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on Transition Economics |
| By: | Hagemeier, Jan (National Bank of Poland); Svejnar, Jan (Columbia University); Tyrowicz, Joanna (University of Warsaw) |
| Abstract: | In this paper we provide the first analysis of whether rushed privatizations, usually carried out under fiscal duress, increase or decrease firms' efficiency, scale of operation (size) and employment. Using a large panel of firm-level data from Poland over 1995-2015, we show that rushed privatization has negative efficiency, scale and employment effects relative to non-rush privatization. The negative effect of rushed privatization on the scale of operations and employment is even stronger than its negative effect on efficiency. Our results suggest that when policy makers resort to rushed privatization, they ought to weigh these negative effects against other expected effects (e.g. on fiscal revenue). |
| Keywords: | privatization, rushed privatization, efficiency, firm size, employment, performance |
| JEL: | P45 P52 C14 O16 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11517&r=tra |
| By: | Do Thi Thuy, Thuy; Nguyen, Quang Dung; Nguyen Van, Huy; Thomas-Agnan, Christine; Trinh, Thi-Huong |
| Abstract: | Vietnam launched the national Expanded Program on Immunization in 1981. Since then, this program has contributed signi cantly to the improvement of child health and to the reduction of child mortality rate. Despite of the fact that the coverage of the national EPI keeps expanding, the number of children who complied with the recommended immunization schedule remains low. This article studies the progress of the timeliness childhood immunization compliance among children between 0-5 years of age in Vietnam from 2006 to 2014 and analyzes the socio-economic factors that account for the changes of the compliance rate during this period. The dataset is extracted from the Multiple Indicator Cluster Survey in 2006 and 2014. We rst identify the socio-economic factors that impact on the vaccination compliance rate using a logistic regression model. Next, we apply the decomposition method to determine the contribution of each factor on the evolution of the timeliness childhood immunization compliance. The progress of the timeliness childhood immunization has been positive and the major contribution comes from the structure e ect (unmeasured e ect). Rural areas show a stronger improvement as of 2014. Among the socio-economic factors, mother education and birth order are the ones that have the larger in uence on the childhood immunization compliance rate. However, these factors have di erent implications in urban and rural areas. These ndings are critical to the current context of Vietnam where the government is designing a strategy focusing on the e ectiveness rather than the traditional coverage indicator. |
| Keywords: | Vaccination; timeliness childhood immunisation compliance; decomposition; logistic model; MICS data; Vietnam |
| JEL: | C02 C21 C51 P46 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:32646&r=tra |
| By: | ZhongXiang Zhang (Ma Yinchu School of Economics and China Academy of Energy, Environmental and Industrial Economics, Tianjin University) |
| Abstract: | The Chinese leadership has determined to assign the market a decisive role in allocating resources. To have the market to play that role, getting the energy prices right is crucial because this sends clear signals to both producers and consumers of energy. While the overall trend of China’s energy pricing reform since 1984 has been moving away from the prices set by the central government in the centrally planned economy and towards a more market-oriented pricing mechanism, the pace and scale of the reform differ across energy types. This article discusses the evolution of price reforms for coal, petroleum products, natural gas, electricity and renewable power in China, and provides some analysis of these energy price reforms, in order to have the market to play a decisive role in allocating resources and help China’s transition to a low-carbon economy. |
| Keywords: | Energy Prices, Tiered Prices, Differentiated Tariffs, Coal, Electricity, Natural Gas, Petroleum Products, Renewable Power, Desulfurization and Denitrification, State-owned Enterprises, China |
| JEL: | H23 H71 O13 O53 P22 Q41 Q43 Q48 Q53 Q58 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2018.18&r=tra |
| By: | Funke, Michael; Sun, Rongrong; Zhu, Linxu |
| Abstract: | Household borrowing in China has increased considerably in recent years, raising concerns about the household sector’s vulnerability and implications for the stability of the financial system. We construct a number of granular debt-burden indicators at the level of individual Chinese households and calculate the share of households that are financially vulnerable using the three available waves (2011, 2013 and 2015) of China’s Household Finance Survey. Overall loan-to-value (LTV) ratios appear safe and sound at first glance, but closer scrutiny reveals that Chinese households in the lowest income quintile face high vulnerability and struggle to meet their debt commitments. Our stress tests suggest that Chinese households in higher quintiles, despite the huge increase in house-hold indebtedness, are not particularly vulnerable to declining incomes or falling house prices. |
