nep-tra New Economics Papers
on Transition Economics
Issue of 2016‒11‒06
sixteen papers chosen by
J. David Brown
United States Census Bureau

  1. A Real Estate Boom with Chinese Characteristics By Edward Glaeser; Wei Huang; Yueran Ma; Andrei Shleifer
  2. The Intergenerational Transmission of Human Capital and Earnings in Contemporary Russia By Borisov, Gleb V.; Pissarides, Christopher A.
  3. China?s Carbon Emissions Report 2016 By Zhu Liu
  4. What makes Vietnamese (not) attend periodic general health examinations? A cross-sectional study By Quan-Hoang Vuong; Quang-Hoi Vu; Thu Trang Vuong
  5. General versus Vocational Education: Lessons from a Quasi-Experiment in Croatia By Ivan Zilic
  6. Globalization Process in Emerging Capital Markets -- Lessons and Implications to China By Zichong Li; Pengyu Huang
  7. Soviet Foreign Trade Earnings Revisited By Kuboniwa, Masaaki; Tabata, Shinichiro; Nakamura, Yasushi
  8. Factions in Nondemocracies: Theory and Evidence from the Chinese Communist Party By Patrick Francois; Francesco Trebbi; Kairong Xiao
  9. Property Rights, Labor Mobility and Collectivization: The Impact of Institutional Changes on China’s Agriculture in 1950-1978 By Sun, Shengmin; Lopez, Rigoberto A.; Xiaoou Liu
  10. Public vs. private sector wage skill premia in recession: Croatian experience By Valerija Botric
  11. Market Quality in the Russian Far East from the Viewpoint of Company Management : Preliminary Report on Microeconomic Comparative Analysis with European Regions By Arai, Hirofumi; Iwasaki, Ichiro
  12. Trade Liberalization and Child Labor in China By Zhao, Liqiu; Wang, Fei; Zhao, Zhong
  13. The Impact of Credit Constraints on the Performance of Chinese Agricultural Wholesalers By Lifang Hu; Lopez, Rigoberto A.; Yinchu Zeng
  14. The Chinese Food Industry: development, constraints and policies By Maria Bruna Zolin; Matilde Cassin
  15. Urbanization and Rural Development in the People’s Republic of China By Chen, Zhao; Lu, Ming; Ni, Pengtu
  16. Determinants of Chinese Government Size: An Extreme Bounds Analysis By Philip Gunby; Yinghua Jin

  1. By: Edward Glaeser; Wei Huang; Yueran Ma; Andrei Shleifer
    Abstract: Chinese housing prices rose by over 10 percent per year in real terms between 2003 and 2014, and are now between two and ten times higher than the construction cost of apartments. At the same time, Chinese developers built 100 billion square feet of residential real estate. This boom has been accompanied by a large increase in the number of vacant homes, held by both developers and households. This boom may turn out to be a housing bubble followed by a crash, yet that future is far from certain. The demand for real estate in China is so strong that current prices might be sustainable, especially given the sparse alternative investments for Chinese households, so long as the level of new supply is radically curtailed. Whether that happens depends on the policies of the Chinese government, which must weigh the benefits of price stability against the costs of restricting urban growth.
    JEL: E60 G10 R21 R28 R31
    Date: 2016–10
  2. By: Borisov, Gleb V. (St. Petersburg State University); Pissarides, Christopher A. (London School of Economics)
    Abstract: We make use of longitudinal data for the Russian economy over 1994-2013 to obtain earnings and education information about parents and children. We estimate the intergenerational transmission of educational attainment and earning capacity and find high intergenerational correlation of earnings for both sons and daughters independently of educational qualifications. We attribute them to the impact of informal networks. We also find high correlation of educational qualifications but with critical variations due to labour market conditions. At the time of transition around 1990 children's educational attainment fell well below parents but recovered a decade later when the economy was booming.
