nep-tra New Economics Papers
on Transition Economics
Issue of 2018‒02‒12
24 papers chosen by
J. David Brown
United States Census Bureau

  1. International expansion of Russian multinationals - a focus on home-country push factors, Europe and five CEE countries By Csaba Weiner
  2. Technological catching-up, sales dynamics and employment growth: evidence from China’s manufacturing firms By Dosi, Giovanni; Yu, Xiaodan
  3. Effects of health insurance on labour supply: Evidence from the health care fund for the poor in Viet Nam By Le, Nga T.Q.; Groot, Wim; Tomini, Sonila; Tomini, Florian
  4. Supplier search and re-matching in global sourcing: theory and evidence from China By Defever, Fabrice; Fischer, Christian; Suedekum, Jens
  5. Structural adjustments and international trade: theory and evidence from China By Huang, Hanwei; Ju, Jiandong; Yue, Vivian Z.
  6. Monthly Report No. 7-8/2017 By Vasily Astrov; Rumen Dobrinsky; Vladimir Gligorov; Richard Grieveson; Doris Hanzl-Weiss; Peter Havlik; Gabor Hunya; Sebastian Leitner; Isilda Mara; Olga Pindyuk; Leon Podkaminer; Sandor Richter; Hermine Vidovic
  7. Structural analysis of the offshore wind innovation system in Poland By Jakub Sawulski
  8. Social Capital and Migration Intentions in Post-Communist Countries By Peter Huber; Stepan Mikula
  9. Efficiency of sustainability management in Bulgarian agriculture By Bachev, Hrabrin
  10. The real value of China’s stock market By Carpenter, Jennifer N.; Lu, Fangzhou; Whitelaw, Robert F.
  11. The Anchoring Effect in Mergers and Acquisitions: Evidence from an Emerging Market By Anastasia Stepanova; Vladislav Savelyev; Malika Shaikhutdinova
  12. The Effect of Firm Ownership Structure on Performance: A case study of Eastern Europe and Central Asian Countries. By Bekena, Sisay Menji
  13. Paradigmele istoriei. Datoria publică a României în ultimii 100 de ani By Georgescu, George
  14. Statistical estimation of agricultural resource potential and opportunities for rural development in Russia based on Census By Bautin, Vladimir; Ukolova, Anna; Romanceva, Julia
  15. Testing the growth links of emerging economies: Croatia in a growing world economy By Ziesemer, Thomas
  16. Who Are the First Users of a Newly-Emerging International Currency? A Demand-Side Study of Chinese Renminbi Internationalization By Hyoung-kyu Chey; Geun-Young Kim; Dong Hyun Lee
  17. Demographics and FDI: Lessons from China's One-Child Policy By John B. Donaldson; Christos Koulovatianos; Jian Li; Rajnish Mehra
  18. Russian food and agricultural import ban: The impact on the domestic market for cattle, pork and poultry By Perekhozhuk, Oleksandr; Glauben, Thomas
  19. Higher Education for Smart Specialisation: The case of North East Romania By Elisabetta Marinelli; John Edwards; Cosmina Mironov
  20. Permissible collateral and access to finance: Evidence from a quasi-natural experiment By Xu, Bing
  21. Evolution of Regional Innovation with Spatial Knowledge Spillovers: Convergence or Divergence? By Junwen Qiu; Wenjian Liu; Ning Ning
  22. Wage Dynamics and Financial Performance: Evidence from Czech Firms By Jan Babecky; Kamil Galuscak; Diana Zigraiova
  23. Driving forces behind the international expansion strategies of Chinese MNEs By Agnes Szunomar
  24. Европейската дългова криза, качеството на институциите и икономическия растеж в България By Dimitrov, Mitko

  1. By: Csaba Weiner (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: Russian multinationals play an active role in international capital flows, although, over the past decade, two financial crises have interrupted the upward trend of their outward foreign direct investment (OFDI). This paper focuses on the specific characteristics of Russian OFDI and multinationals in general, in particular regarding their presence in the European Union – Russia’s prime export market and the main destination of Russian OFDI – and, more specifically, five EU-member Central and East European states, including the Czech Republic, Hungary, Poland, Slovakia and Slovenia. Besides official statistics, the research relies on company data gathered to present the activities of Russian multinationals in this region. Among the investment motives, the focus is on home-country push factors, both negative and positive. The paper also asks whether the emergence and presence of Russian multinationals could be explained by using an existing FDI framework.
