nep-tra New Economics Papers
on Transition Economics
Issue of 2016‒11‒27
eighteen papers chosen by
J. David Brown
United States Census Bureau

  1. Land rights, rental markets and the post-socialist cityscape By Castañeda Dower, Paul; Pyle, William
  2. The Determinants of Foreign Direct Investment in Transition Economies: A Meta-Analysis By Masahiro Tokunaga; Ichiro Iwasaki
  3. Gender Differences in Willingness to Compete: The Role of Culture and Institutions By Booth, Alison L.; Fan, Elliott; Meng, Xin; Zhang, Dandan
  4. Resolving China’s Corporate Debt Problem By Wojciech Maliszewski; Serkan Arslanalp; John Caparusso; José Garrido; Si Guo; Joong Shik Kang; W. Raphael Lam; Daniel Law; Wei Liao; Nadia Rendak; Philippe Wingender; Jiangyan Yu; Longmei Zhang
  5. Optimal fiscal policy in the presence of VAT evasion: the case of Bulgaria By Vasilev, Aleksandar
  6. The Price of Growth: Consumption Insurance in China 1989-2009 By Santaeulàlia-Llopis, Raül ; Zheng, Yu
  7. (A)symmetric shocks in CEECs and euro area By Katarzyna Pilat
  8. Career Breaks after Childbirth: The Impact of Family Leave Reforms in the Czech Republic By Alena Bicakova; Klara Kaliskova
  9. Fiscal multipliers in non-EMU CEE countries By Piotr Krajewski
  10. Sociodemographic factors and expenditure issues in Vietnamese consideration of periodic general health examination By Quan-Hoang Vuong; Quang-Hoi Vu
  11. The Belarus Economy: The Challenges of Stalled Reforms By Amat Adarov; Kateryna Bornukova; Rumen Dobrinsky; Peter Havlik; Gabor Hunya; Dzmitry Kruk; Olga Pindyuk
  12. Изследване на устойчивостта на земеделските стопанства в България By Bachev, Hrabrin
  13. Intergenerational transmission of education in China: Pattern, mechanism, and policies By Jingyi Huang; Yumei Guo; Yang Song
  14. Social Costs of the Inefficient Management of the EU Funds for Bulgaria By Nozharov, Shteryo
  15. Efficiency in Spatially Disaggregated Labour Market Matching By Elzbieta Antczak; Ewa Galecka-Burdziak; Robert Pater
  16. Fertility and Parental Labor-Force Participation: New Evidence from a Developing Country in the Balkans By Iva Trako
  17. Растениеводство в Волго-Вятском регионе и в Придунавье Сербии: сравнительный анализ и возможности сотрудничества By Bukvić, Rajko; Pajović, Ivan; Petrović, Dragan
  18. The Role of Lawyers in Social Changes in Developing Countries: Evidence from Russia By Andrei Yakovlev; Anton Kazun; Daniil Sitkevich

  1. By: Castañeda Dower, Paul; Pyle, William
    Abstract: Inefficiently organized, factory-dominated cityscapes have been one of the more enduring legacies of the twentieth century experiment with socialist central planning in Eastern Europe and the Soviet Union. Drawing on a unique survey of large, formerly state-owned urban industrial firms in Russia, we explore how land tenure reforms affect the pace at which this legacy is being erased. Specifically, the privatization of plots is shown to promote the development of a rental market that transfers land use rights away from socialist-era industrial users. We address the potential endogeneity of land tenure in two ways, including using a measure of regional variation in urban land policy as an instrumental variable.
    Keywords: land titles, firms, misallocation, transition, urban land, rental market, Russian Federation
    JEL: D22 D23 O18 P25 P26 R14
    Date: 2016–11–16
  2. By: Masahiro Tokunaga (Faculty of Business and Commerce, Kansai University); Ichiro Iwasaki (Institute of Economic Research, Hitotsubashi University)
    Abstract: In this paper, we conduct a meta-analysis of studies that empirically examine the relationship between economic transformation and foreign direct investment (FDI) performance in Central and Eastern Europe and the former Soviet Union over the past quarter century. More specifically, we synthesize the empirical evidence reported in previous studies that deal with the determinants of FDI in transition economies, focusing on the impacts of transition factors. We also perform meta-regression analysis to specify determinant factors of the heterogeneity among the relevant studies and the presence of publication selection bias. We find that the existing literature reports a statistically significant nonzero effect as a whole, and a genuine effect is confirmed for some FDI determinants beyond the publication selection bias.
