nep-tra New Economics Papers
on Transition Economics
Issue of 2019‒05‒20
29 papers chosen by
J. David Brown
United States Census Bureau

  1. The long-term evolution of income inequality and poverty in China By Sicular Terry; Chuliang Luo; Shi Li
  2. IFAD IMPACT ASSESSMENT - Guangxi integrated agricultural development project (GIADP): China By Alessandra, Garbero; Tisorn, Songsermsawas
  3. Decentralization of Firms in a Country with Weak Institutions: Evidence from Russia By Irina Levina
  4. Wage growth and inequality in urban China: 1988–2013 By Gustafsson Björn; Wan Haiyuan
  5. China’s growth miracle in the context of Asian transformation By Lin Justin
  6. Farming efficiency, cropland rental market and welfare effect: Evidence from panel data for rural Central Vietnam By Nguyen, Trung Thanh; Tran, Viet Tuan; Nguyen, Thanh-Tung; Grote, Ulrike
  7. Market and Network Corruption By Maria Kravtsova; Aleksey Oshchepkov
  8. Influence of country rating on national economic growth, before and after euro By Ana Maria Necula; Andrei Tudor Stancu
  9. Regulating the Land Market on the Basis of Incomplete Information: the case of Romania By Luca, Lucian
  10. When the opportunity knocks: large structural shocks and gender wage gaps By Joanna Tyrowicz; Lucas van der Velde
  11. Risk-return puzzle in internationally diversified equity portfolios – the Romanian perspective By Ioana-Alexandra Radu; Cristian-George Vlaicu
  12. Consumers’ Perception of Food Safety Risk From Vegetables: A Rural - Urban Comparison By Thanh Mai Ha; Shamim Shakur; Kim Hang Pham Do
  13. Property Rights Insecurity and Agriculture Land Market - The Inherited Challenge of the Post-communist Land Reform in Albania By Zhllima, Edvin; Imami, Drini; Rama, Klodjan
  14. Relationship between Foreign Exchange Rate and Stock Price of Commercial Banks in Romanian financial market By Violeta Duta
  15. The Financial Instability Hypothesis and the Financial Crisis in Eastern European Emerging Economies By Grytten, Ola Honningdal; Koilo, Viktoriia
  16. Sanctions and Public Opinion: The Case of the Russia-Ukraine Gas Disputes By William Seitz; Alberto Zazzaro
  17. Market constraints, misallocation, and productivity in Viet Nam agriculture By Brandt Loren; Syerst Stephen; Restuccia Diego; Ayerst Stephen
  18. The influence of capital structure on financial performance of microfinance institutions By Razvan-Gabriel Hapau
  19. Optimizing the allocation of private pension funds in Romania (2nd Pillar) By Leonardo Badea; Ion Stancu; Adina-Alexandra Darman-Guzun
  20. The financial stability index (5) – Estimated by the Institute of Financial Studies By Ion Stancu; Andrei Tudor Stancu; Iulian Panait
  21. Impacts of accessing extension on agricultural production profit: Empirical evidence from the Viet Nam Access to Rural Households Survey By Thiep Do; Nhung Thi
  22. Does union membership pay off?: Evidence from Vietnamese SMEs By Torm Nina
  23. Top incomes in China: Data collection and the impact on income inequality By Li Shi; Wan Haiyuan; Li Qinghai
  24. IFAD IMPACT ASSESSMENT - Livestock and pasture development project (LPDP): Tajikistan By Romina, Cavatassi; Paola, Mallia
  25. Insulating property of the flexible exchange rate regime: A case of Central and Eastern European countries By Dąbrowski, Marek A.; Wróblewska, Justyna
  26. Central Asia Oil and Gas Industry - The External Powers’ Energy Interests in Kazakhstan, Turkmenistan and Uzbekistan By Raimondi, Pier Paolo
  27. Structural change in the Chinese economy and changing trade relations with the world By Bekkers, Eddy; Koopman, Robert; Lemos Rego, Carolina
  28. Impacts of agricultural price support policies on price variability and welfare: evidence from China’s soybean market By Wang, Wenting; Wei, Longbao
  29. Taxation and the cost of leasing in Romania: an analytic examination By Mihaela Teodorescu; Mihai Mieila

  1. By: Sicular Terry; Chuliang Luo; Shi Li
    Abstract: By using the five waves of the China Household Income Project surveys conducted during 1988–2013, this paper investigates long-term changes in income inequality and poverty in China.Income inequality rose before 2007 and then fell by a small amount. The main reason for the rise in income inequality was that high-income percentiles had faster income growth than lower percentiles; the fall in income inequality implies faster income growth among low-income percentiles.The paper also indicates a considerable poverty reduction during China’s economic transition, mainly because of the growth effect of poverty decomposition.
