nep-tra New Economics Papers
on Transition Economics
Issue of 2017‒01‒15
25 papers chosen by
J. David Brown
United States Census Bureau

  1. "Province-Managing-County" Fiscal Reform, Land Expansion, and Urban Growth in China By Yongzheng Liu; James Alm
  2. Land Policy and Urbanization in the People’s Republic of China By Zhang, Li; Xu, Xianxiang
  3. Persistent high-growth firms in China's manufacturing By Daniele Moschella; Federico Tamagni; Xiaodan Yu
  4. A Tale of Transition; An Empirical Analysis of Economic Inequality in Urban China, 1986–2009 By Haiyan Ding; Hui He
  5. Testing Kuznets' Hypothesis for Russian Regions: Trends and Interpretations By James Alm; Ruslan A. Grigoriev; Marat V. Kramin; Timur V. Kramin
  6. China’s Rising IQ (Innovation Quotient) and Growth; Firm-level Evidence By Hui He; Nan Li; Jing Fang
  7. Tariff Scares: Trade policy uncertainty and foreign market entry by Chinese firms By Crowley, Meredith A; Meng, Ning; Song, Huasheng
  8. There is poverty convergence By Crespo Cuaresma, Jesus; Klasen, Stephan; Wacker, Konstantin M.
  9. On the train to brain gain in rural China By Zhang, Yi; Matz, Julia Anna
  10. Active labour market policies: Challenge for the Macedonian labour market By Petreski, Blagica; Tumanoska, Despina
  11. Determining minimum wages in China: Do economic factors dominate? By Christian Dreger; Reinhold Kosfeld; Yanqun Zhang
  12. Examining public Policy in Romania: is it transparent and legitimated? By Dogaru, Tatiana Camelia
  13. Housing Prices and Business Cycle in China: A DSGE Analysis By He, Qing; Liu, Fangge; Qian, Zhongxin; Chong, Terence Tai Leung
  14. Key Issues of Central and Local Government Finance in the People’s Republic of China By Qichun, Zhang; Shufang, Li
  15. Evaluating the Economic Effects of Flat Tax Reforms Using Synthetic Control Methods By Bibek Adhikari; James Alm
  16. Mental cognition of scattered farms in the Great Plain By Andrea Szekely
  17. Do Siblings Take Your Food Away? Using China's One-Child Policy to Test for Child Quantity-Quality Trade-Offs By Yun Liang; John Gibson
  18. Structural Change and Income Distribution: Accounting for Regional Inequality in the People’s Republic of China and Its Changes during 1952–2012 By Wan, Guanghua; Wang, Chen; Zhang, Xun
  20. Estonia in Global Value Chains By Ali-Yrkkö, Jyrki; Mattila, Juri; Seppälä, Timo
  21. Two Stages of Economic Development By Gong, Gang
  22. Harmonic distances and systemic stability in heterogeneous interbank networks By Gabor Fukker
  23. Interfirm Relationships and Business Performance By Cai, Jing; Szeidl, Adam
  24. Entrepreneurial Activities and Institutional Environment in China By Luo, Bei; Chong, Terence Tai Leung
  25. Fiscal Decentralization and Local Budget Deficits in Viet Nam: An Empirical Analysis By Morgan, Peter; Long, Trinh Q.

  1. By: Yongzheng Liu (School of Finance, China Financial Policy Research Center, Renmin University of China); James Alm (Department of Economics, Tulane University)
    Abstract: The central government of the People's Republic of China enacted a fiscal reform known as the "Province-Managing-County" (PMC) fiscal reform in the early 2000s. This reform eliminated the prefecture city government as the intermediate layer between the province and the county, and was intended largely to improve administrative efficiency and to lessen the fiscal stress of county governments. We apply a difference-in-difference method using a panel data set of 263 cities nationwide over the period of 1999-2011 to examine how the introduction of the PMC fiscal reform affects the economic growth of the cities. Our results show that on average implementing the PMC fiscal reform moderately increases city GDP growth by around 1 percentage point. We argue that this unexpected positive growth effect of the reform is induced by the expansion of land supply of the reformed cities, which in the post-reform period have faced the need to look for revenues outside the budget system, mainly extra-budgetary funds in the form of leasing land. Our analysis provides evidence on this argument, and reveals that the reformed cities tend to expand land leasing at a speed that is 14 percent higher than the non-reformed cities. Furthermore, we show that the impacts of the reform tend to be strengthened over time following the introduction of the reform. Our results are quite robust to alternative estimation methods.