| JEL: | D10 D14 G21 |
| Date: | 2018–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2018_012&r=tra |
| By: | Bai, Yiyi; Dang, Vi Tri; He, Qing; Lu, Liping |
| Abstract: | We examine China’s June 2013 liquidity crunch as a negative shock to banks and analyze the wealth effects on exchange-listed firms. Our findings suggest that liquidity shocks to financial institutions negatively impact borrower performance, particularly borrowers reporting outstanding loans at the end of 2012. Stock valuations of firms with long-term bank relationships, however, outperform the market and experience smaller subsequent declines in investment than peers lacking solid banking relationships. This effect is the strongest for firms that enjoy good relations with China’s large state-owned banks or foreign banks, and weakest for firms whose connections are solely with local banks. We document a positive correlation between the stock performances of firms and the stock performances of lender banks and the likelihood of lender banks operating as net lenders in the interbank market. These results suggest that banks transmit liquidity shocks to their borrowing firms and that a long-term bank-firm relationship may mitigate the negative effects of a liquidity shock. |
| JEL: | G30 G14 G21 |
| Date: | 2018–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2018_013&r=tra |
| By: | Angelina Todorova (Institute of Consulting, UK; Cluster for Aero-Space Technologies, Research and Applications - CASTRA (Sofia, Bulgaria)); Milena Slavcheva (European Commission - JRC) |
| Abstract: | The R&I Observatory country report 2017 provides a brief analysis of the R&I system covering the economic context, main actors, funding trends & human resources, policies to address R&I challenges, and R&I in national and regional smart specialisation strategies. Data is from Eurostat, unless otherwise referenced and is correct as at January 2018. Data used from other international sources is also correct to that date. The report provides a state-of-play and analysis of the national level R&I system and its challenges, to support the European Semester. |
| Keywords: | Research and Innovation, Bulgaria, Innovation System |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc111361&r=tra |
| By: | Andreyev, Mikhail |
| Abstract: | In our opinion, the key problems that will determine the parameters of the financial sector in the coming years are the budget deficit and growth of the monetary base. Growth of the monetary base is a direct consequence of the budget deficit. The government can withdraw liquidity through the sale of foreign currency by the Bank of Russia, through the borrowing in the domestic money market by the Ministry of Finance or through the spending of the Russian National Wealth Fund with the simultaneous sale of these funds in the foreign exchange market. According to scenarios concerned, the development of the financial sector will depend on how the government will restrain the growth of the monetary base and how fast the government will reduce the budget deficit. We present a forecast for the Russian financial sector for 2018-2020. The forecast includes quarter series for the sector of commercial banks, the Bank of Russia and the Ministry of Finance. We used the financial balances methodology. The main external variables of the forecast were the macroeconomic variables of socio-economic development forecast, published by the Ministry of Economic Development, as well as the budget deficit parameters. In this regard, our forecast gives an answer to the question “under what parameters of financial policy can the socio-economic forecast be realized?” |
| Keywords: | financial sector, forecast, financial balance, cash flows, liquidity surplus, budget deficit, demand for money, liquidity absorption |
| JEL: | E47 E51 E58 |
| Date: | 2018–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:86666&r=tra |
| By: | Georgescu, George |
| Abstract: | This study, based on more recent research, including disarchived and / or declassificated information regarding the communist period in Romania, both internally and internationally, focuses on exploring the 1980s external debt crisis context and causes, as well as the impact of internal and external factors, having as intention a reevaluation, closer to the reality, of those times state of affaires. At the beginning of the 1980s, the global economy was marked by a severe economic and financial crisis, the first on global-scale in history, felt by more than 30 developing countries as a balance of payments crisis, which resulted in the renegotiation and rescheduling of their sovereign debt. In the case of Romania, the external debt crisis triggered in 1982 has been aggravated, in an extremely severe manner, by overlapping internal vulnerabilities