less efficient than others. The regression result shows that state-owned firms in all three sectors are lagging in export performance. Ongoing Government support for state-owned, firms may lead to an unfair competitive environment especially for small, privately owned firms since the Government protection of the Government seem to be unreasonable. If full data on firms' exports of in all sectors had been obtained, the author of the dissertation were able to draw conclusions on the determinants for all sectors and compare their effects on exports accordingly. We consider innovation indicators would be interesting particularly for firms located in a developing and emerging country such as Vietnam. Therefore, we need an appropriate survey method to collect information to resolve the missing data problem of the existing database.
    Keywords: research copperation; doing business
    Date: 2015–08–24
  42. By: Dora Szendi (University of Miskolc)
    Abstract: The distribution of the Hungarian territorial income is not equal across the local administration units (LAU1). There are huge disparities between the different parts of the country. The most developed territories can be found in the central and north-western part of Hungary, until the least developed ones are there in north-eastern Hungary and in the southern Transdanubian region. Nemes Nagy (1998) in his works emphasizes that the territorial inequalities have several aspects and because of this need complex, more-dimensional analysis. From the beginning of the 2000ïs several researchers analysed the inequalities from various aspects (for example the four component model of Szak ln (2011) for territorial competitiveness). The aim of this recent research is to examine those significant factors which have a great influence onto the dispersion of the Hungarian territorial income and create optimal regression function. Because of the wide range of the indicators the use of factor analysis was strongly recommended. According to my former results (Szendi, 2015.) there is a significant medium-strong positive spatial autocorrelation in the case of the Hungarian territorial income at level LAU1. This correlation indicates the existence of spatial regression models.
    Date: 2015–10–15
  43. By: Tamas Dusek; Eva Palmai
    Abstract: This study examines the association between urban/rural residence and various forms of trust in Hungary, including control variables such as age, gender, income, marriage, qualification into the analysis. Trust is a basic dimension of human capital and a very often used concept in everyday situations too. Trust research became increasingly popular in recent years. However, urban-rural and spatial differences of specific forms of trust remains a rarely investigated question. Trust can be measured with one question (global or general trust) or with many questions. Global measures of trust have serious methodological and interpretative problems. Therefore a research was conducted with 19 questions concerning the various personal or impersonal subjects of trust. Respondents (n=2031) of a countrywide representative survey in Hungary rated their trust in various groups or institutions on a 10-point Likert scale. The results were analysed along the settlement hierarchy at four different levels: Budapest, the country capital; cities with county rights (namely the biggest Hungarian cities, apart from Budapest); smaller and medium sized cities; villages. Various sociodemographic factors were included into the analysis. In some cases age and gender is a more significant factor in differentiating the results as the settlement type, but age and gender can have a different effect on results for different settlement types. The results have a great variability according to the subject of trust. General differences between settlement types show a higher trust level in cities with county rights, then towns, villages and at last Budapest. Exceptions from this general picture are highly interesting: trust in personal contacts is much lower in Budapest, trust in institutions or abstract institutions (law and legal system, market system, political system, banks) is higher than in villages, institutions with more concrete personal contacts is higher in villages than in Budapest. The difference is bigger in the case of church. In Budapest, compared to other settlements, trust is lower in personal contacts, but the differences between settlement categories are lower than the differences of trust between the personal and impersonal contacts. Gender differences according to the settlement categories are also interesting. The highest trust level can be seen in elder age. However, trust of younger adults is higher in Budapest, mainly thanks to the much higher trust level in abstract institutions. Trust of younger adults in personal contacts and health institutions is not higher in Budapest. These are just some of the main finding of our complex results.
    Keywords: urban-rural differences; trust; territorial capital
    JEL: R5 R20
    Date: 2015–10
  44. By: Dang, Duc Anh
    Abstract: This paper considers the effects of social network on income and employment dynamics of rural-urban migrants in Vietnam. Estimation of a causal effect is challenging because unobserved factors affects both employment performances and social networks. I address this endogeneity problem by using instrumental variable method. The results suggest that social networks improve migrant’s earnings and make wage earners willing to change their jobs.
