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on Transition Economics |
| By: | Xiang Xu; Alice Siqi Han |
| Abstract: | Since the dissolution of the Soviet Union, China’s economic and political stabilities have been repeatedly called into question. In this paper, we review long-lasting debates as to whether or not China will collapse and explain why we believe China is not going to collapse economically or politically. Our main argument is that Chinese authorities have applied a gradual anti-crisis approach to reform since 1978. This approach means that the Chinese government has both pursued modest reform measures and reacted quickly to internal and external shocks. Structurally speaking, the party and Chinese central government’s control over social resources represents an implicit guarantee against potential collapses. This paper then studies current risks of a sudden growth collapse in the form of a debt crisis, a housing bubble bust, and political disintegration, and lays forth why these events are not likely to happen and spark a major Chinese collapse in the near future. We also identify new instabilities in China’s economic and political system and discuss how the current gradual anti-crisis approach to reform can be upgraded to deal with these problems. |
| Keywords: | political collapse; economic collapse; approach to reform |
| JEL: | H63 H68 O17 P16 P21 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:hoo:wpaper:18104&r=tra |
| By: | Li, Chenhui; Lian, Xubei; Zhang, Zhi |
| Abstract: | This paper investigates the relationship between government education expenditure and regional innovation, a key engine of China's long-term economic growth as the nation undergoes massive economic restructuring and deep transformations. In an attempt to inform a whole-of-government approach in promoting indigenous knowledge generation, the authors examined the effect of two additional institutional factors, financial market development and Intellectual Property protection, as well as their interaction with education expenditure on regional innovation levels. By employing a sample of provincial panel data from 1998 to 2014, the authors find a significant positive correlation between education expenditure and regional innovation levels, an effect most pronounced in the Western provinces of China. Their analysis also revealed that financial market development augments the pro-innovation effect of education spending whereas a stronger IP protection regime could potentially mitigate such effect. The findings indicate that government investments in education as well as the creation of a more developed financial landscape will be effective ways to enhance regional innovation levels. However, attention should be paid to the nuances of the current IP protection system as well as the conduct of market players to pre-empt exploitations and enable greater incentives for sustained innovations. |
| Keywords: | education expenditure,innovation,financial market development,intellectual property protection |
| JEL: | I21 I28 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201823&r=tra |
| By: | Tom Barker (Reserve Bank of New Zealand); Murat Ungor (Department of Economics, University of Otago, New Zealand) |
| Abstract: | We investigate the growth experience of Vietnam, the country which has been getting recent attention as being the next emerging giant. First, we present an aggregate level investigation of Vietnam's economic growth experience, since the inauguration of reform in 1986 known as Doi Moi. We focus on a top-down approach that performs growth and level accounting exercises. These decompositions o er the possibility to track the economic progress of Vietnam and to formulate policy accordingly depending on where the gaps originate from. Second, we build a two-sector general equilibrium model, investigating the secular decline in agricultural employment. Despite the notable structural changes over the past thirty years, agriculture still has a substantial weight in the Vietnamese economy. We conduct a quantitative analysis using a theoretical framework, with an emphasis on the counterfactual outcomes of inheriting Chinese sectoral productivity growth rates, where China is recognized as the paragon emerging economy. The main fndings are: (i) Vietnam has grown impressively since 1986, but is still a relatively poor country in absolute terms; (ii) Vietnam must decrease its reliance on factor accumulation as its source of growth and increase its technological capabilities; (iii) economic policies should equally target both agricultural and nonagricultural sectors to increase sectoral productivity growth rates in Vietnam. |
| Keywords: | Vietnam; capital formation; convergence; deagriculturalization |
| JEL: | N10 O47 O53 O57 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:otg:wpaper:1803&r=tra |
| By: | Yu-Lei Wan (ECUST); Gang-Jin Wang (HNU); Zhi-Qiang Jiang (ECUST); Wen-Jie Xie (ECUST); Wei-Xing Zhou (ECUST) |