    Keywords: foreign direct investment (FDI), FDI determinants, transition economies, meta-analysis, publication selection bias
    JEL: E22 F21 P33
    Date: 2016–11
  3. By: Booth, Alison L. (Australian National University); Fan, Elliott (National Taiwan University); Meng, Xin (Australian National University); Zhang, Dandan (Peking University)
    Abstract: In the laboratory experiment reported in this paper we explore how evolving institutions and social norms, which we label 'culture', change individuals' preferences and behaviour in mainland China. From 1949 China experienced dramatic changes in its socio-economic institutions. These began with communist central planning and the establishment of new social norms, including the promotion of gender equality in place of the Confucian view of female 'inferiority'. Market-oriented reforms, begun in 1978, helped China achieve unprecedented economic growth and at the same time Marxist ideology was gradually replaced by the acceptance of individualistic free-market ideology. During this period, many old traditions crept back and as a consequence social norms gradually changed again. In our experiment we investigate gender differences in competitive choices across different birth cohorts of individuals who, during their crucial developmental-age, were exposed to one of the two regimes outlined above. In particular we investigate gender differences in competitive choices for different birth cohorts in Beijing using their counterparts in Taipei (subject to the same original Confucian traditions) to control for the general time trend. Our findings confirm: (i) that females in Beijing are significantly more likely to compete than females from Taipei; (ii) that Beijing females from the 1958 birth cohort are more competitive than their male counterparts as well as more competitive than later Beijing birth cohorts; and (iii) that for Taipei there are no statistically significant differences across cohort or gender in willingness to compete. In summary, our findings confirm that exposure to different institutions and social norms during the crucial developmental age changes individuals' behaviour. Our findings also provide further evidence that gender differences in economic preferences are not innately determined.
    Keywords: gender, competitive choices, culture, behavioural economics
    JEL: C9 C91 C92 J16 P3 P5 D03
    Date: 2016–11
  4. By: Wojciech Maliszewski; Serkan Arslanalp; John Caparusso; José Garrido; Si Guo; Joong Shik Kang; W. Raphael Lam; Daniel Law; Wei Liao; Nadia Rendak; Philippe Wingender; Jiangyan Yu; Longmei Zhang
    Abstract: Corporate credit growth in China has been excessive in recent years. This credit boom is related to the large increase in investment after the Global Financial Crisis. Investment efficiency has fallen and the financial performance of corporates has deteriorated steadily, affecting asset quality in financial institutions. The corporate debt problem should be addressed urgently with a comprehensive strategy. Key elements should include identifying companies in financial difficulties, proactively recognizing losses in the financial system, burden sharing, corporate restructuring and governance reform, hardening budget constraints, and facilitating market entry. A proactive strategy would trade off short-term economic pain for larger longer-term gain.
    Keywords: Corporate debt;China;Credit expansion;Credit booms;Debt strategy;Corporate Debt Overhang; Credit; Restructuring; Hardening Budget Constraints
    Date: 2016–10–14
  5. By: Vasilev, Aleksandar
    Abstract: This paper explores the effects of fiscal policy in an economy based on indirect taxes, and in the presence of VAT evasion channel. In addition, the government is taxing all income at the same rate. The focus of the paper to compare and contrast two regimes - the exogenous (observed) vs. optimal (Ramsey) policy case. The results are evaluated in light of consumption vs. income taxation debate, the issue of optimal provision of valuable public services, and the effect of fiscal policy on the size of VAT evasion. To this end, a Real-Business-Cycle model, calibrated to Bulgarian data (1999-2014), is augmented with a government sector. Bulgarian economy was chosen as a case study due to its dependence on consumption taxation as a source of tax revenue, and the prevalence of VAT evasion. The main findings from the computational experiments performed in the paper are: (i) The optimal steady-state income tax rate is zero; (ii) The benevolent Ramsey planner provides the optimal amount of the utility- enhanc- ing public services, which are now three times lower; (iii) The optimal steady-state consumption tax needed to finance the optimal level of government spending is twice lower, as compared to the exogenous policy case.