accumulated in previous decades with external shock caused by the major changes in the global economic, financial and geopolitical context at the end of 1979, which led to the explosive rise in interest rates on loans contracted from private commercial banks under floating interest rates, as well as the introduction of conditionalities on loans granted by international financial institutions. The study conclude that the decision of Romanian authorities to liquidate the external debt and the crisis management errors had a destructive impact on the Romanian economy, degenerated in a system crisis at the end of 1989. Many of the external debt crisis were felt also afterwards, slowing down significantly the pace of the transition to the market economy and the positioning of the country on a sustainable development trajectory. |
| Keywords: | external debt crisis; oil crisis shocks; IMF; FED monetary policy; interest rates; sovereign debt rescheduling |
| JEL: | B22 E44 E62 F34 H63 N44 |
| Date: | 2018–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:86790&r=tra |
| By: | Howell, Anthony (Asian Development Bank Institute) |
| Abstract: | We adopt a structural framework to study the process of indigenous innovation and its impact on firm performance in the People’s Republic of China (PRC). In our analysis we use a rich source of panel data comprising almost 70,000 private Chinese firms operating in the PRC from 2004 to 2007. Relying on a structural innovation framework, we estimate the effects of technological learning during each phase of the structural model: (i) the firm’s decision to innovate, (ii) the innovation effort, (iii) the innovation throughput, and (iv) the firm performance. We show that in the early stages of innovation, Chinese firms fail to incorporate learning spillovers into their innovation effort, even when considering their absorptive capacity. Conversely, we found that in the later stages of innovation, learning spillovers positively increase firms’ innovation output as well as their performance, especially for firms with high absorptive capacity. |
| Keywords: | innovation; firm performance; learning; agglomeration; institutions; People’s Republic of China |
| JEL: | O30 |
| Date: | 2018–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0805&r=tra |
| By: | Philippe D Karam; Dirk V Muir |
| Abstract: | China and Australia have increasingly strong links, especially through trade. These are driven by demand from China for Australian commodities (coal and iron ore) and services (tourism and education). These links are influenced by China’s transition to a services-driven, consumer-led economy. Using ANZIMF, the Australia-New Zealand Integrated Monetary and Fiscal model, three risks (both upside and downside) to China during this transition process are considered, focusing on their spillovers to Australia. One simple takeaway is central to each risk – while the real GDP response to shocks in Australia typically is small, responses in demand components or sectors are usually much larger– along with three further takeaways, all of which help in the analysis of Australia in relation to any risk emanating from China. |
| Date: | 2018–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:18/119&r=tra |
| By: | Milan Eliskovski (National Bank of the Republic of Macedonia) |
| Abstract: | Research subject of this paper is the credit transmission mechanism in the Republic of Macedonia or in other words this paper investigates the effects of the monetary signals by the National Bank of the Republic of Macedonia on banks' lending. The credit transmission is analyzed through its narrow nature or so called bank lending channel. In order to explain how the bank lending channel operates in Macedonia, two theoretical models are considered and econometrically tested. The first one is the traditional bank lending channel explained by Bernanke and Blinder model and the second one is the credit rationing model by Stiglitz and Weiss. The econometric technique employed is the vector error correction model or known as Johansen cointegration technique which is appropriate for empirical testing based on time series. The empirical results suggest that the Stiglitz and Weiss model better explains the banks' behavior in the Republic of Macedonia, that is the banking sector is risk averse and rations loans with an aim not to deteriorate its' profitability. Therefore, monetary tightening signals clearly affect the banks to restrict lending. On the other hand, the monetary expansionary signals have to be supported by favorable balance sheet structure of the banks as well as by favorable macroeconomic conditions in order to encourage lending. |
| Keywords: | bank lending channel, monetary transmission, credit rationing, VECM analysis |
| JEL: | C22 E52 E58 G21 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:mae:wpaper:2018-02&r=tra |
| By: | Fan, Peilei (Asian Development Bank Institute) |