| Abstract: | In this paper, we investigate the cooling-off effect (opposite to the magnet effect) from two aspects. Firstly, from the viewpoint of dynamics, we study the existence of the cooling-off effect by following the dynamical evolution of some financial variables over a period of time before the stock price hits its limit. Secondly, from the probability perspective, we investigate, with the logit model, the existence of the cooling-off effect through analyzing the high-frequency data of all A-share common stocks traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange from 2000 to 2011 and inspecting the trading period from the opening phase prior to the moment that the stock price hits its limits. A comparison is made of the properties between up-limit hits and down-limit hits, and the possible difference will also be compared between bullish and bearish market state by dividing the whole period into three alternating bullish periods and three bearish periods. We find that the cooling-off effect emerges for both up-limit hits and down-limit hits, and the cooling-off effect of the down-limit hits is stronger than that of the up-limit hits. The difference of the cooling-off effect between bullish period and bearish period is quite modest. Moreover, we examine the sub-optimal orders effect, and infer that the professional individual investors and institutional investors play a positive role in the cooling-off effects. All these findings indicate that the price limit trading rule exerts a positive effect on maintaining the stability of the Chinese stock markets. |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1803.09422&r=tra |
| By: | Aleksandar Vasilev (Independent researcher) |
| Abstract: | We introduce an environmental dimension into a real-business-cycle model augmented with a detailed government sector. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999-2016). We investigate the quantitative importance of utility-enhancing environmental quality, and the mechanics of environmental ("carbon") tax on polluting production, as well as the effect of government spending on pollution abatement over the cycle. In particular, a positive shock to pollution emission in the model works like a positive technological shock, but its effect is quantitatively very small. Allowing for pollution as a by-product of production improves the model performance against data, and in addition this ex- tended setup dominates the standard RBC model framework, e.g., Vasilev (2009). |
| Keywords: | Business cycles, pollution, environmental quality, environmental tax, abatement spending |
| JEL: | E32 C68 Q2 Q4 Q54 Q58 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:sko:wpaper:bep-2018-03&r=tra |
| By: | Andrei Potlogea (University of Edinburgh); Wenya Cheng (University of Manchester) |
| Abstract: | We study the effect of improvements in foreign market access brought by China’s WTO accession on Chinese local economies. We exploit cross-city variation in these improvements stemming from initial differences in sectoral specialization and exogenous cross-industry differences in US trade liberalization that originate from the elimination of the threat of a return to Smoot-Hawley tariffs for Chinese imports. We find that Chinese cities that experience greater improvement in their access to US markets following WTO accession exhibit faster population, output and employment growth as well as increased investment and FDI inflows. The benefits of WTO membership for Chinese local economies are augmented by significant local spillovers. These spillovers operate both from the tradable to the non-tradable sector and within the tradable sector. Within the tradable sector, spillovers are transmitted primarily via labor market linkages. We find important local demand linkages from the tradable to the nontradable sector. Most local service sectors benefit from trade liberalization. In particular, our evidence suggests that increased investment demand caused by trade liberalization drives financial sector growth. We find little effect of trade liberalization on local wages. Alongside our results on population and employment, this indicates that local labor supply elasticities are high in our setting. Our findings can be explained by a Lewis model of urbanization that combines geographic mobility with an abundant reserve of labor. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:1648&r=tra |
| By: | Bodnár, Katalin; Fadejeva, Ludmila; Iordache, Stefania; Malk, Liina; Paskaleva, Desislava; Pesliakaitė, Jurga; Jemec, Nataša Todorović; Tóth, Peter; Wyszyński, Robert |
| 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 adds to the rest of literature by presenting the reactions of firms 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 are less popular and occur 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. JEL Classification: D22, E23, J31 |
| Keywords: | adjustment channels, firm survey, minimum wage |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20182122&r=tra |
