nep-tra New Economics Papers
on Transition Economics
Issue of 2018‒10‒08
fifteen papers chosen by
J. David Brown
United States Census Bureau

  1. Mechanisms of non-tariff bariers in agri-food trade between Poland and the Chech Republic on the intra-EU market By Ambroziak, Adam A.; Grochowska, Renata
  2. Fiscal Sustainability in the EU After the Global Crisis: Is there any Progress? By Maciej Wysocki; Cezary Wójcik
  3. Sources of return on equity in economically diversified agriculture of the European Union countries By Bereznicka, Joanna
  4. Seasonal adjustment of time series and calendar influence on economic activity By Ante Čobanov
  5. Multidimensional Poverty of Farm and Herder Households in Tibetan Areas of Gansu Province, China By Yang, Fan; Paudel, Krishna; Zhuang, Tianhui; Li, Kun
  6. Global changes in the geographical structure of trade in Central Asia: Real flows in the 1989-2016 period versus gravity model predictions By Gharleghi, Behrooz; Popov, Vladimir
  7. Functioning of farms from areas of high natural values at the background of other farms By Zieliński, Marek; Sobierajewska, Jolanta
  8. Effect of Aging on Urban Land Prices in China By Sun, Tianyu; Chand, Satish; Sharpe, Keiran
  10. Eurasian Economic Integration: Impact Evaluation Using the Gravity Model and the Synthetic Control Methods By Amat Adarov
  11. Domestic Value Added of Chinese Brand Mobile Phones By Yuqing Xing; Yuzhen He
  12. Automotive industry in the Visegrad Group By Tomas Chlopcik
  14. Emigrant Selection and Wages: the Case of Poland By Anna Rosso
  15. Balance Sheet Implications of the Czech National Bank's Exchange Rate Commitment By Michal Franta; Tomas Holub; Branislav Saxa

  1. By: Ambroziak, Adam A.; Grochowska, Renata
    Abstract: The paper aimed identification of mechanisms of non-tariff barriers used by the EU Member States that affect the intra-EU exchange of agri-food products on the example of the trade between Poland and the Czech Republic. In the beginning the paper presents, the main theoretical assumptions of the free movement of goods, based on subsequent economic integration stages according to Balassa. Next it discusses, examples of the identified actions of the Czech Republic against the agri-food products imported from Poland, together with an analysis of potential economic mechanisms resulting from these activities. The next section presents the statistical effects of trade exchange, which allows us to formulate conclusions regarding the potential consequences of the barriers. On the basis of the analysis, it was found that soft non-tariff barriers on the Czech market have not brought any significant negative effects for the overall Polish exports of agri-food products to the Czech Republic. The negative consequences have been borne by individual traders, who according to the Czech authorities offered products that do not meet the requirements. Moreover, our study identified traditional non-tariff barriers introduced on the Czech market for export of all food suppliers which led to the collapse of exports from Poland, while at the same time the growth of the main suppliers from other EU Member States continued to grow.
    Keywords: Agricultural and Food Policy, International Relations/Trade
    Date: 2018
  2. By: Maciej Wysocki; Cezary Wójcik
    Abstract: In response to the global crisis a number of new institutional measures have been introduced in the fiscal framework, both on the UE and on the member states’ level, and the question is: have these measures provided better fiscal sustainability outcomes? We approach this question by looking at the evolution of fiscal sustainability in Poland, which is an interesting case of a member state that without significant market pressure (the only EU country without recession during the crisis) actively promoted several changes in the EU fiscal framework (e.g. 6-pack) and effectively internalized some of these key changes in its domestic fiscal policy, including a domestic expenditure fiscal rule. Our analysis reveals that the fiscal sustainability in Poland has significantly improved in the post-crisis period of 2009-2017: we detect both improvement of the fiscal sustainability parameters and structural breaks in the fiscal outcomes after the crisis. Namely, in comparison to the whole sample of 2004-2017 the strength of reaction of the primary deficit to a change of the public debt increased in the post-crisis time by nearly 50%. Importantly, these results are robust with respect to the pension fund reform which led to a one-off redemption of T-bonds in amount of 8.5% of GDP. The analysis also reveals a cycle of structural breaks of 2-and 4 years lags: for the output gap in 2008 Q4, for the primary deficit in 2010 Q4 and for the public debt in 2014 Q1. The case of Poland seems to suggest that the post-crisis EU fiscal measures can be effectively used to increase fiscal sustainability, if properly approached and internalized into the domestic fiscal framework. More research should be devoted to understanding the political and economic conditions under which such positive outcomes were possible.