    Keywords: Gini decomposition,Income inequality,Poverty decomposition,Poverty
    Date: 2018
  2. By: Alessandra, Garbero; Tisorn, Songsermsawas
    Abstract: Improving market access of smallholder farmers in the developing world is considered an important approach to moving them out of poverty and increasing their economic mobility. In China, rural poverty has declined at a phenomenal speed within just two decades, and much of this success story is attributable to rapid income growth in rural areas. Thus, having a good understanding of how development efforts in rural China may help alleviate poverty and improving economic mobility is of particular interest for policy, as they are instrumental in informing future project design and scaling-up of success stories to other regions in China as well as to other countries. The Guangxi Integrated Agricultural Development Project (GIADP) is an example of a development effort aimed at increasing rural household income in China through three project components: community infrastructure development, agricultural production and marketing support, and rural environmental improvement. The project was approved by the Executive Board of the International Fund for Agricultural Development (IFAD) in December 2011, entered into effect in January 2012, and ran until March 2017. Interventions delivered covered three main components: community infrastructure improvements, agricultural production and marketing support, and interventions aimed at preserving the rural environment.
    Keywords: Agribusiness, Farm Management, Food Security and Poverty
    Date: 2018
  3. By: Irina Levina (Institute for Industrial and Market Studies, National Research University Higher School of Economics)
    Abstract: Can decentralization of firms be successful in an environment with weak institutions? Decentralization can do a great job for improving firms’ efficiency and competitiveness by creating opportunities for quicker and more competent decision-making and enhancing motivation of employees. However, decentralization is associated with a substantial increase in agency risk, which is particularly important for firms that operate under weak institutions. Hence, the popular belief is that in countries with weak institutions, firms are unable to successfully decentralize. In this paper, we study evidence from Russian firms to challenge this belief. Following anecdotal evidence and trends observed in the data, we introduce the notions of real decentralization for firms that decentralize decision-making to competitively hired professionals and cautious decentralization for firms that decentralize to people hired through connections. We demonstrate that really decentralized firms are, on average, significantly more likely to invest even in Russian weak institutional conditions. We also show that the gap in investment between really decentralized and other firms declines as corruption grows. Empirical research presented in the paper implies that there still can be significant room for decentralization even in an environment with weak institutions, such as that of Russia. However, as the role of non-market factors (such as corruption) in firms’ prosperity increases, the potential value of decentralization for the firms declines.
    Keywords: decentralization, decision-making, investment, institutions, corruption, Russia
    JEL: D02 D22 D23 L2 M2 M51
    Date: 2018–08
  4. By: Gustafsson Björn; Wan Haiyuan
    Abstract: We investigate the evolution of wage levels, wage inequality, and wage determinants among urban residents in China using China Household Income Project data from 1988, 1995, 2002, 2007, and 2013.Average wage grew impressively between each pair of years. Wage inequality had long been on the increase, but between 2007 and 2013 no clear changes occurred. In 1988, age and wages were positively related throughout working life, but more recently older workers’ wages have been lower than those of middle-aged workers.The relationship between education and wages was weak in 1988 but strengthened rapidly thereafter—a process that came to a halt in 2007. During the period in which China was a planned economy the gender wage gap was small in urban China, but it widened rapidly between 1995 and 2007.We also report the existence of a premium for being employed in a foreign-owned firm or in the state sector.
    Keywords: Income inequality,Labour market,Wage function,Wage growth,Wages
    Date: 2018
  5. By: Lin Justin
    Abstract: Myrdal did not cover China in his Asian Drama. If he did, he would have been most likely pessimistic about China, as he was about other Asian countries in his book. However, China has achieved miraculous growth since the transition from a planned economy to a market economy at the end of 1978.This paper provides answers to the questions: Why was China trapped in poverty before 1978? How was it possible for China to achieve an extraordinary performance during its transition? Why did most other transition economies fail to achieve a similar performance? What price did China pay for its success? Can China continue its dynamic growth in the coming decades? What lessons can we draw from China’s development experiences in view of Asian Drama.The paper concludes on a positive note: if a developing country adopts a pragmatic approach to developing its economy along its comparative advantages in a market economy and taps into the potential of latecomer advantages with a facilitating state, the country can grow dynamically like China.
