nep-tra New Economics Papers
on Transition Economics
Issue of 2019‒02‒04
thirty-one papers chosen by
J. David Brown
United States Census Bureau

  1. Inequality and Welfare Dynamics in the Russian Federation during 1994-2015 By Dang, Hai-Anh H.; Lokshin, Michael M.; Abanokova, Kseniya; Bussolo, Maurizio
  2. Marshallian vs Jacobs effects: which one is stronger? Evidence for Russia unemployment dynamics By Demidova, Olga; Kolyagina, Alena; Pastore, Francesco
  3. Marshallian vs Jacobs Effects: Which One Is Stronger? Evidence for Russia Unemployment Dynamics By Demidova, Olga; Kolyagina, Alena; Pastore, Francesco
  4. How Do Large Banking Groups Manage the Efficiency of Their Subsidiaries? Evidence from CEE By Vaclav Hausenblas; Jitka Lesanovska
  5. The Shattered “Iron Rice Bowl”— Intergenerational Effects of Economic Insecurity During Chinese State- Owned Enterprise Reform By Nancy Kong; Lars Osberg; Weina Zhou
  6. Government institutions and the dynamics of urban growth in China By Andrés Rodríguez-Pose; Min Zhang
  7. Ratio Working Paper No. 317: China’s Wind Power Development – An Anatomy of Mishaps By Grafström, Jonas
  8. Emigration and Alcohol Consumption among Migrant Household Members Staying Behind: Evidence from Kyrgyzstan By Paulone, Sara; Ivlevs, Artjoms
  9. Is There a Demand for Reverse Mortgages in China? Evidence from Two Online Surveys By Katja Hanewald; Hazel Bateman; Hanming Fang; Shang Wu
  10. INFORMATION CONTENT OF THE RUSSIAN SERVICES SURVEYS By Liudmila Kitrar; Tamara Lipkind; Georgy Ostapkovich
  11. State capitalism, economic systems and the performance of state owned firms By Estrin, Saul; Liang, Zhixiang; Shapiro, Daniel; Carney, Michael
  12. What Influences Private Investment? The Case of the Czech Republic By Martin Gurtler
  13. Returns to Higher Education Subjects and Tiers in China: Evidence from the China Family Panel Studies By Kang, Lili; Peng, Fei; Zhu, Yu
  15. Macroeconomic Effects of China's Financial Policies By Chen, Kaiji; Zha, Tao
  16. A regression discontinuity evaluation of reducing early retirement eligibility in Poland By Joanna Tyrowicz; Oliwia Komada; Pawel Strzelecki
  17. The effect of the single currency on exports: Comparative firm-level evidence By Lalinsky, Tibor; Meriküll, Jaanika
  19. Dying Light: War and Trade of the Separatist-Controlled Areas of Ukraine By Artem Kochnev
  20. Устойчиво производство и потребление – ролята на стандартизацията, ИК “Ран-Р”, София, 2018 (Sustainable production and consumption - the role of standardization, Ed. "Ran-R", Sofia, 2018) By Vasileva, Elka
  21. Reducing emissions of the fast growing Vietnamese coal sector: the chances offered by biomass co-firing By An Truong; Piera Patrizio; Sylvain Leduc; Florian Kraxner; Minh Ha-Duong
  22. The gains from catch-up for China and the US: An empirical framework By Mardi Dungey; Denise R. Osborn
  23. Labor Market Discrimination and the Macroeconomy By Muhammad Asali; Rusudan Gurashvili
  24. A German view on the Baltic Sea region By Laaser, Claus-Friedrich; Schrader, Klaus
  25. Academic Engagement and Commercialization in an Institutional Transition Environment: Evidence from Shanghai Maritime University By Dongbo Shi; Yeyanran Ge
  26. Are Labor Unions Important for Business Cycle Fluctuations: Lessons from Bulgaria (1999-2016) By Aleksandar Vasilev
  27. CONDITIONS FOR INNOVATION IN KIBS: EVIDENCE FROM RUSSIA By Nikolay Chichkanov; Ian Miles; Veronika Belousova
  28. Assessing the External Demand of the Czech Economy: Nowcasting Foreign GDP Using Bridge Equations By Tomas Adam; Filip Novotny
  29. An evaluation of the trade relationship between South Africa and China: An empirical review 1995-2014 By Simbarashe Mhaka; Leward Jeke
  30. Financial security of Kazakhstan: gross domestic product, public debt, budget deficit. By Baydalinova, Aynur; Sandybayeva, Balzhan; Stukach, Victor
  31. Националната платформа за електронно възлагане – стъпка в процеса на хармонизация с европейските изисквания By Dimitrova, Diana

  1. By: Dang, Hai-Anh H.; Lokshin, Michael M.; Abanokova, Kseniya; Bussolo, Maurizio
    Abstract: Russia offers the unique example of a leading centrally planned economy swiftly transforming itself into a market-oriented economy. We offer a comprehensive study of inequality and mobility patterns for Russia, using multiple rounds of the Russian Longitudinal Monitoring Surveys over the past two decades spanning this transition. We find rising income levels and decreasing inequality, with the latter being mostly caused by pro-poor growth rather than redistribution. The poorest tercile experienced a growth rate that was more than 10 times that of the richest tercile, leading to less long-term inequality than short-term inequality. We also find that switching from a part-time job to a full-time job, from a lower-skill job to a higher-skill job, or staying in the formal sector is statistically significantly associated with reduced downward mobility and increased income growth. However, a similar transition from the private sector to the public sector is negatively associated with income growth.