    Keywords: outward foreign direct investment, multinational enterprises, Russia, Europe, Czech Republic,Hungary, Poland, Slovakia, Slovenia
    JEL: D22 F23 M16
    Date: 2017–12
  2. By: Dosi, Giovanni; Yu, Xiaodan
    Abstract: This paper investigates the microeconomics of employment dynamics, using a Chinese manufacturing firm-level dataset over the period 1998-2007. It does so in the light of a scheme of “circular and cumulative causation”, whereby firms’ heterogeneous productivity gains and sales dynamics, and innovation activities ultimately shape the patterns of employment dynamics. Using firm’s productivity growth as a proxy for process innovation, our results show that the latter correlates negatively with firm-level employment growth. Conversely, relative productivity levels, as such a general proxy for the broad technological advantages/disadvantages of each firm, do show positive effect on employment growth in the long-run through replicator-type dynamics. Moreover, firm-level demand dynamics play a significant role in driving employment growth, which more than compensate the labour-saving effect due to technological progress. Finally, and somewhat puzzlingly, the direct effects of product innovation and patenting activities on employment growth appear to be negligible.
    Keywords: Employment Growth,Demand,Product Innovation,Process Innovation,Export,China catching-up
    JEL: D22 J01 O33
    Date: 2018
  3. By: Le, Nga T.Q. (UNU-MERIT, Maastricht University); Groot, Wim (TIER and CAPHRI School for Public Health and Primary Care, Maastricht University,); Tomini, Sonila (UNU-MERIT, Maastricht University); Tomini, Florian (TIER, Maastricht University, and Amsterdam School of Economics, University of Amsterdam,)
    Abstract: The expansion of health insurance in emerging countries raises concerns about unintended negative effects of health insurance on labour supply. This paper examines the labour supply effects of the Health Care Fund for the Poor (HCFP) in Vietnam in terms of the monthly number of work hours and the probability of employment. Employing Difference-in- Differences Matching methods on the Vietnam Household Living Standard Survey 2002-2006, we show that HCFP, which aims to provide poor people and disadvantaged minority groups with free health insurance, has a positive labour supply effect in the short run. However, in the longer run, the net effect becomes negative due to the income effect. This is manifested in both average work hours per month and the probability of employment albeit the effect on the latter is statistically insignificant. Interestingly, the finding of the income effect is mainly driven by the non-poor recipients living in rural areas. This raises the question of targeting strategy of the programme to avoid unintended labour supply distortion.
    Keywords: health insurance, human resources, labour supply, health care funding, welfare, Vietnam
    JEL: I13 J22 O15
    Date: 2017–12–04
  4. By: Defever, Fabrice; Fischer, Christian; Suedekum, Jens
    Abstract: In this paper, we consider a dynamic search-and-matching problem of a firm with its intermediate input supplier. In our model, a headquarter currently matched with a supplier, has an interest to find and collaborate with a more efficient partner. However, supplier switching through search and rematching is costly. Given this trade-off between the fixed costs and the expected gains from continued search, the process will stop whenever the headquarter has found a sufficiently efficient supplier. Using firm-product-level data of fresh Chinese exporters to the United States, we obtain empirical evidence in line with the predictions of our theory. In particular, we find that the share of short-term collaborations is higher in industries with more supplier-cost dispersion, an indication of higher expected search opportunities
