nep-tra New Economics Papers
on Transition Economics
Issue of 2017‒09‒24
nineteen papers chosen by
J. David Brown
United States Census Bureau

  1. Functional upgrading in China’s export processing sector By Ari Van Assche; Jo Van Biesebroeck
  2. Transmission of monetary policy and exchange rate shocks under foreign currency lending By Malgorzata Skibinska
  3. Economic policy, the international environment and the state of Poland’s public finances: Scenarios By Aleksander £aszek
  4. A Fresh Look at the Nutrition Transition in Vietnam using Semiparametric Modeling By Simioni, Michel; Thomas-Agnan, Christine; Trinh, Thi-Huong
  5. Economic Freedom and Government Efficiency: Recent Evidence from China By Shaomeng Jia; Yang Zhou
  6. Economic Analysis and Recommendation of Mobile Virtual Operation Market in China By Lei, Haidong; Song, Luona; Lv, Tingjie; Chen, Xia
  7. The Impact of Marketization on Entrepreneurship in China: Recent Evidence By Yang Zhou; Joshua C. Hall
  8. The effect of China’s One Child Policy on sex selection, family size, and the school enrolment of daughters By Nancy Qian
  9. Competition, Markups, and Gains from Trade: A Quantitative Analysis of China Between 1995 and 2004 By Hsu, Wen-Tai; Lu, Yi; Wu, Guiying Laura
  10. Emerging economies, emerging processes and the rent-based model of emergence : a note on Russia By Julien Vercueil
  11. Where Are Migrants from? Inter- vs. Intra-Provincial Rural-Urban Migration in China By Su, Yaqin; Tesfazion, Petros; Zhao, Zhong
  12. Determinants of the Adoption of Organic Tea Production in Northern Vietnam: A Robustness Analysis By Nicolas Lampach; Phu Nguyen-Van; Nguyen To-The
  13. RIO Country Report 2016: Croatia By Racic Domagoj; Jadranka Svarc; Hristo Hristov
  14. Demystifying the belt and road initiative: Scope, actors and repercussion for Europe By Esteban, Mario; Li, Yuan
  15. Combining experimental evidence with machine learning to assess anti-corruption educational campaigns among Russian university students By Denisova-Schmidt, Elena; Huber, Martin; Leontyeva, Elvira; Solovyeva, Anna
  16. The Effects of the Internet and Mobile Services on Urban Household Expenditures By Zhang, Aihua; Lv, Jia; Kong, Ying
  17. Different interpretations of the automotive industry and its role in three semi-peripheral regions of the EU By Gábor Túry
  18. Female Brain Drain in Poland and Germany: New Perspectives for Research By Karolina Beaumont; Matthias Dauner; Matthias Kullas
  19. Pension reform in Belarus in the shadow of Social Europe: vulnerability issues of people aged 50+ and points for improvement By Sierž Naurodski

  1. By: Ari Van Assche; Jo Van Biesebroeck
    Abstract: Functional upgrading occurs when a firm acquires more sophisticated functions within an existing value chain. In this paper, we analyze if there is evidence of this type of upgrading in China’s export processing regime by investigating dynamics in the relative prevalence of Import & Assembly (IA) versus Pure Assembly (PA) processing trade over the period 2000-2013. Firms in both regimes provide similar manufacturing services to foreign companies, but IA firms also conduct the sophisticated tasks of quality control, searching, financing and storing imported materials. Consistent with a trend of functional upgrading, we show that the share of IA trade in total processing trade has increased rapidly during the period 2000-2006, both overall and within product categories. Furthermore, we find that this trend has gone hand in hand with improvements in a sector’s labor productivity and unit values. Against expectations, we find that this process has slowed down notably during the period 2006-2013.