    Keywords: Province-Managing-County Fiscal Reform, Land Lease, City GDP Growth, China.
    JEL: H11 H77 R11 R52
    Date: 2016–12
  2. By: Zhang, Li (Asian Development Bank Institute); Xu, Xianxiang (Asian Development Bank Institute)
    Abstract: We explore the relationship between land policies and urbanization in the PRC. We analyze the land policies associated with urbanization and summarize findings related to central and local government involvement in the process of urbanization. In particular, we explore the relationship between urbanization and land leasing. We find that the urbanization rate and the land leasing revenue are positively related. Land leasing provides financial support for PRC urbanization, but damages the interest of landless peasants. Especially in the west, population urbanization lags behind land urbanization, resulting in much higher land and house prices in the east than those in inland PRC. Current land and household registration policies hinder the mobility of production factors, including construction land and the labor force, and distort the process of urbanization and industrialization. Land policy should be revised such that the market determines the allocation of land resources, which will create a unified, competitive urban–rural land market.
    Keywords: Urbanization; land policy; land leasing; land prices; hukou system
    JEL: H71 P26 R52
    Date: 2016–12–31
  3. By: Daniele Moschella; Federico Tamagni; Xiaodan Yu
    Abstract: This article investigates the characteristics of high-growth (HG) firms in Chinese manufacturing, and further explores the effects of firm characteristics on persistence of high-growth. We employ a multidimensional definition of HG firms that simultaneously accounts for growth of sales and employment. Exploiting a representative panel covering the period of the Chinaùs miracle, we find that HG firms outperform other firms, showing higher productivity, higher profitability, larger investment intensity, higher sales from product innovation, lower interest expenses and lower leverage. HG firms are also relatively young, larger in size, more often exporters and more concentrated in non-State-controlled companies. However, regression analysis suggests that none of the indicators of structural characteristics and performance considered above displays any statistical association with the ability to persistently replicate high-growth over time. The results speak against the long-run effectiveness of policies supporting the creation and backing of high-growth firms.
    Keywords: Entrepreneurship, Firm growth, High-growth firms, Persistent high-growth firms
    Date: 2017–09–01
  4. By: Haiyan Ding; Hui He
    Abstract: This paper is the first comprehensive empirical study of earnings, income, and consumption inequality in urban China from 1986 to 2009, using unique micro-level data from the Urban Household Survey (UHS). The paper documents a drastic increase in economic inequality for the sample period. The paper finds that consumption inequality closely tracks income inequality, both over time and over the life cycle. The paper believes that the main driver of this co-movement could be a dramatic increase in noninsurable idiosyncratic permanent income shocks after the early 1990s, associated with the economic transition in urban China.