| By: | Resnia Novitasari (Department of Psychology, Universitas Islam Indonesia Author-2-Name: Hazhira Qudsyi Author-2-Workplace-Name: Department of Psychology, Universitas Islam Indonesia Author-3-Name: Tika Pratiwi Ambarito Author-3-Workplace-Name: Department of Psychology, Universitas Islam Indonesia Author-4-Name: Eri Yudhani Author-4-Workplace-Name: Department of Psychology, Universitas Islam Indonesia Author-5-Name: Fakhrunnisak Author-5-Workplace-Name: Department of Psychology, Universitas Islam Indonesia Author-6-Name: Chenxi Wang Author-6-Workplace-Name: Department of Psychology and Behavioral Sciences, Zhejiang University, China Author-7-Name: Mingming Liu Author-7-Workplace-Name: Department of Psychology and Behavioral Sciences, Zhejiang University, China Author-8-Name: Baihua Chen Author-8-Workplace-Name: Department of Psychology and Behavioral Sciences, Zhejiang University, China) |
| Abstract: | Objective – This study investigates cross-cultural differences in subjective well-being among working mothers in Indonesia and China, as members of the big five countries with high density populations in the world. Methodology/Technique – The participants in this study include 168 working mothers, of which 118 are Indonesian and 50 are Chinese. The subjective well-being variable was measured using the Satisfaction with Life Scale (SWLS) and The Scale of Positive and Negative Experiences (SPANE). This study also uses an independent sample t-test to examine the difference between the two. Findings – The results show that t (116) = 2.779, p = 0.006, which indicates that there are different conditions between working mothers in Indonesia and China that affect subjective well-being. |
| Keywords: | China; Indonesia; Comparative Study; Subjective Well-Being; Working Mothers. |
| JEL: | J16 P52 |
| URL: | http://d.repec.org/n?u=RePEc:gtr:gatrjs:gjbssr507&r=tra |
| By: | Enzo Dia; Lunan Jiang; Lorenzo Menna; Lin Zhang (Universita degli Studi di Milano Bicocca ; Center for Financial Development and Stability at Henan University, Kaifeng, Henan; Banco de Mexico) |
| Abstract: | We document the existence of a substantial dispersion of interest margins charged by commercial banks among Chinese provinces, and we build a parsimonious dynamic stochastic general equilibrium model featuring both banking and production sectors that we calibrate at both the national and provincial level. Our model can explain a considerable share of the interest margin charged in different provinces, and we find support for the hypothesis that Chinese banks adopt a similar technology across different provinces. Since in the case of Chinese provinces differences in wages are substantial, the adoption of a national technology implies an inefficient industrial structure for the banking industry. The adoption of a common nationwide technology generates also a stronger response of the rate on loans to productivity shocks than would be the case if banks adopted different technologies in different provinces, and the capability of banks to smooth regional idiosyncratic productivity shock hitting firms declines substantially. |
| Keywords: | Interest margins, market segmentation, Chinese economy |
| JEL: | E1 |
| URL: | http://d.repec.org/n?u=RePEc:fds:dpaper:201802&r=tra |
| By: | L Rachel Ngai (Centre for Macroeconomics (CFM); London School of Economics (LSE)); Christopher A Pissarides (Centre for Macroeconomics (CFM); London School of Economics (LSE); Hong Kong University of Science and Technology); Jin Wang (Hong Kong University of Science and Technology) |
| Abstract: | China's hukou system imposes two main barriers to population movements. Agricultural workers get land to cultivate but are unable to trade it in a frictionless market. Social transfers (education, health, etc.) are conditional on holding a local hukou. We show that the land policy leads to over-employment in agriculture and it is the more important barrier to industrialization. Effective land tenure guarantees and a perfect competitive rental market would correct this inefficiency. The local restrictions on social transfers favour rural enterprises over urban employment with a relatively smaller impact on industrialization. |
| Keywords: | Chinese immigration, Chinese land policy, Imperfect rent, Hukou registration, Social transfers |
| JEL: | J61 O18 R23 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:cfm:wpaper:1811&r=tra |
| By: | International Monetary Fund |
| Abstract: | The Polish government is beginning to implement its ambitious budget system reform program, first approved by the Council of Ministers in 2016. Building on considerable conceptual thinking within the government, it has sought out the support of international organizations to help deliver on the two highest priority reforms: the introduction of a medium-term budget, that will help attain the medium-term objective of reducing the structural deficit to one percent of GDP by 2021; and the reform of the chart of accounts (CoA) and budget classification to improve consistency and provide a much stronger basis for understanding the current position of the public finances. This work builds upon and extends the approach laid out in the February 2017 FAD mission, which provided guidance on delivering a medium-term budget framework. It also draws on previous World Bank support to reform the chart of accounts. |
