nep-tra New Economics Papers
on Transition Economics
Issue of 2016‒11‒20
25 papers chosen by
J. David Brown
United States Census Bureau

  1. How Does the Minimum Wage Affect Firm Investments in Fixed and Human Capital? Evidence from China By Haepp, Tobias; Lin, Carl
  2. Decline and Growth in Transition Economies: A Meta-Analysis By Iwasaki, Ichiro; Kumo, Kazuhiro
  3. Carbon Dioxide Emission-Intensity in Climate Projections: Comparing the Observational Record to Socio-Economic Scenarios By Felix Pretis; Max Roser
  4. Competitive Strategies: A New Perspective on the Internationalization of the Czech Enterprises By Šárka Zapletalová
  5. Time-varying return predictability in the Chinese stock market By Huai-Long Shi; Zhi-Qiang Jiang; Wei-Xing Zhou
  7. The Determinants of the Benchmark Interest Rates in China: A Discrete Choice Model Approach By Hyeongwoo Kim; Wen Shi
  8. Evaluation of selected statistical indicators in balneological care in the Czech Republic in 2002 – 2014 By Patrik Kajzar; Klára Václavínková
  9. Factory Asia and Asia-Pacific Economic Regionalism: The Connectivity Factor Revisited By Evgeny A. Kanaev; Alexander S. Korolev
  11. Revolutionary Developments in the World Economy By Horst Hanusch
  12. Migration and development at home: Bitter or sweet return? Evidence from Poland By Jan Brzozowski; Nicola Daniele Coniglio
  13. Price Levels across Russian Regions By Gluschenko, Konstantin; Karandashova, Maria
  14. Interest rate pass-through in Poland since the global financial crisis By Mariusz Kapuściński; Ewa Stanisławska
  15. Estimating GDP and Foreign Rents of the Oil and Gas Sector in the USSR then and Russia now By Kuboniwa, Masaaki
  16. Vicious and virtuous cycles of female labour force participation in post-socialist Eastern Europe By Sonja Avlijas
  17. Bridging or Bonding? Preferences for Redistribution and Social Capital in Russia By Ekaterina Borisova; Andrei Govorun; Denis Ivanov
  20. Do people gamble more in good times? Evidence from 27 European countries By Baumöhl, Eduard; Výrostová, Eva
  21. Carbon taxation and market financial instruments for mobilizing climate finance By Oleksandr Sushchenko; Reimund Schwarze
  23. Does Urbanization Help Poverty Reduction in Rural Areas? Evidence from Vietnam By Mohamed Arouri; Adel Ben Youssef; Cuong Nguyen-Viet

  1. By: Haepp, Tobias (Peking University); Lin, Carl (Bucknell University)
    Abstract: This paper empirically analyzes the impact of Chinese minimum wage regulations on the firm decision to invest in physical and human capital. We exploit the geographical and inter-temporal variations of county-level minimum wages in a panel data set of all state-owned and all above-scale non-state-owned Chinese firms covering the introduction of the new Chinese minimum wage regulations in 2004. In our basic regressions including all Chinese firms, we find significant negative effects of the minimum wage on human capital investment rates and no overall effects on fixed capital investment rates. When grouping firms by their ownership structure, we find that these results hold for most firms. Foreign-owned firms are an exception to some extent, because the likelihood that they invest in human capital has not decreased in response to the policy.
    Keywords: minimum wage, firm investment, fixed capital, human capital
    JEL: J31 J38
    Date: 2016–10
  2. By: Iwasaki, Ichiro; Kumo, Kazuhiro
    Abstract: Immediately after the collapse of socialism, the countries of Central and Eastern Europe and the former Soviet Union fell into a serious economic crisis, after which they experienced a gradual recovery. Therefore, without exception, these countries followed a J-curved growth path. However, there were marked differences among them in the length and depth of the crisis and the speed of recovery. In this paper, we perform a comparative meta-analysis of the effect size and statistical significance of structural change, transformation policy, the legacy of socialism, inflation, and regional conflict in order to elucidate the mechanism that generated the J-shaped trajectory in transition economies. The meta-synthesis, which employs 3,279 estimates drawn from 123 previous studies, revealed that while the growth-enhancing effects of structural change and transformation policy were small yet significant, inflation and regional conflict had a highly significant and strongly negative effect on output. In addition, the legacy of socialism might exacerbate the decline in production in the early stages of transition. The meta-regression analysis that simultaneously controls for various research conditions and the assessment of publication selection bias provides supporting evidence for the results obtained from the meta-synthesis.