    Keywords: welfare dynamics,poverty,inequality,pro-poor growth,panel data,household surveys,Russia
    JEL: C15 D31 I31 O10 O57
    Date: 2019
  2. By: Demidova, Olga; Kolyagina, Alena; Pastore, Francesco
    Abstract: This paper is devoted to the study of diversification and specialization influence on one of the main indicators of Russian labour market, the unemployment growth. The purpose of the work is to find out which effects dominate in the Russian regions, Marshallian or Jacobs, and whether this predominance is stable for different time intervals. The following hypotheses were empirically tested: 1) the dependence of the unemployment rate on the degree of concentration or diversification is non-monotonic due to possible overlapping effects of urbanization and localization; 2) the influence of the degree of concentration or diversification on the level of unemployment depends on the time period. To test these hypotheses nonparametric additive models with spatial effects were used. Both hypotheses found empirical confirmation. It was shown that in Russia, depending on the period, various effects dominated: in 2008-2010, and 2013-2016 Marshallian effects predominated, while in 2010-2013, Jacobs effects dominated.
    Keywords: concentration,diversification,unemployment,spatial effects,nonparametric models
    JEL: C14 C21 J64
    Date: 2019
  3. By: Demidova, Olga (NRU HSE, Moscow); Kolyagina, Alena (NRU HSE, Moscow); Pastore, Francesco (Università della Campania Luigi Vanvitelli)
    Abstract: This paper is devoted to the study of diversification and specialization influence on one of the main indicators of Russian labour market, the unemployment growth. The purpose of the work is to find out which effects dominate in the Russian regions, Marshallian or Jacobs, and whether this predominance is stable for different time intervals. The following hypotheses were empirically tested: 1) the dependence of the unemployment rate on the degree of concentration or diversification is non-monotonic due to possible overlapping effects of urbanization and localization; 2) the influence of the degree of concentration or diversification on the level of unemployment depends on the time period. To test these hypotheses nonparametric additive models with spatial effects were used. Both hypotheses found empirical confirmation. It was shown that in Russia, depending on the period, various effects dominated: in 2008-2010, and 2013-2016 Marshallian effects predominated, while in 2010-2013, Jacobs effects dominated.
    Keywords: concentration, diversification, unemployment, spatial effects, nonparametric models
    JEL: J64 L16 L25 L52 R23
    Date: 2018–12
  4. By: Vaclav Hausenblas; Jitka Lesanovska
    Abstract: We analyse the cost efficiency over the period 2002-2015 of subsidiaries of selected international banking groups (IBGs) that built up significant banking businesses in Central and Eastern Europe (CEE) in the 1990s and 2000s. Using Bayesian stochastic efficiency analysis, we find evidence of superior efficiency management by IBGs of their subsidiaries, particularly in the period following the crisis of 2008-2009. We find that the subsidiaries of IBGs were in general more cost-efficient than their peers in CEE and that the difference further increased in the post-crisis period. While the overall heterogeneity of banks in CEE in terms of efficiency increased and remained at a higher level in the post-crisis period, the IBGs were able to get it close to the pre-crisis level or to reduce it even further. Although we find bank efficiency to be relatively persistent, we also find evidence of beta-convergence for all the analysed IBGs towards the estimated long-term mean, which is expected to be significantly higher than that of the control group for the majority of the IBGs.
    Keywords: Banking groups, convergence, efficiency, governance
    JEL: G21 G39
    Date: 2018–10
  5. By: Nancy Kong; Lars Osberg; Weina Zhou (Department of Economics, Dalhousie University)
    Abstract: Reform of the Chinese state-owned enterprise (SOE) sector in the late 1990s produced massive layoffs (34 million employees) and marked the end of the “iron rice bowl” guarantee of employment security. An expanding international literature has documented the adverse health impacts of economic insecurity on adults but has usually neglected children. This paper uses the natural experiment of SOE reform in China to explore the causal relationship between increased parental economic insecurity and children’s BMI Z-score. Using provincial and year-level layoff rates and income loss from the layoffs, we estimate a generalized differences-in-differences model with individual fixed effects and year fixed effects. For a medium-built 10-year-old boy, a 10%-point increase in expected parental economic loss from layoff (largest treatment effect) implies a gain of 4 kg. The counterfactual analysis suggests a 4.5%-point increase in overweight rate due to the reform. The weight gain persists for boys whose parents kept their jobs, indicating the importance of anxiety about potential losses, as well as the experience of actual loss. Quantile regressions suggest that boys who were relatively overweight were more severely affected by parental economic insecurity. Girls are not significantly affected. Accounting for intergenerational effects therefore increases the estimated public health costs of greater economic insecurity.
