nep-tra New Economics Papers
on Transition Economics
Issue of 2018‒07‒16
23 papers chosen by
J. David Brown
United States Census Bureau

  1. Plunging into the Sea: Ideological Change, Institutional Environments and Private Entrepreneurship in China By Jin Yang; Jian Huang; Yanhua Deng; Massimo Bordignon
  2. China's economic integration with the Greater Mekong Sub-region: An empirical analysis by a panel dynamic gravity model By Shahriar, Saleh; Qian, Lu; Kea, Sokvibol
  3. Methodical Presentation of the All-Russian Survey 'Man, Family, Society' By Vyrskaya, Marina; Makarentseva, Alla
  4. Will Financial Liberalization Trigger the First Crisis in the People’s Republic of China? Lessons from Cross-Country Experiences By Gou, Qin; Yiping, Huang
  5. Education Expansion, Assortative Marriage, and Income Inequality in China By Nie, Haifeng; Xing, Chunbing
  6. The "family 500+" child allowance and female labour supply in Poland By Iga Magda; Aneta Kiełczewska; Nicola Brandt
  7. The challenge of improving efficiency of Soum Health Centers in Mongolia - What data tell us for Soum Health Centers in five provinces? By Martine Audibert; Marlène Guillon; Jacky Mathonnat
  8. Innovation, Wages, and Polarization in China By Fleisher, Belton M.; McGuire, William H.; Su, Yaqin; Zhao, Min Qiang
  9. Competitiveness and sustainable growth analysis of the EU countries with the use of Global Indexes' methodology By Dana Kiseľáková; Beáta Šofranková; Veronika Čabinová; Erika Onuferová
  10. The Trafficking in Human Beings Crime in Romania By Nicoleta-Elena Buzatu
  11. The impact of credit availability on small and medium companies By Bogdan Włodarczyk; Marek Szturo; George Ionescu; Daniela Firoiu; Ramona Pirvu; Roxana Badircea
  12. Monetary Policy Announcements and Market Interest Rates Response: Evidence from China By Rongrong Sun
  13. Market peculiarities of natural gass: case of the Pacific Region By Larisa Shakhovskaya; Elena Petrenko; Alexandr Dzhindzholia; Victoria Timonina
  14. Soviet legacies of economic development, oligarchic rule and electoral quality in Eastern Europe’s partial democracies: the case of Ukraine By Lankina, Tomila V.; Libman, Alexander
  15. Institutional development in Transition Economies - The role of institutional experience By Eydam, Ulrich; Gabriadze, Irakli
  16. Multifractal characteristics and return predictability in the Chinese stock markets By Xin-Lan Fu; Xing-Lu Gao; Zheng Shan; Zhi-Qiang Jiang; Wei-Xing Zhou
  17. The Impact of Primary School Investment Reallocation on Educational Attainment in Rural Areas of the People’s Republic of China By Haepp, Tobias; Lyu, Lidan
  18. Financial Inclusion, Financial Literacy, and Financial Education in Georgia By Babych, Yaroslava; Grigolia, Maya; Keshelava, Davit
  19. China’s Social Credit System: A Mark of Progress or a Threat to Privacy? By Martin Chorzempa; Paul Triolo; Samm Sacks
  20. Financing innovative business investment in Poland By Antoine Goujard; Pierre Guérin
  21. Bribery, Hold-Up and Bureaucratic Structure By John Bennett; Matthew D. Rablen
  22. Economic Crimes in the Shortage Economy By Hana Lipovská; Libor ?ídek; Lucie Coufalová
  23. Managing Trade: Evidence from China and the US By Bloom, Nicholas; Manova, Kalina; Sun, Stephen Teng; Van Reenen, John; Yu, Zhihong

  1. By: Jin Yang; Jian Huang; Yanhua Deng; Massimo Bordignon
    Abstract: This paper examines the integration of Chinese Communist Party membership and private entrepreneurship in China after 2002, when the Party revised its constitution and officially removed ideological discrimination against private entrepreneurs. Using six waves of a nationwide survey of privately owned enterprises in China from 1997 to 2008, we find that the constitutional change led to an exodus of Party members, and particularly senior officials, into the private sector. On the contrary, very few private entrepreneurs were admitted to the Party. The exodus of Party members was more prominent in regions with weaker market-supporting institutions. After the reform, Party affiliation is also shown to provide considerable private benefits to entrepreneurs, in the form of easier access to loans from state owned banks, reduced government expropriation, improved firms’ performance. These political rents were larger in regions with weaker market-supporting institutions.
