|
on Transition Economics |
| By: | Alina Klein (University of Dubuque); Rudolf Klein (University of Dubuque) |
| Abstract: | There is considerable evidence that both mean reversion and momentum exist in stock prices, especially in well developed countries. We analyze these phenomena for two Central and Eastern European countries that experienced very different transitions from centrally-planned to market economies: Poland and Romania. While being considered an emerging market, Poland?s stock market capitalization increased from 3 percent of GDP in 1995 to about 30 percent in 2017. Romania?s stock market capitalization in the 1990s and early 2000s was less than 6 percent of GDP and only recently increased to about 21 percent. We examine how mean reversion and momentum have affected stock prices in these two very different emerging economies and we find very similar results. For both, the speed at which stocks converge back to their fundamentals (i.e., mean reversion) is much faster than that of the developed markets, with half-lives only slightly greater than 9 months. These results are similar to the ones obtained for the Chinese market (see Wu, 2011), but much shorter than the 3-4 years found for the well-developed economies. We also find that, similarly to the Chinese market, the momentum effect is weak. As a result, in most cases, a strategy combining mean reversion and momentum generates abnormal excess returns only for holding periods of less than 12 months. |
| Keywords: | Transition Economies, Mean Reversion, Momentum, International Asset Pricing Model, Investment Strategies |
| JEL: | G12 G14 P34 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:8208378&r=tra |
| By: | Zuzana Virglerova (Tomas Bata University in Zlín, Facutly of Management and Economics) |
| Abstract: | Many enterprises fight with various risks and it can be a reason of lack of success for their business. The first step towards successful risk management is a risk identification. Entrepreneurs use different methods for risk identification and they also detect diverse risks. The aim of the article is to identify determinants of business risks in SMEs in Visegrad Four. The article deals with the partial results of the empirical questionnaire survey, which was completed in 2018 at the Tomas Bata University in Zlín in the Czech Republic. Questionnaires from the owners of micro and SME enterprises in Hungary (388), Poland (498), Slovakia (487) and Czech Republic (408) were collected. Entrepreneurs were asked for the ability to identify risks, importance of risks and methods used for risk management in their companies. 3 research questions were set in this context. In process of solving the formulated research questions the following statistical tools such as tables, descriptive characteristics, and Person coefficient of contingency were used. Finally, the results indicate that there are differences in risk identification among countries. Also the importance of each risk is different. The similarity of results in Czech Republic and Slovakia was proved. The article concludes with a discussion which explains possible couse of differences and similarities of results. |
| Keywords: | business risks, SME, entrepreneurship, risk identification |
| JEL: | G32 M21 L26 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:6509314&r=tra |
| By: | Qi-lin Cao; Hua-yun Xiang; You-jia Mao; Ben-zhang Yang |
| Abstract: | This paper studies the extent to which social capital drives performance in the Chinese venture capital market and explores the trend toward VC syndication in China. First, we propose a hybrid model based on syndicated social networks and the latent-variable model, which describes the social capital at venture capital firms and builds relationships between social capital and performance at VC firms. Then, we build three hypotheses about the relationships and test the hypotheses using our proposed model. Some numerical simulations are given to support the test results. Finally, we show that the correlations between social capital and financial performance at venture capital firms are weak in China and find that China's venture capital firms lack mature social capital links. |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1810.02952&r=tra |
| By: | Asadullah, Niaz (University of Malaya); Xiao, Saizi (University of Malaya) |
| Abstract: | We re-examine the economic returns to education in the People's Republic of China (PRC) using data from the China General Social Survey 2010. We find that the conventional ordinary least squares estimate of returns to schooling is 7.8%, while the instrumental variable estimate is 20.9%. The gains from schooling rise sharply with higher levels of education. The estimated returns are 12.2% in urban provinces and 10.7% in coastal provinces, higher than in rural and inland areas. In addition, the wage premium for workers with good English skills (speaking and listening) is 30%. These results are robust to controls for height, body weight, and English language skills, and to corrections for sample-selection bias. Our findings, together with a critical review of existing studies, confirm the growing significance of human capital as a determinant of labor market performance in post-reform PRC. |