    Keywords: consumption tax,income tax,VAT evasion,general equilibrium,fiscal policy,Bulgaria
    JEL: D58 H26
    Date: 2016
  6. By: Santaeulàlia-Llopis, Raül ; Zheng, Yu
    Abstract: The welfare gains of economic growth hinge on the ability of households to insure consumption against the risks associated with growth. We exploit a novel and unique opportunity to study this question using China, an economy that has witnessed enormous and sustained growth and for which we build a long panel of household-level consumption and income. We find that consumption insurance deteriorates along the growth process with a transmission of permanent income shocks to consumption that triples from 1989 to 2009. The loss of consumption insurance has implications for the welfare assessment of economic growth across time and across space.
    Keywords: Income Risk, Consumption Insurance, Growth, Welfare, China
    JEL: O4 D1
    Date: 2016
  7. By: Katarzyna Pilat (University of Lodz, Economics and Sociology Faclty)
    Abstract: Similar response of economies to demand and supply shocks is one of the most important feature which can define if there are foundations to form by a group of countries a currency area. This criterion, together with mobility of factors of production, elasticity of prices and wages, production diversification and financial and policy integration is the main principle of optimum currency area (OCA) theory. High level of similarity in responses to economic shocks among countries forming a currency area enables a supranational central bank to conduct an effective monetary policy. The analysis is aimed to verify if responses to common shocks in CEECs are correlated with the response of euro area. Supply and demand shocks are identified on the basis of SVAR model. Decomposition of shocks is based on Blanchard and Quah methodology. Quarterly data on GDP growth and inflation are used. Results show that the correlation coefficients of responses to demand shock with reaction of euro area economy are the highest for Czech Republic (0.87) and Poland (0,83), while in case of supply shock correlation coefficients are generally much lower, with the highest value for Poland (0,83) and Hungary (0,77).
    Keywords: economic shocks, optimum currency area, SVAR model
    JEL: F44 A10 C32
  8. By: Alena Bicakova; Klara Kaliskova
    Abstract: The Czech Republic is a country with a strong attachment of women to the labor market, but with one of the longest paid family leaves, which is often followed by a spell of unemployment. Using a difference–in–differences methodology, we study the impact of two reforms of the duration of the parental allowance on the labor market status of mothers 2–7 years after childbirth. While the 1995 reform prolonged the allowance from 3 to 4 years, the 2008 reform allowed some parents to shorten the duration of the allowance to only 2 or 3 years with an equivalent total monetary amount. The impact of the reforms on the length of women’s career breaks following childbirth is substantial.
    Keywords: family leave; female labor supply; unemployment; policy evaluation;
    JEL: J13 J18 J22
    Date: 2016–08
  9. By: Piotr Krajewski (University of Lodz)
    Abstract: The effects of fiscal policy in non-EMU Central and Eastern European counties are analysed in the study. The analysis is based on dynamic stochastic general equilibrium model, which takes into account both optimizing and rule-of-thumb households. Results of the study indicate that the share of rule-of-thumb households has significant impact on government spending multipliers. On one hand, the fiscal multiplier reaches three in Hungary, which is the country with highest share of rule-of-thumb households among non-EMU CEE countries. On the other hand, in the Czech Republic, which is the country with lowest share of rule-of-thumb households, the fiscal multiplier is lower than one. Moreover, the results show that effects of government spending shocks on consumption are very sensitive to the share of rule-of-thumb households.
    Keywords: fiscal multiplier, government spending, rule-of-thumb households
    JEL: E62
  10. By: Quan-Hoang Vuong; Quang-Hoi Vu
    Abstract: Medical expenditure is perceived as a major obstacle for people wanting to access healthcare services in general, and in particular periodic general health examinations (GHE). However, the extant literature concerning expenditure on periodic health examinations in Vietnam is rather scarce and lacking in specific figures. Therefore, this article aims to examine the price people are willing to pay to take GHE periodically. From analyzing a dataset of 2,068 subjects collected from Hanoi and its vicinities, our study confirms that demographic factors (gender, job status, marital status) and socioeconomic factors (health insurance, low belief in healthcare quality and perceptions on public’s health status) have significant effects on GHE fees. The probability of people accepting to spend a larger sum (>VND2mn) for periodic GHE is relatively low (
    Keywords: Medical expenditure; general health examination; public perception; Vietnam
    JEL: I12 I18 P20
    Date: 2016–11–21
  11. By: Amat Adarov (The Vienna Institute for International Economic Studies, wiiw); Kateryna Bornukova; Rumen Dobrinsky (The Vienna Institute for International Economic Studies, wiiw); Peter Havlik (The Vienna Institute for International Economic Studies, wiiw); Gabor Hunya (The Vienna Institute for International Economic Studies, wiiw); Dzmitry Kruk; Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Twenty-five years after the dissolution of the Soviet Union, Belarus stands out as a special case in transition blending, on the one hand, signs of relative prosperity, socially oriented policies and sprouts of entrepreneurships and, on the other hand, remnants of the communist past. The core of the Belarusian economic model throughout most of this period was a combination of external rents and soft budget constraints on the state-owned part of the economy backed by a strong system of administrative control. In periods of favourable external conditions this mix provided for relatively high rates of economic growth and allowed the authorities to maintain a ‘social contract’ with the population targeting close to full employment. But this model also led to the persistent accumulation of a quasi-fiscal deficit which time and again came to the surface, and its subsequent monetisation provoked macroeconomic and currency turmoil. At present, Belarus’ economic model has run up against its limits and policy changes seem inevitable.
