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on Transition Economics |
| By: | Tom Coupe (University of Canterbury); Maksym Obrizan (Kyiv School of Economics) |
| Abstract: | In this paper, we analyse the life satisfaction of adolescents in transition countries, comparing their life satisfaction to the life satisfaction of their peers in non-transition countries. We find that at the start of transition, ceteris paribus, the life satisfaction of adolescents in our sample of transition countries did not differ much from the life satisfaction of adolescents in our sample of non-transition countries. With the economic crisis of the early nineties, however, the difference increased dramatically but by the beginning of the 2000s this gap had again become fairly limited. From that point, respondents’ health situation, their material wealth and their school experience mattered much more than where they lived. Unlike the literature on adults, we find that macro-variables cannot explain much of the happiness gap between transition and non-transition countries. |
| Keywords: | adolescents, happiness, happiness gap, transition countries |
| JEL: | I31 P20 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:kse:dpaper:60&r=tra |
| By: | Zuzana Smidova; Naomitsu Yashiro |
| Abstract: | Estonia is highly integrated into the global trade system: it exports approximately 80% of GDP and around half of domestic employment is sustained by foreign demand. Given that international trade and foreign direct investment are considered as major channels of technology diffusion and productivity growth, this bodes well for reviving income convergence. To capitalize on the country’s high trade intensity, policymakers need to remove remaining trade barriers and improve policies fostering knowledge diffusion as well as talent retention and attraction. At the same time, to ensure that benefits of more trade are shared across the population, the social safety net should be bolstered, and participation in upskilling programmes and their labour-market relevance increased. This Working Paper relates to the 2017 OECD Economic Survey of New Zealand (www.oecd.org/eco/surveys/economic-surve y-estonia.htm). |
| Keywords: | global value chains, innovation, migration, productivity, social safety net |
| JEL: | F22 F43 I31 O24 O52 |
| Date: | 2017–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1436-en&r=tra |
| By: | Kellee S. Tsai (Division of Social Science, The Hong Kong University of Science and Technology) |
| Abstract: | Based on industry data, research reports, and field interviews in both cities, this paper compares the networked effects of return migration in three areas: ICT, VC, and philanthropy/social entrepreneurship. We find that Chinese returnees play a substantial role in ICT companies listed abroad and dominate the domestic VC market. Overseas Indians and returnees have represented key links to multinationals’ outsourcing activities, and are as dominant in VC as their counterparts in China. In both Beijing and Bangalore, entrepreneurs draw on school- and work-based networks, whether domestic or international. A greater contrast between the Silicon Valleys are their areas of comparative advantage. ICT firms in Beijing are geared towards serving the domestic ICT market, while Bangalore has been oriented towards global outsourcing. In the field of philanthropy, despite high profile exceptions, returnees are less active than domestic entrepreneurs in both countries. However, returnees are increasingly active in running non-governmental organizations (NGOs) and social enterprises. Analytically, the paper outlines a framework for understanding returnee impact that includes both the individual attributes of returnees and the institutional context of different policy environments. |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:hku:wpaper:201747&r=tra |
| By: | Mai T.P. Vu (Foreign Trade University); Flora Bellone (Université Côte d'Azur; GREDEG CNRS); Marion Dovis (Aix-Marseille University; GREQAM) |
| Abstract: | We propose some new stylized facts on Vietnamese exporters that emphasize firm heterogeneity in trade regimes and firm ownership. We show first that the distribution of firms export intensities is U-shaped with more than half of Vietnamese exporters exporting more than 50% of their output. This contrasts with the export patterns in industrialized countries but is similar to the export intensity distribution for other emerging economies with strong participation in global value chains. Second, we show that export premia, evaluated in terms of both productivity and wage indexes, are positive only for Vietnamese exporters involved primarily in ordinary trade, and that processing exporters exhibit lower productivity indexes and pay lower wages than their non-exporting counterparts. This pattern is more pronounced among the group of foreign-owned firms in Vietnam compared to the group of domestic firms and is in line with previous ndings for China. |
