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on Transition Economics |
| By: | Eugenia Bessonova (National Research University Higher School of Economics); Gonchar Ksenia (National Research University Higher School of Economics) |
| Abstract: | We investigate the impact of court conditions on multinational decisions on entry, subsidiary size and entry mode across subnational regions in Russia. We apply the literature on heterogeneous firms and the institution-based view of investor behavior, which predict that higher institutional costs raise the size and productivity cut-off of start-up subsidiaries. Our empirical results based on microestablishment data of foreign-owned firms in Russia show that a weaker judicial framework and stronger political power of the local governor significantly de-stimulate entry. The majority of multinationals enter Russia, which is viewed as a high-risk country, through large and very large subsidiaries wholly owned by the foreign parents. Variation of the business strategies of multinationals between regions is largely explained by regional court conditions, as foreign investors adapt their strategic decisions to compensate court deficiencies by increasing the size of the subsidiary and acquiring local institutional knowledge through partnership with resident firms. We also find that structural adjustments to court risks are typical for horizontal investments, which only serve the host market |
| Keywords: | Multinational enterprise, foreign direct investment, production location decision, affiliate size decision, entry mode decision, institutions, Russia |
| JEL: | F10 F23 L22 R30 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:161/ec/2017&r=tra |
| By: | Alisher UMIRDINOV |
| Abstract: | This paper investigates the applicable international economic regulation framework for the state owned enterprises (SOEs) of Kazakhstan, one of the powerhouse in the Central Asian region in respect to natural resources, territory, and scale of economy. After the collapse of the Soviet Union, notwithstanding to the fact that Kazakhstan chose the path of radical transition to a market economy and organized several rounds of a large scale privatization program, the presence of SOEs in the economy is still high, and more than half of its gross domestic product (GDP) reportedly is produced by SOEs. Moreover, the sovereign wealth fund keeps important assets under its management, and competition law does not function well on state subsidy issues. In 2015, on the other hand, the Russia-led Eurasian Economic Union entered into force, and Kazakhstan joined the World Trade Organization (WTO) and concluded a new Enhanced Partnership and Cooperation Agreement with the European Union (EU). The importance of such international economic treaties lies in that Kazakhstan made several significant accession commitments, including price regulation during the WTO accession and agreed to inclusion of a far-fetching SOE chapter in the Enhanced Partnership and Cooperation Agreement with EU. Although, with respect to Kazakhstani SOEs, these treaties have not yet generated enough practice, but it can be concluded that the above treaties highly disciplined the Kazakhstani SOEs, and that their enforcement and dispute settlement situation needs to be followed carefully. |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:17029&r=tra |
| By: | Idrisov Georgy (Gaidar Institute for Economic Policy); Gordeev Dmitry (Gaidar Institute for Economic Policy) |
| Abstract: | The paper analyzes the need to change the approaches to Russia’s natural gas pricing in domestic and foreign markets. The authors conclude that changes are inevitable in the medium term because existing pricing practices are becoming obsolete in the rapidly transforming gas market. The development of the gas industry is severely hampered by inefficient domestic consumption due to distorted price incentives, lack of competition in the domestic market and the pegging of export gas prices to the oil product basket. The paper discusses possible development options for Russia’s gas industry and their potential macroeconomic effects. |
| Keywords: | natural gas, pricing, cross subsidization |
| JEL: | D24 D40 D60 E20 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:gai:wpaper:wpaper-2017-274&r=tra |
| By: | Kanbur, Ravi (Cornell University); Wang, Yue (Cornell University); Zhang, Xiaobo (Peking University) |
| Abstract: | This paper argues that after a quarter century of sharp and sustained increase, Chinese inequality is now plateauing and even turning down. The argument is made using a range of data sources and a range of measures and perspectives on inequality. The evolution of inequality is further examined through decomposition by income source and population subgroups. Preliminary explanations are provided for these trends in terms of shifts in policy and structural transformation of the Chinese economy. The narrative on Chinese inequality now needs to focus on the reasons for this great turnaround. |