    Keywords: Belarus, economic transformation, macroeconomic policy, soft budget constraints, currency crisis
    JEL: E65 O52 P30 P52
    Date: 2016–11
  12. By: Bachev, Hrabrin
    Abstract: Evaluation of sustainability of agricultural farms is among the most topical academic and practical (farm, agri-business, policies forwarded) issues. Despite that there are practically no studies on overall, economic, social, ecological, etc. sustainability of farms in general and holdings of different type in Bulgaria during EU CAP implementation. This paper presents a holistic framework for defining and assessing sustainability of farms for the specific conditions of Bulgarian agriculture as well as results of the first large-scale study on integral, governance, economic, social, and environmental sustainability of Bulgarian farms. Initially, a framework for assessing farm sustainability is outlined which is based on incorporation of the interdisciplinary methodologies of New Institutional Economics, and Sustainable Development. That holistic framework includes a system of appropriate principles, criteria, indicators, and reference values for evaluating the individual aspects and the integral sustainability of farms in the specific Bulgarian conditions. After that an assessment is made on the overall, governance, economic, social, and environmental sustainability levels of Bulgarian farms in general and holdings of different juridical type, size, specialisation, and location.
    Keywords: sustainability of farms, definition, assessment, Bulgarian farms
    JEL: Q1 Q12 Q18 Q5 Q56 Q57
    Date: 2016–09–01
  13. By: Jingyi Huang (University of Michigan, U.S.A.); Yumei Guo (Central University of Finance and Economics, China); Yang Song (Renmin University of China)
    Abstract: This paper has three objectives. First, we present the mobility pattern for intergenerational education persistence. Second, we estimate the effect of parental education on children education by using instruments generated by the Chinese Cultural Revolution, and further explore the mechanisms of this causal relationship. Third, this study aims to investigate the impact of two education reforms on intergenerational transmission of education, including the Compulsory Education Law and college expansion reform. Although mobility seems increasing for the newer generation, the lowest mobility is found in rural areas for the lowest-educated group. Fathers' education has a significant impact on children education through the nurture effect, which is almost entirely driven by father's income. Finally, we find that popularizing compulsory education did not have a expected effect on increasing mobility. Moreover, the college expansion policy indeed reduces the intergenerational education mobility in urban areas, but this effect is not found in rural areas.
    Keywords: intergenerational education mobility, nurture effect, education reforms, China.
    JEL: H5 I2 O1
    Date: 2016–10
  14. By: Nozharov, Shteryo
    Abstract: The study identifies and defines the social costs of the inefficient management of EU funds for Bulgaria. It is analyzed the last due programme period (2007-2015) and its prolongation. As methodology of the research the V4 BM model of Al-Debei and Avison (2010) which has not been used for analysis of EU funds management for cohesion policy in the public sector, is applied. In this way its potential for application in this field is tested. The concept of the study could be successfully used for analysis of the social costs of inefficient management of EU funds in other member-states.
    Keywords: social costs,absorption of EU funds,V4 BM model
    JEL: F15 H43 O21
    Date: 2016
  15. By: Elzbieta Antczak; Ewa Galecka-Burdziak; Robert Pater
    Abstract: We analyse the efficiency in a labour market matching process. We understand efficiency as a share of the mean number of matches (conditional on given covariates) in the number of matches that would occur if search and matching was optimal, bearing in mind that, contrary to the production function, being unemployed or vacant is not freely chosen or changed. We apply a stochastic matching frontier for random, job queuing and stock-flow models. We use data for Poland, a country with a highly regionally diversified unemployment rate. We contribute to the literature by comparing different spatial aggregation levels – NUTS-1 to NUTS-4 in monthly and annual perspectives. We analyse whether and how the efficiency changes over time. We find spatial and temporal heterogeneity in the labour market. Thus, various policy measures should be designed to improve labour market matching efficiency at certain regional levels.