    Keywords: party membership, private entrepreneur, ideology, market institutions, political rents
    JEL: H19
    Date: 2018
  2. By: Shahriar, Saleh; Qian, Lu; Kea, Sokvibol
    Abstract: The purpose of this study is to fill an existing gap in the literature by addressing the following research question: what are the major determinants of China's regional economic integration with the Greater Mekong Sub-regional countries (GMS), namely; Cambodia, Laos, Myanmar, Thailand and Vietnam? The author measures the economic integration in terms of bilateral trade and foreign direct investment (FDI). In accordance with the literature, the present study adopts a panel gravity framework method to analyze the significant factors affecting the bilateral aggregate exports flows of China with five economies of the Greater Mekong sub-region. Data were collected from both the Chinese national and the international sources over the period of 23 years, spanning from 1993 to 2016. The time period was chosen on the consideration of data availability. The result shows that the gravity model is econometrically fitted to our dataset. Among other factors GDP, bilateral exchange rate, and population have a positive impact on regional trade integration with the GMS. The author's second-stage regression analysis confirms that China's accession to the WTO impacts positively on the bilateral trade. China's accession to the WTO is a significant factor for facilitation of trade flows. As expected, distance hinders regional trade. Furthermore, the role of historical trade relationship between China and GMS countries is estimated in the dynamic model. The result shows that China's trade relationship with GMS countries is determined historically.
    Keywords: China,regional economic integration,dynamic gravity model,Greater Mekong Sub region (GMS),exports,panel data
    JEL: F14 F15
    Date: 2018
  3. By: Vyrskaya, Marina (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Makarentseva, Alla (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: "Person, family, society" is a large-scale representative population survey in Russia, which addresses all key issues of socio-economic and demographic development. The first two waves of the survey for comparable instruments were conducted in 2013 and in 2015. In 2015, it was decided to abandon the paper technology interview and go to paperless surveys. Two technologies were tested: a telephone survey and a quarterly survey on tablets. Based on the results of the analysis of the results of these two components of the survey, it was decided to dwell on conducting a telephone survey as the main one in 2017. Telephone technology makes it possible to implement a completely random sample of respondents. Despite a number of restrictions related to the length of the interview, remote contact with the respondent, the quality of communication and other aspects, telephone technology now seems to be the most adequate way of conducting mass population surveys.
    Date: 2018–05
  4. By: Gou, Qin (Asian Development Bank Institute); Yiping, Huang (Asian Development Bank Institute)
    Abstract: The People’s Republic of China (PRC) is beginning a new wave of financial liberalization, which is necessary to support strong economic growth, but will financial liberalization lead to major financial crises, as in many middle-income countries? We propose that financial liberalization generally lowers financial risks, especially for middle-income economies. Nevertheless, the pace of liberalization, quality of institutions, and regulatory structure also matter for outcomes of financial instability. From these findings, we draw some policy implications for the PRC: (1) further liberalization is important not only for economic growth but also for financial stability; (2) a gradual liberalization approach should work better, focusing on the sequencing of reforms; (3) the quality of institutions, especially strong market discipline, is also important for containing financial risks; and (4) it is better for the central bank to participate in financial regulation.