    Keywords: human capital, intergenerational education mobility, intergenerational earnings elasticity, Russia
    JEL: J21 J23 J24 J62 O15
    Date: 2016–10
  3. By: Zhu Liu
    Abstract: Climate change driven by anthropengic carbon emissions is one of the most serious challenges facing human development. China is currently the world?s largest developing country, primary energy consumer, and carbon emitter. The nation releases one quarter of the global total of carbon dioxide (9.2 Gt CO2 in 2013), 1.5 times that from the US. Nearly three-quarters (73%) of the growth in global carbon emission between 2010 and 2012 occurred in China. Without mitigation, China?s emissions could rise by more than 50% in the next 15 years. Given the magnitude and growth rate of China?s carbon emissions, the country has become a critical partner in developing policy approaches to reduce global CO2 emissions.China is a country with significant regional differences in terms of technology, energy mix, and economic development. 1 Understanding the characteristics and state of regional carbon emissions within China is critical for designing geographically appropriate mitigation policies, including the provincial cap and trade system that is projected to be lanuched in 2017. In this study, I summarize the key features and drivers of China?s regional carbon emissions and conclude with suggestions for a low carbon policy for China.The principal findings are:Provincial aggregated CO2 emissions increased from 3 billion tons in 2000 to 10 billion tons in 2016. During the period, Shandong province contributed most to national emissions, followed by Liaoning, Hebei, and Shanxi provinces. Most of the CO2 emissions were from raw coal, which is primarily burned in the manufacturing and the thermal power sectors.Significant differences exist among provinces in terms of CO2 emissions. Analyses of per capita emissions and emission intensity indicate that provinces located in the northwest and north had higher per capita. CO2 emissions and greater emission intensities than the central and southeast coastal regions. Developing areas have intensive resource use and their economic structure is dominated by heavy industries with higher sectoral emission intensity. These areas contribute to most of the growth in national emissions and are the main drivers of China?s carbon intensive economic structure.An analysis of the factors that affect China?s CO2 emissions shows that technology heterogeneity is directly connected to China?s carbon growth. The dissimilar rate of adoption of energy efficient technologies among regions is a major barrier to China?s CO2 mitigation, and thus needs more attention from researchers and policy makers.
    Date: 2016–01
  4. By: Quan-Hoang Vuong; Quang-Hoi Vu; Thu Trang Vuong
    Abstract: Background: General health examinations (GHE) have become an increasingly common measure for preventive medicine in Vietnam. However there has still been a lack of understanding about what make Vietnamese (not)attend GHE. The effects of budget or time constraints remain to evaluated. Better-informed policy making needs these inputs. Aim & Objectives: This study aims to investigate factors that may affect Vietnamese behaviors with respect to periodic GHE. Main objectives are to: i) explore empirical relationships between influencing factors and periodic GHE frequencies; and, ii) predict the probabilities of attending GHE and associated conditions.Materials and Methods: The study uses a 2,068-observation categorical dataset obtained from a Vietnamese survey in 2016Q4. The analysis is then performed using the methods of baseline-category logits for establishing relationships between predictor and response variables. Results: There exist relationships among: (i) GHE expenditure and time consumption; (ii) health priority and sensitivity to health data; (iii) insurance status, and (iv) the frequency of GHE, with most p’s
    Keywords: General health examination; Health insurance; Medical costs; Health service consumers; Vietnam
    JEL: I18 P20 I10
    Date: 2016–10–26
  5. By: Ivan Zilic (The Institute of Economics, Zagreb)
    Abstract: This paper identifies the causal effect of an educational reform implemented in Croatia in 1975/76 and 1977/78 on educational and labor market outcomes. High-school education was split into two phases which resulted in reduced tracking and extended general curriculum for pupils attending vocational training. Exploiting the rules on elementary school entry and timing of the reform, we use a regression discontinuity design and pooled Labor Force Surveys 2000–2012 to analyze the effect of the reform on educational attainment and labor market outcomes. We find that the reform, on average, reduced the probability of having university education, which we contribute to attaching professional context to once purely academic and general high-school programs. We also observe heterogeneity of the effects across gender, as for males we find that the probability of finishing high school decreased, while for the females we do not observe any adverse effects, only an increase in the probability of having some university education. We explain this heterogeneity with different selection into schooling for males and females. Reform did not positively affect individuals’ labor market perspectives; therefore, we conclude that the observed general-vocational wage differential is mainly driven by self-selection into the type of high school.
    Keywords: general education, vocational training, reform
    JEL: I21 J24 P20
    Date: 2016–10
  6. By: Zichong Li; Pengyu Huang
    Abstract: Since 2002 when China first introduced QFII (Qualified Foreign Institutional Investors) system, QFII has been developing in China for 14 years, during when RQFII, Shanghai-Hongkong Stock Connect Program, Shanghai-London Stock Connect Program furthur broadened the avenue for foreign capital to invest in Chinese Security Market. As FTA (Free Trade Area) Financial Reform Program emerged, RMB (CNY) Capital Project is likely to make the currency exchangeable. With the success in QFII, RQFII and Shanghai-Hongkong Stock Connect Program, China's long term advantage in interest rate, and the relatively low stock index value after the recent stock market crashes in mid 2015 and early 2016, foreign capitals' demand for Chinese market to loosen its restrictions continually increases. This article picks the three most representative emerging capital markets in the world, namely Taiwan, Korea and India, by comparing and analyzing their paths of globalization, attempts to shed light on China's next steps regarding globalization.