    Keywords: Income inequality;China;Income distribution;Consumption distribution;Household expenditures;Household survey data;Time series;Transition economies;Inequality over time and life-cycle; Income dynamics; Chinese economy; Structural transformation
    Date: 2016–12–12
  5. By: James Alm (Department of Economics, Tulane University); Ruslan A. Grigoriev (Professor of Economics, Kazan Innovative University); Marat V. Kramin (Professor of Applied Mathematics, Kazan Innovative University); Timur V. Kramin (Professor of Economics, Kazan Innovative University)
    Abstract: The paper established a number of "stylized facts", one of which is a confirmation of S. Kuznets' hypothesis of the nonlinear dependence between the degree of inequality in income distribution and welfare economic systems on the example set of Russian regions for the period 2002-2012. It is shown that, for a given sample, the welfare and economic growth factors amplifies their influence on inequality in income distribution in the post-crisis period. Observed before the 2008 crisis, monotonous growth of income inequality in the process of raising the per capita GRP is slowing in the post-crisis period, and for the foreseeable future, in some regions, its direction can be reversed, while maintaining a trend of socio-economic development. Despite the persistence over time of a convex nature of S. Kuznets' curve for Russian regional data its parameters are changed during the reporting 2002-2012 period. The maximum point of the curve shifts to the left, its convexity increases. These facts indicate that the growth of income inequality Russian regions as a result of growth of per capita GRP is slowing. For some regions in the post-crisis period (after 2008), income inequality does not grow with the growth of per capita gross regional product, or it even reduces. This fact can be attributed to the implementation of the Russian federal socially oriented projects and programs in recent years. The results of the presented paper can be used for the implementation of regional economic policy in order to regulate the level of inequality in income distribution in the regions of Russia.
    Keywords: Inequality of income distribution, economic growth, the Gini coefficient, the competitiveness of regions, regression modeling, gross regional product.
    JEL: I3 P2 O4 R1
    Date: 2016–12
  6. By: Hui He; Nan Li; Jing Fang
    Abstract: This paper examines whether the rapid growing firm patenting activity in China is associated with real economic outcome by building a unique dataset uniting detailed firm balance sheet information with firm patent data for the period of 1998-2007. We find strong evidence that within-firm increases in patent stock are associated with increases in firm size, exports, and more interestingly, total factor productivity and new product revenue share. Event studies using first-time patentees as the treatment group and non-patenting firms selected based on Propensity-Score Matching method as the control group also demonstrate similar effects following initial patent application. We also find that although state-owned enterprises (SOEs) on average have lower level of productivity and are less innovative compared to their non-state-owned peers, increases in patent stock tend to be associated with higher productivity growth among SOEs, especially for patents with lower innovative content. The latter could reflect the preferential government policies enjoyed by SOEs.
    Keywords: Technological innovation;China;Business enterprises;Public corporations;Innovation, Growth, Patent, R&D, Productivity, SOE Reforms, China
    Date: 2016–12–22
  7. By: Crowley, Meredith A; Meng, Ning; Song, Huasheng
    Abstract: We estimate how a rise in uncertainty about future tariff rates impacts firm decisions to enter into and exit from export markets. Using Chinese customs transactions between 2000-2009, we exploit time-variation in product-level trade policy and find that Chinese firms are less likely to enter new foreign markets and more likely to exit from established foreign markets when their products are subject to increased trade policy uncertainty. Our analysis is based on the phenomenon of ``tariff echoing'' -- after a tariff hike in one country, another country is likely to raise its tariff on the same product. Overall, we find that if there had been no trade policy uncertainty created by the use of contingent tariffs, Chinese entry into foreign markets would have been roughly 2 percent higher per year. We use our model to counterfactually estimate how much entry by Chinese firms over 2001-2009 was due to future trade policy certainty provided by membership in the WTO.
    Keywords: antidumping; China shock; Chinese exporters; information spillovers; Trade agreements; Trade policy uncertainty
