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on Transition Economics |
| By: | Mishra, SK |
| Abstract: | This study is concerned with a great socio-economic experiment in history that replaced the naturally evolved market economy with the humanly designed command economy to achieve a socialist triumph over capitalism, experienced a setback and ultimately returned to the market economy for managing the material aspects of the society. Efforts to open the subject economies in the aftermath of the said experiment are on the contemporary agenda worldwide. Yet, the past pulls the present causing hysteresis that thwarts the momentum of globalization. Using KOF and AEMC indices of globalization (based on KOF data 1991-2014), the paper concludes that most of the countries to the south of Russian Federation (Armenia, Azerbaijan, Tajikistan, Kyrgyzstan, Kazakhstan) have performed rather poorly in globalization efforts. On the other hand, the countries in the north-western side of the Russian Federation (except Moldova) have on the whole performed better. In comparison, China has performed fairly while India lags behind. In spite of all proclamations, unless the political will to globalization is there, globalization cannot progress much further. However, such a political will has not been strong in India. India has remained protectionist of vested interests of politicians, industrialists, business houses and perhaps the intelligentsia, a coalition of the dominant proprietary classes that benefit from the status quo or stagnancy of the Indian economy and society. Globalization in India is under a strong spell of hysteresis on account of the pre-1991 pseudo-socialistic nostalgia as well as age-old internal contradictions. |
| Keywords: | Globalization, KOF index, equi-marginal, Shapley value, China, India, Eastern Bloc countries |
| JEL: | C43 C61 C71 P52 |
| Date: | 2017–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:81962&r=tra |
| By: | Chen, Yuanyuan (Shanghai University of Finance and Economics); Wang, Le (University of Oklahoma); Zhang, Min (East China Normal University) |
| Abstract: | The use of informal job search method is prevalent in many countries. There is, however, no consensus in the literature on whether it actually matters for wages, and if it does, what are the underlying mechanisms. We empirically examine these issues specifically for rural migrants in urban China, a country where one of the largest domestic migration in human history has occurred over the past decades. We find that there exists a significant wage penalty for those migrant workers who have conducted their search through informal channels, despite their popularity. Our further analysis suggests two potential reasons for the wage penalty: 1) the informal job search sends a negative signal (of workers' inability to successfully find a job in a competitive market) to potential employers, resulting in lower wages; and 2) there exists a trade-off between wages and search efficiency for quicker entry into local labor market. We also find some evidence that the informal job search may lead to low-skilled jobs with lower wages. We do not find strong evidence supporting alternative explanations. |
| Keywords: | social network, rural-urban migrants, wage, search friction, information asymmetry, chinese economy |
| JEL: | J31 J64 P2 P5 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11058&r=tra |
| By: | Duoduo Xu (Division of Social Science, The Hong Kong University of Science and Technology; Institute for Advanced Study, The Hong Kong University of Science and Technology); Xiaogang Wu (Division of Social Science, The Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology) |
| Abstract: | The impact of market transition on the changing order of social stratification in post-socialist regimes has been a highly prominent topic in sociology in recent decades. However, the debate has yielded no concrete conclusions, due in part to the lack of substantive institutional analysis. In this article, we aim to provide new answers to this age-old question by specifically examining how the economic opportunities available to former political elites have been shaped by the process of privatization. Based on firm-level data from a national representative survey on Chinese private enterprises, we show that nomenclatures in some regions successfully converted their political power into personal wealth by acquiring privatized firms, and the extent to which they could exploit the opportunities available to them was contingent upon how the privatization process was structured and regulated in a local context. Further analysis reveals important institutionalized inequality among private entrepreneurs, with former nomenclatures at the top of the social hierarchy in post-reform China. |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:hku:wpaper:201745&r=tra |
| By: | Hou, Yang; Nartea, Gilbert |