    Date: 2016–11
  7. By: Kuboniwa, Masaaki; Tabata, Shinichiro; Nakamura, Yasushi
    Abstract: Soviet statistics authorities attempted to incorporate foreign trade earnings into national income, based on a unique formula. First, we clarify that they must have applied the so called Burge-Geary system for trading gain or terms of trade to their specific accounting in a different context. Then we prove that this Soviet practice should have been corrected. Second, demonstrating our estimate of Soviet foreign trade earnings by using Soviet official data on foreign trade and input-output tables, we explore implications of our estimate. We further look at how present Russia has succeeded to the Soviet statistical and institutional legacies of foreign trade earnings in the national accounting.
    Keywords: Soviet Union, special foreign trade earnings, foreign trade tax, national accounting, input-output table
    JEL: E01 P33 P51
    Date: 2016–10
  8. By: Patrick Francois; Francesco Trebbi; Kairong Xiao
    Abstract: This paper investigates theoretically and empirically the factional arrangements and dynamics within the Chinese Communist Party (CCP), the governing political party of the People's Republic of China. Our empirical analysis ranges from the end of the Deng Xiaoping era to the current Xi Jinping presidency and covers the appointments of both national and provincial officials. We present a set of new empirical regularities within the CCP and a theoretical framework suited to model factional politics within single-party regimes.
    JEL: P3 P48
    Date: 2016–10
  9. By: Sun, Shengmin (Shandong University); Lopez, Rigoberto A. (University of Connecticut); Xiaoou Liu (Renmin University of China)
    Abstract: This paper evaluates the impact of property rights, labor mobility barriers and degrees of collectivization on China’s agricultural growth in 1950-1978. Using a semi-Bayesian stochastic frontier analysis, we find that collective production with free labor mobility and private property rights was the most efficient institutional setting. Although deviations from the two institutions resulted in a decline in agricultural production, the loss in agricultural production from labor mobility barriers was up to five times greater than loss from depriving farmers of private property rights.
    Keywords: economic growth, institutions, agriculture, property rights, labor mobility, China
    Date: 2016–04
  10. By: Valerija Botric (The Institute of Economics, Zagreb)
    Abstract: Recent crisis in Croatia has more adversely affected private than public sector workers. However, the question is whether the pay schemes are more related to the nature of jobs in the public sector, where certain skills are in demand and consequently paid more than in the private sector. To shed some light on this issue, wages during the period 2008–2014 have been analysed in two sectors separately. For each sector wage skill premium was assessed by classifying workers into three skills groups: the first is related to abstract problem solving and organizational tasks, the second is relatively more routine-task intensive, while the third is primarily manual-task intensive. Additional emphasis is placed on the young workers (up to age 30). There are two reasons for this. The first is related to the adverse effects recent recession had on youth labour market outcomes throughout the European Union. Croatia, with the youth unemployment rate of 45.5 percent (age group 15–24) in 2014 is no exception to this problem. The second reason is related to the question of a specific active labour market policy (ALMP) measure design for inclusion of young people in the labour market by offering them internship/traineeship subsidized in the amount of an approximately minimum wage. The question remains whether such measure channels young workers into certain jobs and disrupts normal labour market competition due to its wide popularity.
    Keywords: public vs. private sector, wage differences, skill premia, Croatia
    JEL: J31 J33 J45
    Date: 2016–10
  11. By: Arai, Hirofumi; Iwasaki, Ichiro
    Abstract: In the framework of the project titled “Market Quality in the Russian Far East from the Viewpoint of Company Management” initiated by the Economic Research Institute for Northeast Asia (ERINA), a Japan–Russia research team carried out a large-scale questionnaire survey of Russian firms located in 17 federal subjects from October to December 2015 (ERINA Enterprise Survey). In this paper, we briefly describe the background, purpose, and organization of the project and report the chronology, outline, and preliminary results of the enterprise survey.