| Keywords: | Processing trade, wage, firm productivity, firm-level data, Vietnam |
| JEL: | F10 F14 L60 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2017-36&r=tra |
| By: | Katalin Bodnár (Magyar Nemzeti Bank); Ludmila Fadejeva (Latvijas Banka); Stefania Iordache (Banca Nationala a Romaniei); Liina Malk (Eesti Pank); Desislava Paskaleva (Bulgarian National Bank); Jurga Pesliakaite (Lietuvos Bankas); Nataša Todorovic Jemec (Banka Slovenije); Peter Tóth (Národná banka Slovenska); Robert Wyszynski (Narodowy Bank Polski) |
| Abstract: | We study the transmission channels for rises in the minimum wage using a unique firm-level dataset from eight Central and Eastern European countries.Representative samples of firms in each country were asked to evaluate the relevance of a wide range of adjustment channels following specific instances of rises in the minimum wage during the recent post-crisis period. The paper contributes to the literature by presenting the reactions of firms to rises in the minimum wage as a combination of strategies, and evaluates the relative importance of those strategies. Our findings suggest that the most popular adjustment channels are cuts in non-labour costs, rises in product prices, and improvements in productivity. Cuts in employment, which is the adjustment channel most commonly studied in the empirical literature, is less popular and occurs mostly through reduced hiring rather than direct layoffs. Our study also provides evidence of potential spillover effects that rises in the minimum wage can have on firms without minimum wage workers. Finally, we analyse the different firm-level characteristics that drive the choice of adjustment strategies. |
| Keywords: | minimum wages, adjustment channels, firm survey |
| JEL: | D22 E23 J31 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:svk:wpaper:1050&r=tra |
| By: | Pesqué-Cela, Vanesa (School of Finance and Management, SOAS University of London & Stockholm China Economic Research Institute) |
| Abstract: | Can political decentralization and the introduction of local elections improve government accountability and public goods provision in a non-democratic regime like China? Political decentralization reforms in China have only been implemented at the village level, and have been implemented unevenly across villages. Villages differ substantially in terms of the quality of their elections and the amount of power given to (or taken away from) their popularly elected village committees. In light of these differences, this paper investigates the relationship between political decentralization processes and government performance in the rural Chinese context, by addressing the question of whether democratically elected village committees are more responsive to villagers’ demands for better infrastructure in their communities, when given the power to govern. To explain differences among villages in terms of whether and how much they invest in new infrastructure, a tobit model of village-financed investment is estimated using cross-sectional survey data collected from over 100 villages. Results from the regression analysis indicate that variation in the degree of political decentralization is positively associated with variation in the level of public goods investment across villages: villages governed by democratically elected village committees tend to invest more in new infrastructures. These results are robust to the endogeneity between governance and public goods provision. Our findings from rural China illustrate the potential and limitations of political decentralization reforms to enhance government accountability in non-democratic regimes. In some communities, they have improved government performance, but in many others they have failed to make elected local governments accountable to citizens because they have failed to devolve authority and resources to them in the first place. The challenge thus is not only to make decentralization work but, more fundamentally, to make decentralization happen. |
| Keywords: | Decentralization; accountability; public goods provision; China |
| JEL: | H41 H70 |
| Date: | 2017–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hascer:2017-048&r=tra |
| By: | Naomitsu Yashiro; Koen De Backer; Andrés Fuentes Hutfilter; Marco Kools; Zuzana Smidova |