| Abstract: | This paper examines time-varying price discovery of the Chinese stock index futures market during a stock market crash in 2015. We find that the index futures market plays a long-run leading role in terms of its higher static and dynamic generalised information share (GIS) than both the Shanghai and Shenzhen A share markets during the market turbulence. The expected trading volume in each market improves GIS of that market. The importance of trading activities by the majority of investors in increasing market efficiency during a crash is underscored. Government intervention on futures trading impairs price discovery in the futures market. |
| Keywords: | Generalised Information Share, Price Discovery, GARCH model, Chinese stock market crash, Chinese stock index futures |
| JEL: | G13 G14 G15 |
| Date: | 2017–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:81995&r=tra |
| By: | Deng, Xiaohu (Tasmanian School of Business & Economics, University of Tasmania); Jiang, Christine (University of Memphis); Young, Danqing (Chinese University of Hong Kong) |
| Abstract: | Extant literature documents that managers have an incentive to hoard bad news due to political concerns. In this paper, we test the proposition that short selling has an attenuating effect on the politically motivated suppression of bad news. We examine the stock price behavior of Chinese public firms around two highly visible political events - meetings of the National Congress of the Chinese Communist Party and Two Sessions (The National People’s Congress Conference and The Chinese People’s Political Consultative Conference) from 2002-2014, and find that political bad news hoarding has been reduced after short selling becomes available. We establish causality by relying on a difference-in-differences approach based on a controlled experiment of short selling regulation changes in China. We also find this reduction in bad news hoarding to be more pronounced in firms with stronger political connection (higher state ownership and larger size) and higher accounting opacity, which further confirms our finding. This study sheds new light on the real effects of short sellers on political impact on capital market. |
| Keywords: | Short selling; Political force; Negative news hoarding; Information environment |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:tas:wpaper:23736&r=tra |
| By: | Leonardo Baccini; Giammario Impullitti; Edmund J. Malesky |
| Abstract: | What do state-owned enterprises (SOEs) do? How do they respond to market incentives? Can we expect substantial efficiency gains from trade liberalization in economies with a strong presence of SOEs? Using a new dataset of Vietnamese firms we document a set of empirical regularities distinguishing SOEs from private firms. We embed some of these features characterizing SOEs operations in a model of trade with firm heterogeneity and show that they can hinder the selection effects of openness and tame the aggregate productivity gains from trade. We empirically test these predictions analyzing the response of Vietnamese firms to the 2007 WTO accession. Our result show that WTO accession is associated with higher probability of exit, lower markups, and substantial increases in productivity for private firms but not for SOEs. Domestic barriers to entry and preferential access to credit are key drivers of the different response of SOEs to trade liberalization. Our estimates suggest that the overall productivity gains would have been about 66% larger in a counterfactual Vietnamese economy without SOEs. |
| Keywords: | state capitalism, state-owned enterprises, trade liberalization, heterogeneous firms, gains from trade, WTO, Vietnam |
| JEL: | F12 F13 F14 P31 P33 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6618&r=tra |
| By: | Wang, Haining; Cheng, Zhiming; Smyth, Russell |
| Abstract: | We examine the educational spillover effects of migrant students on local students’ academic achievement in public middle schools in urban China. The identification of peer effects relies on idiosyncratic variation in the proportion of migrant students across classes within schools. We find that the proportion of migrant students in each class has a small, and positive, effect on local students’ test scores in Chinese, but has no significant effect on math and English test scores. We also find considerable evidence of heterogeneity in the effects of the proportion of students in the class on local students’ test scores across subsamples. Local students toward the bottom of the achievement distribution, local students enrolled in small classes and local students enrolled in lower-ranked schools benefit most in terms of test scores from having a higher proportion of migrant students in their class. Our findings have important policy implications for the debate in China about the inclusion of migrant students in urban schools, and for the assignment of educational resources across schools. |
| Keywords: | migrant student,peer effects,academic achievement,China |
| JEL: | I21 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:130&r=tra |
| By: | Roud Vitaliy (National Research University Higher School of Economics); Valeriya Vlasova (National Research University Higher School of Economics) |