    JEL: D22 L22 P25 P31 R11
    Date: 2016–10
  12. By: Zhao, Liqiu (Renmin University of China); Wang, Fei (Renmin University of China); Zhao, Zhong (Renmin University of China)
    Abstract: This paper exploits a quasi-natural experiment – the U.S. granting of Permanent Normal Trade Relations (PNTR) to China after China's accession to the World Trade Organization – to examine whether trade liberalization affects the incidence of child labor in China. PNTR permanently set U.S. duties on Chinese imports at low Normal Trade Relations (NTR) levels and removed the uncertainty associated with annual renewals of China's NTR status. We find that the PNTR was significantly associated with the rising incidence of child labor in China. A one percentage point decrease in average export tariffs raises the odds of child labor by a 1.3 percentage point. The effects are greater for girls, older children, rural children, and children with less-educated parents. The effect of trade liberalization on the incidence of child labor, however, disappears in the long run, because trade liberalization can induce exporters to upgrade technology and thus have less demand for unskilled workers.
    Keywords: child labor, trade liberalization, trade policy uncertainty, difference-in-differences, China
    JEL: F14 F16
    Date: 2016–10
  13. By: Lifang Hu (Renmin University of China); Lopez, Rigoberto A. (University of Connecticut); Yinchu Zeng (Renmin University of China)
    Abstract: Following market reforms and economic growth since the late 1970s, agricultural wholesale markets in China have developed substantially and become increasingly important in food distribution. This paper investigates the impact of credit constraints on the performance of agricultural wholesalers via a stochastic frontier approach (SFA) and a sample of 1,332 wholesalers nationwide. Empirical results show that relaxing credit constraints imposed by formal institutions results in an approximately 20-30 percent increase in the annual sales of agricultural wholesalers who are credit-constrained (40 percent of the sample). Credit constraints disproportionally impact the performance of micro and small wholesalers. Thus, policies aimed at providing credit access for these wholesalers would significantly boost the performance of smaller agricultural wholesalers while improving the functioning of these markets in China.
    Keywords: credit, credit access, agriculture, wholesalers, stochastic frontier, China
    JEL: Q14 Q13 O13
    Date: 2016–08
  14. By: Maria Bruna Zolin (Ca’ Foscari University of Venice, Department of Economics); Matilde Cassin (Ca’ Foscari University of Venice, Department of Economics)
    Abstract: Given the phenomenon of growing urbanization, the pressure on food demand for a rising population as well as changing diets, China has had to resort to imports, becoming a net importer of food. In absence of external flows, this scenario is set to continue and could then materialize in a future Malthusian scenario. Improved efficiency and productivity, reform of land use rights, but also the policy of "going out" or land grabbing are some of the plausible strategies that the country could improve to avoid an inexorable stabilization or, at worst, a decline in domestic production, as well taking into account the impact of climate change on agricultural commodities. Starting from these premises, the paper aims to analyze the existing scenario identifying constrains and policies that could prevent the development of the Chinese food industry.
    Keywords: Food demand, Food supply, China, Food industry, Food security, Food safety
    JEL: Q11 Q15 Q18 Q31 O13 R14
    Date: 2016
  15. By: Chen, Zhao (Asian Development Bank Institute); Lu, Ming (Asian Development Bank Institute); Ni, Pengtu (Asian Development Bank Institute)
    Abstract: This paper presents research findings on how urbanization enhances productivity and economic growth in both urban and rural sectors. Through agglomeration effects, employment opportunities and income levels can largely increase. In addition, the mechanisms of sharing, matching, and learning are much stronger in cities, especially large cities. However, in the People’s Republic of China (PRC), urbanization lags far behind industrialization. Institutional barriers against rural-to-urban and interregional migration, such as the hukou system, have reduced the ability of urban growth to absorb rural labor. As for rural development, urbanization has propelled agricultural productivity, rural income, and consumption levels. Moreover, agricultural productivity is driven to a large extent by capital accumulation, through capital deepening and remittance. Agricultural organizations, urbanization, and outflow of migrant workers make it possible for large-scale production and agricultural mechanization to occur.
    Keywords: Urbanization; rural development; PRC; China; hukou system; productivity; economic growth; 都市化; 農村開発; 経済成長; 中国
    JEL: E23 O14 R11
    Date: 2016–10–31
  16. By: Philip Gunby (University of Canterbury); Yinghua Jin
    Abstract: This paper studies the factors associated with the size of the public sector as measured by government spending at the level of Chinese provinces using the method of extreme bounds analysis to identify robust correlates with public sector size. We find that almost all traditional "economic" and "social stability" factors are insignificant and not robust to model specification changes. In contrast, "political" factors such as the degree of fiscal decentralization and national transfers to provincial governments tend to be significant and robust. Our findings suggest that repeated government attempts to reduce the relative size of the Chinese government sector have failed because the political factors determining government spending haven't changed.
    Keywords: Government Size; Fiscal Decentralization; Wagner's Law; Extreme Bounds Analysis
    JEL: C52 H70 P20
    Date: 2016–11–04

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