    Keywords: Transitional economies,Economic growth,Poverty
    Date: 2018
  6. By: Nguyen, Trung Thanh; Tran, Viet Tuan; Nguyen, Thanh-Tung; Grote, Ulrike
    Abstract: Using panel data of more than 1,000 rural households from three rural provinces in Vietnam, we find that farming efficiency is a driver of cropland rental market development that enhances land use efficiency and results in an overall income gain for market participants. Our findings highlight the importance of cropland rental markets in facilitating economic transformation in rural areas of rapidly growing economies, but also indicate the need to take care of the poor to ensure that they are not left behind.
    Keywords: Land Economics/Use
    Date: 2019–04–28
  7. By: Maria Kravtsova (National Research University Higher School of Economics); Aleksey Oshchepkov
    Abstract: Economists tend to reduce all corruption to impersonal market-like transactions, ignoring the role of social ties in shaping corruption. In this paper, we show that this simplification substantially limits the understanding of corruption. We distinguish between market corruption (impersonal bribery), and network (or parochial) corruption which is conditional on the social connections between bureaucrats and private agents. We argue, both theoretically and empirically, that these types of corruption have different qualities. Using data from the Life in Transition Survey (LiTS) which covers all post-socialist countries we show, first, that the correlation between market and network corruption is weak, which implies that ignoring network corruption leads not only to an underestimation of the overall scale of corruption but also biases national corruption rankings. Secondly, in line with theoretical expectations, we find that network corruption is more persistent over time, less related to contemporary national socio-economic and institutional characteristics and has stronger historical roots than market corruption. Yet, network corruption, unlike bribery, is not able to ‘grease the wheels’ and is not associated with political instability. Lastly, we show that the decline in bribery which was observed in almost all post-socialist countries in the period from 2010 to 2016 was accompanied by rising network corruption in many of them, which has important policy implications.
    Keywords: market corruption, parochial corruption, network corruption, blat, bribery, postsocialist countries
    JEL: D73 Z13 L26
    Date: 2019–02
  8. By: Ana Maria Necula (Academy of Economic Studies and The National Bank of Romania); Andrei Tudor Stancu (Norwich Business School, UK)
    Abstract: Our paper highlights the benefits derived from holding internationally diversified portfolios,from the perspective of Romanian investors, by assessing the riskand return levels forthree portfolio structures, constructed with equities from: (1) Romania and emerging countries; (2) Romania and developed countries; (3) Romania and all countriesanalysedin this study.Moreover, we undertake a comparative analysis betweenthe results obtained for the period January2015-February 2018andthe results obtained during the global financial crisis, when increased correlations among global financial markets threatenedtheir diversification potential. Ourfindings indicate that forboth periods considered, portfolios diversified among all equity markets outperform the other two portfolio structures analysed. The performance of portfolios diversified among emerging countriesequities is significantly higher than the performance of portfoliosdiversified with equities from Romania and the developed countries considered,during both the crisisand January -February 2018 period, but the result is reversed when analysing the results forthe last sixmonths
    Keywords: portfolio choice, international financial markets, financial crisis, foreign exchange risk
    JEL: G11 G15 G01 F31
    Date: 2018–05
  9. By: Luca, Lucian
    Abstract: The paper presents the most important characteristics of land market in Romania after the accession to the EU, i.e. farmland prices, volume of farmland transactions, as well as an estimation of farmland areas owned by foreigners, in order to understand, on the basis of these data, the reasons behind the recent initiative for the modification of the law regulating agricultural land sale-purchase. The conclusion is that the eventual modification of the law will not bring any improvement to land market operation in Romania, but risks breaching the EU Accession Treaty in order to create privileges for certain categories of farmers.
    Keywords: Land Economics/Use
    Date: 2019–04–25
  10. By: Joanna Tyrowicz (FAME|GRAPE, IAAEU, University of Warsaw and IZA); Lucas van der Velde
    Abstract: Undergoing a large structural shock, labor markets may become less inclusive. We test for this thesis analyzing the behavior of adjusted gender wage gaps in a wide selection of transition countries. We estimate comparable measures of adjusted gender wage gaps for a comprehensive selection of transition countries over a period spanning nearly three decades. We combine these estimates with measures of labor market reallocation in transition economies. We identify the episodes of particularly large labor market reallocations and observe the behavior of the gender wage gaps subsequent these episodes, and exploit the discontinuity between the cohorts participating in the labor market prior to the onset of transition and cohorts of subsequent entrants. Our analysis reveals a distinctive role played by separations from the state-owned manufacturing firms, leading to greater adjusted gender wage gaps. In the medium run the adverse effects of separation hikes from this sector are even more pronounced.
