nep-tra New Economics Papers
on Transition Economics
Issue of 2019‒06‒10
27 papers chosen by
J. David Brown
United States Census Bureau

  1. Monetary policy transmission to Russia & Eastern Europe By Stann, Carsten M.; Grigoriadis, Theocharis
  2. Market-based Financing Reforms and Shareholder Valuations: Event Study Evidence from the Chinese Science and Technology Innovation Board By Qin, Yaohua; Xiao, He; Zhang, Yifei
  3. Corruption and the business environment in Vietnam: Implications from an empirical study By Daisuke Maruichi and Masato Abe
  4. Inter-City Spillover and Intra-City Agglomeration Effects among Local Labour Markets in China By Gong, Xiaodong; Gao, Jiti; Liang, Xuan
  5. The effects of China’s growth slowdown on its provinces: Disentangling the sources By Anping Chen; Nicolaas Groenewold
  6. Industrial clusters in the long run: Evidence from Million-Rouble plants in China By Stephan Heblich; Marlon Seror; Hao Xu; Stephan Yanos Zylberberg
  7. Regional inequality in urban China, allowing for spatial cost of living differences: Evidence from a hedonic analysis of apartment prices By Chao Li, John Gibson and Geua Boe-Gibson
  8. Industrial Land Policy and Economic Complexity of Chinese Cities By Zhaoyingzi Dong; Yingcheng Li; Pierre-Alexandre Balland; Siqi Zheng
  9. The Community Origins of Private Enterprise in China By Ruochen Dai; Dilip Mookherjee; Kaivan Munshi; Xiaobo Zhang
  10. Catching up with the West: Chinese Pathways to the Global Middle Class By Gustafsson, Björn Anders; Yang, Xiuna; Sicular, Terry
  11. The efficiency of the distribution of tax sources between levels of government in Russia By Arlashkin, Igor (Арлашкин, Игорь); Barbashova, Natalia (Барбашова, Наталья); Deryugin, Alexander (Дерюгин, Александр); Komarnitskaya, Anna (Комарницкая, Анна)
  12. Russia’s economy and regional spillovers By Becker, Torbjörn
  13. Migrants and Firms: Evidence from China By Clement Imbert; Marlon Seror; Yifan Zhang; Stephan Yanos Zylberberg
  14. Inequality and credit growth in Russian regions By Makram El-Shagi; Jarko Fidrmuc; Steven Yamarik
  15. Understanding the spatial disparities and vulnerability of population aging in China By Yang Cheng, Siyao Gao, Shuai Li, Yuchao Zhang and Mark Rosenberg
  16. The Czech Exchange Rate Floor: Depreciation without Inflation? By Jaromir Baxa; Tomas Sestorad
  17. Assessment of risks and benefits for the Russian economy from the conduct of various integration strategies in modern conditions By Knobel, Alexander (Кнобель, Александр); Kuznetsov, Dmitriy (Кузнецов, Дмитрий); Sedalischev, Vladimir (Седалищев, Владимир)
  18. An institutional analysis of the fiscal autonomy of public hospitals in Vietnam By Minh Thị Hải Võ and Karl Löfgren
  19. High-tech sector support in Russia By Barinova, Vera (Баринова, Вера); Zemtsov, Stepan (Земцов, Степан)
  20. Convergence of labour productivity in agriculture of the European Union By Gołaś, Zbigniew Jan
  21. The relationship between government and business in the context of the formation of innovation clusters and ecosystems in Russia By Maracha, Vyacheslav (Марача, Вячеслав)
  22. The Belt and Road Initiative: What is in it for China? By Lauren A. Johnston
  23. Building a model of inter-regional Russian trade flows based on rail freight By Kaukin, Andrey (Каукин, Андрей); Tomaev, Aleksandr (Томаев, Александр)
  24. Small and medium-sized Russian enterprises: features of the formation of the management system (organizational design) By Borisova, Larisa (Борисова, Лариса)
  25. Excessive Entry and Exit in Export Markets By Hiroyuki Kasahara; Heiwai Tang
  26. Financial Integration and the Global Effects of China's Growth Surge By Rod Tyers; Yixiao Zhou
  27. Childcare and Maternal Employment: Evidence from Vietnam By Dang, Hai-Anh H.; Hiraga, Masako; Nguyen, Cuong Viet

  1. By: Stann, Carsten M.; Grigoriadis, Theocharis
    Abstract: In this paper, we argue that the ECB's unconventional monetary policy announcements have generated significant spillover effects in Russia and Eastern Europe. The hypothesis is tested using OLS estimations of event-based regressions on monetary policy event dummies and seven financial variables in eleven East European countries including Russia. Overall, the empirical results associate the ECB's unconventional policy announcements with the appreciation of East European currencies, rising stock market indices as well as falling long-term government bond yields and lower sovereign CDS spreads in Eastern Europe and Russia. Notably, bilateral integration with the eurozone is a key determinant of the strength of spillovers, with spillovers strongest in non-euro EU countries and weakest in non-EU East European countries. Interestingly, we find differentiated strength of spillovers to Russia compared to other non-EU East European countries, which we attribute to its fixed exchange rate regime. Lastly, we test for the presence of the portfolio rebalancing and confidence transmission channels.