    Keywords: financial liberalization; financial crisis; financial instability
    JEL: G01 G18
    Date: 2018–03–08
  5. By: Nie, Haifeng (Sun Yat-Sen University); Xing, Chunbing (Beijing Normal University)
    Abstract: We use census and household survey data to document China's educational assortative marriage and its evolution between 1990 and 2009. Empirical results suggest that men are increasingly likely to marry with women with similar education levels in China since the early 1990s, which is also true for urban areas and for different provinces. We then calculate the counterfactual Gini coefficients that would prevail if marriage matching was random in terms of education. For China in 2005, the inequality of per capita household income would drop from 0.508 to 0.476 if marriage was random. For urban areas in 2009, assortative marriage in education also increased the Gini coefficients by around 2 percentage points (from 0.316 to 0.337). The decomposition exercise shows that the increase in the return to education is the major contributor to the increase in urban household income inequality between 1990 and 2009, and the change in the assortative marriage pattern plays a minor role.
    Keywords: education expansion, assortative marriage, income inequality
    JEL: J12 I24 O15
    Date: 2018–05
  6. By: Iga Magda; Aneta Kiełczewska; Nicola Brandt
    Abstract: In 2016 the Polish government introduced a large new child benefit, called “Family 500+”, with the aim to increase fertility from a low level and reduce child poverty. The benefit is universal for the second and every further child and means-tested for the first child. Increasing out-of-work income significantly, the transfer can reduce incentives to participate in the labour market. We study the impact of the new benefit on female labour supply, using Polish Labour Force Survey data. Based on a difference-in-differences methodology we find that the labour market participation rates of women with children decreased after the introduction of the benefit compared to childless women. The estimates suggest that by mid-2017 the labour force participation rate of mothers dropped by 2- 3 percentage points, depending on the estimation specification, as a result of the “Family 500+” benefit. The effect was higher among women with lower levels of education and living in small towns.
    Keywords: child allowance, family policy, labour market participation, Poland, social transfers
    JEL: E24 H53 I38 J13 J21 J22
    Date: 2018–06–29
  7. By: Martine Audibert (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique); Marlène Guillon (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique); Jacky Mathonnat (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique, FERDI - Fondation pour les Etudes et Recherches sur le Développement International)
    Abstract: Mongolia is facing strong constraints on the public financing of health expenditures since the economic crisis that started in 2012. In this context, achieving universal health care requires an improvement of health facilities’ efficiency. No published study has quantitatively investigated the efficiency of primary care facilities in former soviet health systems that are still over-reliant on inpatient and specialized care. We study the efficiency level and determinants of Soum Health Centers (SHCs) that provide primary care in rural areas of Mongolia. Data on activity and resources were collected in all SHCs of five rural regions between 2013 and 2015, for which it was possible to get complete and reliable data. We use a double bootstrap Data Envelopment Analysis (DEA) procedure to estimate SHCs’ efficiency and its determinants. SHCs of our sample exhibit a rather low (and declining) level of efficiency since they could, in average, increase activity by 47% without an increase in inputs. Results point to the role of demand-side factors in explaining SHCs’ efficiency. We find that the size of the population in the catchment area, the share of the nomadic population and the dependency ratio are positively correlated with SHCs’ efficiency. On the contrary, the poverty level of the catchment population is negatively correlated with SHCs’ efficiency.
    Keywords: Efficiency,Data Envelopment Analysis,Double bootstrapping,Primary care,Mongolia
    Date: 2018–05–15
  8. By: Fleisher, Belton M. (Ohio State University); McGuire, William H. (University of Washington Tacoma); Su, Yaqin (Hunan University); Zhao, Min Qiang (Xiamen University)
    Abstract: Using data from CHIPS 1995-2013, we find polarization of employment from middle-income Skilled jobs to work in the Unskilled and Self-Employment job categories. This redistribution of employment is consistent with the automation of routine noncognitive tasks in the skilled sector as analyzed in a number of papers on advanced economies and some work on the Chinese economy. While the Unskilled and Self-Employment jobs remain below median income, the redistribution of employment has not been associated with a commensurate polarization of labor income. We find no evidence of polarization of either employment or income at the upper end of the job-skill spectrum.