| Abstract: | We examine how the People’s Republic of China (PRC) and India, two of the largest transitional economies in Asia, have improved their innovation capability during economic transition. First, we measure and compare innovation capability of both countries by using not only various input and output indicators of innovation systems but also the contribution of technological progress to economic development at different periods of their economic transition. Then we compare how both countries developed their innovation capabilities by focusing on the transformation of their national innovation systems since the economic reform and evolving technology policies. Then we provide a brief view on how the emerging innovative cities in both countries became dominated by the innovation activities of their respective countries. |
| Keywords: | innovation; R&D; China; India; innovation systems |
| JEL: | L65 O30 O31 |
| Date: | 2018–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0809&r=tra |
| By: | Oxana Babecka Kucharcukova; Renata Pasalicova |
| Abstract: | This project investigates the effect of financial constraints and monetary policy on firms' investment behaviour using Czech firm-level data. The empirical specification is based on the dynamic neoclassical investment model, which explains investment by sales and cash flow. In addition, it includes financial constraints and other factors. We differentiate firms according to their size and type of economic activity. We find that indebtedness and availability of liquidity have significant effects on investment. In the post-crisis period firms obtained less additional credit due to greater riskiness and tended to accumulate more liquidity. Expectations about future GDP growth and business sentiment are positively related to investment. At the same time, we observe considerable heterogeneity of the results across sectors. The impact of the short-term real interest rate is highly significant for firms of all sizes and in all important sectors of the Czech economy, reflecting monetary policy effectiveness. |
| Keywords: | Financial constraints, firms, indebtedness, investment, liquidity, monetary policy |
| JEL: | D22 E5 E22 G3 G32 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2017/16&r=tra |
| By: | Dünhaupt, Petra; Hein, Eckhard |
| Abstract: | Since the early 1980s, financialisation has become an increasingly important trend in developed capitalist countries, with different beginnings, speed and intensities in different countries. Rising inequality has been a major feature of this trend. Shares of wages in national income have declined and personal income inequality has increased. Against this background unsustainable demand and growth regimes have developed and dominated the major economies before the crisis: the "debt-led private demand boom" and the "export-led mercantilist" regime. The current paper applies this post-Keynesian approach on the macroeconomics of finance-dominated capitalism to three Baltic Sea countries, Denmark, Estonia and Latvia, both for the pre-crisis and the post-crisis period. First, the macroeconomics of finance-dominated capitalism are briefly reiterated. Second, the financialisation-distribution nexus is examined for the three countries. Third, macroeconomic demand and growth regimes are analysed, both before and after the crisis. |
| Keywords: | finance-dominated capitalism,financialisation,distribution,financial and economic crisis,Kaleckian theory of distribution |
| JEL: | D31 D33 D43 F40 F43 G01 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:1042018&r=tra |
| By: | Jia, Pengfei; Lim, King Yoong |
| Abstract: | This paper explores the effects of a government tax policy in a growth model with economic transition and toxic housing bubbles applied to China. Such a policy combines taxing entrepreneurs with a one-time redistribution to workers in the same period. Under the tax policy, we find that the welfare improvement for workers is non-monotonic. In particular, there exists an optimal tax at which social welfare is maximized. Moreover, we consider the welfare effects of setting the tax at its optimum. We show that the tax policy can be welfare-enhancing, compare to the case without active policies. The optimal tax may also yield a higher level of welfare than the case even without housing bubbles. Finally, we calibrate the model to China. Our quantitative results show that the optimal tax rate is about 23 percent, and social welfare is significantly improved with such a tax policy. |
| Keywords: | China, Economic Transition, Housing Bubbles, Welfare |
| JEL: | O18 P31 R21 R28 |
| Date: | 2018–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:86576&r=tra |
| By: | Chai, Shijun (Asian Development Bank Institute); Chen, Yang (Asian Development Bank Institute); Huang, Bihong (Asian Development Bank Institute); Ye, Dezhu (Asian Development Bank Institute) |