    Keywords: gender wage gap, transition, non-parametric estimates, worker flows
    JEL: C24 J22 J31 J71
    Date: 2019–02
  11. By: Ioana-Alexandra Radu (Financial Supervisory Authority); Cristian-George Vlaicu (Financial Supervisory Authority)
    Abstract: Our paper highlights the benefits derived from holding internationally diversified portfolios,from the perspective of Romanian investors, by assessing the riskand return levels forthree portfolio structures, constructed with equities from: (1) Romania and emerging countries; (2) Romania and developed countries; (3) Romania and all countriesanalysedin this study.Moreover, we undertake a comparative analysis betweenthe results obtained for the period January2015-February 2018andthe results obtained during the global financial crisis, when increased correlations among global financial markets threatenedtheir diversification potential. Ourfindings indicate that forboth periods considered, portfolios diversified among all equity markets outperform the other two portfolio structures analysed. The performance of portfolios diversified among emerging countriesequities is significantly higher than the performance of portfoliosdiversified with equities from Romania and the developed countries considered,during both the crisisand January -February 2018period, butthe result is reversed when analysing the results forthe last sixmonths.
    Keywords: portfolio choice, international financial markets, financial crisis, foreign exchange risk
    JEL: G11 G15 G01 F31
    Date: 2018–05
  12. By: Thanh Mai Ha (School of Economics and Finance, Massey University, Palmerston North); Shamim Shakur (School of Economics and Finance, Massey University, Palmerston North, New Zealand); Kim Hang Pham Do (School of Economics and Finance, Massey University, Palmerston North, New Zealand)
    Abstract: Rapid urbanization brings challenges to managing food safety in Vietnam. Today, consumers pay more attention to the safety of food, particularly vegetables. This paper investigates the impact of consumer perception of food safety risk on self-reported vegetable consumption and then compares the determinants of risk perception between the rural and the urban region. We conducted a survey and observe a decline in self-reported vegetable consumption as a consequence of heightened risk perception among residents in the Hanoi area. The differences, as well as the similarities in the underlying drivers of risk perception, were identified across regions. In both regions, information about food incidents and perceived consequence of hazards associated with vegetables shaped risk perception of vegetables. Respondents’ age, education, and trust in food retailers at wet markets determined risk perception in the rural area, but not in the urban region. Personal experience with vegetable poisoning, whether the household was growing vegetables, perceived control over hazards, and trust in responsible institutions only influenced risk perception in the urban region. We suggest that these spatial disparities in behaviours should be taken into account in designing and implementing risk communication programs and food safety policies in Vietnam.
    Keywords: food safety, risk perception, rural-urban, Vietnam
    JEL: Q18 D12 Q13
    Date: 2019
  13. By: Zhllima, Edvin; Imami, Drini; Rama, Klodjan
    Abstract: Land consolidation has been viewed by policy makers as panacea for tackling the inherited challenges of Albania´s egalitarian land reform. The paper argues that farmers´ efforts towards farm consolidation through land purchase and rent-in are affected by overall structural factors. Farm structure, farm-orientation and other socio-economic factors play an important role in farmers´ decision to purchase and rent-in agricultural land. Rental market has been the most common mechanism for consolidation, although agriculture land rent is not suitable for all agriculture activities, such as those which require long term investments.
    Keywords: Land Economics/Use
    Date: 2019–05–13
  14. By: Violeta Duta (Academy of Economic Studies, Bucharest)
    Abstract: In the context of globalization and the financial crisis that the world traversed over the period 2007-2009, the Romanian capital market suffered extreme shocks (stock indices recording a decline of up to 90% while the national currency depreciated sharply against EUR and USD), which led to a significant increase in volatility in the national financial market. Considering that the financial sector was the trigger of the crisis and one of the most affected sector, we chose to analyze whether we can talk about the foreign exchange rate impact on price of the bank shares traded on the Bucharest Stock Exchange and vice versa (during March 2008 -June 2017), using correlation and VAR Granger Causality test. Frequency of data is daily. We also studied the evolution of the correlation between the banking sector (represented bythe shares of the banking companies traded on the Bucharest Stock Exchange) and the foreign exchange market during and after the financial crisis.Next, we analyzed volatility changes in this sector in the post-crisis period compared to the one recorded during the financial crisis. We have included the three Romanian banks: BRD-Groupe Societe Generale, Banca Transilvania, Patria Bank and two foreign banks traded on BSE: Erste Bank AG and Deutsche Bank and RON/EUR and RON/USD exchange rates.The results of the study showed that we can speak of a unidirectional causality running from the RON / EUR exchange rate to the prices of the Romanian banks included in the study (except for Patria Bank) and of a bidirectional causality for foreign banks Erste Bank and Deutsche Bank. During the crisis (as could be expected), we noticed an increase in volatility and market correlation and a slight decline once the effects of the crisis began to dissipate.