| Keywords: | Chinese inequality turnaround, inequality data, inequality trends, inequality and structural transformation, harmonious development and government policy |
| JEL: | D31 D63 O15 O53 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10635&r=tra |
| By: | Aleksandar Vasilev (Department of Economics, American University in Bulgaria) |
| Abstract: | In this paper we introduce reciprocity in labor relations and government sector to investigate how well the real wage rigidity that results out of that arrangement explains business cycle uctuations in Bulgaria. The reciprocity mechanism described in this paper follows Danthine and Kurmann (2010) and is generally consistent with micro-studies, e.g. Lozev et all. (2011) and Paskaleva (2016), while at the same time comes into contrast with models with eciency wages of no-shirking type that emphasize the importance of aggregate labor market conditions as the main determinant in wage setting, e.g. Vasilev (2017). Rent-sharing considerations, and worker's own past wages turn out to be the most important aspects of how labor contracting happens. In contrast, aggregate economic conditions, as captured by the employment rate, are not found to be quantitatively important for wage dynamics. Overall, the model with reciprocity and fiscal policy performs well vis-a-vis data, especially along the labor market dimension, and in addition dominates the market-clearing labor market frame- work featured in the standard RBC model, e.g Vasilev (2009). |
| Keywords: | general equilibrium, reciprocity, gift exchange, eciency wages, unemployment, fiscal policy, Bulgaria |
| JEL: | E24 E32 J41 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:sko:wpaper:bep-2017-03&r=tra |
| By: | Aytalina Azarova; Darja Irdam; Alexi Gugushvili; Mihaly Fazekas; Gábor Scheiring; Pia Horvat; Denes Stefler; Irina Kolesnikova; Vladimir Popov; Ivan Szelenyi; David Stuckler; Michael Marmot; Michael Murphy; Martin McKee; Martin Bobak; Lawrence King |
| Abstract: | Population-level data suggest that economic disruptions in the early 1990s increased working-age male mortality in post-Soviet countries. This study uses individual-level data, using an indirect estimation method, to test the hypothesis that fast privatisation increased mortality in Russia. |
| JEL: | N0 |
| Date: | 2017–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:73617&r=tra |
| By: | Tho Pham; Oleksandr Talavera |
| Abstract: | This paper examines the relationship between gender, social capital, and access to finance of micro, small, and medium enterprises in the manufacturing sector in Viet Nam. Our dataset is from the 2011, 2013, and 2015 waves of the Micro, Small, and Medium Enterprise Survey in Viet Nam. Using the Heckman technique to control for sample selection bias, the data do not provide evidence for discrimination against female-owned enterprises in the formal lending market. Specifically, female entrepreneurs have a higher probability of getting a loan and they pay lower interest rates in comparison with male entrepreneurs. No discrimination in formal credit markets may arise from the preference for informal loans over formal loans—that is, entrepreneurs tend to borrow informal loans before applying for formal ones. Further analysis shows that social capital could facilitate loan applications: firms that have a closer relationship with government officials and other business people can get loans of longer duration. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2017-67&r=tra |
| By: | Ha, Le Thu |
| Abstract: | SECO Working Paper 3/2017 by Le Thu Ha |
| Abstract: | In February 2016, after more than three years of negotiation, the European Union and Vietnam officially announced the conclusion of negotiation and published the text of the EU-Vietnam Free Trade Agreement (EVFTA). This research focuses on the impacts of EVFTA on both economies. By using the Sussex Framework, the EVFTA is expected to have positive impacts on both economies, also exposing many opportunities and challenges to Vietnam as a developing country when trading with an economy giant of the EU. Based on the results of both quantitative and qualitative analysis, the research proposed some recommendations for Vietnamese government and enterprises to enhance the benefits of the FTA. |
| Date: | 2017–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:wti:papers:1052&r=tra |
| By: | Emma Howard |