    Keywords: polarization, innovation, wage growth, China
    JEL: J24 J31 O30 D33
    Date: 2018–05
  9. By: Dana Kiseľáková (University of Prešov); Beáta Šofranková (University of Prešov); Veronika Čabinová (University of Prešov); Erika Onuferová (University of Prešov)
    Abstract: The issue of countries' competitiveness and sustainable economic growth is constantly at the centre of interest and represents the frequent object of research in economic theory as well as economic practice. The multi-criterial approach and the assessment methodologies relating to the global competitiveness have been dynamically adjusted over the recent years to reflect the current globalization trends in the world economy. The main objective of this study is to analyse the objectivity and resulting values' deviations of the Global competitiveness Index (GCI) and World Competitiveness Index (WCI) composite indexes that are currently considered to be the world's most respected and to identify the impact of key factors that affect the countries' competitive positions with a focus on Slovakia. The research study is realized within the group of EU (24) countries for the period 2006 – 2016. The partial objective is to summarize the main starting points of the World Economic Forum (WEF) and Institute for Management Development (IMD) composing these indices, to identify their common features and different approaches that create differences in the results achieved. Then we analyzed the differences between the resulting rankings and the resulting scores of the GCI and WCI rated countries. In the next part, we focused on analyzing the position of Slovakia using the correlation and multiple regression analysis and identifying the interrelationships between individual pillars and the GCI score in order to determine the impact of key factors that influence the competitive position and sustainable growth of Slovakia and improve or worsen its position. Our results highlighted the economic and statistical context of GCI Slovakia development and the impact of the following key pillars and key factors: pillar P1 (P1: Institutions – Public trust in politicians), pillar P3 (P3: Macroeconomic environment – Government debt) and pillar P11 (P11: Business sophistication – Nature of competitive advantage). All three pillars, identified as crucial to the development of the overall Slovakias' GCI scores, occupy unflattering positions in the comparison of pillar rankings. Therefore, we conclude that it is necessary to clarify the causes of their development and eliminate these identified factors as soon as possible. The results can be seen as beneficial to countries' economic policies in increasing global competitiveness.
    Keywords: regression model,regression analysis,key factors,competitiveness,global indexes,multi-criterial approach,key pillars
    Date: 2018–03–30
  10. By: Nicoleta-Elena Buzatu (†Dimitrie Cantemir†Christian University)
    Abstract: The study below is meant to focus on the trafficking in human beings crime in Romania, especially analysis of the trafficking infraction provided in the Romanian Criminal Code. Romania is one of the transit states, but mostly one of the main source countries for trafficking in human beings in Europe. Currently, the trafficking in human beings phenomenon, as for the drug trafficking, the arms trafficking, corruption, tax evasion, represent one of the most extended ways of displaying the criminality, that, in a very short time span, recorded unimaginable and unacceptable proportions for the society we live in. The trafficking in human beings phenomenon is defined through the illegal migration. The Romanian legal response to the trafficking in human beings phenomenon was a gradual one, by ratification certain international provisions, but also through enacting a special law and legal measures that can be applied regarding the field in the talk.
    Keywords: crime, human trafficking, organized crime, Romanian Criminal Code
    Date: 2018–05
  11. By: Bogdan Włodarczyk (University of Warmia and Mazury in Olsztyn); Marek Szturo (University of Warmia and Mazury in Olsztyn); George Ionescu (Romanian-American University); Daniela Firoiu (Romanian-American University); Ramona Pirvu (University of Craiova); Roxana Badircea (University of Craiova)
    Abstract: Existing research proves that companies' access to bank loans or other external sources of financing for business development is one of the defining factors of the survival and development of a company on the market. This is all the more important in the case of small and medium-sized companies, knowing that they face a series of difficulties in obtaining financing from banking institutions, especially due to an insufficient amount of information needed provided to banks and needed by them to analyze the opportunity for a loan. However, as the economic and financial conditions of a company are better, the more information is available to banks and the credit availability is higher. By this research we analyse the factors affecting the credit availability and their influence on development of Polish small and medium companies, such as company’s size and age, financial results or the length of relationship with the banking institution, as well as the features characterizing the banking sector. The results demonstrate that in Poland, similarly to other European countries, small and medium companies have a more limited access to credit availability than large companies. Moreover, a significant dependence of bank credit availability from the size of the company, liquidity, profitability and the situation in the banking sector was demonstrated.