    Date: 2017–07
  2. By: Malgorzata Skibinska
    Abstract: This paper analyses the di erences in reaction of domestic and foreign currency lending to monetary and exchange rate shocks, using a panel VAR model estimated for three biggest Central and Eastern European countries (Poland, the Czech Republic and Hungary). Our results point toward a drop in domestic currency loans and an increase of foreign currency credit in reaction to monetary policy tightening in Poland and Hungary, suggesting that the presence of foreign currency debt weakens the transmission of monetary policy. A currency depreciation shock leads to an initial decline in foreign currency lending, but also in loans denominated in domestic currency as central banks react to a weaker exchange rate by increasing the interest rates. However, after several quarters, credit in foreign currency accelerates, indicating that borrowers start using it to substitute for depressed domestic currency lending.
    Keywords: foreign currency loans, lending currency structure, monetary policy and exchange rate shocks, CEE countries
    JEL: E44 E52 E58
    Date: 2017–08
  3. By: Aleksander £aszek
    Abstract: Poland’s structural deficit is one of the largest in the EU. While other Member States are taking action to reduce their deficits, the Polish government has not only introduced costly projects, but has also announced additional projects that will further aggravate the state of Polish public finances. The aim of maintaining the nominal deficit under 3% of GDP, as declared by the government, is insufficient because it does not leave a margin of safety in case of an economic slowdown. In the meantime, the turbulent global economy and the structural challenges the Polish economy is facing make the scenario of an economic slowdown increasingly plausible. Dr. Aleksander £aszek evaluates the government’s current policy through the lens of the challenges that stand a head of Polish economy, and its resilience to shocks, in the new mBank-CASE Seminar Proceedings "Economic policy, the international environment and the state of Poland’s public finances: Scenarios".
    Keywords: Public finance, general government debt, general government deficit, structural deficit
    JEL: E20 E62 E66 G21 G28 H24 H25 H3 H6
    Date: 2017–03
  4. By: Simioni, Michel; Thomas-Agnan, Christine; Trinh, Thi-Huong
    Abstract: Policies aimed at reducing starvation and redressing nutritional deficiencies remain among the most widely accepted policies in the world. These policies can take many different forms, from subsidized prices of basic foodstuffs to cash transfers, and their effectiveness depends on the existence of a sensitivity of food demand to income variation and its magnitude. This paper revisits the issue of estimating the relationship between calorie intake and income. We present and compare estimates of this relationship for Vietnam which has undergone profound economic changes over the last 30 years. After estimating semiparametric generalized additive models are estimated, we compare their performances are compared to the performance of the classical double log model using the recently proposed revealed performance test. This methodology is implemented using successive waves of the Vietnam Household Living Standard Survey. The application delivers some new and interesting insights on nutritional transition in Vietnam between 2004 and today. The analysis focuses not only on the comparison of the general shape of the estimated curves but also on the decomposition of the evolution of average calorie intake in terms of changes in the structure of the surveyed sample (greater urbanization, for example) and changes in preferences as reflected by changes in the estimated curves over time.
    Keywords: Calorie -income relationship; Nutritional transition; Vietnam; Semiparametric modeling
    Date: 2017–09
  5. By: Shaomeng Jia (Mississippi State University, Department of Economics); Yang Zhou (West Virginia University, Department of Economics)
    Abstract: We investigate the effects of economic freedom (marketization) on governance efficiency defined with the newest provincial level economic indicator data (NBSC, 2017) and economic freedom data (Fan et al., 2017) from 2008 to 2014 in China. With two different measures, the results suggest that economic freedom is positively correlated with governance efficiency. Moreover, the liberalization and marketization progress in the “factors market†is the single most significant area for both governance efficiency measures, while other areas like “market intermediary & legal system†have no significant effects.