    Keywords: migration, social network, employment
    JEL: D02 J61
    Date: 2015–10–26
  45. By: Emran,M. Shahe; Sun,Yan - EAPCE
    Abstract: This paper relaxes the single-factor model of intergenerational educational mobility and analyzes heterogeneous effects of family background on children?s education in villages, with a focus on the role of nonfarm occupations. The analysis uses data from rural China that cover three generations, and are not subject to coresident sample selection. Evidence from a battery of econometric approaches shows that the mean effects of parents? education miss substantial heterogeneity across farm-nonfarm occupations. Having nonfarm parents, in general, has positive effects, but children of low educated non-farmer parents (with higher income) do not enjoy any advantages over the children of more educated farmer parents. Estimates of cross-partial effects without imposing functional form show little evidence of complementarity between parental education and nonfarm occupation. The role of family background remains relatively stable across generations for girls, but for boys, family background has become more important after the market reform. The paper explores causality using three approaches: Rosenbaum sensitivity analysis, minimum biased inverse propensity weighted estimator, and heteroscedasticity-based identification. The analysis results suggest that the advantages of having more educated parents, especially with nonfarm occupations, are unlikely to be due solely to selection on genetic transmissions. However, the estimated positive effects of nonfarm over farmer parents among the low educated households may be driven entirely by moderate selection on genetic endowment.
    Keywords: Education For All,Education and Society,Social Inclusion&Institutions,Population&Development,Primary Education
    Date: 2015–10–26
  46. By: Laetitia Duval (Imperial College London - Imperial College London); François-­charles Wolff (UN - Université de Nantes, INED - Institut national d'études démographiques)
    Abstract: Economic studies on the Roma population, which is the largest and the poorest ethnic minority in Europe, remain sparse due to the limited availability of appropriate micro level data. This paper provides a comparative analysis of life satisfaction between Roma and non-­‐Roma young adults aged between 15 and 24 using survey data collected from Serbia in 2010 and from Bosnia and Herzegovina in 2011. Results from raw answers show that young Roma living in settlements are less satisfied with life than non-­‐Roma. However, we find instead that the former group is more satisfied once we account for the fact that Roma have more disadvantaged characteristics on average. Also, Roma young adults expect a better life within one year compared to non-­‐Roma in Serbia while there is no difference in Bosnia and Herzegovina.
    Keywords: Life satisfaction,ethnicity,youth,Roma,Bosnia and Herzegovina,Serbia
    Date: 2015–10–22
  47. By: Vera Ivanova
    Abstract: Using the data covering the time period from 1996 till 2011, I estimate a spatial autoregressive model of wages' growth rates across Russian cities. I _x001C_find that wages in Russian cities exhibit convergence. I also test whether city population (which is a proxy for city size) has positive impact on the speed of convergence. Using geographical location characteristics (longitude, latitude, average annual temperature, soil quality) and historical data (the fi_x001C_rst two censuses of the country) as instruments for population, I _x001C_find a positive relationship between city size and city growth. In other words, cities converge in wages, but diverge in size.
    Keywords: cities; wages; convergence; spatial econometrics
    JEL: R12 O18
    Date: 2015–10
  48. By: Agapova, E. (Russian presidental academy of national economy and public administration (RANEPA)); Grinenko, A. V. (Russian presidental academy of national economy and public administration (RANEPA)); Lobov, Artem (Russian presidental academy of national economy and public administration (RANEPA)); Tatarnikov, A. S. (Russian presidental academy of national economy and public administration (RANEPA))
    Abstract: Economic relations arising in the implementation of state functions when placed, execution and control of public procurement of the Russian Federation and throughout the common economic space allow us to study the norms of competition policy and procurement for state and municipal needs and natural monopolies, to identify the main trends of contemporary national economic policy, identify key issues and prospects for the development of a single economic space. Extensive and comprehensive review of the various aspects allow for a fresh look at modern national economic policies in Russia and a number of recommendations to adapt the national economy to the conditions of the functioning of the multilateral trading system.
    Keywords: economic relations, common economic space, synergistic effect, public procurement
    Date: 2015–07–29
  49. By: Daniela-Luminita Constantin; Adriana Elena Dardala
    Abstract: Location is a key concept in tourism sector analysis, given the dependence of this activity on the natural, built, cultural and social characteristics of a certain territory. Consequently, the tourist zoning is an important instrument for delimiting tourist areas in accordance with multiple criteria, so as to lay the foundations for finding the most suitable solutions of turning to good account the resources in this field. The modern approaches propose in this respect a series of analytical tools that combine GIS and spatial agglomeration analysis based techniques. They can be also employed in order to examine and explain the differences between tourist zones (and sub-zones) in terms of economic and social results and thus to suggest realistic ways to improve the efficiency and effectiveness of tourist activities in various geographical areas. In the described context this paper proposes an interdisciplinary perspective (spatial statistics and geographical information science) for analysing the tourism activity in Romania, mainly aiming to identify the agglomerations of companies acting in this industry and assess their performance and contribution to the economic development of the corresponding regions. It also intends to contribute to a better understanding of the way in which tourism related business activities develop in order to enhance appropriate support networks. Territorial and spatial statistics as well as GIS based analyses are applied, using data about all companies acting in tourism industry in Romania provided by the National Authority for Tourism as well as data from the Environmental Systems Research Institute (ESRI).