    Keywords: decline, growth, transition economies, meta-analysis, publication selection bias, Central and Eastern Europe, former Soviet Union
    JEL: E31 O47 O57 P20 P21
    Date: 2016–10
  3. By: Felix Pretis; Max Roser
    Abstract: The large span of long-run projected temperature changes in climate projections does not predominately originate from uncertainty across climate models; instead it is the wide range of different global socio-economic scenarios and the implied energy production that results in high uncertainty about climate change. It is therefore important to assess the observational tracking of these scenarios. For the first time observations over two decades are available against which the initial sets of socio-economic scenarios used in IPCC reports can be assessed. Here we compare these socio-economic scenarios created in both 1992 and 2000 against the recent observational record to investigate the coupling of economic growth and fossil-fuel CO2 emissions. We find that the growth rate in fossil fuel CO2 emission intensity – fossil fuel CO2 emissions per GDP – over the 2000s exceeds the projections of all main emission scenarios. Proposing a method to disaggregate differences in global growth rates to country-by-country contributions, we find that the relative discrepancy is driven by high growth rates in Asia and Eastern Europe, in particular in Russia and China. The growth of emission intensity over the 2000s highlights the relevance of unforeseen local shifts in projections on a global scale.
    Keywords: Climate, Energy, Scenarios, Emission Intensity
    JEL: Q40 Q47 Q54
    Date: 2016–11–01
  4. By: Šárka Zapletalová (Department of Business Economics and Management, School of Business Administration, Silesian University)
    Abstract: The entrance of an enterprise on the market itself allows for a significant business opportunity. The entrance and activities of entrepreneurial subjects on the international markets can be complicated owing to a number of factors that are given by the environment on one hand, and by the position and situation of the entrepreneurial subject itself on the other hand. The companies that decide to enter international entrepreneurship must be aware both of entrepreneurship opportunities and risks, which are inseparably connected with entrepreneurship. Entrepreneurial activities on international markets bring significant changes in strategy and strategic management of enterprise and are conditioned by them as well. This paper aims to investigate the competitive strategies of Czech companies on the international markets at the first foreign entrance. The paper is based on data collected in interviews with managers and founders of Czech enterprises. The companies included in the study are those that have already undertaken internationalization activities and are incorporated in the Czech Republic. Strategies of the Czech enterprises have been researched using the method of questioning: the main primary data collection instrument was a questionnaire-interview.
    Keywords: Czech enterprises, internationalization, international markets, Porter’s competitive strategy, strategy
    JEL: F23 M16
    Date: 2016–10–26
  5. By: Huai-Long Shi (ECUST); Zhi-Qiang Jiang (ECUST); Wei-Xing Zhou (ECUST)
    Abstract: China's stock market is the largest emerging market all over the world. It is widely accepted that the Chinese stock market is far from efficiency and it possesses possible linear and nonlinear dependence. We study the predictability of returns in the Chinese stock market by employing the wild bootstrap automatic variance ratio test and the generalized spectral test. We find that the return predictability vary over time and significant return predictability is observed around market turmoils. Our findings are consistent with the Adaptive Markets Hypothesis and have practical implications for market participants.