    Date: 2018–01–01
  6. By: Andrés Rodríguez-Pose; Min Zhang
    Abstract: Economic growth in China in recent decades has largely rested on the dynamism of its cities. High economic growth has coincided with measures aimed at improving the efficiency of local governments and with a mounting political drive to curb corruption. Yet the connection between government institutions and urban growth in China remains poorly understood. This paper is the first to look into the connection between government efficiency and corruption, on the one hand, and urban growth in China, on the other and to assess what is the role of institutions relative to more traditional factors for economic growth in Chinese cities. Using panel data for 283 cities over the period between 2003 and 2014, the results show that urban growth in China is a consequence of a combination of favourable human capital, innovation, density, local conditions, foreign direct investment (FDI), and, city-level government institutions. Both government quality ? especially for those cities with the best governments ? and the fight against corruption at the city level have a direct effect on urban growth. Measures to tackle corruption at the provincial level matter in a more indirect way, by raising or lowering the returns of other growth-inducing factors.
    Keywords: Economic growth, cities, government efficiency, corruption, China
    JEL: O43 R11 R58
    Date: 2019–01
  7. By: Grafström, Jonas (The Ratio Institute)
    Abstract: China has in recent decades expanded its wind power generation capacity and become the world leader. Still, despite robust government support, wind power in China is obstructed by various barriers (e.g. quality deficiencies, inability to export, missing grid connections, and permit delays from central government for grid construction etc.). This paper synthesises the literature that has discovered weaknesses in the Chinese wind power development and suggests improvements. One energy policy relevant observation is that when the Chinese government sets command-and-control construction targets over new installed capacity, actors delivered to target – but with several power plants without grid connectivity and severe quality problems. The article contributes to the academic debate over the role of policy making in renewable energy development and argues that China should improve their incentive structure and coordination of regulations.
    Keywords: China; Wind power; Generation; Policy; Energy; Innovation
    JEL: O11 O21 O53
    Date: 2019–01–24
  8. By: Paulone, Sara (University of Siena); Ivlevs, Artjoms (University of the West of England, Bristol)
    Abstract: Despite the growth of alcohol consumption and international migration in many developing countries, the links between the two remain underexplored. We study the relationship between emigration of household members, receiving remittances (migrant monetary transfers), and alcohol consumption of migrant household members staying behind in Kyrgyzstan, a poor post-socialist country that has recently witnessed both large-scale emigration and a rise in alcohol-related health problems. Using a large longitudinal survey, we find that, among the ethnic majority (Kyrgyz), an increase in migrant remittances is associated with a higher likelihood and frequency of consuming alcohol, as well as an increase in the consumption of beer. Among ethnic Russians, the emigration of family members who do not send remittances back home is associated with an increased likelihood and frequency of alcohol consumption. We discuss possible mechanisms through which emigration and remittances may affect the alcohol consumption of those staying behind, including the relaxation of budget constraints and psychological distress. Overall, our findings suggest that the emigration of household members contribute to a greater alcohol consumption among those staying behind, and highlight the role of remittances and cultural background in understanding the nuances in this relationship.
    Keywords: emigration, alcoholism, Kyrgyzstan, Central Asia, monetary remittances, social remittances
    JEL: F22 F24 J61 I12
    Date: 2019–01
  9. By: Katja Hanewald; Hazel Bateman; Hanming Fang; Shang Wu
    Abstract: Reverse mortgages provide an alternative source of retirement funding by allowing older homeowners to borrow against their home. However, a recent pilot program of reserve mortgage products in several large Chinese cities saw almost no take up. To ascertain the demand for reverse mortgages in China, we conduct and analyze two online surveys that focus respectively on homeowners aged 45-65 as potential purchasers, and on adult children in the 20-49 age group representing children of potential purchasers. We address the reported shortcomings of the pilot reverse mortgage product by testing an improved product design presented in a clear and comprehensive format. In stark contrast, we find that 89% of older Chinese homeowners would be interested in this new reverse mortgage product, and 84% of adult children would recommend such a product to their parents. Participants in both surveys reported that they would use the reverse mortgage payments to fund a more comfortable retirement and to pay for better medical treatments and aged care services. Respondents' interest in reverse mortgages was associated with their familiarity and understanding of the product, and its perceived potential to address liquidity constraints in retirement. Health status, aged care preferences and proxies for intergenerational links were also important. Our results are contrary to the common perception of intergenerational expectations of wealth transfer in China, and provide new evidence in support of the potential development of China's reverse mortgage market.