    Keywords: economic freedom, governance efficiency, marketization, regional economics, China
    JEL: H11 P25 P37
    Date: 2017–09
  6. By: Lei, Haidong; Song, Luona; Lv, Tingjie; Chen, Xia
    Abstract: With the continuous development and iteration of telecommunication technology, the users’ requirements of the quality and service have increased dogmatically. In order to meet the diverse and personalized consumer demands, virtual network operators came into being. In 2013, China officially launched mobile wholesale business pilot which symbolized the arrival of virtual operation in China market. This paper explores the economic effect of China virtual operation from the perspective of consumer surplus and social welfare according to the data of data service from three years after the introduction of virtual operation. The results show that, after introducing virtual operators into China market, consumer surplus and social welfare have both enhanced. Moreover, comparing with the wholesale mode, simple virtual operation mode could provide greater consumer surplus and social welfare. At the same time, MVNO will get more profits. In the early stage, MVNO is in a weak position, but the policy of simple virtual operation mode reflects strong government support. Finally, this paper puts forward some recommendations based on the result of the mathematical model and China’s national conditions.
    Keywords: Virtual Operation,Mobile Wholesale,Consumer Surplus,Social Welfare
    Date: 2017
  7. By: Yang Zhou (West Virginia University, Department of Economics); Joshua C. Hall (West Virginia University, Department of Economics)
    Abstract: While marketization has been linked to provincial-level economic growth in China, how marketization leads to growth has not been explored. We hypothesize that marketization creates an environment that encourages entrepreneurship, which manifests itself in economic growth. While this argument is not new, it has not been explored in the Chinese context. We fill this gap by empirically testing the relationship between marketization and measures of entrepreneurship across Chinese provinces. Our primary measures of entrepreneurship are level changes in the number of "private enterprises" and "self-employed individuals". We find that higher levels of marketization are positively related to higher levels of entrepreneurship. These positive effects are largely driven by three areas of marketization. "Government and market" drives both measures of entrepreneurship, while "Legal frameworks" in uences only private enterprises and "ownership structure" in uences self-employment.
    Keywords: entrepreneurship, marketization, economic freedom, regional science, China
    JEL: L26 P25 P37
    Date: 2017–09
  8. By: Nancy Qian
    Abstract: I first document that the introduction of the One Child Policy dramatically increased sex selection in certain regions, and that the Chinese government responded to this by allowing parents who had a daughter as their first child to try for a second child. Next, I show that the increase in family size caused by this relaxation in the One Child Policy increased school enrolment of first-born daughters. The analysis provides suggestive evidence that economies of scale in childrearing and short-term income demands contribute to the main results.
    Date: 2017
  9. By: Hsu, Wen-Tai (School of Economics, Singapore Management University); Lu, Yi (School of Economics and Management, Tsinghua University); Wu, Guiying Laura (Division of Economics, Nanyang Technological University)
    Abstract: This paper provides a quantitative analysis of gains from trade in a model with head-to-head competition using Chinese firm-level data from Economic Censuses in 1995 and 2004. We find a significant reduction in trade cost during this period, and total gains from such improved openness during this period is 9:4%. The gains are decomposed into a Ricardian component and two pro-competitive ones. The procompetitive effects account for 25:4% of the total gains. Moreover, the total gains from trade are 17 􀀀 27% larger than what would result from the formula provided by ACR (Arkolakis, Costinot, and Rodriguez-Clare 2012), which nests a class of important trade models, but without pro-competitive effects. We find that head-to-head competition is the key reason behind the larger gains, as trade flows do not reflect all of the effects via markups in an event of trade liberalization. One methodological advantage of this paper’s quantitative framework is that its application is not constrained by industrial or product classifications; thus it can be applied to countries of any size.
    Date: 2017–08–02
  10. By: Julien Vercueil (Inalco - Institut National des Langues et Civilisations Orientales)
    Abstract: Within the general framework of comparative analysis of emerging economies, this paper explores the concept of 'emerging processes' and tries to show the ways in which a rent-based accumulation regime can shape them. It illustrates these reflections by the Russian case.