    Date: 2016–11
  6. By: Antonescu, Daniela
    Abstract: In Romania, regional policy is a relatively new phenomenon that was slow to develop in the transition period. Regional policy in Romania for all analytical purposes been notably absent in the 1990s and only started shaping up mainly as a response to EU requirements to integration. This was despite the significant problems of disparity and backwardness faced by many regional and local economies of the country – and the trend of widening inequality associated with the processes of transition and fast economic growth. As a consequence, the regional policy framework in Romania reflects strongly the EU influence and shows little sensitivity to, and appreciation of, the main regional and spatial problems that policy in the country should be addressing. This paper addresses the evolution, structure and effectiveness of the regional policy in Romania, by evaluating the nature of regional, examining the development of regional policy, and discussing the role played by the EU. This analysis provides useful conclusions regarding the strengths and weaknesses of Romania’s regional policy and helps highlight the main challenges for the future perspectives.
    Keywords: Regional policy; Transition; EU accession; Regional Disparities
    JEL: R1 R11 R12
    Date: 2016–05–15
  7. By: Hyeongwoo Kim; Wen Shi
    Abstract: This paper empirically investigates the determinants of the two key benchmark interest rates in China using an array of constrained ordered probit models for quarterly frequency data from 1987 to 2013. Specifically, we estimate the behavioral equation of the People's Bank of China that models its decision-making process for revisions of the benchmark deposit rate and the lending rate. Our findings imply that the PBC's policy decisions are better understood as responses to changes in inflation and money growth, while output gaps and the exchange rate play negligible roles. We also implement in-sample fit analyses and out-of-sample forecast exercises. Our empirical findings show robust and reasonably good performances of our models in understanding dynamics of these benchmark interest rates.
    Keywords: Monetary Policy; People's Bank of China; Ordered Probit Model; Deposit Rate; Lending Rate; In-Sample Fit; Out-of-Sample Forecast
    JEL: E52 E58
    Date: 2016–11
  8. By: Patrik Kajzar (Department of Tourism and Leisure Activities, School of Business Administration, Silesian University); Klára Václavínková (Department of Tourism and Leisure Activities, School of Business Administration, Silesian University)
    Abstract: The aim of this paper is evaluation of selected statistical indicators in balneological care in the Czech Republic in 2002 – 2014. The main sources for this research were gained from organizations’ websites (Czech Statistical Office, IHIS CR, Ministry of Health CR). The spa industry is represented in all regions the Czech Republic, except Vysocina Region and the City of Prague. Balneological care in the Czech Republic has its own character based on history area and local conditions.
    Keywords: balneological care, Czech Republic, evaluation, statistical indicators
    JEL: L83
    Date: 2016–10–26
  9. By: Evgeny A. Kanaev (National Research University Higher School of Economics); Alexander S. Korolev (National Research University Higher School of Economics)
    Abstract: With its strong economic, technological and innovative potential, Asia-Pacific has the potential to drive the global economy. The “engine” of this drive is the system of supply-value chains within the vertically-organized Asia-Pacific conglomerates specializing in producing value-added intermediate goods and services. In the academic literature, this phenomenon is conceptualized as “Factory Asia”. To unlock Asia-Pacific’s true potential, the implementation of measures embracing regional infrastructural, institutional and people-to-people connectivity becomes the key prerequisite for success. The initiatives of Asia-Pacific economic regionalism covering the trans-Pacific and the East Asian/South Asian geographical domain—the Free Trade Area of Asia-Pacific (FTAAP), the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP)—have different possibilities to develop the connectivity agenda. While FTAAP and potentially RCEP can stimulate these processes, for TPP it is highly problematic. This broadens the possibilities for Russia to get more involved in Asia-Pacific economic cooperation with an emphasis upon technologically-advanced exchanges within Factory Asia. Strengthening regional connectivity is the key component in Russia’s agenda in multilateral cooperation with Asia-Pacific countries, which was exemplified by Russia’s APEC agenda. While at present the resource-intensive production in Russia’s Far East is prioritized, the multiplier effect produced by the Territories of Advanced Development on the industrial and innovative sectors of Russian economy can help Russia to enter Factory Asia.