    Keywords: tourist zones; location analysis; GIS; economic performance
    JEL: R11 R12
    Date: 2015–10
  50. By: Martin Borowiecki; Karl-Heinz Leitner
    Abstract: Using a panel data model, we study the effects of regional and industry-level traits on new business formation (NBF) for 164 industries across 266 Chinese prefectures between 1998 and 2007. The objective is to provide empirical estimates on effects of prefecture traits on entry rates, and in particular on effects of prefecture knowledge capital stocks on R&D-intensive new business formation. In line with literature on knowledge spillovers, we find extensive evidence of a positive prefecture knowledge capital stock effect on R&D-intensive NBF rates, whereas knowledge capital stocks do not predict non R&D-intensive entry rates. Among regional and industry-level characteristics, we find that prefecture supplier and customer market strength are strongly linked to higher business entry rates. Our results for China contrast with recent findings on the effects of regional traits on firm entry rates in India and the US, indicating distinct regional patterns of Chinese entrepreneurship.
    Keywords: Entrepreneurship; knowledge spillovers; agglomeration; development; China
    JEL: L26 L60 M13 O10 O14 O33 R00 R10 R12
    Date: 2015–10
  51. By: Yuri Yegorov
    Abstract: The role of population density for economic activity was neglected in most part of economic theory. This paper is a review and extension of the previous works of the author in this field. So far, densities did not become common economic variables in economic analysis, and two countries with different densities of population and infrastructure but similar in macroeconomic parameters are treated as similar. One of the presented models is about an influence of population density on infrastructure development, and later on country potential for economic growth (Yegorov 2005a). Self-organization of production activity in space is elaboration of the ideas of von Thunen. When a city emerges as a center of industrial activity, it deforms the space, and agricultural land rent becomes a function of distance due to transport cost to bring the good to the market. Population density plays an important role in harvesting societies, i.e. those that depend on agriculture and natural resources. Too high population density decreases the natural endowment per capita, but eases the development of infrastructure, leading to existence of an optimal population density for economic growth (Yegorov, 2009). The trade-off between scale economies and transport costs leads to an optimal area served by a local monopolist. In the world with low population density competition might not even emerge because even monopolist can become bankrupt due to low demand density, especially in the environment of high transport costs. Such situation took place on the most part of Russian territory after liberalization that also lead to an increase in relative transport costs. Population density also can play role for an optimal size of a country. While there are many other reasons (mostly historical), spatial structure is also important. Land area of a country is considered as some capital bringing rent from natural resource extraction. The length of a border requires protection efforts and thus is a first type of cost. Commuting with the capital is another type of cost, and here the population density also matters. All these 3 factors enter with different power, and optimization with respect to linear scale give different results (Yegorov, 2005b). Literature 1. Yegorov Y. (2005a) Role of Density and Field in Spatial Economics. ? In: Yee Lawrence (Ed). ?Contemporary Issues in Urban and Regional Economics?. Nova Science Publishers, 2005, N.Y., p.55-78. 2. Yegorov Y. (2005b) Dynamically Sustainable Economic Equilibria as Self-Organized Atomic Structures (2005b) ? In: M.Salzano, A.Kirman, Eds., ?Economics: Complex Windows?, Springer-Verlag Italia, 2005, p.187-199 3. Yegorov Y. (2009) Socio-economic influences of population density. - Chinese Business Review, vol.8, No. 7, p.1-12.