| Abstract: | Stronger integration in global value chains would speed up economic convergence to advanced OECD economies and raise living standards. Participation in global value chains (GVCs) offers opportunities for boosting productivity through knowledge transfer and intensive use of technologically advanced inputs. It also enables Latvia to diversify exports into high value added goods and services. Latvia’s participation in GVC lags behind its Baltic and Central European peers. It also draws less value added from GVCs compared to many OECD economies. Nevertheless, GVC participation boosts the productivity of Latvian firms and enables them to increase employment and wages. Strong skills, high innovation capabilities and efficient resource allocation are essential for Latvian firms to engage in more knowledge intensive activities within GVCs. Improving access to higher education, promoting innovation cooperation between Latvian firms and foreign research institutes, reducing the large informal economy and establishing an effective judiciary and insolvency regime would unlock productivity growth through stronger integration in GVCs. This Working Paper relates to the 2017 OECD Economic Survey of Latvia. (www.oecd.org/eco/surveys/economic-surve y-latvia.htm). |
| Keywords: | education, global value chains, innovation |
| JEL: | F12 F43 O38 |
| Date: | 2017–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1438-en&r=tra |
| By: | Caroline Klein; Olena Havrylchyk; Lorenzo Casullo |
| Abstract: | Since the crisis, Estonia has experienced one of the most pronounced declines in the ratio of non-residential investment to GDP in the OECD. In addition, investment in intangible capital has remained well below OECD standards, partly explaining the low innovative capacities of typical Estonian firms. Uncertainty created by regional geopolitical tensions has played a role but poor investment performance stems from domestic factors too, such as a normalisation after the boom years, the lack of adequate skills and insufficient incentives for risk-taking. Improving lifelong learning and maintaining skilled mothers in employment can contribute to reducing shortages in skills needed by investors. Restructuring of insolvent firms should be eased to increase credit recovery and redirect capital to the most productive ones. Developing alternatives to bank funding can support investment in small and innovative firms. While there is room to improve the quality of infrastructure further, selection and prioritisation of projects should improve. Incentives for green investment, in particular to reduce pollution emitted by the oil shale industry and to achieve energy efficiency gains, could be strengthened. This Working Paper relates to the 2017 OECD Economic Survey of Estonia (www.oecd.org/eco/surveys/economic-surve y-estonia.htm). |
| Keywords: | business environment, financing, Fintech, infrastructure, insolvency, intangible capital |
| JEL: | E22 G21 G23 G28 J24 O52 Q56 |
| Date: | 2017–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1437-en&r=tra |
| By: | Stuart Gietel-Basten (Division of Social Science, The Hong Kong University of Science and Technology; Institute of Emerging Market Studies, The Hong Kong University of Science and Technology); Vladimir Mau (Russian Presidential Academy of National Economy and Public Administration); Warren Sanderson (Stony Brook University); Sergei Scherbov (International Institute for Applied Systems Analysis); Sergey Shulgin (Russian Presidential Academy of National Economy and Public Administration) |
| Abstract: | The Russian Federation, like most industrial and post-industrial countries, is currently in the midst of a great discussion about how to meet the challenges of population ageing. Again, in common with many other countries, a discussion is taking place regarding both the parameters and, indeed, the very nature of the pension system and the relationship between work and retirement. In this paper, we have sought to present a more systematic representation of ageing in Russia. We have done so by presenting a series of standard and alternative measurements. By doing so, it is possible to suggest that the scale of ageing in Russia is arguably exaggerated precisely by the low pensionable ages. The second contribution of this paper is to explicitly bring in the concept of inequality regarding pension entitlement. Noting that these dimensions of inequality include gender, geography and socioeconomic differentials, we found that the current heterogeneity of conditions of wellbeing in Russia are such that very high degrees of inequality can be detected. |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:hku:wpaper:201749&r=tra |
| By: | Iakov Frizis; Krzysztof G³owacki; Katarzyna Mirecka |
| Abstract: | The paper summarizes knowledge on tax gaps in Poland with respect to PIT, CIT, VAT, and excise. An introduction to the Polish tax system is given, trends in tax collectability and estimates of the tax gaps are discussed, and methods of combating tax evasion and avoidance are reviewed. The paper has been written as part of the project “Mutual Learning for Reducing Tax Gaps in V4 Countries and Ukraine” co-financed by the Visegrad Fund in the years 2016-2017. |
| Keywords: | tax gap, tax evasion, tax avoidance, tax administration, compliance costs, CIT, PIT, VAT, excise, Visegrad, V4, Poland |