    Keywords: input sourcing; relational contracts; supplier search
    JEL: D23 F23 L23
    Date: 2017–11–01
  5. By: Huang, Hanwei; Ju, Jiandong; Yue, Vivian Z.
    Abstract: This paper studies how changes in factor endowment, technology, and trade costs jointly determine the structural adjustments, which are defined as changes in distributions of production and exports. We document the structural adjustments in Chinese manufacturing firms from 1999 to 2007 and find that production became more capital-intensive while exports did not. We structurally estimate a Ricardian and Heckscher-Ohlin model with heterogeneous firms to explain this seemingly puzzling pattern. Counterfactual simulations show that capital deepening made Chinese production more capital-intensive, but technology changes that biased toward the labor-intensive sectors and trade liberalizations provided a counterbalancing force
    Keywords: structural adjustments; comparative advantage; heterogeneous firm
    JEL: F12 L16
    Date: 2017–11–01
  6. By: Vasily Astrov (The Vienna Institute for International Economic Studies, wiiw); Rumen Dobrinsky (The Vienna Institute for International Economic Studies, wiiw); Vladimir Gligorov (The Vienna Institute for International Economic Studies, wiiw); Richard Grieveson (The Vienna Institute for International Economic Studies, wiiw); Doris Hanzl-Weiss (The Vienna Institute for International Economic Studies, wiiw); Peter Havlik (The Vienna Institute for International Economic Studies, wiiw); Gabor Hunya (The Vienna Institute for International Economic Studies, wiiw); Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw); Isilda Mara (The Vienna Institute for International Economic Studies, wiiw); Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw); Leon Podkaminer (The Vienna Institute for International Economic Studies, wiiw); Sandor Richter (The Vienna Institute for International Economic Studies, wiiw); Hermine Vidovic (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Central, East and Southeast Europe Recent Economic Developments and Forecast Table Overview 2015-2016 and outlook 2017-2019 (pp. 1) Figures GDP growth in 2016-2017 and contribution of individual demand components in percentage points, EU-CEE, Western Balkans + Turkey, CIS + Ukraine (p. 2) Albania Growth forges ahead (by Isilda Mara; p. 3) Belarus On the road to recovery (by Rumen Dobrinsky; p. 4) Bosnia and Herzegovina Broad-based pick-up in growth (by Richard Grieveson; p. 5) Bulgaria An on-going economic revival (by Rumen Dobrinsky; p. 6) Croatia Economy overshadowed by Agrokor troubles (by Hermine Vidovic; p. 7) Czech Republic Performance better than expected (by Leon Podkaminer; p. 8) Estonia Growing at potential (by Sebastian Leitner; p. 9) Hungary Strong growth performance in the first quarter (by Sándor Richter; p. 10) Kazakhstan Oil exports on the rise (by Olga Pindyuk; p. 11) Kosovo Election outcome unlikely to derail strong growth (by Richard Grieveson; p. 12) Latvia Investment cycle on the upturn (by Sebastian Leitner; p. 13) Lithuania Growth shifting into higher gear (by Sebastian Leitner; p. 14) Macedonia Reforms now (by Vladimir Gligorov; p. 15) Montenegro Fiscal Adjustment (by Vladimir Gligorov; p. 16) Poland Unexpectedly strong start into 2017 (by Leon Podkaminer; p. 17) Romania Boom continues (by Gábor Hunya; p. 18) Russian Federation Sluggish reforms lead to sluggish growth (by Peter Havlik; p. 19) Serbia Risks of backsliding (by Vladimir Gligorov; p. 20) Slovakia Sustained robust growth (by Doris Hanzl-Weiss; p. 21) Slovenia Growth boosted by investments (by Hermine Vidovic; p. 22) Turkey Growth robust amid major risks (by Richard Grieveson; p. 23) Ukraine Visa-free into the EU (by Vasily Astrov; p. 24)
    Keywords: economic forecasts, GDP, investment, consumer prices, unemployment, current account, household consumption, net exports, GDP growth
    Date: 2017–08
  7. By: Jakub Sawulski
    Abstract: The paper is a preliminary evaluation of the offshore wind innovation system in Poland. The analysis is based on the Technology Innovation System concept. The paper includes the two first steps of the procedure: the structural analysis and the technology stage of development analysis. We found that, although there are not any offshore wind farms in Poland yet, Polish industry has broad experience in implementing offshore wind projects and can cover a large part of the offshore wind farm investment. However, knowledge area is not a strong point of the innovation system. Also the institutional (political) uncertainty, as well as inadequate public system of support for RES, may be significant barriers for the development of the technology. So far, the Baltic Sea has remained weakly explored in terms of offshore wind deployment. Poland, with its large sea space and good wind and soil conditions, may play a pivotal role in kick-starting the offshore market in this area.