    Keywords: monetary policy transmission,spillovers,European Central Bank,transmission channels,Eastern Europe,Russia
    JEL: E52 E58 F34 F37 F42 P51
    Date: 2019
  2. By: Qin, Yaohua; Xiao, He; Zhang, Yifei
    Abstract: This paper studies the impact of the newly introduced science and technology innovation board (STIB) on stock valuations in China. This Nasdaq-style board features a market-based IPO system that contrasts with the current approved-based arrangement. Event study approach shows that A-share firms pertaining to STIB related industries increased significantly after the reform announcement. The effect is stronger for Non-SOEs and firms with higher R&D capacity. Public shareholders of the firms filing STIB IPO applications experienced salient growth in their abnormal returns while their industry competitors suffered price drops. Financial analysts also broadened their company coverages in STIB related industries and revised their market valuation forecasts positively in line with the market investors.
    Keywords: China's financial reform, Registration-based IPO system, Science and technology innovation board in China, Chinese financial markets.
    JEL: G18 G38 N25 O16
    Date: 2019–05–19
  3. By: Daisuke Maruichi and Masato Abe
    Abstract: This paper examines the effect of corruption on the business environment in Vietnam. Our survey of firms conducted in Vietnam suggests that corruption is perceived as the most impactful business obstacle for their operation. It was also found that corruption has a significant negative association with the overall satisfaction of the business environment in Vietnam, which supports the hypothesis that corruption has a “sand the wheel†effect on firms' business activities. Given these results, it is urgent that the Vietnamese public authorities accelerate efforts in mitigating this issue. Although this paper sheds light on the importance of corruption, it would be useful to conduct follow†up studies examining corruption and its impact in more detail. Such studies could be conducted in segments that most severely suffer from corruption according to our survey, that is, medium†sized enterprises in the hotel/restaurant and construction sectors, Hanoi based, and Vietnamese owned firms.
    Keywords: business environment, business obstacle, corruption, firm perception, Vietnam
    Date: 2019–06–07
  4. By: Gong, Xiaodong (NATSEM, University of Canberra); Gao, Jiti (Monash University); Liang, Xuan (Australian National University)
    Abstract: We examine how city size affect wage levels of cities (agglomeration externality) and how it influence surrounding cities (spill-over effect) in China for the period between 1995 and 2009. Using spatial fixed-effect panel data models and allowing for endogenous and exogenous spatial dependence, we find strong positive city size effect on real wage levels, which confirms the existence of agglomeration economy within cities. We also find significant differences in both the direct and indirect effect of factors such as FDI between more and less population dense areas.
    Keywords: agglomeration economy, spill-over, spatial econometrics, fixed-effects
    JEL: C23 R12 R23
    Date: 2019–05
  5. By: Anping Chen (School of Economics, Jinan University); Nicolaas Groenewold (Economics Discipline, Business School, The University of Western Australia)
    Abstract: Since 2007 China’s growth has fallen from around 10% to about 6-7% per annum. This paper investigates the experience of this slowdown at the provincial level. We use a vector-autoregressive modelling approach and annual data from 1978 to decompose each province’s growth into various factors. We find that (1) all provinces experienced the slowdown; (2) there is considerable variation in this experience across provinces; (3) national factors dominate the provincial slowdown while province-specific factors explain most of the interprovincial variation; (4) when the national factor is separated into supply and demand components, the supply component dominates.
    Keywords: China, growth, slowdown, provincial effects
    JEL: E61 R50 O53
    Date: 2019
  6. By: Stephan Heblich; Marlon Seror; Hao Xu; Stephan Yanos Zylberberg
    Abstract: This paper exploits a short-lived cooperation program between the U.S.S.R. and China, which led to the construction of 156 "Million-Rouble plants" in the 1950s. We isolate exogenous variation in location decisions due to the relative position of allied and enemy airbases and study the long-run impact of these factories on local economic activity. While the "156" program accelerated industrialization in treated counties until the end of the command-economy era, this significant productivity advantage fully eroded in the subsequent period. We explore the nature of local spillovers responsible for this pattern, and provide evidence that treated counties are overspecialized and far less innovative. There is a large concentration of establishments along the production chain of the Million-Rouble plants, which limits technological spillovers across industries.