    Keywords: banking sector,credit availability,small and medium enterprises
    Date: 2018–03–30
  12. By: Rongrong Sun (Center for Financial Development and Stability at Henan University, and School of Economics at Henan University, Kaifeng, Henan)
    Abstract: This paper uses the event study to estimate the impact of various monetary policy announcements on market interest rates in China over the 2002-2017 period. I find that financial markets understand the quantitative signals better: the market response to an announced adjustment of the regulated retail interest rate and the required reserve ratio is positive and significant at all maturities of bond rates, but smaller at the long end of the yield curve. However, the market barely responds to announced changes in the qualitative policy stance index, which contains limited vague information and is easily anticipated. Two newly introduced central bank lending rates do not appear to be sufficient to replace the retail interest rate and the reserve ratio in guiding market rates in the post-deregulation era. My results suggest that the PBC adopts a publicly announced short-term interest-rate operating target regime, similar to the Fed’s federal funds rate target. Length: 26 pages
    Keywords: announcement effect, event study, monetary policy, monetary transmission, China
    JEL: E52 E58
  13. By: Larisa Shakhovskaya (Volgograd State Technical University); Elena Petrenko (PRUE - Plekhanov Russian University of Economics [Moscow]); Alexandr Dzhindzholia (Volgograd State Technical University); Victoria Timonina (Volgograd State Technical University)
    Abstract: In this article are considered by authors the technological, resource and economic capacity of the Far East, the first stages of a cooperation between Russia and the largest gas importers in the Pacific Rim are described, the main projects and fields contributing to the development of a cooperation between the countries are also considered. Statistical methods of the analysis act as methodological base of a research. In modern conditions in relation to the energy sector of Russia (imposition of sanctions by the western countries) there is a reorientation of export deliveries to the EU to Asia-Pacific countries. In these conditions the Far East of Russia acts as a large oil and gas source which has advantages and opportunities to compete in the Asian market, using not only the favorable investment climate, but also the infrastructure developed for today's time. The carried-out analysis showed that Russia is the largest suppliers in the market of Asia-Pacific countries. Constantly interest in the Russian energy resources in the Asian market grows. It is connected with a geographical location of Russia, with high inventories of hydrocarbons in the Far East, safety of deliveries, low policy risks, etc.
    Keywords: consumption,import,competition,natural gass,market,Asia-Pacific countries,Russia,projects
    Date: 2018–03–30
  14. By: Lankina, Tomila V.; Libman, Alexander
    Abstract: Can economic development retard democracy, defying expectations of classic modernization theorizing? If so, under what conditions? Our paper addresses the puzzle of poor democratic performance in highly urbanized and industrialized post-communist states. We assembled an original dataset with data from Ukraine’s local and national elections and constructed district- (rayon) and region- (oblast) level indices of electoral quality. Regions and districts that score higher on developmental indices also score lower on electoral quality, including in Ukraine’s Western regions conventionally considered more democratic than the predominantly Russian-speaking Eastern regions. We explain these outcomes with reference to the peculiarities of Soviet industrial development, which facilitated the emergence of “oligarchs” in territories housing Soviet-era mega-industries. Our research contributes to comparative debates about the links between economic development and democracy.
    JEL: J1
    Date: 2019–10
  15. By: Eydam, Ulrich; Gabriadze, Irakli
    Abstract: We examine the institutional development of a set of transition economies since the dissolution of the USSR, with a particular focus on the effect of natural resource dependency, EU accession and institutional experience. In a cross-sectional analysis these factors show a significant association with the different dimensions of institutional quality. To provide a more comprehensive picture of the development and to control for confounding factors, a Hausman-Taylor estimator on panel data is applied. This analysis confirms the positive relationship between institutional experience and institutional development; moreover, it also confirms the positive effects of the EU accession process on institutional development. Finally, resource dependency, although highly significant in the cross-section, has no significant relationship with average institutional quality in the panel. However, the panel results suggest that resource dependency has a negative effect on the quality of political institutions, while it has no significant association with administrative or legal institutions. Overall, the analysis highlights the persistent nature of institutions and indicates that experience of having independent institutions can affect the pace and path of institutional development.