    Keywords: causality, stock market, foreign exchange rate, VAR Granger Causality model, volatility
    JEL: C15 C58 G01
    Date: 2018–05
  15. By: Grytten, Ola Honningdal (Dept. of Economics, Norwegian School of Economics and Business Administration); Koilo, Viktoriia (HSM/NLA)
    Abstract: The present paper applies the financial instability hypothesis in order to explain the financial crises of 2008-2010 in eleven emerging Eastern European economies Also, it seeks to map if institutional frameworks of these countries enabled them to stand against the factors leading into the financial crisis. The paper maps cycles of three macroeconomic indicators representing the real economy, and four indicators representing financial markets. A cycle analysis is conducted with the help of a Hoderick-Prescott filter, made to isolate cycles from trends in time series. The paper concludes that there were substantial positive financial cycles previous to the financial crisis mirrored by similar cycles in the real economy. Similarly, the results show negative cycles in the same parameters during the years of crisis. It seems as an uncontrolled increase in money and credit caused the economy to overheat and thereafter contract in both substantial financial and real economy crises. Also, the paper compiles twelve different indices of institutional development. These are standardized and presented in an institutional development matrix, showing that the institutional framework for the eleven economies was weak previous to and under the melt down of the economy. The construction of an integrated institutional development index on the basis of the same twelve parameters confirm institutional shortcomings, which may have made the economies less able to guard themselves from a crisis initiated by both domestically and internationally financial instability.
    Keywords: Financial Crisis; Financial Instability Hypothesis; Institutional Development; Crisis Anatomy; Financial History; Eastern European Economies; Emerging Economies
    JEL: E32 E44 E51 E52 G15 N14 N24
    Date: 2019–04–27
  16. By: William Seitz (Independent Researcher); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR.)
    Abstract: Economic sanctions usually fail, sometimes even provoking the opposite of the intended outcome. Why are sanctions so often ineffective? One prominent view is that sanctions generate popular support for the targeted government and its policies; an outcome referred to as the rally-around-the-flag effect. We quantify this effect in the context of a major trade dispute between Ukraine and the Russian Federation, which led to a cut in gas exports to Ukraine and a sharp increase of gas prices. Using individual data on political and economic preferences before and after the trade dispute and exploiting the cross section heterogeneity in the individual exposure to the price shock—measured by the connection to a centralized gas/heating system—we find that people more directly affected by the increase of gas prices were significantly more likely to change their opinions in support of Western-style political and economic systems preferred by the incumbent government, consistent with a rally-around-the-flag effect.
    Keywords: Sanctions, Gas Dispute, Russia, Ukraine, Rally-Around-the-Flag
    JEL: F13 F51
    Date: 2019–05–09
  17. By: Brandt Loren; Syerst Stephen; Restuccia Diego; Ayerst Stephen
    Abstract: We examine important changes in agriculture in Viet Nam in the context of ongoing structural changes in the economy. We use a household-level panel dataset and a quantitative framework to document the extent and consequences of factor misallocation in agriculture during the period between 2006 and 2016.Despite rapid growth in agricultural productivity and a reallocation of factor inputs to more productive farmers, we find that misallocation across farmers remains high and increased during the period. Reallocation of factor inputs has not been strong enough to accommodate substantial changes in farm productivity over time.Our analysis also reveals important differences between the north and south regions.