| Abstract: | This paper develops an integrated framework to examine the determinants of industry-science cooperation in the general process of developing innovation. Based on the literature review and using firm-level data on innovation strategies of 805 manufacturing enterprises in Russia we investigate what are the incentives to firms (1) to cooperate with universities and R&D organizations and (2) to choose a particular mode of interaction that ranges from purchasing S&T services to a full scale original R&D aimed at creating new-to-market innovation. We suggest that a broad range of intramural and external determinants, including competition regime, absorptive capacity, technological opportunities, appropriability conditions, public support, as well as barriers to the practical application of R&D results influence the firm’s decision on cooperation with knowledge producers. The findings indicate that the scale of industry-science linkages in Russian manufacturing is limited and generally hampered by low propensity of business to the R&D-based innovation strategies |
| Keywords: | Science-industry cooperation; Innovation strategy; Firm-level; Manufacturing; Russia |
| JEL: | D22 D83 L2 O31 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:75sti2017&r=tra |
| By: | Jiankun LU (Zhejiang University of Finance and Economics. Address: Xueyuan Street No. 18, Xiasha Higher Education Park, Hangzhou, China, 310018); Pi-Han Tsai (Zhejiang University. Address: 38 Zheda Rd, Xihu, Hangzhou, Zhejiang, China, 310027) |
| Abstract: | Vertical accountability in China has long been considered as essentially indirect or informal. This paper provides evidence that direct local accountability may exist to a greater or lesser degree in China under current political institutions. By using provincial environmental petition data, this paper finds that the number of environmental petitions is positively associated with provincial governments' investments in pollution mitigation. The increased petitions serve as a signal to provincial leaders of the possibility of potential social instability. However, since "local" provincial party secretaries are better informed, the signaling effect of the petitions is lessened in these cases. |
| Keywords: | political signal; political accountability; environmental expenditure |
| JEL: | H11 H70 P26 Q58 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:nan:wpaper:1711&r=tra |
| By: | Vinokurov, Evgeny; Korshunov, Dmitry; Pereboev, Vladimir; Tsukarev, Taras |
| Abstract: | The monograph serves as a full-fledged introduction to the Eurasian Economic Union (EAEU) — its institutions, legal foundation, evolution, and, above all, economic integration issues. The authors focus on the common markets for goods, services, capital, and labour, as well as the EAEU foreign economic policies. They strive to provide a balanced analysis using a variety of approaches. In 300 pages of text, augmented by 50 tables and figures, the authors not only present a plethora of facts on economics and politics of the Union, but also attempt to explain why Eurasian integration processes are evolving in this particular way. Furthermore, they indicate the tasks and problems that the Union may have to deal with over the next 10 years. |
| Keywords: | Eurasian Economic Union, common markets, history of Eurasian integration, regional integration, non-tariff barriers, free trade area, foreign direct investments, trade, labour, China, European Union, post-Soviet states |
| JEL: | E44 E52 F15 F21 F36 F53 J61 O11 O15 |
| Date: | 2017–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82051&r=tra |
| By: | Su, Yaqin (Hunan University); Tesfazion, Petros (Central College); Zhao, Zhong (Renmin University of China) |
| 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: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11029&r=tra |
| By: | Xin Huang (Graduate School of Economics, Osaka University); Koichi Nakagawa (Graduate School of Economics, Osaka University); Jie Li (School of Management, Shanghai University) |
| Abstract: | Employing data from Chinese companies listed on the board for small and medium-sized enterprises (SMEs), the research examines the relationship between top management team (TMT) characteristics and corporate charitable activities in China. My findings confirm: 1) Firms less engaged in charitable activities are likely to have TMTs characterized by more educational specialty in science and engineering, and more functional background in output functions; 2) TMT age heterogeneity has a significant and positive effect on corporate charitable activities, while TMT educational specialty heterogeneity has a negative influence on corporate charitable activities; 3) TMT age, tenure, educational level and these heterogeneities of tenure, educational level and functional background have little or no influence on corporate charitable activities. Based on the upper echelons theory, the study can provide evidence for further research on top management teams and corporate social responsibility in an emerging economy. |
| Keywords: | top management team; charity; heterogeneity; corporate social responsibility; Chinese companies |