    JEL: D14 G11 G21 G22
    Date: 2019–01
  10. By: Liudmila Kitrar (National Research University Higher School of Economics); Tamara Lipkind (National Research University Higher School of Economics); Georgy Ostapkovich (National Research University Higher School of Economics)
    Abstract: The paper explores the information content of surveys of the Russian services sector using the surveys’ results since 2012Q1 to 2018Q4. To summarise entrepreneurial opinions in a one-dimensional index the indicators of confidence and business climate are calculated. To examine the reaction of GDP to impulses in the business climate indicator and to forecast GDP growth by the end of 2019, the Vector Autoregression Model was used. The results of services surveys provide reliable information on the economic sentiment that is essential to measure recession and recovery development of the sector. Since 2013, the survey’s results demonstrate a stable five-year trend of ‘pessimism accumulation’ in the indicators dynamics. The slight increase in entrepreneurial optimism in 2016-2018 did not result in moving confidence to a positive zone. The business climate indicator (BCI) performs better than the traditional confidence indicator in terms of synchronous correlations with GDP growth. A longer observation period needs to draw conclusions about the BCI cyclic properties; however, it can be used now to analyze the development of the Russian services sector.
    Keywords: services surveys, confidence indicator, business climate indicator, Russia
    JEL: C81 C82 L89
    Date: 2019
  11. By: Estrin, Saul; Liang, Zhixiang; Shapiro, Daniel; Carney, Michael
    Abstract: In this paper, we pursue two related research questions. First, we enquire whether state owned enterprises (SOEs) perform better than privately owned firms in a large variety of emerging markets. To test this, we develop a unique dataset using firm-level data from the World Bank Enterprise Survey (WBES), resulting in a sample of over 50,000 firms from 57 understudied countries including emerging capitalist, former socialist and state capitalist ones. Our results suggest that SOEs do display productivity advantages over private firms in these understudied economies. Our second research question asks whether the performance of state-owned firms in these understudied countries is context specific, namely whether performance depends on the institutional system to which a country is classified. We refer to these systems as configurations. In particular, we are interested in whether state owned firms perform better in “state capitalist” countries including China and Vietnam. We find empirical support for the argument that the “state led” configuration provides better institutional support for the ownership advantages of SOEs than others.
    Keywords: comparative economic systems; state ownership; varieties of institutional systems (VIS); firm performance
    JEL: L44 P31 P5
    Date: 2018–10–05
  12. By: Martin Gurtler
    Abstract: What influences private investment in the Czech Republic? This paper arrives at a conclusion based on a survey of fixed-asset purchases in 30,000 non-financial corporations over the period 2008-2015. BVAR models are estimated on aggregates for 19 industries and the whole non-financial economy. As our results show, foreign demand is the most important factor for Czech business investment, especially in manufacturing and tourism. We also find an increased importance of expectations and uncertainty during the period under review. According to our findings, business investment is fostered by a devalued currency and is crowded out by public investment. The most profound crowding-out was seen in manufacturing and agriculture, whereas services, trade, and construction exhibit crowding-in. Finally, EU funds are found to be successful in providing occasional support to private investment.
    Keywords: Bayesian VAR, crowding-out, Czech Republic, EU funds, exchange rate, interest rate, investment, monetary and fiscal policy, survey data, uncertainty
    JEL: D22 E22 H32 M21
    Date: 2018–12
  13. By: Kang, Lili (Shanghai Lixin University of Accounting and Finance); Peng, Fei (Shanghai Lixin University of Accounting and Finance); Zhu, Yu (University of Dundee)
    Abstract: Using the recent China Family Panel Studies, we identify the subjects studied by college (2–3 years) graduates and university (4–5 years) graduates. For the university graduates, we can further distinguish universities by the tier of selectivity (i.e., Key and Ordinary Universities). We take advantage of the rich information on the respondent's school cohort, hukou status at age 12, and the mother's age and education to estimate university applicants' simultaneous choice of subject and tier of prestige of higher education institutions (HEIs). Using the doubly robust Inverse Probability Weighted Regression Adjustment method to account for selection – on observables – into subjects and tiers, our treatment effect estimates suggest that pooled OLS and random-effect models substantially underestimate the effect of attending universities that are more prestigious for graduates of both genders in law, economics, and management (LEM). We also demonstrate that the recent massive expansion of the higher education sector resulted in reduced returns to HE for all graduates, except for graduates who studied LEM or Other non-STEM (sciences, technology, engineering and math/medicine) subjects at the most prestigious universities. The results are robust to treating subjects as predetermined for the selection into HEIs by tiers of prestige.