    Keywords: Asia-Pacific, economic regionalism, Factory Asia, TPP, RCEP, Russia
    JEL: F5
    Date: 2016
  10. By: Prof.Ion Ghizdeanu (Institute of Economic Forecasting, Romanian Academy); Dana Ioana Ţapu (Institute of Economic Forecasting, Romanian Academy)
    Abstract: Labour force was more affected by the crisis than other categories of the population and even than the capital. The crisis has led to serious and visible effects on European society and economy. Social protection systems have mitigated some of the impact, but the target groups were the disadvantaged categories and the elderly. Measures to support capital (European Economic Recovery Plan, Junker Plan, etc) have not put restrictions regarding the effectiveness and productivity; on the contrary, they favoured restructuring and technological upgrading with effects on employment in the European area. As a result, unemployment has become the main challenge for European countries. Even today, almost 22 million people are unemployed in the European Union, of which 10 million are in this situation for more than a year4. If in 2008, on overall EU, the employment rate of labour between 26-64 years was 69%, being an achievable objective, the one undertaken by the 2020 European Strategy in 2012 approached 68%. Only in 2014 the employment level returned to pre-crisis level. Average annual reduction of employment in the period 2009-2013 was on the whole EU-28 of 0.6%, given that the average annual rate in the last 10 years before the crisis was strongly positive, of 1% respectively. In this extremely unfriendly European context for labour market, Romania has registered developments, that most often diverge from European trends, developments that apparently favoured better utilization of labour resources. After the crisis unemployment in Romania was kept relatively low, well below the European average and the employment rate of labour force aged between 20 and 64 years has increased from 63% in 2009 to 66% in 2015. At the same time, however, part-time employment was extended, representing a positive phenomenon from the perspective of capital, but with negative implications on economic growth potentials. Labour productivity has improved, which has fade the impact of declining employment on potential gross domestic product. Comparative analyze with the situation in developed countries shows that, overall, the economic crisis has reduced the contribution of labour to potential growth.
    Keywords: number of employees, hours worked, employment, potential GDP, total factors productivity
    JEL: E24 J21 O15
    Date: 2016–11
  11. By: Horst Hanusch (Institute of Economics, University of Augsburg, Augsburg)
    Abstract: In the last decades the world changed dramatically. From a global point of view three disruptive processes are on their way which can be called revolutionary: a political, a technological and an economic revolution. This paper aims to give an overview when and how these movements started what the essence of these processes is and with which consequences we will have to deal with in the future. Concerning the political revolution the year 1990 can be characterized as a historical landmark because of two reasons: At first, it finished with orthodox communism as it was practiced primarily in the former Soviet Union. Secondly, this year created a new illusion which is described at its best by Francis Fukuyama in his book "The End of History" (1990). The Western form of a liberal representative democracy had overruled communism as its most important counterpart and it promised to stay forever as a political system when combined with a capitalistic market economy. That means in last consequence "the end of history". The paper shows how this illusive thinking has been demolished in the last twenty years and in which way a new regime of political thinking, the "autocratic system" of political decision making, is gaining relevance worldwide in developed as well as in developing countries. Starting in China and spreading over to other countries in the second half of the last century it now even reached countries in Europe which after 1990 tried to install a liberal representative democracy with great empathy, for instance Russia, Hungary, the Czech Republic and recently also Poland. The paper tries to grasp this process, to find answers why the attractiveness of the democratic ideal is fading away in these days and to show which consequences this political transformation process might have for the global economy. The last two decades of the 20 th century set off a third great wave of technological invention and disruptive innovation, the "digital revolution". Radical advances in computing-, information- and communication-technology may deliver a similar mixture of transformation as societies had experienced in the centuries before, getting acquainted to the steam engine, electricity, the telegraph and telephone for instance. The larger part of economists and scientists today sticks to the opinion that this new technological revolution will change fundamentally essential characteristics of the three