    Keywords: USSR, China, million-rouble plants.
    Date: 2019–05–21
  7. By: Chao Li, John Gibson and Geua Boe-Gibson
    Abstract: Studies of inequality in China typically ignore cost of living differences between areas. Under the Balassa–Samuelson effect, nontradeables cost more in richer areas, so nominal inequality exceeds real inequality. This especially matters in China, where spatial cost of living differences should grow with recent development of urban housing markets. We use new data on apartment prices in 104 cities in China to develop housing†related spatial deflators. The level of spatial inequality in urban China is overstated by 27% if cost of living differences are ignored. Our hedonic analysis of 41,000 individual apartment sales shows that most price variation is between areas, rather than from features of individual apartments. The dominant trend in the reform era is for regional inequality in China to decline, contrary to the common perceptions. In nominal terms, the Theil index for interprovincial inequality in 2016 is just 46% of its 1978 level. The current results imply that the fall in inequality in real terms would be even greater.
    Keywords: China, housing, inequality, regional policy, spatial deflators
    Date: 2019–06–03
  8. By: Zhaoyingzi Dong; Yingcheng Li; Pierre-Alexandre Balland; Siqi Zheng
    Abstract: Economies producing more complex products tend to be wealthier and grow more quickly. Therefore, a key issue for cities around the world is to develop new specializations into more complex industries. In China, local governments tend to use industrial land subsidy as a policy tool to attract new firms in desired industries and promote industrial growth. However, relatively little is known about the impact of this policy tool on the economic complexity of Chinese cities. Drawing upon the recent literature on the principle of relatedness and economic complexity, this paper investigates the impact of this industrial land policy (ILP) on the diversification of Chinese cities into more complex industries. The empirical results support our hypothesis that those cities providing higher intensity of land subsidy are more likely to enter new industries, in particular the most complex ones.
    Keywords: : Economic Complexity, Industry Complexity, Industrial Land Policy, Industrial Diversification
    JEL: O25 O38 R11
    Date: 2019–05
  9. By: Ruochen Dai (Peking University); Dilip Mookherjee (Boston University); Kaivan Munshi (University of Cambridge); Xiaobo Zhang (Peking University)
    Abstract: This paper identifies and quantifies the role played by birth-county-based community networks in the growth of private enterprise in China. The starting point for the analysis is the observation that population density is positively associated with local social interactions, social homogeneity, and enforceable trust in counties (but not cities). This motivates a model of network-based spillovers that predicts how the dynamics of firm entry, concentration, and firm size vary with birth county population density. The predictions of the model are validated over the 1990-2009 period with administrative data covering the universe of registered firms. Competing non-network-based explanations can explain some, but not all of the results. We subsequently estimate the structural parameters of the model and conduct counter-factual simulations, which indicate that entry and capital stock over the 1995-2004 period would have been 40% lower without community networks. Additional counter-factual simulations shed light on misallocation and industrial policy.
    Keywords: Community Networks. Enforceable Trust. Entrepreneurship. Misallocation. Informal Institutions. Growth and Development.
    JEL: J12 J16 D31 I3
    Date: 2019–02
  10. By: Gustafsson, Björn Anders (University of Gothenburg); Yang, Xiuna (China Development Research Foundation); Sicular, Terry (University of Western Ontario)
    Abstract: We investigate whether Chinese household incomes have caught up to those of the middle class in the developed world. Using nationwide survey data for 2002 and 2013, we find considerable catch up. Defining the global middle class as being neither poor nor rich in the developed world, we estimate that China's global middle class grew rapidly after 2002, reaching 250 million in 2013. We describe the characteristics of this middle class, which is predominately urban, in the eastern region, and wage-earning. A distinct business middle class exists but is relatively small. Analysis of the chances of attaining the middle class reveals the importance of an individual's circumstances at birth. Parents' education and occupation matter. Being born with an urban hukou provides a large advantage. For those born with a rural hukou, the most effective pathways to the middle class are migration and, if possible, obtaining an urban hukou.