    Keywords: Misallocation,Regional characteristics,Agriculture,Productivity,Agricultural productivity
    Date: 2018
  18. By: Razvan-Gabriel Hapau (Academy of Economic Studies, Bucharest)
    Abstract: This paper aims to investigate the influence of capital structure on the financial performance of microfinance institutions (MFIs) using a sample of 89 institutions from 35 countries using the data provided by the MIX Market platform for the year 2015.In order to do that, the paper focus on two main objectives: the first one is to evaluate the financial performance of microfinance institutions using a synthetic measure-composite index based on principal component analysis using several financial indicators and the second one is to assess the impact of capital structure on the MFIsfinancial performance composite index using regression techniques, taking into account three proxies for capital structure(capital to asset ratio, debt to equity ratio, deposits to total assets) and controlling for a variety of MFI-specific variables.Theempirical results pointed out two important factors for the financial performance of MFIs: profit margin and yield on gross loan portfolio. Based on the results of the composite index, Mexico, Azerbaijan, Bolivia, Nepal, Romania, Moldova, Egypt, Armenia and Bolivia are considered to be poles of microfinance performance. In Romania, the best performances were recorded by Express Finance, while at the opposite side there are OMRO and Pro-Credit, which performed poorly.Analysing the influence of capital structure on the financial performance of MFIs, a significant and positive impact have been highlighted by the capital to asset ratio, while for the other two proxies any influence has been refuted. Therefore, a higher ratio of capital to total assets is positively associated with a higher MFIs financial performance.
    Keywords: microfinance institutions, capital structure, financial performance, principal component analysis, regression analysis
    JEL: G21 G32 G10 G15 C38 C40
    Date: 2018–05
  19. By: Leonardo Badea (Financial Supervisory Authority); Ion Stancu (Institute of Financial Studies Bucharest); Adina-Alexandra Darman-Guzun (West University Timisoara)
    Abstract: Recent phenomena on the aging of the population due to the improvement of the quality of life, the decrease of the population, the decrease in the fertility rate and the development of the capital markets have led to the encouragement of private pension funds. The private pension system is essential to any modern and prosperous economy; the competitive allocation of capital under this scheme ensures the maintenance / increase of the purchasing power of future earnings from pensions, as well as the most appropriate way to finance national economic development.Basedon extensive literature on the optimization of financial investment portfolios and efficient management of private pension funds, our main objective is to optimize portfolios of private pension funds in relation to the degree of risk assumed by the managers of these funds. In concrete terms, we report optimal weights for the allocation of pension funds in five asset categories (shares, corporate bonds, participation funds, government securities and bank deposits) by using three optimal portfolios models: equipping, minimizing standard deviation and risk minimization.The database includes the monthly profitability of the five asset fund categories of pension funds, as well as the VUAN evolution of pension funds and the profitability of pension fund managersfor the period from August 2013 to July 2018 (5 years). The results obtained will constitute recommendations for private pension fund managers both in choosing the portfolio optimization model and as choices for choosing the optimal combination of assets at a discounted profitability of the portfolio in relation to the assumed degree of risk by each administrator.
    Keywords: private pension system; optimal financial investment portfolios, the Markowitz model (average variance, MV), the average MCVaR model, the unit value of the net asset (VUAN), the profitability of private pension fund managers
    JEL: G11 G23 J32
    Date: 2018–11
  20. By: Ion Stancu (Institute of Financial Studies Bucharest); Andrei Tudor Stancu (Norwich Business School, UK); Iulian Panait (Financial Supervisory Authority)
    Abstract: In each issue of the Financial Studies Review, we update and publish the Financial Stability Index (FSI) of our Institute of Financial Studies, which tracks the correlation between economic growth and macroeconomic and financial factors in Romania.We constructeda composite index using a linear combination of financial variables that are considered to have a significant impact on economic activity. These financial variables are weighted with respect to their cumulated two quarters impulse response on GDP growth, as estimated by a VAR model.Developing such a composite index of financial stability or financial stresshas two main utilities:•The analysis of the correlation between financial variables and the real economy placed in the context of different historical episodes of financial crisis. Also, this correlation analysis reveals, in each period, the significant positive or negative contribution of each financial variable to real economic growth. Following this analysis, the FSIcan measure the impact of economic and financial policy measures aimed at mitigating financial crises. The short-term prediction of real economic growth estimated by forecasting the next period evolution of the real economic activity (GDPt+1) using current period GDPtand FSItand economic and financial variables in the FSItcomposition.
    Keywords: composite index, financial stress index, economic growth, VAR model, short-term prediction
    JEL: E63 G01 G28
    Date: 2018–11
  21. By: Thiep Do; Nhung Thi
    Abstract: This paper aims to evaluate the impact of accessing agricultural extension on households’ agricultural profit. Results from pooled cross-sectional data show that each additional time of access is associated with a 15.5 per cent increase in agricultural profit.However, this relation is not linear and if it exceeds 6 times, it will eventually cause more harm than good. We also construct a household and time-fixed effect model to eliminate the effect of unobserved factors.The local extension service impact on agricultural profit is 15.2 per cent for 2010–12; 19.8 per cent for 2012–14 and 25.5 per cent for 2014–16.