    Keywords: Economic Growth; Institutions; Comparative Development; Transition Economies; Resource curse
    JEL: O11 O17 O43 O57 P20 P26 P52
    Date: 2018–06–05
  16. By: Xin-Lan Fu (ECUST); Xing-Lu Gao (ECUST); Zheng Shan (ECUST); Zhi-Qiang Jiang (ECUST); Wei-Xing Zhou (ECUST)
    Abstract: By adopting Multifractal detrended fluctuation (MF-DFA) analysis methods, the multifractal nature is revealed in the high-frequency data of two typical indexes, the Shanghai Stock Exchange Composite 180 Index (SH180) and the Shenzhen Stock Exchange Composite Index (SZCI). The characteristics of the corresponding multifractal spectra are defined as a measurement of market volatility. It is found that there is a statistically significant relationship between the stock index returns and the spectral characteristics, which can be applied to forecast the future market return. The in-sample and out-of-sample tests on the return predictability of multifractal characteristics indicate the spectral width $\Delta {\alpha}$ is a significant and positive excess return predictor. Our results shed new lights on the application of multifractal nature in asset pricing.
    Date: 2018–06
  17. By: Haepp, Tobias (Asian Development Bank Institute); Lyu, Lidan (Asian Development Bank Institute)
    Abstract: We analyze the effect of removing village-level primary schools and effectively merging these into larger township-level schools on educational attainment in rural areas of the People’s Republic of China. We employ individual- and village-level information from the China Household Ethnic Survey, which covers regions that are intensively affected by the removal campaign. We find a negative effect of school removals on primary school and junior high school completion rates. However, we also find positive effects on educational attainment beyond junior high school for those students who began their education in the new merged primary schools. This effect can be attributed to resource pooling and higher teacher quality in the new schools. The adverse effects are more severe for girls, especially if the new schools do not provide boarding and are located far away from student residences, and for children whose parents have low educational attainment, thus exacerbating gender inequality and the intergenerational transmission of education inequality. Our findings provide an important reference for other developing countries that will need to reallocate primary school investment in the future.
    Keywords: primary education; school removals; educational attainment; People’s Republic of China
    JEL: H52 I21 I24 J62
    Date: 2018–03–13
  18. By: Babych, Yaroslava (Asian Development Bank Institute); Grigolia, Maya (Asian Development Bank Institute); Keshelava, Davit (Asian Development Bank Institute)
    Abstract: We provide a comprehensive overview of the current state of financial inclusion and financial literacy in Georgia based on the latest literature, statistical evidence, and recent surveys. We review current government policy initiatives and strategy documents aimed at improving financial access of SMEs and households; analyze the state of the regulatory framework in Georgia; focus on the causes behind the current low levels of financial inclusion and financial literacy among the young, the poor, and the rural population; and provide policy recommendations to comprehensively address the financial inclusion problem in Georgia.
    Keywords: economic development; financial stability; financial literacy; financial inclusion; financial education
    JEL: G20 G21 G23 G28
    Date: 2018–06–14
  19. By: Martin Chorzempa (Peterson Institute for International Economics); Paul Triolo (New America and Eurasia Group); Samm Sacks (Center for Strategic and International Studies)
    Abstract: No government has a more ambitious and far-reaching plan to harness the power of data to change the way it governs than the Chinese government. Its Social Credit System (SCS), laid out in a plan released in 2014 and still under construction, aims to extend financial credit scoring systems—commonly used by financial institutions in the United States—to other areas of government regulation, from contract enforcement to food safety, corruption, and environmental protection. The plan is to link public and private data on financial and social behavior across China, use the data to evaluate behavior of individuals and organizations, and punish or reward them according to certain agreed upon standards of appropriate conduct. While many of the SCS goals are laudable, the scale and potential impact pose serious risks to individuals and organizations that could result in the opposite of the promised effects. There is still time to shape the SCS to become an effective tool to deal with some of China’s most intractable domestic problems and at the same time minimize the odds of it becoming an Orwellian system of social control.