    JEL: F12 F13 F14
    Date: 2016–12
  8. By: Crespo Cuaresma, Jesus; Klasen, Stephan; Wacker, Konstantin M.
    Abstract: Martin Ravallion ("Why Don't We See Poverty Convergence?" American Economic Review, 102(1): 504-23; 2012) presents evidence against the existence of convergence in global poverty rates despite convergence in household mean income levels and the close linkage between income growth and poverty reduction. We show that this finding is driven by a specification that demands more than simple convergence in poverty headcount rates and assumes a growth elasticity of poverty reduction, which is well-known to accelerate with low initial poverty levels. If we motivate the poverty convergence equation using an arguably superior growth semi-elasticity of poverty reduction, we find highly significant and robust evidence of convergence in absolute poverty headcount ratios and poverty gaps. Relatedly, we show that the results in Ravallion (2012) are driven by the special income growth and poverty dynamics in Central and Eastern European transition economies that started with low initial poverty rates and thus observed a high elasticity of poverty reduction. Once we control for their abnormal poverty dynamics, we again find robust evidence of global convergence in poverty, even in the original specification by Ravallion (2012). (authors' abstract)
    Keywords: poverty convergence; economic growth; poverty trap; transition economies
    Date: 2016–01
  9. By: Zhang, Yi; Matz, Julia Anna
    Abstract: This study investigates the well-researched relationship between migration and the formation of human capital in the source region using a novel instrument: the existence of a local train station. We make use of Chinese panel data and of the fact that the decision to build a new train station is taken by the central government and unrelated to characteristics of a rural village receiving the station. As an intermediate result we find that train stations are negatively related to migration outflows, thus indicating that the facilitation of local employment through economic integration outweighs the reduction of migratory costs. Investigating variation within villages over time in the instrumental variables approach for the central research question, we see a positive effect of out-migration on educational attainment in the source region. Additional results suggest that the effect is stronger for male and young stayers.
    Keywords: Migration, human capital formation, instrumental variables, China, Consumer/Household Economics, Labor and Human Capital, D10, I25, J61,
    Date: 2017–01
  10. By: Petreski, Blagica; Tumanoska, Despina
    Abstract: Labor market outcomes in Macedonia have been improving in the past eight years, despite the lingering effects of the Global economic crisis. The unemployment rate has been declining, albeit still remains high at 26.1% at the end of 2015. At the same time, the employment rate increased from 36.2% in 2007 to 42.1% in 2015. In spite the favorable developments related to the employment and unemployment rates, the activity rate continued to be the main challenge. Activity rate improved moderately, from 55.7% in 2007 to 57% in 2015, being still much lower than the EU-28 average of 72.4%. In order to tackle the high unemployment and inactivity, the government introduced ALMPs in 2017, with key objectives: 1) social inclusion of vulnerable groups on the labour market, 2) reducing unemployment, 3) increasing employability of the long-term unemployed people, and 4) fostering competitiveness of the economy. The ALMPs include four main categories: 1) direct job creations; 2) employment incentives; 3) traineeship; and 4) community work. The main objective of this research is to investigate the success of the ALMPs and its impact to the unemployment rate in the country.
    Keywords: ALMPs, active labor marker measures, employment, unemployment.
    JEL: J21 J8
    Date: 2016–12–29
  11. By: Christian Dreger; Reinhold Kosfeld; Yanqun Zhang
    Abstract: Minimum wages may be an important instrument to reduce income inequality in a society and to promote socially inclusive economic growth. While higher minimum wages can support the Chinese transformation towards consumption driven growth, they can worsen the price competitiveness in export markets. As they differ throughout the country, this paper investigates their determinants at the regional level. In addition to a broad set of economic determinants, such as per capita income and consumption, consumer prices, unemployment and industrial structures, spatial effects are taken into account. They might arise for different reasons, including competition of local policymakers. The results show that the impact of economic variables declines, once spatial spillovers are considered. Although the minimum wage regulation pursues the relevance of economic factors in the determination of the appropriate levels, the actual development is largely driven by regional dependencies. As minimum wage standards set by local officials do not fully reflect the regional economic development, further reforms should be on the agenda.
    Keywords: Chinese transformation; minimum wages; spatial effects
    JEL: J30 R23 C23
    Date: 2016–12
  12. By: Dogaru, Tatiana Camelia
    Abstract: In the last decades, in the context of many economic and financial crisis, the policy-making became the heart of government. In Romania, they represents the main instruments for solving the citizens’ problem: health care, education, the environment, and the mechanisms by which public money is budgeted. Therefore, this paper analyses the transparency and consultation in policy-making process from the view of different policy-making stages. The paper discusses the different mechanism and procedure designed and applied by Romanian government in policy-making process. Finally, it describes possible links between policy-making capacity and indicators for transparency, starting from Joseph Stiglitz assertion on the adverse effects of secrecy in government policy-making, “with more mistakes, public officials become more defensive; to protect themselves, they seek even more secrecy, narrowing in the circle still further, eroding still further the quality of decision-making”.