    Keywords: fiscal sustainability, fiscal policy, global crisis
    JEL: C22 E60 H63
    Date: 2018
  3. By: Bereznicka, Joanna
    Abstract: The study analysed sources of return on equity in countries with strong and economically weak farms. The economic size used in FADN was used as the breakdown criterion. In the group of countries where farms reached a relatively small economic size, there were Bulgaria, Greece, Croatia (from 2013), Malta, Lithuania, Poland, Romania and Slovenia. Farms with a high standard value of production came from the Netherlands, Belgium, the Czech Republic, Denmark, Germany and Slovakia. The studies used panel methods, and the model with fixed effects was used to estimate model parameters. Factors that influenced the return on equity in the group of weaker countries included asset productivity, sales profitability (sales margin) and operating subsidies. In the group of countries with economically stronger farms, the return on equity rate was positively affected by the margin on sales and profitability of production measured by the ratio of total production to total costs and property debt. Which confirms that foreign capital can contribute to achieving positive effects from the perspective of the return on equity.
    Keywords: Agribusiness, Agricultural Finance, Farm Management
    Date: 2018
  4. By: Ante Čobanov (The Croatian National Bank, Croatia)
    Abstract: This paper describes the process of the seasonal adjustment of data time series for Croatia, a process that involves cooperation between the Croatian National Bank and the Croatian Bureau of Statistics. The paper shows individual steps of the process, explains calendar effects, describes the revision policy for seasonally adjusted data and presents the seasonal adjustment of selected main monthly indicators of economic activity in the Republic of Croatia: industrial production, the volume of construction works and retail trade turnover. Working-day effect was identified for all indicators; leap year effect was identified for all but the volume of construction works, i.e. the Easter effect for retail trade turnover only. The described assumptions and limitations of the models applied are useful to end-users for the purpose of a better understanding of the published data and their use in further analysis.
    Keywords: seasonal adjustment, working-day effect, leap year effect, Easter effect, calendar effects, JDemetra+
    JEL: C87 C82
    Date: 2018–03
  5. By: Yang, Fan; Paudel, Krishna; Zhuang, Tianhui; Li, Kun
    Abstract: This paper measures the multidimensional poverty situation of farm and herder households located in the Tibetan areas of Gansu Province in China by using the Alkire-Foster method. Twelve indicators are included in the multidimensional poverty indicator system, and six different methods are used to calculate the weight of each indicator. Results indicate the adult family members received formal education (x3), the labor availability (x2), the home toilet type (x7), the self-health assessment (x1), and the school-age children drop out (x4) are the major determinants of poverty.
    Date: 2018–01–17
  6. By: Gharleghi, Behrooz; Popov, Vladimir
    Abstract: In the 1980s, six former southern republics of the USSR (Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan), like other former Soviet republics, traded very intensively both between themselves and with the other Soviet republics, but had a meagre volume of trade with the rest of the world. After the transition to the market, the deregulation of foreign trade, and the collapse of the USSR in the 1990s, trade between the former Soviet republics shrank dramatically and was only partially replaced by trade with other countries, mostly from Western Europe. In the 2000s and 2010s, the relative importance of trade with Western Europe has declined and the share of trade with China and other Asian countries has grown. This paper compares changes in the geographical structure of trade of both former Soviet republics (Central Asian countries and Azerbaijan) and Turkey, with the predictions of the gravity model. The gravity model suggests that trade between two countries is proportionate to their respective GDPs and is inversely related to the geographical distance between them.2 Turkey serves as a yardstick for comparison. For Turkey, changes in its geographical trade structure resulted from a rise in the proportion of trade with Asian countries and a decline in the proportion of trade with other regions in the world economy. In contrast, for the former Soviet republics there was an additional reason for changes in their geographical trade structure: the collapse of trade within the former USSR.