| Keywords: | endogeneity bias, language skills, schooling, health |
| JEL: | J30 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11809&r=tra |
| By: | Ke Wang; Kexin Yang; Yi-Ming Wei; Chi Zhang |
| Abstract: | Construction industry, together with building materials industries supplying it, is one of China¡¯s largest emitters of CO2. Structural change in construction industry has been promoted to mitigate CO2. This paper estimates CO2 shadow price of construction industry and its supporting materials industries in China so as to help them to mitigate CO2 cost-effectively. A parametric directional distance function model, taking into account all possible directional vectors, is applied to address issues regarding arbitrary selection of direction that will affect estimation of shadow price. Results show that there is larger potential for CO2 reduction in supporting material industries than in construction industry itself and shadow price of overall CO2 is much lower than that of direct CO2. The existence of enlarging heterogeneity in shadow prices among different regions provides strong support for introducing a national carbon trading market, thereby helping construction industry and building materials industries to reduce their abatement costs. |
| Keywords: | Abatement cost; Building material industry; Construction industry; Shadow price |
| JEL: | Q54 Q40 |
| Date: | 2018–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:biw:wpaper:120&r=tra |
| By: | Lu, Di |
| Abstract: | This paper analyzes the effects of the earlier selective two-child policy (TCP) in the 1990s (both parents have to be only children) to explore the impacts of this relaxation on the marriage market as well as the fertility effect due to the marriage choice distortion. By using a difference in differences (DID) design in a subhazard model with competing risks, the results show that the subhazard ratio is 355.06% higher and this treatment effect is significant at a 1% level. The results suggest that the selective TCP increased the probability of the treatment group of choosing an only-child spouse rather than marrying a spouse with siblings or a spouse belonging to an ethnic minority. The marriage effect is stronger in urban areas where OCP was previously implemented more rigorously. The probability of giving birth to a second child is also positive and significant in a DID design, which implies that the fertility preference is binding under the OCP. |
| Keywords: | China’s two-child policy,marriage distortion,subhazard model,fertility effect |
| JEL: | J12 J13 C41 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc18:181586&r=tra |
| By: | Bin Qiu; Kuntal K. Das (University of Canterbury); W. Robert Reed (University of Canterbury) |
| Abstract: | Previous studies investigating the effect of exchange rate changes on a country’s exports have found little evidence that exchange rates matter. This “Exchange Rate Disconnect Puzzle” may stem from the fact that studies have mostly focused on aggregate data. Using HS- 6 digit product-level data for exports from China, we analyze the effect of real exchange rate as well as the volatility of real exchange rate of the Chinese RMB. By decomposing China’s exports into its “extensive” and “intensive” margins, we find that real exchange rate volatility has a significantly impact on overall Chinese exports that operate via both the extensive and the intensive margins of trade. Real exchange rate volatility increases the uncertainty and deters small and new firms from entering the market or force them to exit the market via the extensive margin. As less firms operate in the export market, the export share of the existing firms increase via the intensive margin. The overall effect of this volatility is slightly positive. We find that these effects are dominant for the sub sample of countries that are the minor trading partners of China compared to its major trading partners. We find weak evidence that real exchange rate depreciation affects China’s exports via the extensive margin. |
| Keywords: | Chinese Trade, Extensive Margin & Intensive Margin, Real Exchange Rate, Volatility |
| JEL: | F14 F31 |
| Date: | 2018–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:18/14&r=tra |
| By: | Kimberly Singer Babiarz; Paul Ma; Grant Miller; Shige Song |