    Keywords: policy-making, public consultation, transparency, financial crisis
    JEL: D7 H1 H12
    Date: 2016
  13. By: He, Qing; Liu, Fangge; Qian, Zhongxin; Chong, Terence Tai Leung
    Abstract: We investigate the interaction between the real estate market and the business cycle volatility in China over the past two decades. A Bayesian dynamic stochastic general equilibrium (DSGE) model with nominal stickiness and collateral constraints is estimated. It is found that shocks from the housing market (e.g., loan-to-value ratio and housing preference shocks) affect the macroeconomy of China. The interactive feedback between credit constraints and housing prices amplifies the impact of various economic shocks, which plays an important role in explaining the business cycle volatility in China.
    Keywords: housing prices; business cycle; DSGE; China
    JEL: E32 E42 R31
    Date: 2016–07–21
  14. By: Qichun, Zhang (Asian Development Bank Institute); Shufang, Li (Asian Development Bank Institute)
    Abstract: Fiscal decentralization has been established in the People’s Republic of China (PRC), but crises emerge at the local government level due to remaining problems of the fiscal administration system of tax allocation and the impact of replacing the business tax with a value added tax. The PRC taxation system requires readjustment and local governments have begun to focus on innovative financing models. The main path to stable and sustainable government finances is to maintain the general public budget and the government fund budget. We show that the use of innovative fundraising and financing channels will lead to the upgrading of local government infrastructure and public service. Suggestions for enhancing local government fiscal stability and sustainability include: reducing the fiscal burden at the local level by standardizing and legalizing outlay responsibilities at all government levels; forming a long-term fiscal growth mechanism by establishing a modern taxation system; establishing a standardized and predictable transfer payment system by introducing block transfer payments and prioritized transfer payments as a basis for a stable growth mechanism for general transfer payments; promoting public-private partnership legislation to encourage participation of social capital and maximize the multiplier effect of public expenditure; improving the mid-term budget and debt-annexed budget; and establishing a government planning mechanism for investment and debt financing of major infrastructure construction projects.
    Keywords: Local government; fiscal stability; fiscal sustainability; fiscal administration; China’s “new normal”
    JEL: E62
    Date: 2016–12–31
  15. By: Bibek Adhikari (Department of Economics, Tulane University); James Alm (Department of Economics, Tulane University)
    Abstract: Tax reforms are often motivated by their potential to improve economic performance. However, their actual impacts are difficult to quantify. We analyze the impact of flat tax reform on incomes using "synthetic control" methods. We identify the 8 Eastern and Central European countries that adopted flat tax systems between 1994 and 2005, and then compare post-reform GDP per capita of "treated" countries with a convex combination of similar but "untreated" countries, while accounting for the time-varying impact of unobservable heterogeneity. We find positive impacts in all 8 countries, with 7 out of 8 cases significant at the conventional level.
    Keywords: Flat tax, tax reform, synthetic control methods.
    JEL: H20 H25 H31
    Date: 2016–12
  16. By: Andrea Szekely
    Abstract: The farm or lodge historically means a few isolated settlements of the Hungarian Great Plain (that belongs nowadays into three countries Hungary-Serbia-Romania) that are today the centres of the agricultural works and more generally, the centres of the agricultural management. The farm is not an independent form of settlement, but with its domain, is the depending form of a city or a village. The above mentioned criterions of farming units were changed during the twentieth century. The most visible changes could be observed after the 2nd World War, during collectivization. In the years after the fall of communism, and during the reprivatisation process, the structure of agriculture and land use has changed again dramatically. Now, the functions of farms are also scattered, including healthcare, tourism and secondary residence. In our comparative study we analyse the mental cognition of scattered farms in Hungary and in Serbia. We compare the mental maps of different populations (people living on farms, agriculture related students, and not related people). The differences of cognition can be observed on the drawings (elaboration, number of objects, their relative location); and we offer a typology based on spatial statistical analysis.