| Date: | 2018–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:18/82&r=tra |
| By: | Sylvain Rossiaud (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes); Catherine Locatelli (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes) |
| Abstract: | This contribution sets out to clarify the determinants and modalities by which Russian companies played a part in structuring the energy complex of central and eastern European countries. In so doing we seek to supplement state-centred analysis of realist inspiration. The Soviet legacy explains both the incentive for Russian companies to develop operations in downstream oil and gas in these countries and why, given the vulnerability of national energy systems, target countries tend to see such developments as a threat to their security. In this respect the mid-2000s may be seen as a turning point, with the downstream growth strategies of Russian energy suppliers increasingly called into question. |
| Keywords: | energy company,Russia |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01727667&r=tra |
| By: | Boryana Bogdanova (Sofia University St. Kliment Ohridski, Faculty of Economics and Business Administration); Bozhidar Nedev (Sofia University St. Kliment Ohridski, Faculty of Economics and Business Administration) |
| Abstract: | This paper studies the momentum effect at the Bulgarian stock exchange in terms of its temporal structure for a period spanning from Jan-2004 to Jul-2017. Our aim is to reveal insights on the changes that took place with the beginning of the 2008 Financial crisis. The application of continuous wavelet analysis allows us to gain an in-depth knowledge on the cyclical patterns of the times series of raw profits on momentum trading strategy. This enables us to carry on further analysis aimed at identifying the drivers behind the phenomenon of significant momentum raw profits and the observed breaks during and after the crisis. Our findings contribute mainly to the process of delivering thorough understanding of the momentum effect from an empirical as well as from a behavioral perspective. |
| Keywords: | momentum trading strategy, 2008 Financial crisis, wavelet spectrum, frontier stock markets |
| JEL: | C32 G11 G14 G17 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:sko:wpaper:bep-2017-11&r=tra |
| By: | Maurer-Fazio, Margaret (Bates College); Wang, Sili (Columbia University) |
| Abstract: | This field experiment explores whether single and married female job candidates' un/employment histories differentially affect their chances of obtaining interviews through China's Internet job boards. It also considers whether firms' discrimination against, and/or preference for, candidates who are un/employed vary with the duration of unemployment spells. Resumes of fictitious applicants are carefully crafted in terms of realistic work histories and educational backgrounds. Candidates' experiences of unemployment and declaration of marital status are carefully controlled. Over 7000 applications are submitted to real job postings. Callbacks are tracked and recorded. Linear probability models are employed to assess the effects of particular resume characteristics in terms of obtaining interviews. The marital status of female candidates affects how recruiters screen their applications. While current spells of unemployment, whether short- or long-term, significantly reduce married women's chances of obtaining job interviews in the Chinese context, they strongly increase the likelihood that single women will be invited for interviews. Chinese firms appear to "forgive" long-term gaps in women's employment histories as long as those gaps are followed by subsequent employment. This paper is the first to explore how marital status affects the ways that firms, when hiring, interpret spells of unemployment in candidates' work histories. It is also the first to explore the effects of both marital status and unemployment spells in hiring in the context of China's dynamic Internet job board labor market. |
| Keywords: | field experiments, unemployment, discrimination in employment, hiring, chinese labor markets, internet job boards, résumé correspondence audit study, marital status |
| JEL: | C93 J71 J23 O53 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11363&r=tra |
| By: | Jens Hoelscher (Bournemouth University, Executive Business Centre); Marta Postula (Warsaw University); Agnieszka Alińska (Warsaw School of Economics); Jarosław Klepacki (University of Social Sciences, Poland) |