| Abstract: | Using the 2011 China Household Finance Survey (CHFS) database, we explore the heterogeneous impacts of social networks on informal financial inclusion for urban and rural households in the People’s Republic of China. We find that social networks significantly increase the probability of households’ participation in the informal financial market, augment the size of informal financial transactions, and raise the ratio of informal lending to total household assets. We also identify the mechanisms through which social networks affect households’ participation in the informal financial market. By reducing the information cost, perceived risk, and precautionary saving, social networks play a larger role for urban households than for rural households. Notably, the effects of social networks on informal finance are strengthened by the development of the formal financial market. |
| Keywords: | social networks; informal financial inclusion; perceived risk; precautionary saving; formal financial market |
| JEL: | D10 G20 |
| Date: | 2018–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0802&r=tra |
| By: | Christopher Hansman; Harrison Hong; Wenxi Jiang; Yu-Jane Liu; Juan-Juan Meng |
| Abstract: | Research on leverage and asset-price fluctuations focuses on the direct effect of lax bank lending enabling financially-constrained investors to take excessive risks. Ignored are unconstrained investors speculating on higher prices during credit booms. To identify these two effects, we utilize China's staggered liberalization of stock-margin lending from 2010-2015—which encouraged a bank/brokerage-credit-fueled stock-market bubble. The direct effect is a 25 cent increase in a stock's market capitalization for each dollar of margin debt. Unconstrained investors led to an even larger increase in valuations of an additional 32 cents as they speculated on stocks likely to qualify for lending. |
| JEL: | E51 G01 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24586&r=tra |
| By: | HuiHui Liu (Academy of Chinese Energy Strategy, China University of Petroleum); ZhongXiang Zhang (Ma Yinchu School of Economics and China Academy of Energy, Environmental and Industrial Economics, Tianjin University); ZhanMing Chen (Department of Energy Economics, School of Economics, Renmin University of China); DeSheng Dou (Academy of Chinese Energy Strategy, China University of Petroleum) |
| Abstract: | The regulated price mechanism in China’s power industry has attracted much criticism because of its incapability to optimize the allocation of resources. To build an “open, orderly, competitive and complete” power market system, the Chinese government launched an unprecedented marketization reform in 2015 to deregulate the electricity price. This paper examines the impact of the electricity price deregulation in the industry level. We first construct two-stage dynamic game models by taking the coal and coal-fired power industries as the players. Using the models, we compare analytically the equilibriums with and without electricity regulation, and examine the changes in electricity price, electricity generation, coal price and coal traded quantity. The theoretical analyses show that there are three intervals of the regulated electricity sales prices which influence the impact of electricity price deregulation. Next, we collect empirical data to estimate the parameters in the game models, and simulate the influence of electricity deregulation on the two industries in terms of market outcome and industrial profitability. Our results suggest that the actual regulated electricity price falls within the medium interval of the theoretical results, which means the price deregulation will result in higher electricity sales price but lower coal price, less coal traded amount and less electricity generation amount. The robustness analysis shows that our results hold with respect to the electricity generation efficiency and price elasticity of electricity demand. |
| Keywords: | China, Electricity Deregulation, Reform, Coal Industry, Power Industry |
| JEL: | Q41 Q43 Q48 L94 L98 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2018.17&r=tra |
| By: | International Monetary Fund |
| Abstract: | Georgia has legislated numerical fiscal rules for the main fiscal aggregates. The Economic Liberty Act (ELA), which was adopted in 2011 and came into force in 2014, defines numerical upper limits for the state debt (60 percent of GDP), the budget balance (3 percent of GDP), and expenditures (30 percent of GDP). While the debt and budget balance rules (BBRs) have been adhered to since their introduction, expenditures have exceeded the legislative limit, albeit by a small margin. Previous IMF technical assistance (TA) identified several issues in the application of the fiscal rules. A Fiscal Transparency Evaluation (FTE), conducted by the Fiscal Affairs Department in late 2016, found some gaps in reporting of general government revenue and expenditures against the standards set out in the IMF’s Government Finance Statistics Manual 2014 (GFSM2014) as well as gaps in the assessment and reporting on compliance with the fiscal rules. The FTE recommended a review of the fiscal rules framework, and this report summarizes the findings and recommendations of this review. |
| Date: | 2018–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:18/132&r=tra |