    Keywords: rural areas; scattered farms; mental map
    Date: 2016–12
  17. By: Yun Liang (University of Waikato); John Gibson (University of Waikato)
    Abstract: We test for the existence of a trade-off between child quantity and quality in Chinese families. We use changes over time and space in the local stringency of the one-child policy as a source of exogenous variation in family size. Investment in child quality is measured by intake of three nutrients, using seven waves of data from the China Health and Nutrition Survey. For all three nutrients, a quantity-quality trade-off is apparent, which persists for fats if child-specific effects are introduced. The trade-off would be less apparent if exogenous sources of variation in family size were ignored.
    JEL: I12 J13 O15
    Date: 2017–01–12
  18. By: Wan, Guanghua (Asian Development Bank Institute); Wang, Chen (Asian Development Bank Institute); Zhang, Xun (Asian Development Bank Institute)
    Abstract: This study explores the relationship between inequality and structural transformation by constructing a theoretical model, developing analytical frameworks, and implementing a case study. The general equilibrium model we develop demonstrates that inequality exhibits an inverted U shape as structural change proceeds from onset to completion. Our analytical frameworks enable decomposition of total inequality into sector contributions and a change in total inequality into a component attributable to structural transformation and the other component to concentration or spatial agglomeration. Applying the decomposition frameworks to data from the People’s Republic of China yield various interesting findings and more importantly confirms the inverted U shape as predicted by our theoretical model.
    Keywords: Structural transformation; structural change; income distribution; income inequality; inequality decomposition; spatial agglomeration; macroeconomics; China; 不均等; 收入分配; 结构变化
    JEL: D63 O18 O53 R12
    Date: 2016–12–31
  19. By: Sherzod Hamdamov
    Abstract: Uzbekistan, country which is situated in Central Asia, is characterised with huge amount of agricultural resources. It is a leading economy of exporting agricultural products to CIS countries, especially Russia and Kazakhstan. Government of Uzbekistan has been supporting development of entrepreneurship in the sphere of agriculture, one of the successful results of which is presence of specialized farms almost in each region of country. At present, the main task for specialized farms is to provide both domestic and foreign markets with qualified agricultural products. In the conditions of competition and free market relations, farms need to have and use appropriate strategies, especially marketing strategies for gaining good positions in domestic and foreign markets. This article explains how specialized farms to succeed on gaining competitive positions in markets through developing and implementing effective marketing strategies. Key words: marketing, marketing activity of farms, agricultural enterprises, specialized farms, product sales markets, market conquest. Policy
    Date: 2016–12
  20. By: Ali-Yrkkö, Jyrki; Mattila, Juri; Seppälä, Timo
    Abstract: In this study, we analyse Estonia’s position in global value chains using World Input-Output Data and firm-level data. We find that 69% of Estonia’s total exports are intermediate goods and services, exceeding the EU average (65%). Two-thirds of Estonian imports are intermediates. Our findings suggest that Estonia is heavily involved in vertically and geographically fragmented production even though its most significant trading partners are its neighbouring countries. We also analyse the value chains of two significant companies operating in the Estonian economy along with their GDP contributions. According to our findings, the GDP contributions generated by the exports of these two companies vary significantly from one another. The euros generated from exports do not contribute equally to the national economy.
    Keywords: Global value chains, GVC, GDP, exports, gross domestic product, value added, Estonia, granular
    JEL: D22 F14 F6 F62 F68 L2
    Date: 2017–01–11
  21. By: Gong, Gang (Asian Development Bank Institute)
    Abstract: We suggest that the development process of a less-developed country can be divided into two stages, which demonstrate significantly different properties in areas such as structural endowments, production modes, income distribution, and the forces that drive economic growth. The two stages of economic development have been indicated in the growth theory of macroeconomics and in the various “turning point” theories in development economics, including Lewis’s dual economy theory, Kuznets curve, and the middle-income trap. A dynamic macroeconomic model is constructed to simulate the development process that reveals these two stages. Using the two-stage theory of economic development, we find that the People’s Republic of China’s economy is currently at the intersection between the first and second stages. This is the definition of “new normal” in the current Chinese economy.