| JEL: | M54 M12 M14 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1730&r=tra |
| By: | Xiuli Sun; Haizheng Li; Vivek Ghosal |
| Abstract: | Understanding the factors that may produce a sustained rate of innovation is important for promoting economic development and growth. In this paper, we examine the role of human capital in firms’ innovation by using a large sample of manufacturing firms from China. We use two firm-level datasets from China: one from metropolitan cities, and one from provincial small and medium sized cities. Patent applications are used as the measure of innovation. Human capital indicators used include skilled human capital (number of highly educated workers), general manager’s education and tenure, and management team’s education and age. We find that skilled human capital has a significant positive effect on firms’ innovation, while the management team’s age has a significant negative effect on innovation. The General Manager’s tenure plays a significant positive role in firm innovation in metropolitan cities, while it is the General Manager’s education that has a positive and significant effect on firms’ innovation in small and middle cities. We also find that the effect of R&D on patents is insignificant for firms in large cities, but it is positive and significant in the smaller and medium sized cities. We conclude by noting some policy issues for promoting innovation in developing economies. |
| Keywords: | human capital, education, innovation, patents, R&D, economic development, Asia, China |
| JEL: | J24 I25 D21 D22 L13 O32 O33 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6370&r=tra |
| By: | Zheng, Liang; Zhao, Zhong |
| Abstract: | Since Chinese government initiated economic reform in the late 1970s, entrepreneurship and private sectors have emerged gradually and played an increasingly important role in promoting economic growth. However, entrepreneurship is distributed unevenly in China. Using micro data from 2008 economic census and 2005 population census, this paper explains spatial clusters of entrepreneurship for both manufacturing and services. For both sectors, entrepreneurship (measured by new private firms) tends to emerge in places with more relevant upstream and downstream firms. Moreover, Chinitz's (1961) theories are also supported for manufacturing: small upstream and downstream firms seem to be more important for manufacturing entrepreneurship. For both sectors, entrepreneurship is positively related to city size, the share of young adults and the elderly population, and foreign direct investment. More migrants are also found to promote service entrepreneurship. Our paper is the first to consider both manufacturing and service entrepreneurship in China and should be of interest to both local and national policymakers who plan to encourage entrepreneurship. |
| Keywords: | New Firm Formation,Entrepreneurship,Marshallian Effect,Chinitz Effect,China |
| JEL: | L26 L60 L80 R10 R12 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:127&r=tra |
| By: | Hu, Zhongzhong; Rodrigue, Joel; Tan, Yong; Yu, Chunhai |
| Abstract: | This paper quantifies the separate contribution of idiosyncratic productivity and demand growth on aggregate Chinese exports. We develop firm, product, market and year specific measures of productivity and demand. We use these measures to document a number of novel findings that distinguish the growth of Chinese exports. First, we document that changes in demand explain nearly 78–89% of aggregate export growth, while only 11–22%of export growth is determined by productivity growth. Second, our results highlight two mechanisms which contribute significantly to aggregate export growth: the rapid reallocation of market shares towards products with growing demand, and high rates of product exit among low demand products. Investigating the mechanisms underlying these results we find that new exporters suffer demand shocks which are 66% smaller than those observed for incumbent producers in the same product market. By comparison, we find that there is only an 8% difference on average between the productivity of new and incumbent exporters.Repeating our exercise with revenue productivity reveals much smaller differences. This is largely attributed to differential movements in prices and marginal costs. |
| Keywords: | Exports, China, Productivity, Demand |
| JEL: | D24 F12 L11 L25 |
| Date: | 2017–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82039&r=tra |
| By: | Kürschner, Kathleen |
| Abstract: | This paper exploits the natural experiment provided by the unexpected disintegration of socialist East Germany to study the impact that immigration has on residential housing rents in recipient regions. Using a spatial correlation approach, annual district-level migration data and rental price indicators, we find strong evidence for a positive and sizeable effect of immigration on housing rents. An exploration of exogenous origin-region push factors yields IV estimates of even larger magnitude. |
| JEL: | J61 R21 R23 R31 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc17:168092&r=tra |