    Keywords: RES, offshore wind, innovation system, TIS
    JEL: O31 O33 Q42 Q55
    Date: 2017–12
  8. By: Peter Huber (WIFO); Stepan Mikula
    Abstract: We analyse the impact of social capital on the willingness to migrate in 28 post-communist and five western European comparator countries using the Life in Transition Survey. We find substantially lower levels of professional social capital among the older cohorts in post-communist than in the comparator countries. In addition, differences in endowments with professional social capital between the post-communist and comparator countries explain 1.5 to 3.9 percentage points of the total 4.0 to 17.0 percentage points difference in the willingness to migrate between the two country groups. Differences in local social capital, by contrast, contribute only little to explaining these differences. Furthermore, the robust positive relationship between the willingness to migrate and professional social capital is mainly due to a strong correlation between these variables among the young in all country groups. We therefore argue that future research should focus on explaining differences in the impact of social capital on migration decisions of different age groups.
    Keywords: Migration, social capital, transition countries
    Date: 2018–01–26
  9. By: Bachev, Hrabrin
    Abstract: This paper applies a holistic framework for assessing efficiency of environmental and sustainability management in Bulgarian agriculture. Initially the multiprinciple, multictiteria and mulriindicator framework for assessing environmental and sustainability management in agriculture is outlined. After that environmental sustainability of Bulgarian agriculture at national and farms levels is evaluated. Finally, factors for improving environmental and sustainability management in agricultural farms in the country are identified. Our assessment at national and farm level have found out that there are significant discrepancies in efficiency levels based on aggregate national data and assessment (perception) of farm managers. Therefore, in management practices all kind of data have to be used in order to be able to take efficient decision at different managerial levels. Having in mind the importance of holistic assessments of efficiency of environmental and sustainability management in agriculture, and the enormous benefits for the farm management and agrarian policies, such studies are to be expended and their precision and representation increased.
    Keywords: environmental management, efficiency, sustainability, Bulgarian agriculture
    JEL: Q1 Q12 Q13 Q18 Q2 Q3 Q5
    Date: 2018–01
  10. By: Carpenter, Jennifer N.; Lu, Fangzhou; Whitelaw, Robert F.
    Abstract: This paper shows that, counter to common perception, stock prices in China are strongly linked to firm fundamentals. Since the reforms of the early 2000s, stock prices are as informative about future profits as they are in the US. Although the market is segmented from international equity markets, Chinese investors price individual stock characteristics like other global investors: they pay up for size, growth, liquidity, and long shots, while they discount for systematic risk. Price informativeness is significantly correlated with corporate investment e ciency. For international investors, China's stock market offers high average returns and low correlation with other equity markets.
    JEL: E44 F30 G12 G14 G15 O16 O53 P21 P34
    Date: 2018–01–19
  11. By: Anastasia Stepanova (National Research University Higher School of Economics); Vladislav Savelyev (National Research University Higher School of Economics); Malika Shaikhutdinova (National Research University Higher School of Economics)
    Abstract: This article examines the presence of the reference price effect in mergers and acquisitions in Russia, which can act as a distortion in investor perception of the influence a deal has on a company. In this study we use the Russian market as a laboratory for the investigation of behavioral effects in a relatively inefficient market. We find a relationship between the acquirer’s announcement period return and the proximity of its pre-announcement share price to the 52-week high. The 52-week high serves as a salient anchor even though it is economically irrelevant for valuation purposes. This effect appears to be stronger for deals associated with higher levels of uncertainty. The findings confirm the presence of the anchoring bias in evaluating the effect of a merger or acquisition announcement by Russian investors. We demonstrate a significant anchoring effect even for deals with a blocking (>10%) or a controlling stake (>25%) in an emerging market with a highly concentrated ownership.