| JEL: | H26 H60 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:sec:report:0491&r=tra |
| By: | Liis Roosaar, Jaan Masso, Urmas Varblane |
| Abstract: | This paper aims to clarify how changes in the age and wage composition of the labour force are related to the productivity of firms over the business cycle. Based on a matched employer-employee database of Estonian firms from 2006–2014, we decompose changes in the labour force and distinguish between hired, separated and staying workers. Considering the age and wage of workers, we link changes in the labour force to changes in productivity. Using fixed effect panel data analysis we indicate that among high-waged employees middle-aged are the most productive, the productivity decreases with age but remains higher for old compared to young. the increase in labour productivity is supported by the decreasing share of employees with the lowest productivity. The share of high-income employees was reduced in the crisis and later mostly low-income employees were hired. In addition, structural changes have accelerated the process of ageing. There are, however, sector-specific differences because in knowledge intensive services, ageing is not as prevalent as in industry. We also show that labour productivity is higher in the youngest quartile than in the oldest quartile of enterprises in all four periods. |
| Keywords: | productivity, labour productivity, ageing, Estonia |
| JEL: | J23 J24 J31 J63 M51 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:mtk:febawb:103&r=tra |
| By: | Kellee S. Tsai (Head, Department of Social Science , Hong Kong University of Science and Technology; Chair Professor, Division of Social Science, Hong Kong University of Science and Technology) |
| Abstract: | Professor Kellee Tsai, Faculty Associate at the Institute, offers insights on the Chinese government’s 2016-2020 plan to encourage digital technologies in order to promote financial inclusion and social stability. This brief examines the explosive growth of China’s fintech in response to demand for web-based services, and the government’s attempts to regulate this space. |
| Keywords: | Fintech, financial inclusion, china, entrepreneurship |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:hku:briefs:201720&r=tra |
| By: | Iakov Frizis; Krzysztof G³owacki |
| Abstract: | The paper is a summary of the exchange of knowledge and experience that took place in the course of the project “Mutual Learning for Reducing Tax Gaps in V4 Countries and Ukraine” co-financed by the Visegrad Fund in the years 2016–2017. Five institutions took part in the project: Center for Social and Economic Research (Warsaw, Poland), Center for Social and Economic Research Ukraine (Kiev, Ukraine), INEKO Institute for Economic and Social Reform (Bratislava, Slovak Republic), EUROPEUM Institute for European Policy (Prague, Czech Republic), and Kopint-Tárki Institute for Economic Research (Budapest, Hungary). |
| Keywords: | tax gap, tax evasion, tax avoidance, tax administration, compliance costs, CIT, PIT, VAT, excise, Visegrad, V4, Ukraine |
| JEL: | H26 H60 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:sec:report:0490&r=tra |
| By: | FUJITA Mai |
| Abstract: | This paper examines the progress and outcomes of state-owned enterprise (SOE) reforms under international economic integration in Vietnam. While the literature has focused primarily on strategic SOEs that have been largely treated as exceptions under international commitments or domestic reforms, the paper focuses on the Vietnam National Textile and Garment Group (Vinatex), a major SOE group in the textile and garment (T&G) industry in which the impact of international economic integration was expected to be substantial. The main findings are as follows. First, unlike large-scale SOEs in strategic sectors that receive the most attention in the literature, the transformation of Vinatex in terms of ownership, organization, policy roles, and relationship with the state, albeit incomplete, has made significant progress. Second, nevertheless, there are indications that Vinatex's relationship with the state and its non-commercial roles may continue in subtle and indirect forms. Third, with the entry and growth of foreign-invested and domestic private enterprises, both SOEs and Vinatex have lost shares in the T&G industry. However, some Vinatex members stay among the country's top garment exporters, successfully competing with their foreign-invested rivals. These findings suggest the recent realities of Vietnamese SOEs that are increasingly hybrid, similar to those in many other countries. |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:17121&r=tra |