    Keywords: Central Asia, Gravity Model, Trade
    JEL: F14 F17
    Date: 2018–09–17
  7. By: Zieliński, Marek; Sobierajewska, Jolanta
    Abstract: The paper aims at assessment of functioning of farms from gminas (municipalities) of high natural values at the background of farms from other gminas in Poland. The gminas for which the Natural and Tourism Value Index (NTVA), established by the Institute of Soil Science and Plant Cultivation – State Research Institute, amounted to at least 35.6% out of 100% possible to be achieved were considered as gminas of high natural values. The comparative analysis took into account the production potential of farms, production organization, costs incurred, productivity of factors of production, farm income per 1 FWU, share of operating subsidies in farm income and the net investment rate. The analysis was carried out using the data of farms keeping accounting for the Polish FADN in 2015 and data of the Institute of Soil Science and Plant Cultivation – State Research Institute. It was recognized that farms from areas of high natural values and keeping accounting for the Polish FADN in 2015, for instance, provided payment for the owner’s and his family members’ labour costs at above the parity level and saw possibilities for further development for themselves.
    Keywords: Environmental Economics and Policy, Farm Management, Resource /Energy Economics and Policy
    Date: 2018
  8. By: Sun, Tianyu; Chand, Satish; Sharpe, Keiran
    Abstract: This paper investigates the effect of demographic changes on land prices in urban China using an Overlapping Generation (OLG) model. The model suggests that the rapid rise in land prices could be explained by the rise in per capita income and demographic changes. This finding is validated by fitting the historical data of China. We then simulate land price dynamics for China from 2000 to 2100. The simulation indicates that the rate of rising in land prices is softening. From 2035 to 2055, the effect of demographic changes on urban land prices in China will be close to zero. After 2055, the effect will turn to negative until the end of this century; however, a meltdown is unlikely.
    Keywords: Aging Population; OLG Model; Urban Land Prices; Forecast
    JEL: E21 E31 J11 R21 R31
    Date: 2018–06–26
  9. By: Jiri Kutlak (University of West Bohemia)
    Abstract: The issue of generations, namely the focus on their characteristics and the current and future impact on business practices, is the key factor for business management due to the diversity of this generations. The paper on this issue aims to analyze the current and future trend of generation groups in the Czech Republic with respect to their characteristics and to the demography development on the Czech labor market. The paper theoretically defines issues of demographic development and generations (Baby Boomers, X, Y, Z), including their often different timing anchors and qualitative characteristics. Subsequently, on the basis of statistical data analysis, the labor market situation in the Czech Republic is characterized by a focus on individual generations. The paper also analyzes the population development of individual generations with the presentation of the 5 and 10-year forecasts. In the end, there are presented possible threats (change of generation groups, occupying higher positions, similarity of generations) or opportunities (unique diversity) that companies should take into account in their business practices. There are also three areas (evaluation, communication and mentoring) where the author presents the possible management of business processes and their limitation.
    Keywords: generation; generation groups; management; workforce; generation differences; demographic development
    JEL: M54 J11
    Date: 2018–07
  10. By: Amat Adarov (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: The study examines the impact of Eurasian economic integration at aggregate and industry levels using the gravity model of trade and the synthetic control methods. The analysis finds that the trade creation effect associated with the establishment of the Eurasian Customs Union in 2010 and its further deepening, while initially exhibiting high significance, largely dissipated towards the year 2015. Overall, the net impact was overwhelmingly positive for Belarus, generally positive for Russia and mixed for Kazakhstan. Most gains are attributed to the exports of commodities (mineral products and metals), agri-food sector, and, notably, machinery and transportation sectors. The inception of the Eurasian bloc was also associated with trade diversion effects, consistent with the expectations for trade-diverting customs unions, yet the impact on imports from some countries and sectors outside the bloc, on the contrary, was positive.
    Keywords: Eurasian integration, economic integration, trade policy impact, synthetic counterfactual method, gravity model of trade
    JEL: F13 F14 F15
    Date: 2018–09
  11. By: Yuqing Xing (National Graduate Institute for Policy Studies, Tokyo, Japan); Yuzhen He (University of International Business and Economics, Beijing, China)
    Abstract: In this paper, we evaluate the domestic value added of Chinese brand mobile phones using the teardown data of two sample phones: Xiaomi MIX 2 and OPPO R11s. For calculation of the distribution of value added by country, we adopt two benchmarks: production cost and retail price. In terms of the production cost of the sample phones, which consists of bill of materials, manufacturing cost and royalty, Chinese domestic value added embedded in the MIX 2 is 15.4% and 16.7% in the R11s. The teardown analysis reveals that no indigenous Chinese firms are involved in the manufacture of the printed circuit board assembly, which explains the relatively low Chinese domestic value added. Using retail price to measure total value added, we find that the domestic value added of the MIX 2 to be 41.7% while that of the R11s to be 45.3%. The cost of retail services and gross marginal profits contribute most to the increase, which implies that nurturing mobile phone brands has not only enabled the Chinese mobile phone industry to move up ladder of value chains, but also to improve domestic value added.