| Abstract: | The research question presented in this analysis focuses on national fiscal rules applicable in the Visegrád Group, also called V4, Czech Republic, Hungary, Poland and Slovakia as expressed in the European standardised fiscal rules index and on their impact on the socio-economic policy, expressed by indicators relating to the condition of public finance, economic results and sustainability finance indicators. The use of fiscal rules as an instrument of fiscal sustainability is manifested by imposing the requirements as regards to borrowing and the costs of public debt service. A high level of debt can cause social development expenditure to be crowded out, contributing to growing development disparities in social and economic terms. |
| Keywords: | fiscal rules; sustainable development; socio-economic policy |
| JEL: | F4 H5 H6 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:bam:wpaper:bafes17&r=tra |
| By: | Elena Petrenko (SUSU - South Ural State University); Nurlan Iskakov (Almaty Management University); Oleg Metsyk (Institute of Economics, The Ural Branch of Russian Academy of Sciences); Tatyana Khassanova (SUSU - South Ural State University) |
| Abstract: | Favorable ecosystem of entrepreneurship plays crucial role for successful development of small and medium enterprises (SMEs) and their sustainability. One of preconditioms of encouraging business environment is its' stability, and trust in long-term stability. Meanwhile the global economic crisis has created a state of economic and political instability, what consequently affected trust of business entities, and therefore contributed to increase of social and economic risks. The article discusses the decline of trust in the entrepreneurship of Kazakhstan, examines the causes and consequences of loss of confidence as an important institutional resource. |
| Keywords: | state,corruption,SMEs,entrepreneurship ecosystem,trust,business risks,economics,Kazakhstan |
| Date: | 2017–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01724560&r=tra |
| By: | Marcel Lincényi (College of Public Administration Economics and Management); Michal Fabuš (College of Public Administration Economics and Management) |
| Abstract: | Since 1989, daily press in Slovakia has been characterised by dynamic development, reflected, besides others, in a number of systemic changes, ownership relationships, typology, contents, circulations, readership, prices, advertising volumes or the number of dailies. Over the last years, the development of daily newspapers has been affected not only by legislation and economic impact (business environment, effects of the financial crisis, purchasing power of population, etc.) but also revolution in social habits of people resulting from the development of information and communications technology. The main objective of the research study is to analyse trends on the Slovak daily newspaper market between 2000 and 2014, focusing on analysing the development of the number of national dailies, their average price and advertising volume as independent variables and their overall single average circulation as a dependent variable and finding relationships between selected variables. |
| Keywords: | market,circulation,price,advertising,legislation,periodicals,Slovakia,daily,terminology,history,typology |
| Date: | 2017–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01724545&r=tra |
| By: | Venky Venkateswaran (New York University); Joel David (USC) |
| Abstract: | We study a model of investment in which both technological and informational frictions as well as institutional/policy distortions lead to capital misallocation, i.e., static marginal products are not equalized. We devise an empirical strategy to disentangle these forces using readily observable moments in firm-level data. Applying this methodology to manufacturing firms in China reveals that adjustment costs and uncertainty have significant aggregate consequences but account for only a modest share of the observed dispersion in the marginal product of capital. A substantial fraction of misallocation stems from firmspecific distortions, both productivity/size-dependent as well as permanent. For large US firms, adjustment costs are relatively more salient, though permanent firm-level factors remain important. These results are robust to the presence of liquidity/financial constraints. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:1636&r=tra |
| By: | James Daniel; Jose M Garrido; Marina Moretti |
| Abstract: | This note considers the role debt-equity conversions and NPL securitization can play in addressing excessive corporate debt in China, and the corresponding burden on banks of impaired assets. It finds that such techniques can play a role, but getting their design right is critical, as is nesting them within a comprehensive, system-wide, plan. |
| Keywords: | Asia and Pacific;Credit, bank lending, borrowing, bank, bank regulation, insolvency, liquidation, non-performing, loan, corporate restructuring, governance, shares, equity, debt, loans, conversion, debt-equity |
| Date: | 2016–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imftnm:16/05&r=tra |