    Keywords: Agriculture,Agricultural extension,Fixed effects
    Date: 2018
  22. By: Torm Nina
    Abstract: In the absence of adequate institutional mechanisms, trade unions can potentially promote higher wages and other worker benefits, yet limited data availability means little is known about the effect unions have on individual earnings in developing economies.Using matched employer–employee data from 2013 and 2015 surveys, this paper examines the union wage premium among Vietnamese small and medium-sized enterprises. Controlling for firm and worker characteristics, the results show that unionized workers’ wages are 9–22 per cent higher than those of non-union workers. The wage gain is substantially larger at the upper end of the wage distribution.
    Keywords: Small and medium enterprises,Labor unions,Wages
    Date: 2018
  23. By: Li Shi; Wan Haiyuan; Li Qinghai
    Abstract: With the data on the top incomes collected from different sources, we combine the samples of the top incomes with a household survey to investigate changes in the income distribution with and without the top incomes.The Gini coefficient of income inequality using household survey data is 0.464 for 2016, and it jumps to 0.646 after including the samples of the top incomes, which demonstrates the great importance of the top incomes in estimating income inequality.
    Keywords: Pareto distribution,Top incomes,Income inequality
    Date: 2018
  24. By: Romina, Cavatassi; Paola, Mallia
    Abstract: The Republic of Tajikistan is a land locked country, where most of the territory (93%) is occupied by mountains. Poverty is quite widespread with about half of the country’s population living below the poverty line. The poorest people in the country reside in the Khatlon region, where 78 per cent of the population lives under the national poverty line and where land is degraded, the availability of inputs and credit is limited, irrigation facilities are lacking, and access to improved technologies and markets is poor (World Bank, 2015). About 50 per cent of the population depends on agriculture for livelihood, and most farmers lack access to adequate inputs, resources, technology and markets. Livestock is a key part of the agricultural sector and it is of critical importance in the livelihood strategy of poor rural households in Tajikistan. The pasture management system in Tajikistan remains largely unchanged since Soviet times with the exception that the lowest rung in the management system (corporate farms) no longer has adequate resources for pasture upkeep nor an adequate management system. The inadequacy of such a centralized management system is reflected in the overexploitation of pasture which has led to a vicious cycle of ever-lower animal yields and rural income, which is triggered by the legitimate will of farmers to increase their livestock production by adding animal units. This, in turn, has created a greater demand for feed, leading to a decrease in the feed per animal ratio, to a deterioration of the grazing land and to a further fall in animal weight. As a result, the rise in livestock inventories coupled with the fall in feed supplies has meant the dramatic fall of livestock productivity, low milk and meat yields and land degradation in the country, further worsening poverty among households. To address and overcome these problems, the Government of Tajikistan launched the Livestock and Pasture Development Project (LPDP) in August 2011, a project financed jointly by IFAD and the Government of the Republic of Tajikistan. The project had the goal of reducing poverty in the Khatlon region, increasing the nutritional status and incomes of rural poor households by boosting livestock productivity through the improvement of the productive capacity of pastures.
    Keywords: Farm Management, Food Security and Poverty, Productivity Analysis
    Date: 2018
  25. By: Dąbrowski, Marek A.; Wróblewska, Justyna
    Abstract: We examine the insulating property of flexible exchange rate in CEE economies using the fact that they have adopted different regimes. A set of Bayesian structural VAR models with common serial correlations is estimated on data spanning 1998q1-2015q4. The long-term identifying restrictions are derived from a macroeconomic model. We find that irrespective of the exchange rate regime output is driven mainly by real shocks. Its reactions to these shocks, however, are substantially stronger under less flexible regimes, whereas the responses to nominal shocks are similar. Hence, the insulating property of flexible regimes can reduce the costs from economic shocks.