| By: | Junxue Jia (School of Finance, China Financial Policy Research Center, Renmin University of China); Cong Qin (School of Finance, China Financial Policy Research Center, Renmin University of China); Yongzheng Liu (School of Finance, China Financial Policy Research Center, Renmin University of China) |
| Abstract: | Using a unique dataset for 2,190 Chinese villages, this paper evaluates the poverty-reducing effect of large scale village-based anti-poverty development projects in rural China. We find that these projects significantly increase village net income per capita and thus reduce rural poverty. We also highlight the importance of funding methods, matching requirements, and political institutions for project effectiveness. Specifically, compared to projects funded by unconditional grants, microfinance projects exhibit a stronger poverty-reducing effect; matching requirements enhance the effectiveness of the projects; and a more democratic political environment improves project performance. |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper1722&r=tra |
| By: | International Monetary Fund |
| Abstract: | Policy support, strengthening external demand, and supply-side reforms have helped maintain strong growth which, along with tighter enforcement of capital flow management measures, has also reduced exchange rate pressure. Regulators have recently focused on addressing financial sector risks, resulting in tightening financial conditions. The five-yearly Communist Party Congress is scheduled for the fall. |
| Keywords: | Asia and Pacific; |
| Date: | 2017–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:17/247&r=tra |
| By: | Margit Molnar; Thomas Chalaux; Qiang Ren |
| Abstract: | This paper focusses on the link between urbanisation and consumption behaviour in China. Urbanisation is defined here as rural people moving to cities to work and migrant workers in cities obtaining urban residential status, against the backdrop of government plans to settle 100 million rural dwellers into cities and grant urban residential status to another 100 million migrant workers who already reside in cities. Using household data of the China Family Panel Studies dataset, the paper investigates the impact of those residential status changes on household consumption. The results of the analysis suggest that moving up the residential ladder in this way will likely result in increased consumption by almost 30% for both groups of people and thus contribute to rebalancing of the economy. Higher incomes and longer times in education are important drivers of this process, while a greater number of children in the family discourages consumption. This Working Paper relates to the 2017 OECD Economic Survey of China (www.oecd.org/eco/surveys/economic-surve y-china.htm). |
| Keywords: | consumption, migrant workers, rebalancing, residential status, urbanisation |
| JEL: | E21 J61 P23 P25 |
| Date: | 2017–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1434-en&r=tra |
| By: | Polukhina Elizaveta (National Research University Higher School of Economics); Strelnikova Anna (National Research University Higher School of Economics); Vanke Alexandrina (National Research University Higher School of Economics) |
| Abstract: | This paper presents an analytical description of working-class identity in three key periods of the socioeconomic transformations which changed the structure of a plant’s industry and working-class life: the Soviet era (1930s-1980s), the time of economical change (1990s), and the post-Soviet years (2000s-2010s). The analytical framework of the study is based on the concept of ‘cultural class analysis’ (Savage 2015). It includes the concepts of habitus and cultural capital, and culture as embedded in economic and social relations (Bourdieu 1980). In the course of the research we conducted an ethnographic case-study in 2017 and lived in the neighborhood of Uralmash, which was designed for workers of a heavy machinery plant dating back to the 1920s in the city of Yekaterinburg. Based on 15 in-depth interviews with Uralmash workers living in the neighborhood and 8 experts, and our field observations, we discovered 3 restructuring shapes of the Uralmash worker identity. These working class identities shapes referred to 3 determined periods. The Soviet period showed a ‘consistent’ working-class identity of the Uralmash workers, whereby the plant and working spirits were the centers of their lives. The 1990s was marked by severe deterioration of workers’ social conditions and the loss of their familiar bearings in life. As a consequence, the Uralmash workers perceived themselves as ‘victims of circumstances’ with ‘collapsing’ worker identity in 1990s. Currently, ‘Soviet’ and ‘post-Soviet’ practices and values are combined in today’s ‘mixing’ and an inconsistent worker identity. The notions of ‘simple’ and ‘working-class’ as sense-making images are encapsulated in nostalgic memories and retain their role as criteria for the delineation between inequalities and social discrimination along the ‘them’ and ‘us’: ‘we are those who live belonging to the past’. The Soviet past still continues to be an important sense-making resource; in fact, it is the only ‘universal’ prop for them that support their subjective perception of themselves |