    Keywords: returns to university tier and subjects, China, inverse probability weighted regression adjustment, higher education expansion
    JEL: I23
    Date: 2019–01
  14. By: Victor Rudakov (National Research University Higher School of Economics); Ilya Prakhov (National Research University Higher School of Economics)
    Abstract: For several years, the Russian system of higher education had been undergoing massive transformations related to the enhancement of the global competitiveness of the national academic sector. The introduction of research-oriented universities and the transition to incentive contracts are the main elements of the reform. In this article we show how these institutional changes contribute to reducing the problem of gender inequality in academia. Based on comprehensive data from a Russian faculty survey (MEMO), it is found that there are considerable differences in gender wage inequality by university status: female faculty earn significantly lower salaries in ordinary universities, but there are no gender differences in pay in research-oriented universities, which are most actively transitioning to incentive remuneration schemes. Female faculty experience vertical segregation: women are less likely to achieve senior positions in university hierarchies. We also found indirect evidence of women’s self-selection for lower-paid positions: female faculty are less likely to achieve advanced degrees and to have research publications. Overall, the study shows that male faculty earns 8.7% higher salaries than female counterparts after controlling for all observable characteristics. Oaxaca decomposition showed that 53% of the gender wage gap can be explained by observable characteristics, while the rest can be attributed to discrimination, self-selection or unobservable factors. In the absence of discrimination, male faculty should earn 10% higher salaries, but due to discrimination and unobservable factors, male faculty, on average, earn 18.7% more. However, the gender wage gap in academia is considerably below the national average: women earned on average around 80% of male salaries in academic sector, while in the whole Russian economy women earned around 70% of men’s wages
    Keywords: gender wage gap, economics of gender, gender inequalities in academia, faculty pay, incentive contract, project “5-100”
    JEL: J16 J30 J31 J41 J78
    Date: 2019
  15. By: Chen, Kaiji (Emory University); Zha, Tao (Federal Reserve Bank of Atlanta)
    Abstract: The Chinese economy has undergone three major phases: the 1978–97 period marked as the SOE-led economy, the 1998–2015 phase as the investment-driven economy, and the new normal economy since 2016. All three economies have been shaped by the government financial policies, defined as a set of credit policy, monetary policy, and regulatory policy. We analyze the macroeconomic effects of these financial policies throughout the three phases and provide the stylized facts to substantiate our analysis. The stylized facts differ qualitatively across different phases or economies. We argue that the impacts of China's financial policies work through transmission channels different from those in developed economies and that a regime switch from one economy to another was driven mainly by regime changes in financial policies.
    Keywords: marketized tools; regime change; growth; investment; capital intensity; local governments; regulations; shadow banking; debts; real estate; preferential credits; industrialization; SOEs; POEs; heavy and light sectors; monetary stimulus; trends and cycles
    JEL: E5 G1 G28 O2
    Date: 2018–11–01
  16. By: Joanna Tyrowicz (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University); Oliwia Komada (Warsaw School of Economics); Pawel Strzelecki (Warsaw School of Economics, National Bank of Poland)
    Abstract: The reform introduced in Poland in 2009 substantially and abruptly reduced the number of workers eligible for early retirement. This paper evaluates the causal effects of this reform on labor force participation and exit to retirement. We use rich rotating panel from the Polish Labor Force Survey and exploit the discontinuity imposed by this reform. We find a statistically significant, but economically small discontinuity at the timing of the reform. The placebo test shows no similar effects in earlier or later quarters, but in a vast majority of specifications the discontinuity is not larger for the treated individuals, i.e. those whose occupation lost eligibility. We interpret these results as follows: the changes in the eligibility criteria were not instrumental in fostering the participation rates among the affected cohort, i.e. the immediate contribution to increased labor force participation of these cohorts is not economically large.
    Keywords: retirement age, early retirement, regression discontinuity, Poland
    JEL: J14 J26
    Date: 2018–10
  17. By: Lalinsky, Tibor; Meriküll, Jaanika
    Abstract: We investigate how adopting the euro affects exports using firm-level data from Slovakia and Estonia. In contrast to previous studies, we focus on countries that adopted the euro individually and had different exchange rate regimes prior to doing so. Following the New Trade Theory we consider three types of adjustment: firm selection, changes in product varieties and changes in the average value of the exports that compose the exports of individual firms. The euro effect is identified by a difference in differences analysis comparing exports by firms to the euro area countries with exports to the EU countries that are not members of the euro area. The results highlight the importance of the transaction costs channel related to exchange rate volatility. We find the euro has a strong pro-trade effect in Slovakia, which switched to the euro from a floating exchange rate, while it has almost no effect in Estonia, which had a fixed exchange rate to the euro prior to the euro changeover. Our findings indicate that the euro effect manifested itself mainly through the intensive margin and that the gains from trade were heterogeneous across firm characteristics.