    Keywords: Rent extraction,Emerging economies
    Date: 2017–05–15
  11. By: Su, Yaqin; Tesfazion, Petros; Zhao, Zhong
    Abstract: Using a representative sample of rural migrants in cities, this paper investigates where the migrants in urban China come from, paying close attention to intra-provincial vs. inter-provincial migrants, and examining the differences in their personal attributes. We find that migrants who have come within the province differ significantly from those who have come from outside of the province. Using a nested logit model, we find that overall, higher wage differentials, larger population size, higher GDP per capita, and faster employment growth rate are the attributes of a city that attract migrants from both within and outside province. In addition, moving beyond one’s home province has a strong deterrent effect on migration, analogous to the “border effect” identified in international migration studies. We also explore the role of culture, institutional barrier, and dialect in explaining such a pronounced “border effect”.
    Keywords: Rural-urban migration,Inter- vs. intra-provincial migration,Border effect,China
    JEL: J62 O15
    Date: 2017
  12. By: Nicolas Lampach; Phu Nguyen-Van; Nguyen To-The
    Abstract: Increasing consumer awareness on sustainable and healthy food choices gave rise to a growing demand for organic tea in the past decades. Most of this demand is met by imports from developing countries. This article examines the main factors affecting the choice of farm households to adopt organic tea production in Northern Vietnam. We apply a logit model to survey data on 241 Vietnamese tea farming households. We assess the robustness of the results by addressing three important statistical issues: (i) regressor endogeneity, (ii) unobserved heterogeneity at farm level and (iii) missing values. The main results are chiefly robust and largely in line with the theoretical predictions. We find that farm households with higher revenues and located in rich natural and physical environments are significantly more inclined to adopt organic tea production. Furthermore, the analysis reveals that farm households being consulted by extension agents and belonging to a tea association increase the odds for the adoption of organic tea cultivation.
    Keywords: Organic farming; Regressor endogeneity; Unobserved heterogeneity; Multiple imputations method; Tea production; Vietnam.
    JEL: Q15 O33 Q18
    Date: 2017
  13. By: Racic Domagoj (Mreza Znanja d.o.o); Jadranka Svarc (Ivo Pilar Institute of Social Sciences); Hristo Hristov (European Commission - JRC)
    Abstract: The 2016 series of the RIO Country Report analyses and assesses the development and performance of the national research and innovation system of the EU-28 Member States and related policies with the aim of monitoring and evaluating the EU policy implementation as well as facilitating policy learning in the Member States.
    Keywords: R&I system, R&I policy, ERA, innovation union, Semester analysis, Croatia
    JEL: I20 O30 Z18
    Date: 2017–09
  14. By: Esteban, Mario; Li, Yuan
    Abstract: Despite the high international consensus on the enormous potential of the Belt and Road Initiative for reconfiguring international relations in Eurasia and beyond, and the consequent attention raised by this strategy throughout the world, there are still many unanswered questions. The present paper analyzes the case studies of the Yuxinou (渝新欧) and the Yixinou (义新欧) railway lines to tackle three debates surrounding this initiative: its scope, whether this is a merely economic scheme or also has a geostrategic dimension; its actors, underlining the coordinated action of Chinese central and local authorities; and its implications on EU-China relations, with emphasis on trade imbalances and the consolidation of global value chains. Both secondary and primary sources have been used in this paper, including interviews with relevant officials, business people, and scholars from China, Germany, and Spain.
    Keywords: Yuxinou,Yixinou,Belt and Road Initiative,New Silk Road,China-EU relations
    Date: 2017
  15. By: Denisova-Schmidt, Elena; Huber, Martin; Leontyeva, Elvira; Solovyeva, Anna
    Abstract: This paper examines how anti-corruption educational campaigns affect the attitudes of Russian university students towards corruption and academic integrity. About 2,000 survey participants were randomly assigned to one of four different information materials (brochures or videos) about the negative consequences of corruption or to a control group. Using machine learning to detect effect heterogeneity, we find that various groups of students react to the same information differently. Those who commonly plagiarize, who receive excellent grades, and whose fathers are highly educated develop stronger negative attitudes towards corruption in the aftermath of our intervention. However, some information materials lead to more tolerant views on corruption among those who rarely plagiarize, who receive average or above average grades, and whose fathers are less educated. Therefore, policy makers aiming to implement anti-corruption education at a larger scale should scrutinize the possibility of (undesired) heterogeneous effects across student groups.