| Abstract: | The vast majority of China’s fertility decline predates the famous One Child Policy – and instead occurred under its predecessor, the Later, Longer, Fewer (LLF) fertility control policy. In this paper, we first study LLF’s contribution to marriage and fertility behavior, finding that the policy reduced China’s total fertility rate by about 0.9 births per woman, explaining only 28% of China’s modern fertility decline. Given son preference, we then consider the parallel issue of sex selection, which also emerged prior to the One Child Policy (when prenatal selection was not technologically feasible). We find that LLF increased the use of male-biased fertility stopping rules from 3.25% to 6.3% of couples – and that it contributed to the early emergence of postnatal neglect of girls in modern China, rising from none to 0.3% of births (implying 210,000 previously unrecognized missing girls). Considering Chinese population policy to be extreme in global experience, our results demonstrate the limits of population policy’s ability to reduce fertility – and its potential for unintended consequences. |
| JEL: | J1 J12 J13 J18 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25130&r=tra |
| By: | Jaroslav Belas (Tomas Bata University in Zlín); Martin Cepel (Paneuropean University in Bratislava); Anna Kotaskova (Paneuropean University in Bratislava) |
| Abstract: | The aim of this paper was to evaluate the quality of the business environment in the segment of small and medium-sized enterprises (SMEs) in the Czech and the Slovak Republic. In regards to the defined aim a survey-based research was conducted with enterprises operating in the SME segment. Responses from 312 enterprises in the Czech Republic and 329 enterprises in Slovak Republic were obtained via an online questionnaire during this research. The research brought some interesting findings. The evaluation of the business environment in both countries is relatively negative. The current risk rate of the business environment received a more positive rating in both countries. Significant differences in entrepreneurs? notions were discovered when evaluating the development of business environment in the recent past. Entrepreneurs of both countries were rather skeptical in evaluating the current quality of business environment in regards to starting a business. |
| Keywords: | business environment, quality of business environment, Czech Republic, Slovak Republic |
| JEL: | L26 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:6509331&r=tra |
| By: | Jin, Gan |
| Abstract: | This paper studies the persistent impact of good institutions on economic development in China. By exploiting a British-driven institutional switch in part of China's customs stations in 1902, I find that counties that were more affected by the British customs institutions are also better developed today. Moreover, I show that the institutional switch was exogenous to the pre-colonial development, and I provide different estimation models to reveal a robust and causal relationship between good institutions and economic development. |
| Keywords: | Institutions,Economic development,Treaty ports,Chinese Maritime Customs Service (CMCS),China |
| JEL: | N15 O10 P51 N15 O10 P51 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc18:181605&r=tra |
| By: | Jan Hagemejer (Narodowy Bank Polski; University of Warsaw; Group for Research in Applied Economics (GRAPE)); Peter (University of Warsaw; Group for Research in Applied Economics (GRAPE)); Joanna Tyrowicz (Group for Research in Applied Economics (GRAPE); University of Warsaw) |
| Abstract: | We analyze the link between resource misallocation and subsequent long-run economic growth. We use two unique and novel sources of data for Poland and measure misallocation inherited from the period of central planning, i.e. period where input prices did not determine the use of inputs at firm, industry and country level. We assess sectoral, regional and cohort dimension of the inputs misallocation. We then show that undercapitalization was more prevalent that overcapitalization, and that it was due mostly to the firm and sector level variation in factor inputs. Given this insight, subsequent reallocation of the resources required shifting of inputs not only between firms, but also between sectors: a process which is relatively more prone to frictions due to specialization and information. When analyzing the link to the rate of growth once market mechanisms were reinstated, we find that regions with more misaligned firms (especially in terms of undercapitalization) experienced lower subsequent economic growth. This result proves highly robust, even three decades since the market mechanisms were reinstated. |
| Keywords: | misallocation, privatization, transition |
| JEL: | P31 D24 O47 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:fme:wpaper:31&r=tra |
| By: | Nie, Peng; Ding, Lanlin; Sousa-Poza, Alfonso |
| Abstract: | Using data from the China Health and Nutrition Survey (CHNS), this study analyses changes in bodyweight (BMI and waist circumference) distributions between 1991 and 2011 among adults aged 20+ in China. To do so, we quantify the source and extent of temporal changes in bodyweight and then decompose the increase in obesity prevalence into two components: a rightward shift of the bodyweight distribution (mean growth) and a (re)distributional skewing. Our analysis reveals a clear rightward distributional shift combined with a leftward skewing. Although the relatively large size of this skewing in the first decade analysed reflects an increase in obesity inequality, this inequality growth subsides in the second decade. Nevertheless, over the entire 20-year period, obesity inequality increases significantly, especially among females, younger age groups, rural residents and individuals with low socioeconomic status. |