    Keywords: international trade,common currency areas,euro adoption,transaction costs,Slovakia,Estonia,firm-level data
    JEL: F14 F15
    Date: 2019
  18. By: Olga N. Balaeva (National Research University Higher School of Economics); Andrei A. Yakovlev (National Research University Higher School of Economics); Yuliya D. Rodionova (National Research University Higher School of Economics); Daniil M. Esaulov (National Research University Higher School of Economics)
    Abstract: Public procurement cost evaluation is important both for procurement optimization at the company level and for evaluating the public procurement regulatory system. This paper presents a survey-based methodological approach to public procurement cost evaluation at the macro level. Our approach is based on a methodology for assessing the efficiency of public procurement developed by PwC for the European Union. The PwC methodology was adapted to developing and transitional economies and piloted on Russian data. Average costs of each type of procurement procedure implemented in 2016 were evaluated. A regression analysis of factors impacting public procurement cost evaluation revealed considerable differences between respondents who have and do not have experience with complex procurement procedures. Although the average overall costs of public procurements in Russia amounted to about 1% of the total value of concluded contracts, the figure stands at 6.6–8.1% for small purchases. This exceeds the economy from price decreases and calls for a need to simplify regulation of such procurements.
    Keywords: public procurement; public procurement costs; public customers; suppliers.
    JEL: H57 D23
    Date: 2018
  19. By: Artem Kochnev
    Abstract: The paper investigates how war and the war-related government policies affected economic activity of the separatist-controlled areas of Ukraine. The paper applies a quasi-experimental study design to estimate the impact of two events on the separatist-controlled areas the introduction of the separatist control and the introduction of the second round of the trade ban, which was imposed by the government of Ukraine on the separatist-controlled territories in 2017. Using a difference-in-difference estimation procedure that controls for the yearly and monthly effects, individual fixed effects, and the region-specific time shocks, the study finds that the separatist rule decreased the economic activity by 38% in the Donetsk region and 51% in the Luhansk region according to the preferred specifications. At the same time, the trade ban of the year 2017 against the major industrial enterprises of the separatist-controlled areas decreased luminosity by 20%. The paper argues that the trade disruptions due to the war actions were nested within the negative effect of the separatist rule and accounted for half of it.
    Keywords: costs of war, satellite data, trade, Ukraine crisis, political economy
    JEL: D74 E01 E20 F51
    Date: 2019–01
  20. By: Vasileva, Elka
    Abstract: In 2015, the UN New Agenda for Sustainable Development 2030 was adopted and seventeen global goals were developed integrating the economic, environmental and social dimensions of sustainable development. Goal 12 is defined as "Ensuring Sustainable Consumption and Production Patterns" (UN Global Goals 2030). It has a central role to play in tackling global consumption of resources and the environmental impacts associated with it, as well as numerous social and economic problems. The promotion of sustainable patterns of consumption and production and sustainable lifestyle is linked to the creation of policies involving a large number of stakeholders which in turn will offer innovative policy solutions to sustainable development problems. Against the backdrop of a variety of policy initiatives at international, European and national level, there is a need in Bulgaria for policies encouraging sustainable production and consumption. Standards have the potential to play a significant role in these processes, amid a wide range of regulations and existing social norms relating to sustainable consumption and production. A number of authors emphasize that the current development of standardization builds on its conventional focus on technical facilities or systems with the inclusion of social and environmental themes (Bistro and Klintman, 2011, Brunsson and Jacobson, 2000, Busch, 2000, Tamm Hallstrom, 2008). They support the idea that standardization emerges as a common new form of regulation in today's globalized world alongside traditional legislation and social norms (Bostrom and Klintman, 2011; Brunsson and Jacobson, 2000). In their entirety, standards build a "new institutional infrastructure" for organizational sustainability and social responsibility (Rasche 2015; Waddock, 2008). The monograph aims to identify the mechanisms by which standards support the implementation of sustainable patterns of consumption and production. In order to achieve the stated objective, the study examines the problems posed both theoretically and by providing a solid empirical material oriented to the Bulgarian organizations in their national context. The monographic work addresses current issues of sustainable consumption and production patterns through voluntary standardization mechanisms as "soft" regulatory instruments - an area still under-researched on a national and regional scale. The presented studies are among the few similar analyses in this field. They concern issues related to the management models of Bulgarian organizations placed under regulatory pressure in the field of environmental protection and social responsibility and the uncertain choice of the voluntary approaches proposed by international and European standards. At the same time, these studies also look at Bulgarian consumers who have the right to "be heard" in the development and implementation of government policies, laws and standards for sustainable consumption and production. The publication is a result of the author's constant interest in the scientific study of the problems of sustainable development in the country in the last ten years. The research work, both individual and joint in a team of fellow researchers – the University of National and World Economy - Sofia is manifested in the implementation of numerous projects, establishing cooperation and membership in the thematic networks in the field of sustainable consumption and production. The monograph could help all those interested in sustainable consumption and production problems - from Bulgarian consumers searching for their sustainable behaviour patterns, non-governmental organizations and consumer associations, through business organizations, certification and training organizations and reaches the state institutions setting out the policies and tools for implementation of these models.