| Abstract: | This paper uses panel data to assess the relative importance of social networks and geographic proximity to micro, small, and medium enterprises in Viet Nam. The results suggest that a larger social network, and hiring employees mainly through social networks, are both correlated with higher value added per worker. The number of government officials and civil servants in a firm’s network emerges as particularly important. When the quality of contacts is controlled for, firms with tighter social networks have, on average, higher value added per worker. The analysis of spatial networks reveals that firms with a lower percentage of customers and suppliers in the same district actually have higher value added per worker. The results suggest that for micro, small, and medium firms in Viet Nam, strong social networks are much more important than geographic proximity. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2017-69&r=tra |
| By: | Konečný, Tomáš; Seidler, Jakub; Belyaeva, Aelita; Belyaev, Konstantin |
| Abstract: | Most studies focusing on the determinants of loss given default (LGD) have largely ignored possible lagged effects of the macroeconomy on LGD. We fill this gap by employing a wide set of macroeconomic covariates on a retail portfolio that represents 15% of the Czech consumer credit market over the period 2002–2012. We find an important time dimension to the links between LGD and the aggregate economy in the Czech Republic. The model that allows exclusively for contemporaneous effects includes a number of significant macroeconomic variables, some of which have non-intuitive signs. Nonetheless, a more general time structure of the LGD model makes current macroeconomic variables largely irrelevant and highlights the importance of delayed responses of LGD to the macroeconomic environment. JEL Classification: C02, G13, G33 |
| Keywords: | Credit losses, loss given default, recovery rates, workout LGD |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20172037&r=tra |
| By: | Warwick J. McKibbin; Jong Wha Lee; Weifeng Liu; Cheol Jong Song |
| Abstract: | This paper explores the economic impacts of Korean unification on North and South Korea. It presents a new consistent database on macroeconomic, sectoral and trade data, and an input output table for the North Korean economy, and then incorporates it in a global intertemporal multi-sector general equilibrium model. Assuming three hypothetical scenarios such as North Korea’s reform and gradual convergence, its sudden collapse and immediate unification, and chaos and crises in both Koreas, we quantify the consequences of Korean unification on economic activity, trade and capital flows in the two Koreas. The results highlight the importance of the unification processes and of alternative policy responses in both Koreas to the economic impacts of unification. |
| Keywords: | Korean unification, North Korea, economic integration, dynamic general equilibrium, economic growth, convergence |
| JEL: | F15 H77 O19 O23 O53 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2017-30&r=tra |
| By: | Kirill Shakhnov |
| Abstract: | This paper provides a comprehensive analysis of taxation in Belarus. I compare the dynamics of the tax rates and the tax revenue in Belarus to the world averages and to other countries of the Eurasian Union. The paper studies the the harmonization of the rates within the union and the efficiency of tax collection. Finally, the two possible reforms of taxation in Belarus and its possible consequences are discussed: an increase of VAT; reintroduction of the progressive personal income tax. |
| Keywords: | Flat Tax, VAT, Efficiency, Eurasian Union |
| JEL: | H21 F62 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:bel:wpaper:36&r=tra |
| By: | Huong, Trinh Thi Thu |
| Abstract: | SECO Working Paper 2/2017 by Trinh Thi Thu Huong |
| Abstract: | Transport cost is a critical component that structure price of goods at destination points in international trade. This research explored and analysed transport cost and its impact on export by investigating the relationship between transport cost and export of textile (a specific sector) in Vietnam (a developing country) from 2012 to 2014. |
| Date: | 2017–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:wti:papers:1051&r=tra |
| By: | Akhmetov, Almaz |
| Abstract: | This paper uses Vector Autoregression (VAR) models to test the presence of the Dutch disease in Kazakhstan. It was found that tradable industries and world oil price have immediate effect on domestic currency appreciation. This in return has delayed negative impact on agricultural production and positive delayed effect on non-tradable industries. Prolonged period of low oil prices could hurt Kazakh economy if no effective policies to combat the negative effects of the Dutch disease are implemented. |
| Keywords: | Kazakhstan, Dutch disease, VAR |
| JEL: | E6 O13 O53 |
| Date: | 2017–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:77936&r=tra |
| By: | Kanbur, Ravi (Cornell University) |