| Keywords: | industrial neighborhood, worker, working-class identity, ethnographic case-study |
| JEL: | Z |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:77/soc/2017&r=tra |
| By: | Feng, Xunan (Southwestern University of Finance and Economics); Johansson, Anders C. (Stockholm China Economic Research Institute) |
| Abstract: | We examine how venture capitalists and the firms they back utilize network-based strategies in China. Analyzing a manually collected data set of venture capitalists with political ties, we find that firms backed by politically connected venture capitalists are more likely to obtain approval for initial public offerings (IPOs), their time from venture capital investment to IPO approval is shorter. They also exhibit higher IPO offering prices and lower underpricing, and consequently deteriorating long-term post-IPO stock performance. By exploiting a unique regulatory change, we show that venture capitalists’ political connections had less IPO applications withdrawn during the 2013 financial inspection period. We also find that firms backed by politically connected venture capitalists have higher levels of earnings management, are more often mentioned in newspaper articles concerning substantial operating performance declines and are more often accused of illegal information disclosures quickly after the IPO. Finally, politically connected venture capitalists can obtain higher investment returns and attract more fund flows after successful IPOs. Our findings are robust to several robustness tests and suggest that political relationships are valuable for this important group of financial intermediaries in transitional China. |
| Keywords: | Venture capital; Institutions; Network-based strategy; Political connections; IPO; China |
| JEL: | D02 G24 P48 |
| Date: | 2017–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hascer:2017-049&r=tra |
| By: | Vinokurov, Evgeny; Libman, Alexander |
| Abstract: | The authors turn to the large family of institutions that came into existence in post-Soviet Eurasia (and, in some ways, beyond it) over the last two decades. The researchers review their current state, agenda, real and perceived mandate, and their respective achievements and constraints. The main questions of interest are the following: do ‘Eurasian’ institutions serve to provide security/stability and, if so, how? To answer these two questions, the authors identify a number of key challenges to security in Eurasia, review the institutions belonging loosely to the Eurasian Economic Union’s institutional ecosphere, the Collective Security Treaty Organization, and the Shanghai Cooperation Organization. The goal is primarily to find out the possible contributions to security in the region from the point of view of the mandates of regional institutions and their capacity. As the authors will show, the potential of Eurasian regional institutions to provide security is substantial, and it partly materializes itself in concrete policy measures. |
| Keywords: | regional integration, security, EAEU, CSTO, institutions, regional organization, SCO |
| JEL: | F15 F52 F53 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:83021&r=tra |
| By: | Ilya Prakhov (National Research University Higher School of Economics); Denis Sergienko (National Research University Higher School of Economics) |
| Abstract: | It is assumed that a perfect balance between student academic achievement and university quality is beneficial both for students and higher education institutions (HEIs). Matching theory predicts the existence of perfect matching between the two groups in the absence of transaction costs associated with university enrollment. However, in this study we show cases of mismatch situations in Russia under the Unified State Exam (USE) – the standardized student admission mechanism. This research studies the reasons for this phenomenon for minimal transaction costs and the emergence of unequal access to HEIs. Based on data on Moscow high school graduates who entered university, the determinants of the mismatch between the quality of universities and applicant abilities are assessed. It is shown that although in most cases favorable matching results are established, the individual student achievement results themselves are subject to the influence of school and family characteristics. Thus, inequality of access can be formed at stages preceding HEI enrollment |
| Keywords: | matching, mismatch, admission, accessibility of higher education, the Unified State Exam |
| JEL: | I21 I24 I28 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:45edu2017&r=tra |