    Date: 2018–09
  12. By: Tomas Chlopcik (University of West Bohemia)
    Abstract: The article is focused on the current situation of automotive industry in the Visegrad Group. The main goal of the article is to analyze the current situation and define the major aspects of automotive industry in V4 countries. The main sources for the article are secondary data gained from publicly available databases. Analyses rely on basic macroeconomic indicators of V4 countries in comparison with German economy as the main leader of automotive industry in Europe. In the comparison of national?s automotive industries are used following indicators: GDP, GDP per capita, unemployment rate, GVA and turnover of automotive industry, Capital Expenditures and vehicles production. All the informations were acquired from well-known and recognized national, European and other international institutions. The result of the analysis is a compact view of automotive industry?s significance in V4 countries, which is according to initial assumption very high. One of the partial outcomes of the analysis is also a finding proving lack of relevance of some indicators frequently used as a sole scale for automotive industry importance. This have been proven especially on the absolute number of produced vehicles, which doesn?t have to describe the capability of national automotive industry in a relevant way. The article also contains recommendations for further research in this field.
    Keywords: automotive, cars production, Czech Republic, Hungary, macroeconomics, market analysis, Poland, Slovakia, Visegrad
    JEL: M16 M31
    Date: 2018–07
  13. By: Iwona ?adysz (University of Lower Silesia)
    Abstract: Poland, like every European Union Member State, should treat financial security as a priority of its policy. Financial security of the state primarily concerns the safety of public finances. Ensuring good financial condition of the state not only allows its existence, but also its development. For that reason, limiting the value of the debt is necessary. At the same time, the state may take financial risks on the condition that it follows the order of law and its fundamental principles, allowing the building of mutual trust. The aim of the article is to present the state of public finances in Poland between 2007 and 2016 as one of the elements to build financial security of the country. An attempt was made to evaluate the stability of the financial policy conducted by the general government authorities as well as the level of the financial security. What should be particularly taken into account is the risk of a possible underestimation of the official debt, which may result in posing the threat to the financial security of Poland.
    Keywords: management, financial security, public finances, public debt, public deficit, public finance sector
    JEL: E69 E62
    Date: 2018–07
  14. By: Anna Rosso (University of Milan and Centro Studi Luca d'Agliano)
    Abstract: In this paper, I use a unique individual-level pre-migration labour market dataset for Poland, which provides also emigrant final destination, to examine emigrant selection into two major destination countries, the United Kingdom and Germany. Specifically, within a simple theoretical framework, I compare pre-migration observable and unobservable characteristics of emigrants with those of non-emigrants in Poland and test for selection by estimating skill price differences between Poland and the destination based on detailed labour market data for all three countries. I contribute to the migrant selection literature by providing additional evidence on how migrants react to both labour market differences and different migration policies across countries.
    Keywords: International migration, selection, skill prices, EU enlargement, inequality
    JEL: F22 J61 O15 D33
    Date: 2018–09–28
  15. By: Michal Franta; Tomas Holub; Branislav Saxa
    Abstract: We present projections of the Czech National Bank's balance sheet after the discontinuation of the exchange rate commitment. Our model addresses the situation of a large central bank balance sheet with assets consisting almost exclusively of foreign exchange reserves in the circumstances of a catching-up economy exhibiting an exchange rate appreciation trend. Apart from the baseline projection, several counter-factual scenarios are discussed. The scenarios concern the evolution of the balance sheet in the cases of no exchange rate commitment and a commitment with earlier discontinuation. The simulated counter-factual duration of negative CNB equity, and thus the period of no profit distribution to the government, does not differ substantially from the baseline. The fiscal implications of the exchange rate commitment are thus estimated to be relatively small and related only to the period after the year 2030. Our stochastic simulations, however, show that the uncertainty bands are very wide. In addition, we show that the simulation tool can be employed to discuss the consequences of a long-run decline in currency in circulation, the composition of the asset side and the resumption of foreign exchange income sales by the central bank.
    Keywords: Central bank balance sheet, deterministic simulations, stochastic simulations
    JEL: E47 E52 E58
    Date: 2018–09

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