    Keywords: Anti-Corruption Campaigns, Experiments, Corruption, Academic Integrity, University, Students, Russia
    JEL: D73 I23 C93
    Date: 2017–09–16
  16. By: Zhang, Aihua; Lv, Jia; Kong, Ying
    Abstract: In recent years, the economy of China has entered a new normal state and the economic growth rate has decelerated. The telecommunications industry as a national strategic and basic industry, is also facing up with some dilemma. Information consumption is a comprehensive concept including e-commerce, communications, broadband services, online games and so on. On this basis, this paper employs the almost ideal demand system(AIDS) to explore the impact that information consumption has made to residential consumption expenditure and the change of the consumption structure. Ac-cording to empirical analysis, finally we can draw the following conclusions: The income elasticity of information consumption is greater than 1, which means the income demand is flexible. And the self-price elasticity of information consumption is negative and the absolute value is between 0 and 1. It means that the price of information consumption is not flexible.
    Keywords: Information consumption,Household consumption expenditure,The almost ideal demand system(AIDS),Demand elasticity Information consumption
    Date: 2017
  17. By: Gábor Túry (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: The paper investigates the role of the automotive industry in the Baltic, Visegrád and Iberian region, summarizing the relevant literature. In the analysis of each country, the study discusses the importance of the automotive industry in the national economy and the role of individual countries in the global trade. Based on the literature there are different approaches regarding the activities belonging to the automotive industry. The vehicle production is vertically integrated, therefore the industry involves many other activities that sell their products to other industries as well. On the other hand economic contribution of the automotive industry can be interpreted in a broad way including downstream activities related to the use of the motor vehicle, and the socioeconomic employment as well. The broader definition of automotive industry in this paper is based on this previous approach. The study defines the automotive spillovers on the basis of the NACE nomenclature to show how these activities contribute to employment, production and value added in the examined countries.
    Keywords: automotive industry, spillovers, external trade, Baltic countries, Central Europe, Iberian countries
    JEL: F1 L62
    Date: 2017–08
  18. By: Karolina Beaumont; Matthias Dauner; Matthias Kullas
    Abstract: This report provides an analysis of the issues related to female brain drain between Poland and Germany in the years 1989-2015: female and male migration patterns during specific time periods, the challenges of female migration, the emigration of highly-skilled individuals in Poland and Germany, as well as the issues regarding brain drain from a gender perspective.
    Keywords: Brain drain, brain gain, brain circulation, labour migration, intra-EU migration, Poland, Germany, gender equality, women’s migration, highly-educated migrants
    JEL: J11 J16 J24 F22 O15 R23
    Date: 2017–03
  19. By: Sierž Naurodski
    Abstract: The policy brief by Sierž Naurodski presents a review of potential effects of parametric pension reform in Belarus starting in 2017 for the population aged 50 and more in terms of unemployment, alcohol consumption, and poverty. It concludes that, despite the fact that raising the retirement age is overdue in Belarus to address demographic challenges, it may have a negative impact on the quality of life of people close to retirement age as well as a poorer GDP effect within current conditions on the labor market in Belarus. The paper presents a set of public policy improvement directions in Belarus, which could help mitigating vulnerability of the group 50+ during the pension reform.
    Keywords: Belarus, parametric pension reform, pre-retirement population vulnerability, 50+, social security, policy in transition countries
    JEL: H53 H55 J14 J26
    Date: 2017–03

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