    Keywords: Mergers; Acquisitions; Anchoring; Reference point; Behavioral corporate finance
    JEL: G34
    Date: 2018
  12. By: Bekena, Sisay Menji
    Abstract: This paper uses World Bank Enterprise Survey 2009 and 2013 panel data for Central Asia and Eastern Europe to estimate the casual effects of firm ownership structure on firm performance measured by the growth rates of sales, labor productivity and employment. The study uses treatment effect models to compute the average treatment effects. Estimation results using propensity score matching show that on average private firms have sales and employment growth rates that are 6 percentage points higher compared to public firms. The effect is statistically significant at conventional significance levels. Labor productivity growth is similar across public and private firms. The key conditional independence assumption necessary for the validity of the matching models is found to be valid and the computed casual effects are consistent across the different treatment effect models.
    Keywords: Firm ownership, Treatment Effects,
    JEL: D20
    Date: 2017
  13. By: Georgescu, George
    Abstract: The study focuses on the analysis of Romania’s public debt over the last 100 years, on three distinct historical periods (interwar, under communist regime, and the transition to the market economy), characterized, despite essential system differencies, by the same paradigm of a sinusoidal trajectory of the economic development, fundamentally affected by the overindebtedness costs and/or, paradoxically, by those of debt liquidation. The paper highlights the main causes of the public debt accumulation, the destinations of loans, trying to assess the sustainability parameters thoughout the last century. It was found that, in terms of debt sustainability, Romania had, in most of the time, an excessive indebtedness degree, accentuated by heavy financial and political consequences of the two world wars before 1990 and, after this, by the transition costs and the global crisis effects, which impacted the macroeconomic situation of the country.
    Keywords: B22, E44, E62, F34, H63, N44
    JEL: B22 E44 E62 F34 H63 N44
    Date: 2017–10
  14. By: Bautin, Vladimir; Ukolova, Anna; Romanceva, Julia
    Abstract: The census, which became the second in the recent history of the country, provided information on the real state of the resource base of the agricultural sector and gave an idea of the potential opportunities for expanded reproduction in the industry. The study of these issues is relevant in the context of the State Program development of agriculture and regulation of the market of food products, raw materials and foodstuffs for 2013-2020, aimed at ensuring food security of the population, developing rural areas and increasing the profitability of agricultural producers. The aim of the study were structural changes in Russian agriculture in 2006-2016. Comparative assessment of the resource potential of Russia's agrarian sector was carried out based on the statistical analysis of the data of the RAC 2006 and the RAC 2016: the size of land and labor resources has been studied, the changes in area and structure of crops have been assessed, the dynamics of the number and structure of livestock in Russia as a whole and in the context of farm categories has been examined. This made it possible to conclude that over the past decade agrarian reforms in Russia's agriculture have led to significant structural shifts, which manifested itself in the change in the composition of rural commodity producers and in the redistribution of resources between farm categories. The analysis of the data showed a trend of concentration and centralization of agricultural production, which was expressed in the size of the total area of land per household.
    Keywords: agriculture, agricultural census, resource potential, farm categories, structural changes
    JEL: Q18 R2
    Date: 2017–10–01
  15. By: Ziesemer, Thomas (UNU-MERIT, and SBE, Maastricht University)
    Abstract: We estimate a dynamic simultaneous equation model for 16 variables of the Croatian economy in order to test the links of growth with education, R&D, trade, savings and FDI. In order to motivate the choice of variables we review the related theories of growth and look at the relevant data. Permanent shocks increasing the intercepts of the equations for education, R&D, trade, savings and FDI show that most of growth links work well in Croatia, but they also enhance foreign imbalances. Policies to balance the two aspects are briefly discussed.