    Date: 2018–06
  20. By: Antoine Goujard; Pierre Guérin
    Abstract: Poland’s productivity has grown strongly over the past two decades. However, the public and private capital stock is weak, and investment remains focused on the adoption of existing technologies, which weighs on future productivity gains and innovation. Many micro enterprises have low productivity, and structural bottlenecks reduce start-ups' growth and their chances of survival. The EU and the government are stepping up funding for business research and development, collaboration with the public sector, entrepreneurship and innovation. This is an opportunity to improve the management of public business support, and the large new programmes should be carefully discussed with stakeholders and regularly evaluated to avoid the risks of subsidising low-productivity firms and to strengthen the take up from the most productive small and medium-sized enterprises. The sustainability of this ambitious package of measures will also require significant public revenues and promoting alternative market-based financing instruments will be critical over the medium term. Ongoing improvements in insolvency procedures and efforts to reduce the regulatory burden are set to ease reallocation of resources through the economy. However, the level of state involvement would remain important, and ensuring the independence of the network industry regulators and the Competition Authority and a level playing field between alternative technologies, as well as easing labour mobility would be good moves.
    Keywords: business environment, financial markets, financing, innovation, investment, Poland
    JEL: E22 G24 O16 O38 O44 O47
    Date: 2018–06–29
  21. By: John Bennett (Royal Holloway University of London); Matthew D. Rablen (University of Sheffield)
    Abstract: We analyze the provision of infrastructure by a foreign investor when the domestic bureaucracy is corrupt, but puts some weight on domestic welfare. The investor may pay a bribe in return for a higher provisional contract price. After the investment has been sunk, the bureaucracy may hold up the investor, using the threat of expropriation to demand a lower Önal price or another bribe. Depending on the level of care for domestic welfare, greater bureaucratic centralization may increase or decrease domestic welfare. Because of the threat of hold-up, bribery may result in greater domestic welfare than the honest benchmark does.
    Keywords: bribery, hold-up, renegotiation, bureaucratic structure, centralized bureaucracy, decentralized bureaucracy.
    JEL: D73 H11
    Date: 2018–11
  22. By: Hana Lipovská (Faculty of Economics and Administration, Masaryk University); Libor ?ídek (Masaryk University); Lucie Coufalová (Masaryk University)
    Abstract: Rational agents react on the incentives in the market economy as well as in the centrally planned economy. Economic laws are persistent regardless the economic system. Legislative system changes the outcome of the game between economic agents and managers. Base on the original survey among former managers as well as on the legislative sources from the 1970?s and 1980?s the taxonomy of economic reactions on the shortage economy was made. We distinguish plan manipulation in order to ensure payment bonuses; bribery in order to gain the short-supplied inputs and reserves? creation for the purpose of the fulfilling the plan. It was shown, that if the rational agent wanted to obey the higher law, he was forced to ignore lower legislation.
    Keywords: Economic Crimes, Legal Cases, Shortage Economy, Socialist Enterprises, State Development Plan
    JEL: K22 P21 P37
    Date: 2017–10
  23. By: Bloom, Nicholas; Manova, Kalina; Sun, Stephen Teng; Van Reenen, John; Yu, Zhihong
    Abstract: We present a heterogeneous-firm model in which management ability increases both production efficiency and product quality. Combining six micro-datasets on management practices, production and trade in Chinese and American firms, we find broad support for the model's predictions. First, better managed firms are more likely to export, sell more products to more destination countries, and earn higher export revenues and profits. Second, better managed exporters have higher prices, higher quality, and lower quality-adjusted prices. Finally, they also use a wider range of inputs, higher quality and more expensive inputs, and imported inputs from more advanced countries. The structural estimates indicate that management is important for improving production efficiency and product quality in both countries, but it matters more in China than in the US, especially for product quality. Panel analysis for the US and a randomized control trial in India suggest that management exerts causal effects on product quality, production efficiency, and exports. Poor management practices may thus hinder trade and growth, especially in developing countries.
    Keywords: exports; Management; product quality; productivity
    JEL: F10 F14 F23 L20 O19 O32
    Date: 2018–06

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