pillars which constitute a socio-economic system: the financial, the public and the real sector. The paper intends to show how each of these pillars are already affected by the eruptive development of digitalization and how this process may go on in the future with all its social, economic and institutional consequences. If the 1990’s are taken as a historical landmark for fundamental changes in the world, one miraculous development has to be stressed as most important: The economic "catching up" process of the developing world, especially in those emerging countries called the BRICS group consisting of Brazil, Russia, India, China and South Africa. In the last 20 years these nations’ growth has far outpaced that of the US and the EU, with China already having become the second largest economy in the world. The paper will show how this growth phenomenon already changed fundamentally the structure of the world economy and which consequences can be expected in the future, if a country like China will be successful in combining elements of the political and the technological revolution in its development strategy. This scenario and the economic system standing behind may be called "state capitalism" and it is thoroughly in conflict with what is named as "entrepreneurial capitalism", concretized at its best in the US and its Silicon Valley. If we go back to Schumpeter, the Silicon Valley example can be pictured as a realistic portrait of what he had in mind in his 1912 book (The Theory of Economic Development). Whereas the Chinese kind of forming the country’s development process and its innovation culture seems to be more in accordance with the Schumpeter book of 1942 (Capitalism, Socialism and Democracy). The paper will at the end shortly focus on this interesting issue, which might be called a "Schumpeterian Battle of Systems", namely "Entrepreneurial Capitalism" against "State Capitalism". Perhaps, this antagonism might shape the development of the world economy in the coming decades of the 21 st century more than any other event.
    Keywords: Development Economics, Institutional Theory, Technological Change, Schumpeterianism
    JEL: B52 O3 P10
    Date: 2016–11
  12. By: Jan Brzozowski (Cracow University of Economics); Nicola Daniele Coniglio (Università degli Studi di Bari "Aldo Moro”)
    Abstract: The existing economic literature focuses on the benefits that return migrants offer to their home country in terms of entrepreneurship, human and financial capital accumulation. However, return migration can have modest or even some detrimental effects if the migration experience was unsuccessful and/or if the migrant fails to reintegrate into the home country's economy. In our paper, we empirically show which factors - both individual characteristics and features related to the migration experience - influence the likelihood of a sub-optimal employment of returnees' human capital employing an original dataset on a representative sample of return migrants in Silesia (Poland).
    Keywords: return migration; international migration; economic performance; regional development
    JEL: O15 F22 J24 R23
    Date: 2016–11
  13. By: Gluschenko, Konstantin; Karandashova, Maria
    Abstract: Based on price levels (cost-of-living indices) across Russian cities that are published by the Russian Statistical Agency, regional price levels relative to the national average are computed over 2009–2015. Results obtained are compared with approximate estimates of regional price levels that are based on the cost of the fixed basket of goods and services for cross-region comparison of population’s purchasing capacity (many publications use such estimates). This comparison makes it possible to conclude that the crude method provides an acceptable accuracy. Regional price levels obtained are applied to estimating real (i.e. comparable between regions) incomes per capita relative to the national average.
    Keywords: cost-of-living index spatial price index fixed basket of goods and services real income
    JEL: D31 R10
    Date: 2016–11–12
  14. By: Mariusz Kapuściński; Ewa Stanisławska
    Abstract: We analyse why loan rates in Poland have diverged from interbank interest rates since the beginning of the global financial crisis. Following Illes et al. (2015) we calculate a weighted average cost of liabilities, which might be considered as a more accurate proxy for a marginal cost of funding for banks than an interbank interest rate. Then, we investigate the interest rate pass-through on bank-level panel data using both measures. We find that an increase in the weighted average cost of liabilities, relative to interbank interest rates, explains some of the increase in credit spreads. However, deterioration of economic outlook, an increase in uncertainty and non-performing loans, as well as tightening of capital regulation have also been at play. That the cost of funding matters for loan rates has important implications for the current discussion on the potency of negative interest rates, as they rather cannot be transmitted to deposit rates, which are the main component of bank funding.