| Keywords: | BMI,Waist circumference,Obesity inequality,Decomposition,China |
| JEL: | D30 D63 I10 I14 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hohdps:242018&r=tra |
| By: | Thi Kim Cuong Pham; Phu Nguyen-Van; Huu Thanh-Tam Nguyen; Thi Anh-Dao Tran; Kone Noukignonb |
| Abstract: | This paper analyzes the determinants of the households’ welfare perception using a survey database on rural areas in Thailand and Vietnam which have similar economic and social conditions. Welfare perception corresponds to the households’ subjective assessment of their general situations. We focus on the social comparison and take into account geographical isolation, relative poverty, harsh living conditions, economic and environmental risks as well as the households’ degree of risk acceptance. Our study shows that households, in both countries, are sensitive to income and relative poverty, but only Thai households are concerned with wealth comparison. In particular, this comparison is asymmetric. Environmental risks as well as households’ attitude to risks differently affect the households’ well-being in both countries. However, we observe a similarity in the effect of the risks’ monetary consequences. |
| Keywords: | environmental risks, economic risks; rural area, social comparison; subjective well-being. |
| JEL: | I31 O12 Q56 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2018-42&r=tra |
| By: | Eva Hromadkova (Czech National Bank, Na prikope 28, 115 03 Prague 1, Czech Republic; CERGE EI, Politickych veznu 7, 11000 Prague, Czech Republic); Oldrich Koza (Czech National Bank, Na prikope 28, 115 03 Prague 1, Czech Republic); Petr Polak (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic; Czech National Bank, Na prikope 28, 115 03 Prague 1, Czech Republic); Nikol Polakova (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic) |
| Abstract: | This article describes the bank lending survey that the Czech National Bank has been using since 2012 to gather valuable qualitative information about the bank credit market as a complement to statistical reporting. The article sets out to conduct a quantitative assessment of the survey results and to determine the roles played in new credit developments in 2012–2016 by changes in credit supply and changes in demand for loans as reported by banks in the survey. The results of the analysis indicate that although some of banks’ survey responses are statistically significant in explaining the amounts of new loans reported by banks, the survey’s ability to explain credit growth is currently limited. Growth in new loans for house purchase can be attributed primarily to growth in demand driven by falling interest rates. According to the results, supply and demand factors both played a role in the case of loans to non-financial corporations. For consumer credit and other lending to households, the results of the analysis are ambiguous. |
| Keywords: | Bank lending survey, bank lending standards, macroprudential policy |
| JEL: | E44 E62 G01 G21 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2018_28&r=tra |
| By: | Vasilev, Aleksandar |
| Abstract: | We introduce an endogenous discount factor as in Uzawa (1968) and Schmitt-Grohe and Uribe (2003) into a real-business-cycle setup with Greenwood et al. (1988) preferences and augment the model with a detailed government sector. We calibrate the arti ficial economy to Bulgarian data for the period following the introduction of the currency board arrangement (1999-2016). We investigate the quantitative importance of endogenous discounting for the propagation cyclical fluctuations in Bulgaria. The presence of an endogenous discount factor improves the model performance against data, and in addition this extended setup dominates the standard RBC model framework with a constant discount factor, e.g., Vasilev (2009). |
| Keywords: | Business cycles,Uzawa preferences,endogenous discounting,Bulgaria |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:183219&r=tra |
| By: | Georgieva, Daniela |