    Keywords: Growth, open economy, education, R&D, Croatia
    JEL: F43 O11 O19 O41 O47
    Date: 2017–12–11
  16. By: Hyoung-kyu Chey (National Graduate Institute for Policy Studies (GRIPS)); Geun-Young Kim (Research Department, The Bank of Korea); Dong Hyun Lee (Economic Research Institute, The Bank of Korea)
    Abstract: Who are the first users of a newly-internationalizing currency? This issue, crucial to understanding the dynamics of the emergence of a new international monetary order, remains long underexplored in the existing literature, which tends to adopt a supply-side approach analyzing mainly the international currency issuers. Our study addresses this important question, with a focus on the case of the Chinese renminbi, by employing a demand-side approach examining the international currency users through generalized ordered logistic regression analysis. Our primary argument is that a state hosting a major global financial center—a condition largely independent of influence from countries issuing international currencies—is likely to be more interested in enhancing its use of the renminbi, implying thereby that global financial institutions and the related inter-state rivalries among international currency users may play crucial roles in the shaping of a new international monetary order. We in addition find significant impacts on a state's interest in renminbi use resulting from its institutional economic cooperation with China through a preferential trade agreement or a bilateral investment treaty, but that a country's mere trade and investment integration with China does not meaningfully affect its government's support for renminbi use.
    Keywords: Currency internationalization, International currency, Renminbi internationalization, Yuan internationalization
    JEL: F33 F50
    Date: 2016–12–23
  17. By: John B. Donaldson; Christos Koulovatianos; Jian Li; Rajnish Mehra
    Abstract: Lucas (1990) argues that the neoclassical adjustment process fails to explain the relative paucity of FDI inflows from rich to poor countries. In this paper we consider a natural experiment: using China as the treated country and India as the control, we show that the dynamics of the relative FDI flows subsequent to the implementation of China's one-child policy, as seen in the data, are consistent with neoclassical fundamentals. In particular, following the introduction of the one-child policy in China, the capital-labor (K/L) ratio of China increased relative to that of India, and, simultaneously, relative FDI inflows into China vs. India declined. These observations are explained in the context of a simple neoclassical OLG paradigm. The adjustment mechanism works as follows: the reduction in the (urban) labor force due to the one-child policy increases the savings per capita. This increases the K/L ratio and reduces the marginal product of capital (MPK). The reduction in MPK (relative to India) reduces the relative attractiveness of investment in China and is thus associated with lower FDI/GDP ratios. Our paper contributes to the nascent literature exploring demographic transitions and their effects on FDI flows.
    JEL: E13 F11 F12 J11 O11
    Date: 2018–01
  18. By: Perekhozhuk, Oleksandr; Glauben, Thomas
    Abstract: This study analyses the impact of the Russian food and agricultural import ban on import of meat, the structural changes of trade pattern and reallocation of import flows of meat and meat products, and the price development in the import market and its impact on producers and consumers market for cattle, pork and poultry meat in the Russian Federation (RF). There is empirical evidence that the collapse of meat exports to Russia and, hence, the increase of meat prices happened even long before the import ban was introduced. The structure of Russian import market for meat has significantly changed. Brazil became the largest meat exporter in the Russian meat import market achieving market share in the total meat import of the RF almost 50% in 2015-2016. The structural changes of the Russian import market suggests that the beef and pork exporters are not price-takers on the one hand. On the other hand, they may be able to discriminate prices in the Russian import markets.
    Keywords: import ban,meat export,market structure,pricing,Russia,Importverbot,Fleischexport,Marktstruktur,Preisbildung,Russland
    JEL: Q11 Q17 L11 L13
    Date: 2018
  19. By: Elisabetta Marinelli (European Commission - JRC); John Edwards (European Commission - JRC); Cosmina Mironov (Bucharest University)
    Abstract: This report synthesises the findings of the project Higher Education and Smart Specialisation (HESS) in North East Romania, a region that has been examined as one of the case studies. The project analyses the links between the higher education (HE) system and the development and implementation of Smart Specialisation Strategies (S3). On the one hand, the report identifies the challenges that S3 and the shift towards place-based innovation raise for Higher Education Institutions (HEIs) in the region; on the other, it explores how HEIs' activities can best support S3 in a region with an early-stage regional innovation system. The case of North East Romania is particularly interesting, as the region hosts well-established universities , that are anchored to their traditional missions of teaching and research, while facing critical questions posed by S3. In particular the report explores how HEIs can contribute to knowledge-based regional development, not only through locally-relevant teaching programmes, but also through territorially grounded research, technology transfer and societal engagement. The case study has employed participatory and qualitative research methods, which have been complemented by desk based research on the policy and socio-economic context.