    Keywords: interest rate pass-through, monetary policy, global financial crisis, lending spreads, panel data models
    JEL: E43 E52 C23
    Date: 2016
  15. By: Kuboniwa, Masaaki
    Abstract: A Soviet legacy for present-day Russia is found in its resource dependency as well as its implicit exposition of resource rents from foreign trade in the national accounting. Estimating rents from the oreign trade of oil and gas, we demonstrate how large the GDP of the oil and gas sector had been in the Soviet Union and has been in present-day Russia, as well.
    Keywords: Soviet legacy, oil and gas, rent, GDP
    JEL: E01 P33 P51
    Date: 2016–10
  16. By: Sonja Avlijas
    Abstract: Female labour force participation (hereinafter FLFP) trends across Eastern Europe, which were very high during communism, started to diverge substantially following its collapse. Women did not appear to benefit from the changing labour market conditions in those transition countries that pursued industrial upgrading as their strategy of economic development. On the other hand, in some small transition economies, most notably the Baltic countries, women benefited substantially from increased employment opportunities in the knowledge-intensive public and private sector services. This article seeks to explain the observed variation in FLFP rates across the region by synthesising insights from macroeconomic and comparative political economy literature. It identifies four key relationships between industrial upgrading, educational expansion and the expansion of knowledge-intensive services and examines how these factors interacted and translated into specific FLFP outcomes. The article suggests that industrial upgrading, driven by foreign direct investment, created a vicious cycle for FLFP. First of all, the upgrading led to a defeminisation of manufacturing because female labour-intensive sectors were not upgraded. Furthermore, the upgrading absorbed the budgetary resources that could have been used for educational reform and general skills formation. This lack of educational reform impeded the development of knowledge-intensive services, which would have been more conducive to the generation of female employment. The virtuous cycle of FLFP, on the other hand, occurred in those Eastern European countries that turned to reforming their ed-ucational sector towards general skills and expansion of tertiary education, with the aim of transforming themselves into knowledge economies. Such a transformation required an active social investment oriented state and an expansion of knowledge-intensive public and private sector employment. This development path created a positive causal loop for FLFP. I test these propositions quantitatively on a sample of 13 Eastern European countries.
    Keywords: female labour force participation, industrial upgrading, knowledge intensive economy, social investment, capitalist diversity, Eastern Europe
    Date: 2016–11
  17. By: Ekaterina Borisova (International center for the study of institutions and development, National research university higher school of economics (Moscow)); Andrei Govorun (International center for the study of institutions and development, National research university higher school of economics (Moscow)); Denis Ivanov (International center for the study of institutions and development, National research university higher school of economics (Moscow))
    Abstract: Does bridging or bonding social capital matter for redistribution preferences? Existing literature demonstrates causal link between measures of social capital and such preferences but does it mostly for developed countries with good enforcement of formal rules and without a distinction between two completely different types of social capital. We argue that welfare state relies on contributions from an immense number of anonymous citizens, thus attitudes towards strangers, i.e. generalized trust and solidarity should be salient. Using two surveys of about 34,000 and 37,000 Russians we prove this proposition showing the importance of the bridging type but not the bonding one. Instrumenting social capital with education, climate and distance from Moscow we deal with endogeneity concerns. Additionally we claim that connection between social capital and redistribution preferences for less developed countries such as Russia could be similar to developed countries
    Keywords: preferences for redistribution; inequality; social capital; trust; corruption; Russia
    JEL: Z13 H10
    Date: 2016–11
  18. By: Rodica PERCIUN (National Institute for Economic Research, Republic of Moldova); Viorica POPA (National Institute for Economic Research, Republic of Moldova)
    Abstract: In this paper, the authors examine the state of public finances in the Republic of Moldova in recent years, in terms of financial stability indicators. Article aims to identify weaknesses and risks in public finance by presenting recommendations for remediation. Therefore, the worsening economic situation in Moldova in recent years has had a negativ impact on the fiscal year 2015. The financial destabilization of the banking sector, reduced remittances, shrinking exports and imports, depreciation of national currency are several factors that influenced negatively on the completion of the National Public Budget registering in 2015 less budget revenues than expected. Respectively, the tightening of monetary policy by the National Bank of Moldova was pushing the average weighted interest rate on state securities by 3 times compared to 2014. And the country's economic risks have caused the slowing of external grants by 51.7% compared to the same period of the last year. Therefore, foreign assistance has been discontinued due to lack of the program with the International Monetary Fund. In this context, we emphasize that the deterioration of budgetary stability has led to increased cost of funding, but with an impact on economic performance in the medium term. Thus, we consider as a challenge for 2016 the implementation of reforms that would increase the efficiency of public finance management and to counteract the pressures of damage of the structural component of the budget deficit.