    Keywords: population density; optimization; economic growth; transport costs
    JEL: O18 Q10 R14 R40
    Date: 2015–10
  52. By: Kadri Männasoo; Jaanika Meriküll
    Abstract: The paper studies financing constraints for R&D over the latest boom and bust episode in Central and Eastern Europe (CEE). Given that financial and venture capital markets in CEE are thin in comparison to those in high-income economies and that many of CEE countries experienced a credit crunch during the last recession, it is proposed that financing constraints have a significant adverse effect on R&D activity in these countries. The paper uses two complementary firm-level data-sources from ten CEE countries. The results suggest that the role of financing constraints for R&D expenditures in CEE countries is substantial, as the probability of credit constrained firms undertaking R&D activities is around 70% lower and firms’ R&D expenditure cash flow sensitivity is very high. Despite the severity of the crisis, the adverse effect of financing constraints for R&D did not increase in the financial crisis. It is also confirmed that, conditional on credit constraints, firms’ R&D activity is higher in a recession.
    Keywords: R&D financing constraints, credit constraints, business cycle, Central and Eastern Europe
    JEL: O16 O32 O52 E32 P23
    Date: 2015–07
  53. By: Tatiana Mikhailova
    Abstract: This paper studies the geography of competition on Moscow commercial real estate market. We estimate the elasticity of office rental price to the prices of competing objects as a function of the geographical distance. We found that office real estate market in Moscow, although saturated, is surprisingly local. The evidence of price competition exists primarily at a walking distance, and dies down quickly at a distances beyond one kilometer. However, if competing objects are connected by a subway line, the geographical radius of competition extends to up to three kilometers. Thus, in the case of Moscow real estate transportation infrastructure works to integrate local markets and promote competition, although the magnitude of these effects are modest.
    Keywords: spatial competition; real estate; transport
    JEL: R32 R33 L85
    Date: 2015–10
  54. By: Joachim Möller; Uwe Blien; Phan thi Hong Van; Stephan Brunow
    Abstract: This article shows how the impulses of the transformation process in eastern Germany have spread through the economy and the labour market. The form of transformation has long-term effects on the form of control over the economy; it is managed largely from western firms. This fact has manifold consequences for the innovation behaviour of plants, among others, which in turn is further related to productivity and thus to the labour market. We argue that this transfers further to persistently lower wages and higher unemployment rates in eastern compared with western Germany.
    Keywords: Regional Unemployment; Regional Wage Dynamics; Innovation; Human Capital
    JEL: J24 J31 R12
    Date: 2015–10
  55. By: Wenjie Wu; Jianghao Wang
    Abstract: Location-based social media data is, increasingly, an important facilitator of exploring the movement of goods and people in and between countries across the globe. Typical examples include Twitter, Facebook, Foursquare. As with all social media data outputs, the fundamental value of location-based social media data is for sensing users? space?time trajectories, and thus, makes social media data a new platform for understanding business and social interactions in the spatial context. In large developing and emerging economies with massive social media users via computers and mobile phones, real-time ?geo-tagged? human mobility information from social media data sources are clearly potentially large. In these settings, cyberspaces are often built and expanded with the explicit aim of stimulating digital socioeconomic activities and balancing regional disparities. However, despite intense policy and public enthusiasms, there is virtually no direct evidence on exploring the configuration of urban network patterns by using social media users? mobility flows within a large developing country context. The scarcity of empirical evidence is not surprising, given that mining location-based social media data faces serious identification challenges. First, location-based social media data, as a type of big data resource, are often featured by the dynamic, massive information generated by billions of users across space. In truth, despite of the recent development of intensive-computational geographic information system (GIS) modeling programs, social media data with precise individual-level location information is still extremely large to proceed by using the GIS techniques at multiple geographical scales. Furthermore, conventional GIS-based computational methods cannot directly read the unstructured social media datasets (e.g. words, pictures, videos). Additional big data mining methods are often needed to transform social media data information from unstructured data formats to structured, and ready-to-use spatial datasets. In this paper, we tackle these problems by analysing the configuration of intercity connection patterns in China to provide new evidence to the applications of location-based social media data in urban and regional studies. Our examination of changes in human mobility patterns by months by city-pairs throughout China by months involves many potential stages of big data mining analysis. We stratify cities by core-periphery urban systems, by regions and by calendar months, finding that human mobility flows are not distributed evenly over time and across space. We find larger human mobility flows around the Chinese New Year month and the summer months. Our evidence suggests the significantly heterogeneity patterns of core-periphery urban systems as reflected from real-time human mobility flows. As a baseline, this paper is?for the first time in the literature?to comprehensively measure urban network patterns at a detailed spatial degree (the city-pair level) based on location-based social media data from a large developing country context.