    Keywords: Sustainable Production and Consumption; Standardization; consumers and standards; Bulgaria
    JEL: M0 M10 M14 Q5 Q59
    Date: 2018
  21. By: An Truong (CleanED - Clean Energy and Sustainable Development Lab - USTH - University of sciences and technologies of hanoi); Piera Patrizio; Sylvain Leduc (IIASA - International Institute for Applied Systems Analysis); Florian Kraxner (IIASA - International Institute for Applied Systems Analysis); Minh Ha-Duong (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Vietnam's Power Development Plan 7A authorized many new coal power plants projects, implying an increase of greenhouse gases emissions from 90 MtCO2eq/year today to 360 MtCO2eq/year in 2030. How could co-firing technology-that is the partial substitution of coal by biomass-contributes to mitigate that problem? In this study, we assess the costs and potentials of co-firing rice residues in present and planned coal power plants in Vietnam using a spatially explicit optimization model: BeWhere, adapted as recursive annual dynamic. We found that, the cost of CO2 emissions is the key parameter determining at what level the technology is used. A cost of CO2 emissions of 8 $/tCO2 mobilizes the maximum technical potential of the rice straw and husk domestic resource, with an annual emission reduction of 28 MtCO2eq/year by 2030. At this level, biomass co-firing contributes to an 8% emission reduction in the coal power sector with the abatement cost of 137 Million USD.
    Keywords: spatial explicit exploration,greenhouse gas emissions,Co-firing,emission reduction,bioenergy,rice residues
    Date: 2019–01–08
  22. By: Mardi Dungey; Denise R. Osborn
    Abstract: As China becomes more closely entwined with the US, positive shocks in the US translate into positive outcomes for China, but the extent of gain for the US during the convergence process is less clear. We develop an empirical framework of two interacting open economies in which Chinese GDP per capita moves towards convergence and cointegration with the US, resulting in a time-varying structural VAR model. As a result, the impulse responses of the two countries to shocks are sensitive to the timing of the shock. The changing effects of US shocks are evident in the analysis, which shows that over the convergence process both the US and China unambiguously benefit from the catch-up process.
    Keywords: China, SVAR, convergence, catch-up
    JEL: O11 O47 F41
    Date: 2019–01
  23. By: Muhammad Asali (International School of Economics at Tbilisi State University; IZA, Columbia University); Rusudan Gurashvili (National Bank of Georgia)
    Abstract: Using Integrated Household Survey data from Georgia, we measure the observable and discriminatory ethnic wage gap, among male and female workers, and the gender wage gap, among Georgians and non-Georgians. The gender wage discrimination is larger than the ethnic wage discrimination. In the second estimation stage, these wage discrimination estimates are used in a general-to-specific vector autoregression framework to test for the Granger causality between discrimination and growth. A general, negative, bidirectional Granger causality is found between these two variables: in the long-run, discrimination reduces economic growth, and economic growth lowers discrimination. Also, we find that higher unemployment rates are associated with increased ethnic wage discrimination—in line with the predictions of Becker’s theory of discrimination.
    Keywords: Labor market discrimination; Transition economies; Growth; Granger causality.
    Date: 2019
  24. By: Laaser, Claus-Friedrich; Schrader, Klaus
    Abstract: For Germany and the other large BSR neighbors Poland an the Russian Federation Baltic Sea trade is of minor importance. The BSR is only one integration area — i.e. destination of its exports and origin of its imports — among a lot of peers being located in other directions of the compass rose. Moreover the BSR in a narrower sense is characterized by a high degree of economic heterogeneity — a North-South downward gradient of wealth can be observed. This wealth gap at the Baltic Sea implies diverging economic interests.
    Keywords: Ostseeraum,Wirtschaftsintegration
    JEL: F15 F02
    Date: 2018
  25. By: Dongbo Shi; Yeyanran Ge
    Abstract: Does academic engagement accelerate or crowd out the commercialization of university knowledge? Research on this topic seldom considers the impact of the institutional environment, especially when a formal institution for encouraging the commercial activities of scholars has not yet been established. This study investigates this question in the context of China, which is in the institutional transition stage. Based on a survey of scholars from Shanghai Maritime University, we demonstrate that academic engagement has a positive impact on commercialization and that this impact is greater for risk-averse scholars than for other risk-seeking scholars. Our results suggest that in an institutional transition environment, the government should consider encouraging academic engagement to stimulate the commercialization activities of conservative scholars.
    Date: 2019–01
  26. By: Aleksandar Vasilev (Lincoln International Business School, UK)
    Abstract: In this paper we investigate the quantitative importance of collective agreements in explaining uctuations in Bulgarian labor markets. Following Maffezzoli (2001), we introduce a monopoly union in a real-business-cycle model with government sector. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999-2016), and compare and contrast it to a model with indivisible labor and no unions as in Rogerson and Wright (1988). We find that the sequential bargaining between unions and firms produces an important internal propagation mechanism, which fits data much better that the alternative framework with indivisible labor.
    Keywords: business cycles, general equilibrium, labor unions, indivisible labor, involuntary unemployment.