    Keywords: public finance, national public budget, planning, revenues, expenditures, deficit, devaluation, risks.
    JEL: G28 H2 H3 H6 H7
    Date: 2016–11
  19. By: Elena PELINESCU (Institute of Economic Forecasting, Romanian Academy)
    Abstract: The human capital is the main driver of development and economic growth. This paper is focused on human capital and tries to show how the human capital, as an important economic factor contributes to the growth of the economy. Romer (1969) identified a positive relation between the initial level of literacy and its rate of growth and the increase of income per capita. Benhabib, and Spiegel (1994) showed that the growth rate of total factor productivity depends on the human capital stock level. Wilson and Briscoe (2004) in a literature review of relation between human capital and economic performance at macroeconomic level highlighted that the increases in economic growth across the EU are associated with increases in both education and training. This paper is focused on the relation between human capital and development in Romania and uses econometric techniques to highlight the role of human capital in increasing the country’s wealth.
    Keywords: human capital, development, inovation
    JEL: E24 J24 F63 O15 O31
    Date: 2016–11
  20. By: Baumöhl, Eduard; Výrostová, Eva
    Abstract: We provide evidence of a positive relationship between the intensity of gambling and economic growth in 27 European countries for 2005–2013. Our proxy for gambling is represented by government revenues from taxes on lotteries, betting and gambling. This variable is linked to GDP growth in a panel regression framework and pooled OLS. However, when we split our sample to account for the heterogeneity among European countries, we found that the positive “gambling – GDP growth” relationship is driven extensively by the Central and Eastern European countries. It appears that people in these countries tend to gamble more when the economy is expanding.
    Keywords: gambling, lottery, GDP growth, European countries
    JEL: L83 O1 O4
    Date: 2016–11–10
  21. By: Oleksandr Sushchenko (Kyiv National Economic University named after V. Hetman, 03680, Kyiv, Ukraine); Reimund Schwarze (Europa University Viadrina and Helmholtz Centre for Environmental Research (UFZ))
    Abstract: The aim of this paper is to conduct an evaluation of the financial instruments and their role in mobilizing climate finance, provide a set of recommendations aimed at easing the process of climate finance mobilization for both developed and developing countries (especially, for Ukraine). It is also important to show the shift from voluntary corporate social responsibility (CSR) to the new principles of investing (ESG) and business models in the climate change area and how it affects mobilization of climate finance. Another important goal of this paper is to show the importance of transaction costs, and ways how the accounting, reporting and evaluation of the results of emission reduction projects could reduce existing costs and improve access to the financial market, i.e. to the relatively “cheap” financial resources. We also highlights ways for establishing the necessary infrastructure on the financial market needed to minimize the transaction costs while getting financial resources for the purpose of greenhouse gases reduction (GHG reduction).