    Keywords: two stages of economic development; dual economy theory; Kuznets curve; economic growth; new normal
    JEL: C61 C62 E10 O11
    Date: 2016–12–31
  22. By: Gabor Fukker (Magyar Nemzeti Bank)
    Abstract: This paper investigates the effects of contagion in interbank lending networks. I introduce a new measure based on the harmonic distance of Acemoglu et al. (2015) and, motivated by their theoretical results, compare it to well-known centrality measures already applied in the systemic risk literature which do not take into account the structure of a contagion mechanism. I derive an explicit formula of size-adjusted harmonic distances and extend it with the usage of liquid assets for a heterogeneous banking system. The simulation results on scale-free and complete networks do not confirm that this new distance would perform better than "off-the-shelf" measures but its performance becomes similar to the best known measures in case of averaged networks which are applied in central banking analysis. This new measure is capable of identifying systemically important institutions and its time variation is also presented in an interbank network. I also test for the scale-free property of the Hungarian interbank lending network and besides, network measures as systemic risk indicators are analyzed on Hungarian data.
    Keywords: systemic risk, financial networks, interbank contagion, macroprudential regulation.
    JEL: D85 E44 G01 G21 G28 L14
    Date: 2017
  23. By: Cai, Jing; Szeidl, Adam
    Abstract: We organized business associations for the owner-managers of randomly selected young Chinese firms to study the effect of business networks on firm performance. We randomized 2,800 firms into small groups whose managers held monthly meetings for one year, and into a "no-meetings" control group. We find that: (1) The meetings increased firm revenue by 8.1 percent, and also significantly increased profit, factors, inputs, the number of partners, borrowing, and a management score; (2) These effects persisted one year after the conclusion of the meetings; and (3) Firms randomized to have better peers exhibited higher growth. We exploit additional interventions to document concrete channels. (4) Managers shared exogenous business-relevant information, particularly when they were not competitors, showing that the meetings facilitated learning from peers. (5) Managers created more business partnerships in the regular than in other one-time meetings, showing that the meetings improved supplier-client matching. (6) Firms whose managers discussed management, partners, or finance improved more in the associated domain, suggesting that the content of conversations shaped the nature of gains.
    Keywords: business networks; field experiment; information diffusion; meetings; peer effects; referrals; Trust
    JEL: D22 L14 O12 O14
    Date: 2016–12
  24. By: Luo, Bei; Chong, Terence Tai Leung
    Abstract: This paper aims to examine the relationship between the quality of an institutional environment and the characteristics of entrepreneurial activities within the context of China. An event study was conducted to investigate the impacts of the announcement of the Forbes China Rich List on prices of the shares associated with entrepreneurs on the list. This paper concludes that the quality of an institutional environment is greatly negatively related to unproductive entrepreneurial activities.
    Keywords: Forbes; Entrepreneurial activities; Institutional environment.
    JEL: G3 L26
    Date: 2016–10–05
  25. By: Morgan, Peter (Asian Development Bank Institute); Long, Trinh Q. (Asian Development Bank Institute)
    Abstract: Since 1975, Viet Nam has gradually decentralized more fiscal responsibilities to local authorities. This study has two objectives: (i) to take stock of the current institutional framework for intergovernmental fiscal relations in Viet Nam, and (ii) to empirically assess the debt sustainability of local governments in Viet Nam. The empirical analysis uses two estimation methods: (i) fully modified ordinary least squares (OLS) to estimate the long-term correlations between co-integration equations, including vectors of co-integration variables, and stochastic regressor innovations; and (ii) fiscal reaction equations at the provincial level, based upon the Bohn (2008) model. The empirical results suggest that deficit levels are generally sustainable at the local level.
    Keywords: Government decentralization; government fiscal balance; intra-government transfers; expenditure assignment; revenue assignment; local government borrowing; Viet Nam
    JEL: H70 H71 H72 H74 H77
    Date: 2016–12–31

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