    Keywords: open economy macroeconomics; exchange rate regimes; real and nominal shocks; Bayesian structural VAR; common serial correlation
    JEL: C11 E44 F33 F41
    Date: 2019–05–09
  26. By: Raimondi, Pier Paolo
    Abstract: After the Soviet breakup, Central Asia has gained importance for several States because of its geographical location and abundance of hydrocarbon reserves. These hydrocarbon reserves are located mainly in three countries: Kazakhstan, Turkmenistan and Uzbekistan. Each of them has taken different path regarding its foreign policy and the regulation of investments and participation of external companies and States in its energy sector. Through the development, production and export of their oil and gas reserves, they have pursued a ‘multi-vector’ policy, consolidating differently their relations with other countries. The main States involved – at different levels and for different reasons – in the oil and gas sector of the Central Asian countries are: Russia, China, United States, European countries, Iran, India and Turkey. Among these players, Russia considers Central Asia still part of its sphere of influence for historical reasons, while it has to deal an increasing presence of Beijing. The Western countries has gained influence particularly in Kazakhstan, but they have no political leverage in Turkmenistan. This working paper provides an overview of the current situation of external players’ interests in the oil and gas industry of Kazakhstan, Turkmenistan and Uzbekistan. The working paper is structured into four different sections. In the first section, the paper gives an overview of the main interests and pillars of external involvement in Central Asia as a region. The other three sections are devoted to provide separately the current status of energy relations between each Central Asian country and external players, starting from the closest countries (Russia and China) to the regional ones (Iran, Turkey and India) until non-regional countries (United States and European countries). During these analysis, investments in the oil and gas sector as well as energy export routes and volumes are highlighted in order to understand the current situation of the energy relations. At the end of each country section, the main trends and interests of the countries in the regional oil and gas sector are outlined.
    Keywords: Resource /Energy Economics and Policy
    Date: 2019–05–15
  27. By: Bekkers, Eddy; Koopman, Robert; Lemos Rego, Carolina
    Abstract: This paper examines the impact of structural change in China, in particular a reduction in the savings rate, an increase in the share of skilled workers, and an increase in productivity in technologically advanced manufacturing sectors targeted by Made in China 2025. Baseline projections until 2040 are generated with the WTO Global Trade Model, a dynamic computable general equilibrium model. With the modelled structural changes the Chinese economy is projected to reorient its focus increasingly onto the domestic economy, raising the share of private household and government consumption in GDP, turning China's trade surplus into a trade deficit, reducing China's share in global exports, raising the share of services in both production and exports, shifting the destination markets of Chinese exports from developed to developing countries, and changing its pattern of comparative advantage away from sectors like light and heavy manufacturing to electronic and machinery equipment. The large bilateral trade surplus vis-a-vis the United States is projected to fall to almost zero.
    Keywords: China; Dynamic CGE-Modelling; structural change
    JEL: F14 F43 I25
    Date: 2019–05
  28. By: Wang, Wenting; Wei, Longbao
    Abstract: As the world’s largest importer of agricultural commodities, China’s agricultural policies have significant implications for the world agricultural market. For the first time, we develop an aggregate structural econometric model of China’s soybean market with linkage to the rest of the world to analyze the worldwide impacts of China’s soybean price support policies from 2008 to 2016. We investigate the impacts of China’s policies on the variability of their domestic and world prices, and adopt a Monte Carlo simulation to evaluate the distributional and aggregate welfare effects. Results indicate that (a) China’s soybean price support policies play an effective role in stabilizing their domestic price, while its increasing imports absorb world production surplus and reduce world price swings; (b) China’s producers gain at the expense of consumers and budgetary costs, and the net welfare change in their domestic market is negative; (c) Soybean exporting countries experience considerable welfare gains, and the world net welfare change is positive. Our findings provide new insights for future trade negotiations and agricultural market reforms in developing countries.
    Keywords: Agricultural and Food Policy, International Relations/Trade
    Date: 2019–07
  29. By: Mihaela Teodorescu (Valahia University Targoviste); Mihai Mieila (Valahia University Targoviste)
    Abstract: The leasing agreements represent an important share within theo perations of capital assets financing. However, from the stand point of the user, the nominal costs implied by lease may appear as superior to those incurred in case offinancing through the buy-and-borrowalternative. Based onthe provisions of the Romanian Fiscal Code,the paper tries to analyzethe influence of taxation over theimplied costsfrom the user’s viewpoint. Considering financial leaseas an alternative to long-term borrowing,the first part of the article tries to point outthe influence of taxregulations upon thecost of the financial leasing. Thesecond partof the paper is dedicatedto the features and fiscal implications of the operating lease, presentingvarious situations,thecash flowsrelated to taxationinfluencingtheamountofthe requested rental payments.
    Keywords: financial leasing,operatingleasing, profittax, fiscal depreciation, tax onincomesof micro-enterprises
    JEL: G32 H25
    Date: 2018–11

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