    JEL: E32 E24 J23 J51
    Date: 2019–01
  27. By: Nikolay Chichkanov (National Research University Higher School of Economics); Ian Miles (National Research University Higher School of Economics); Veronika Belousova (National Research University Higher School of Economics)
    Abstract: The development of service industries in emerging economies has been attracting more attention in recent years, but to date there have been few studies of knowledge-intensive business services (KIBS) in these countries. (The main exception is the case of a specific sector – software and related Information Technology services, with most focus here being on India. KIBS as a whole have received little examination.) This paper aims to study how conditions for innovation influence innovation activities in KIBS in one of the largest emerging countries, Russia. The study draws on survey data from firms belonging to ten KIBS subsectors, based in major Russian cities in 2015. The results contrast with those generally reported in Western developed economies. In this particular emerging economy, firms experiencing negative market and knowledge conditions are actually more liable to undertake nontechnological innovations. We consider various explanations for this apparent anomaly. The institutional framework appears to be less essential for KIBS than has been earlier documented for manufacturing enterprises in Russia. Implications for innovation management and policy are outlined: both government and corporate, strategies here would benefit from more attention to these sectors
    Keywords: KIBS, conditions for innovation, emerging economies
    JEL: O30 O31
    Date: 2019
  28. By: Tomas Adam; Filip Novotny
    Abstract: We propose an approach to nowcasting foreign GDP growth rates for the Czech economy. For presentational purposes, we focus on three major trading partners: Germany, Slovakia and France. We opt for a simple method which is very general and which has proved successful in the literature: the method based on bridge equation models. A battery of models is evaluated based on a pseudo-real-time forecasting exercise. The results for Germany and France suggest that the models are more successful at backcasting, nowcasting and forecasting than the naive random walk benchmark model. At the same time, the various models considered are more or less successful depending on the forecast horizon. On the other hand, the results for Slovakia are less convincing, possibly due to the stability of the GDP growth rate over the evaluation period and the weak relationship between GDP growth rates and monthly indicators in the training sample.
    Keywords: Bayesian model averaging, bridge equations, nowcasting, short-term forecasting
    JEL: C53 E37
    Date: 2018–12
  29. By: Simbarashe Mhaka (Department of Economics, Nelson Mandela University); Leward Jeke (Department of Economics, Nelson Mandela University)
    Abstract: South Africa’s (SA) largest trading partner is China. The bilateral trade flows between these two economies have been increasing since the end of the global financial crisis. There are several factors that determine the trade flows between these two economies. Research studies the impact of the real exchange rate, market size and economic size on the trade flows between SA and China, applying the gravity model of trade. Time series data for the period of 1995–2014 have been used and a multiple linear regression model was employed in the evaluation process. To determine the impact of the three underlying variables on the bilateral trade flows of SA and China, the ordinary least squares method was used. The explanatory variables consist of the product of SA’s gross domestic product (GDP) and China’s GDP, which act as the proxy for economic size, the product of South Africa’s population and China’s population, which act as the proxy for market size, and the real exchange rate between SA and China. Results revealed that the economic size and the market size have a strong positive impact on trade flows between SA and China and this is consistent with economic theory. On the other hand the real exchange rate has a negative impact on trade flows between SA and China. If two countries each have a large economic and population size trade, this results in high trade flows between the countries as compared to trading with smaller economies. Trade volume is also reduced if the countries trading have a highly volatile exchange rate. Based on the findings of the research, the article recommends that the Department of Trade and Industry should target trade with countries of big economic and market size. The research also shows that the absolute and comparative advantages are not the only basis of trade but other factors should be considered, such as exchange rate, economic size and market size. The central bank should maintain a stable exchange rate between the SA rand and partner countries’ currencies before trading. This enhances trade and leads to strong economic growth.
    Keywords: trade flows, economic size, market size, exchange rate, gravity model
    JEL: C23 F13
    Date: 2018–12
  30. By: Baydalinova, Aynur; Sandybayeva, Balzhan; Stukach, Victor
    Abstract: Ensuring the financial security of the state is an important task for the country. This task becomes a priority before the danger of the financial crisis. This is especially true when the state is in the zone of financial crisis, because this situation a priori means a loss of financial security.
    Keywords: financial security, public debt, financial crisis, economic security, external debt, budget deficit, gross domestic product.
    JEL: G17 G2 G28 G3
    Date: 2018–05
  31. By: Dimitrova, Diana
    Abstract: Резюме. В докладът се разглежда националната платформа за електронно възлагане като стъпка в процеса на хармонизация на българското законодателство с европейските изисквания относно възлагане на обществени поръчки. На база на извършеният анализ се правят изводи и обобщения. Abstract. The report examines the national platform for electronic award as a step in the process of harmonization of the Bulgarian legislation with the European requirements. On base of the analysis the author makes conclusions and summaries
    Keywords: national platform for electronic award; public procurements; harmonization
    JEL: K23
    Date: 2018

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