    Keywords: Big data; Social media; Urban network; China
    JEL: P25
    Date: 2015–10
  56. By: Martin Maris
    Abstract: Evolution of the regional imbalances over the territory is closely linked with the development of commodity-cash relations and hence with creation of the market economy. Since the establishment of the market economy in most countries over the world; rent, interest, yield and wage became the major market driver of the production factors in order to make its localization decisions. It led to spatial organization and deployment of the scarce resources over the territory. The specific feature of these scarce resources is, that they are distributed unevenly over the territory. In the background affects centrifugal and centripetal forces which condition the concentration of the scarce resources in some areas and conversely its deconcentration in other areas. Main object of the paper is to analyse and evaluate effects of centrifugal and centripetal forces on regional economies of the Central Europe countries and recognize some common spatial patterns of the development. In our empirical research we focus on the Central Europe countries, namely Czech Republic, Austria, Slovakia and Hungary. Our sample consists regions of these countries on NUTS III level. For analysis of spatial imbalance within the territory of CE countries we use state variable - regional GDP / capita. In terms of examining causal relations of regional disparities in CE countries is appropriate to rely on tools of spatial statistical analysis. From this point we are concerned with measuring the spatial relations within the regional structure of CE countries. Preliminary we suppose that strongest influence of the centrifugal and centripetal forces is present around the core regions of CE countries, namely: Praha, Bratislava, Wien and Budapest. The object of our paper is measuring the intensity of these forces. Primarily, we examine the spatial imbalance within regions of the CE countries via using the Moran´s autocorrelation statistics, I (1950). We suppose that the spatial differentiation within the regions of CE countries acquire more or less regular pattern, so it, indicates that regional imbalance is conditioned also spatially. Secondary, in more details we focus on local patterns in spatial-temporal data on the wealth, centering on our core regions. For these purpose we use the statistics G_i (d) introduced by Getis and Ord (1992). Our research is based on secondary data sources collected in statistical databases of CE countries . As a basis for measurement we took indicator of regional GDP / capita converted to dollars at PPP. We expect to show on the effects of centrifugal and centripetal forces, which creates clear clusters around the core regions. It also supposes that some signs of the spatial imbalances over the territory are also presents. In conclusion we have to examine possible factors which condition present state.
    Keywords: region; centrifugal and centripetal forces; spatial imbalance; spatial autocorre
    JEL: R12
    Date: 2015–10
  57. By: Otsuki, Tsunehiro; Honda, Keiichiro; Michida, Etsuyo; Nabeshima, Kaoru; Ueki, Yasushi
    Abstract: This paper uses firm-level data to examine the impact of foreign chemical safety regulations such as RoHS and REACH on the production costs and export performance of firms in Malaysia and Vietnam. This paper also investigates the role of global value chains in enhancing the likelihood that a firm complies with RoHS and REACH. We find that in addition to the initial setup costs for compliance, EU RoHS (REACH) implementation imposes on firms additional variable production costs by requiring additional labor and capital expenditures of around 57% (73%) of variable costs. We also find that compliance with RoHS and REACH significantly increases the probability of export and that compliance with EU RoHS and REACH helps firms enter a greater variety of countries. Furthermore, firms participating in global value chains have higher compliance with RoHS and REACH regulations, regardless of whether the firm is directly exporting, when the firm operates in upstream or downstream industries of the countries' supply chain.
    Keywords: Malaysia, Vietnam, International Trade, Productivity, Regulation, Costs, Trade, RoHS, REACH, Cost Function, Market Access, Supply Chain
    JEL: F14 L15 O53
    Date: 2015–04
  58. By: JINJI Naoto; TSURUMI Tetsuya
    Abstract: In this study, we investigate how inward foreign direct investment (FDI) influences the environmental actions of local firms in the host country. We use firm-level data of Vietnam manufacturing firms for the period 2007-2008. Environmental actions are measured in five indexes, including adoption of environmental management system, certification of environmental standards, and application of cleaner production. We estimate the direct effect of foreign ownership share and three types of spillover effects on the environmental behavior of firms. Spillover effects include horizontal, forward, and backward spillovers. We find positive and statistically significant direct effects and negative and significant horizontal spillovers. We also find positive and significant backward spillovers when firms engage in international trade. Moreover, we find heterogeneity in both direct and spillover effects among source countries of FDI.
    Date: 2015–10

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