    Keywords: Smart specialisation, higher education
    Date: 2017–12
  20. By: Xu, Bing
    Abstract: By allowing large classes of movable assets to be used as collateral, the Property Law reform trans-formed the secured transactions in China. Difference-in-differences tests show firms operating with ex-ante more movable assets expand access to bank credit and prolong debt maturity. However, the reform does not seem to improve the efficiency of credit allocation, as debt capacity of ex-ante low quality firms expands the most following the reform. Credit expansion also does not lead to better firm performance. These findings are not driven by confounding factors such as improvements in creditor and property rights protection. Our results also cannot be explained by other important reforms which were introduced around the same time as the introduction of the Property Law. These include anti-tunneling and split-share reforms and amendments to the corporate tax structure in China. We conduct explicit robustness tests for these other reforms and amendments to the corporate tax structure in China. We conduct explicit robustness tests for these other reforms and hence contribute to the empirical literature on the reform process in China with new findings.
    JEL: G21 G28 G32 K22
    Date: 2018–01–31
  21. By: Junwen Qiu; Wenjian Liu; Ning Ning
    Abstract: Based on endogenous economic growth models and the panel data of 31 regions in China, this paper explores the following four questions: Do spatial knowledge spillovers among regions exist? Do spatial knowledge spillovers promote regional innovative activities? What is the radiation range of spatial knowledge spillovers? Do external knowledge spillovers affect the evolution of regional innovations in the long run? The results show that spatial knowledge spillovers exist, and though the range of knowledge spillover is within 1000 kilometers in China, it pushes up regional innovative activities. Moreover, since developing regions benefit more from external knowledge spillovers than developed regions, it leads to the convergence of regional knowledge growth rate.
    Date: 2018–01
  22. By: Jan Babecky; Kamil Galuscak; Diana Zigraiova
    Abstract: This paper examines how the financial performance of a firm affects its wage policy. For this purpose, we match data on Czech firms from the Wage Dynamics Network survey covering the period 2010-2013 with balance sheet data. Controlling for a number of firm-specific characteristics and the environment in which firms operate, we find that financial performance matters for wage setting: contractual wages are more likely to grow in firms with a higher ratio of cash flow to total assets and in firms that invest more. Conversely, firms that froze or cut contractual wages during the survey period had lower cash flow over total assets, but not necessarily a lower investment ratio. The flexible wage component exhibits a similar pattern, but is more sensitive to demand shocks and firms' financial conditions.
    Keywords: Base wages, financial performance, flexible wage component, survey data, wage setting
    JEL: C83 J31 J41 L11
    Date: 2017–12
  23. By: Agnes Szunomar (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: The rise of multinational enterprises (MNEs) from emerging markets is topical, important and poses a number questions and challenges that require considerable attention in the future from academia as well as business management. This rise is driven by the Asian economy, mainly China, as Chinese MNEs have become important players in several regions around the globe, ranging from the least developed countries to the developed markets, including East Central Europe. Although several components of the strategy and attitude of Chinese MNEs are in line with what can be observed for MNEs from developed countries, but some components – with regard to motivations, operational practice and challenges – are different. Therefore, this paper will focus on these specificities of Chinese outward foreign direct investment (OFDI) in order to better understand the rise of Chinese MNEs.
    Keywords: FDI, internationalisation, Chinese MNEs
    JEL: F21 F23 O53 P33
    Date: 2017–12
  24. By: Dimitrov, Mitko
    Abstract: This study explores the impact of the European debt crisis and the quality of the institutions on the economic growth in Bulgaria in the pre-accession period and during the period of EU membership. The European debt crisis broke the upward trend not only on the Bulgarian but also on the economies of all EU member states. On a comparative basis, the significance of the severity of the crisis for each country, the policy on gross public debt and the dynamics of economic development to overcome the crisis is assessed. The quality of institutions is seen as one of the main factors that hinder or help economic growth.
    Keywords: Sovereign Debt, Debt Management, Formal and Informal Sectors, Shadow Economy, Institutional Arrangements, Industrial Policy
    JEL: H63 O17 O25 O43
    Date: 2017

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