    Keywords: matching function; matching efficiency; spatial aggregation; stochastic frontier;
    JEL: C23 J64
    Date: 2016–11
  16. By: Iva Trako (PSE - Paris School of Economics, PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - École des Ponts ParisTech (ENPC) - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper examines the effect of fertility on parental labor-force participation in a developing country. In order to address the potential endogeneity in the fertility decision, I exploit Albanian parental preference for having sons as an exogenous source of variation. Using a repeated cross-section, I find that having an additional child has a positive and statistically significant effect on parental labor-force participation. IV estimates for mothers show that they increase labor supply, especially in terms of hours worked per week and the likelihood of working off-farm. Similarly, father's likelihood of working off-farm and having a second occupation increase as a consequence of further childbearing. The heterogeneity analysis suggests that this positive effect might be the result of two plausible mechanisms: childcare provided by non-parental adults in extended families and greater financial costs of feeding more children.
    Keywords: fertility,parental labor-force participation,instrumental variables
    Date: 2016–09
  17. By: Bukvić, Rajko; Pajović, Ivan; Petrović, Dragan
    Abstract: Russian Abstract. В статье анализируются предположения и результаты в растениеводстве в Волго-Вятском районе и в Дунайском регионе. Волго-Вятский район расположен к северу от черноземной зоны высокого качества в России, лучшей земли для сельского хозяйства, но тем не менее, имеет довольно развитое сельское хозяйство, в том числе oбработку продуктов, в то время как Дунайский регион в Сербии является одним из лидеров в области сербского сельского хозяйства. В Дунайском регионе Сербии, в принципе, и в Сербии в целом, из-за климата, почвы и других факторов, можно изготовить ряд сельскохозяйственных культур, которые обычно дают более низкие урожаи в районе Волго-Вятском, и есть разнообразие культур особенно кукурузы, фруктов и овощей, винограда, которые трудно растут или не выращиваются в Волго-Вятском районе. Техническое сотрудничество и торгово-экономического сотрудничества между двумя регионами может происходить на гораздо более широком уровне два традиционно дружественних народов и стран, а что является предметом данной статьи. English Abstract. The paper analyzes the existing conditions and current results in agricultural production in the Volga-Viatka Region and the Danube Region. The Volga-Viatka Region lies north of the vast high-quality chernozem area in Russia, covered by the highest-quality soil for farm production. However, it is characterized by quite developed agriculture, including the processing industry, while the Danube Region in Serbia is amongst the leading farming regions in Serbia. Due to their climatic, pedological and other factor, the Danube Region as well as Serbia as a whole, are suitable for the production of a number of cultures that yield less in the Volga-Viat Region. Professional as well as commercial and economic cooperation between the two regions can be elevated to a significantly higher level, as between the two traditionally friendly nations and countries, which is the subject of this paper.
    Keywords: Волго-Вятский экономический район; Дунайский регион Сербии; развитие сельского хозяйства и обработки продуктов; растениеводство; физико-географическая предрасположенность; профессиональное и торгово-экономическое сотрудничество Volga-Viat economical region; Danube region of Serbia; development of agriculture and processing industry; agricultural production; physical and geographical conditions; professional and commercial and economic cooperation.
    JEL: O13 O57 R11
    Date: 2016
  18. By: Andrei Yakovlev (National Research University Higher School of Economics); Anton Kazun (National Research University Higher School of Economics); Daniil Sitkevich (National Research University Higher School of Economics)
    Abstract: This paper reviews the activity of professional legal organizations as factors in the transfer from limited access order (LAO) to open access order (OAO) according to the theory of North, Wallis and Weingast. By analyzing the experience of lawyers’ collective action in developing countries, this paper proposes a decision tree explaining the process of the mobilization of the legal community to counter violations of the law by the ruling elite. It shows that this collective action plays a significant role in implementing the rule of law. However, the efficiency of such collective action in a particular country depends on the institutional capacity of its legal association and on the position of the professional elite leading it. The history of the development of Russian legal advocacy shows that exogenous shocks actually stimulate the collective action of lawyers, which in turn compels the government to respond
    Keywords: lawyer, professional elite, collective action, limited access orders, open access orders, professional mobilization.
    JEL: K49 D71 L84
    Date: 2016

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