| Abstract: | This paper explores the question of structural transformation and income distribution through the eyes of the pioneer in such analysis, Simon Kuznets. It argues that his 1955 paper stands the test of time in providing insights which are relevant to understanding current phenomena like the evolution of Chinese inequality. The paper shows how the Kuznetsian framework can be used, for example, in predicting the differential relationship between urbanization and inequality in India versus China, in assessing the detail of the contribution of sectoral mean and inequality evolution to overall inequality change, and in linking the recent inequality of opportunity literature to rural-urban migration. Thus the original Kuznets framework has the seeds of getting us beyond Kuznets as sometimes (mis)understood in the literature on structural transformation and income distribution. |
| Keywords: | Kuznets curve, inequality and development, rural-urban migration, Chinese inequality, place of birth and equality of opportunity |
| JEL: | O41 O14 D31 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10636&r=tra |
| By: | Le, Minh Ngoc; Tu, Thuy Anh |
| Abstract: | SECO Working Paper 5/2017 by Thuy Anh Tu and Minh Ngoc Le |
| Abstract: | This research aims at examining impacts of ASEAN+6 trade agreements on the automobile industry in Vietnam. Vietnam's automobile industry competes with Thailand, Indonesia and the ASEAN countries as well as China, Korea, Japan and those covered by the ASEAN agreement. By 2018, the automobile import tariff from China, Korea and Japan will be reduced to 5%. In the context of multiple trade agreements, the study of the automobile industry has recently become an interesting topic, especially for policy debate. |
| Date: | 2017–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:wti:papers:1054&r=tra |
| By: | Hien Thu Pham (School of Economics, The University of Queensland); Shino Takayama (School of Economics, The University of Queensland) |
| Abstract: | This paper empirically investigates the relationship between firm size, production efficiency, and returns to scale. Using a recently developed stochastic frontier approach and data from Vietnam, our analysis shows that across all of the sectors we consider, production efficiency is most variable among middle-sized firms, with these firms across all sectors tending to have the lowest production efficiency. While most firms across different sized groups show constant returns-to-scale technologies, our analysis using Spearman coefficients shows that there is a significant difference in technologies and this difference varies substantially across size groups in all sectors. Furthermore, we show that the least-efficient size also differs across sectors. Although our analysis is a snapshot of the Vietnamese manufacturing industry, the diverse production efficiencies in the middle-sized groups can be thought of as a risk that small-sized firms would face in expanding their business. |
| Keywords: | Firm size distribution, Missing middle, Productivity, Efficiency, Stochastic frontier. |
| JEL: | D21 D22 L25 |
| Date: | 2017–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:581&r=tra |
| By: | Vu, Tien Manh; Yamada, Hiroyuki |
| Abstract: | In this paper, we decompose the gender wage gap along the wage distribution in Vietnam during the period 2002–14 and search for the presence of a glass ceiling/sticky floor in wages using the method proposed by Chernozhukov, Fernandez-Val, and Melly (2013). We focus on the formal sector and further divide the sample by educational level, age profile, occupational type, and industry. We find evidence for a total gender wage gap with the price of skills (the price gap) being the main contributor. There are also findings of increases and decreases in equality along the gender wage gap distribution and the formation of a sticky floorand a glass ceiling in 2014 in some of the data. |
| Keywords: | gender wage gap, inequality, wage distribution, Vietnam, J31, J71, J16, J21 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:agi:wpaper:00000124&r=tra |
| By: | Elisa Calza; Micheline Goedhuys; Neda Trifkovic |
| Abstract: | Using a rich panel dataset of SMEs active in the manufacturing sector in Viet Nam, this paper investigates the drivers of firm productivity, focusing on the role played by international management standards certification. We develop and test the hypothesis that, controlling for technological innovation (product and process) and other variables related to technological capabilities, international standards are still conducive to higher productivity, through improved management practices associated with their adoption. In line with the requirement of continuous improvement implied by most international standards, the main findings show that the possession of an internationally recognized standard certificate leads to significant productivity premium. We further investigate the relationship between technological innovation and standard adoption. We find that the likelihood of certificate adoption is higher when firms implement technological innovations and that the effect of certification on productivity is particularly strong for firms with technological innovation. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2017-68&r=tra |