| Abstract: | According to data published in the Sustainability Index for Central and Eastern Europe and Eurasia, 1579 new associations and 370 foundations are registered in 2016 in Bulgaria. As a comparison in 2015 the newly registered associations are 1463, and the foundations - 306. Being active entities at the economic life of our country, not only the number of foundations and associations is increasing, but also the range of their business and non-profit activities are expanding. In this respect, non-profit organizations are involved in the political, economic, spiritual, cultural and social life of Bulgaria. Such an idea undoubtedly has a direct impact on the accountability of these activities. As an appendix to the financial statements, accounting policies provide information regarding the accounting methodology used for preparing the statements and hence are essential for the purposes of interpreting the data by the users. The accounting policies must ensure that the information they contain is cautious, reliable, neutral and impartial. Due to the possibility of certain conflicts of interest between the needs of different users, the data written inside the document is not as transparent and comprehensible as it should be. Based on that a main goal of the report is to present data analysis regarding the main content components of the document and their importance based on the user’s point of view. The subject of the study is the content of the accounting policy of Bulgarian associations. The methodology used for the analysis is a survey conducted among target groups related to the activities of the associations. The data collection period covers the months July 2018 - August 2018. For the analysis of the data, the programs SPSS, ver. 16.0/2007, as well as Microsoft Office Excel 2013 are used. The results from the questionnaire are based on the methods of mathematical statistics. The study of statistical relations and dependencies is done on the basis of a Chi square - analysis (χ2). Cramer’s (V) coefficient is used to measure the strength between the nominal variables. The author’s hypothesis is that users are not aware of the role, functions, and purposes of the accounting policies. In this respect the information they expect to find out in the document is irrelevant to the essence of the accounting policy. The results of the survey would help for better understanding of the accounting policy of associations, its structure and expected content components. |
| Keywords: | accounting policy, content, elements, associations |
| JEL: | M40 M41 M49 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:89377&r=tra |
| By: | Gharleghi, Behrooz; Popov, Vladimir |
| Abstract: | Agricultural productivity in the Central Asian republics of the USSR stopped growing from the late 1970s and declined in the 1990s when the transition to the market occurred. As a result, most agricultural goods were uncompetitive on the both the domestic market and the world market, and the agricultural trade balance deteriorated as imports grew faster than exports. Although there have been a few success stories – cereals in Uzbekistan, meat production in Azerbaijan, oil seeds in Kazakhstan – the overall picture is not one of agriculture as the driving force of the region’s future growth. We argue, however, that the relative decline of agriculture is consistent with international experience. In ‘economic miracle’ countries, the share of agriculture fell faster than in other countries because the sector donated labour to the industrial sector, which was the engine of growth. The problem in Central Asia is not the slow growth of agricultural output, but the slow growth of productivity in agriculture, which fails to increase the competitiveness of agricultural products and leads to an inability of the rural population to move to more productive industrial activities. |
| Keywords: | Agriculture productivity, Central Asia, Competitiveness |
| JEL: | Q10 Q18 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:89520&r=tra |
| By: | Jan Hagemejer (Narodowy Bank Polski; University of Warsaw; Group for Research in Applied Economics (GRAPE)); Joanna Tyrowicz (Group for Research in Applied Economics (GRAPE); University of Warsaw) |
| Abstract: | Early transition literature linked large number of firm failures with the inability to overcome the pre-transition misallocation of resources, i.e. the inadequate capital-labor ratio. We look at the link between misallocation and firm survival using a rich firm-level dataset of over 1600 manufacturing plants established in a centrally planned economy after 1945. Our duration models include the standard Olley-Pakes misallocation measures as well as firm-level counterfactual level of capital that takes into account the present day market allocation and productivity. We show that i) misallocation was rather a firm-level than sector-level phenomenon and more importantly ii) it did not have a sizeable effect on the actual firm survival. Moreover, privatization tends to be negatively related to firm survival. This may imply both inappropriate self-selection into privatization programs and possibly inadequate implementation of the privatization. |
| Keywords: | misallocation, privatization, transition |
| JEL: | P31 D24 O47 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:fme:wpaper:32&r=tra |
| By: | Kiril Dimitrov |
| Abstract: | The current article unveils and analyzes some important factors, influencing diversity in strategic decision-making approaches in local companies. Researcher's attention is oriented to survey important characteristics of the strategic moves, undertaken by leading companies in Bulgaria. |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1810.02622&r=tra |