    Keywords: climate finance, carbon taxation, market financial instruments, climate- aligned bonds, non-financial reporting
    JEL: G15 Q58
    Date: 2016–10
  22. By: Mihaela SIMIONESCU (Institute of Economic Forecasting, Romanian Academy)
    Abstract: The analysis of foreign direct investment in crisis period is necessary in order to state the prerequisites for economic recovery. A movering average model of order 1 was proposed for foreign direct investment (FDI) stock inwards growth in Romania, which is in accordance with the expectations when many shocks appear in crisis period. However, an autoregressive behaviour was not discovered. There is a bilateral causality between FDI growth and real GDP in second difference for a level of significance of 5%. According to the Bayesian regression model, in the period after the crisis beginning, the real GDP growth in Romania from an year to another generated an increase in FDI while the decrease in real GDP determined a lower FDI. This result confirmed the previous conclusions from literature that foreign investors in Romania follow the economic growth of this coutry.
    Keywords: foreign direct investment, moving average, Granger causaity, Bayesian model.
    JEL: F21 C51 C53
    Date: 2016–11
  23. By: Mohamed Arouri (Faculté des Sciences Economiques et de Gestion); Adel Ben Youssef (Economic Research Forum); Cuong Nguyen-Viet (Mekong Development Research Institute and National Economics University, Hanoi, Vietnam)
    Abstract: Urbanization and poverty have a two-way relationship. Using fixed-effects regression and panel data from household surveys, we estimate the effect of urbanization on welfare and poverty of rural households in Vietnam. We find that urbanization tends to increase landlessness of rural households and to reduce their farm income. However, urbanization helps rural households increase their wages and non-farm incomes. As a result, total income and consumption expenditure of rural households tend to be increased with urbanization. Then we find that urbanization also helps rural households decrease the expenditure poverty rate, albeit at a small magnitude. JEL Codes: O18, I30, R11
    Keywords: urbanization, household welfare, rural poverty, impact evaluation, household surveys, Vietnam, Asia
    Date: 2016–10
  24. By: Cristina Lincaru (National Scientific Research Institute for Labor and Social Protection - INCSMPS, Bucharest); Speranta Pirciog (National Scientific Research Institute for Labor and Social Protection - INCSMPS, Bucharest)
    Abstract: Using Smart Map Search from Business Analyst Online (BAO) offered in ESRI platform we present some socio-economic profiles useful to characterise some development profiles at local level in Romania in 2013. The profiles result from multi-criteria selection exploration including Total Population, Registered Unemployed Population, Purchasing Power per capita, the total number of household and average household size. The economic development profiles at LAU2 / NUTS 5 level are described by demographic (total population by age and gender), social (households, unemployment), and economic (purchasing power as well as the consumption profile: Apparel and Services, Household Furnishings, Maintenance & Equipment, Health, Entertainment & Recreation, Food and Tobacco, Electronics & Personal effects) characteristics. The resulted profiles could provide valuable inputs for the sustainability of business as well as for policy makers’ decision process if the data will be reliable.
    Keywords: local development profiles, total population, unemployemnt, disposable income, total households, smarth map search
    JEL: R12 D31 E21 E24
    Date: 2016–11
  25. By: Ion PARTACHI (Academia de Studii Economice, Chișinău, Republica Moldova,); Vitalie MOTELICA (Academia de Studii Economice, Chișinău, Republica Moldova,)
    Abstract: Implementing effective inflation targeting strategy requires the knowledge of all the factors that are responsible for the inflationary process. The consumer price index includes sub-components, such as trend or seasonality that makes it difficult to analyze the inflationary pressures for the monetary policy decision making. The annual inflation indicator eliminates these deficiencies to a certain extent. However, in the decision making process and for communication purposes, monthly inflation is used as well which, first must be seasonally adjusted to provide information relevant for monetary policy. In this study we addressed the seasonality issues for both CPI, and for the main sub-components of this indicator in Moldova to track the sources responsible for seasonal fluctuations. The study established that the seasonal factor has moderate positive values in the first 4 months of the year, then in the summer months it becomes negative. During the fall and in December, the seasonal factor is back in positive territory. Furthermore, the largest impact on seasonal fluctuations is determined by the seasonal factor of food prices.
    Keywords: Seasonal factors, CPI inflation, monetary policy, inflation targeting strategy
    Date: 2016–11

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