    Keywords: China, middle class, income distribution, economic mobility
    JEL: D31 P36
    Date: 2019–05
  11. By: Arlashkin, Igor (Арлашкин, Игорь) (The Russian Presidential Academy of National Economy and Public Administration); Barbashova, Natalia (Барбашова, Наталья) (The Russian Presidential Academy of National Economy and Public Administration); Deryugin, Alexander (Дерюгин, Александр) (The Russian Presidential Academy of National Economy and Public Administration); Komarnitskaya, Anna (Комарницкая, Анна) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The paper contains the results of efficiency evaluation of taxes’ distribution between levels of public authority in Russian Federation, as well as the analysis of a relationship between assigning certain taxes to local budgets and regional economic growth. Based on the results of the analysis, recommendations are made in transferring additional revenue sources to the local level of government, and conclusions are provided concerning the impact of tax decentralization on the regional economic growth.
    Date: 2019–05
  12. By: Becker, Torbjörn (Stockholm Institute of Transition Economics)
    Abstract: This paper looks at how the Russian economy has developed under the leadership of Putin and how it spills over to its neighbours in the CIS region. It stresses the importance of international oil prices as a determinant of policies and outcomes in Russia and highlights how this has impacted macroeconomic performance during Putin’s different terms in office. Although Russia is not an economic superpower globally, the size and importance of Russia for the CIS region is significant and thus oil price changes also drive the economic development of non-fuel exporting CIS countries to a significant degree.
    Keywords: Russia; Putin; macroeconomis; CIS; transition
    JEL: E60 F40 O52
    Date: 2019–06–04
  13. By: Clement Imbert; Marlon Seror; Yifan Zhang; Stephan Yanos Zylberberg
    Abstract: This paper estimates the causal effect of rural-urban migration on urban production in China. We use longitudinal data on manufacturing firms between 2001 and 2006 and exploit exogenous variation in rural-urban migration due to agricultural price shocks. Following a migrant inflow, labor costs decline and employment expands. Labor productivity decreases sharply and remains low in the medium run. A quantitative framework suggests that destinations become too labor-abundant and migration mostly benefits low-productivity firms within locations. As migrants select into high-productivity destinations, migration however strongly contributes to the equalization of factor productivity across locations.
    Keywords: China, productivity.
    Date: 2018–12–01
  14. By: Makram El-Shagi (Center for Financial Development and Stability at Henan University, and School of Economics at Henan University, Kaifeng, Henan); Jarko Fidrmuc (Zeppelin University, Friedrichshafen, Germany); Steven Yamarik (California State University Long Beach, CA)
    Abstract: We test the Rajan hypothesis using data for 75 highly heterogeneous Russian regions between the Russian crisis and the introduction of international sanctions (2000-2012). Applying static as well as dynamic panel data models, we show that a rise in income inequality measured by regional Gini indices is significantly correlated with the growth of personal loans. Thus, the rising inequality in Russia is likely to have implications on financial staiblity and occurrence of banking crises. Moreover, the correlation of inequality and corporate loans indicates that inequality affects loans growth across more channels than those implied by the Rajan hypothesis.
    Keywords: Income inequality, bank loans, Rajan hypothesis, Russia
    JEL: E51 G01 R11
    Date: 2019–06
  15. By: Yang Cheng, Siyao Gao, Shuai Li, Yuchao Zhang and Mark Rosenberg
    Abstract: Understanding the regional pattern of population aging in China enables rational policy making to address the challenges of inequity in social welfare and care resources among the east–central–west regions and rural–urban areas of China. This study uses census data in 2000 and 2010, and aging population ratios, annual increase rates, and spatial autocorrelation analysis to examine spatial disparities in population aging in China. The results show that the population is more aged and aging more rapidly in rural areas than in urban areas. Spatial clusters of population aging expanded from the east coastal region in 2000, to inland provinces such as Sichuan and Chongqing in 2010. The vulnerable regions in terms of population aging, health status of the elderly population, and economic level at the prefectural level were also identified.
    Keywords: China, population aging, rural and urban areas, spatial disparities, vulnerable regions
    Date: 2019–01–22
  16. By: Jaromir Baxa; Tomas Sestorad
    Abstract: After the introduction of an exchange rate commitment and an immediate 7% depreciation of the Czech koruna of in 2013, output growth resumed but inflation remained low. Consequently, the Czech National Bank did not return policy to normal for more than three years. Using a time-varying parameter VAR model with stochastic volatility, we show that this was not surprising. The exchange rate pass-through to prices had been rather low and gradually decreasing since the early 2000s, suggesting limited potential effects of the exchange rate commitment on inflation. On the other hand, the pass-through to output growth increased. These results hold even when the period of the exchange rate floor and the zero lower bound is excluded from the sample, and they are robust to other sensitivity checks. Our results are consistent either with a flattened Phillips curve, or rising quality of the Czech exports and participation in global value chains, or a small effect of the exchange rate commitment on inflation expectations when not paired with temporary price-level targeting. Moreover, we highlight the usefulness of models accounting for time variation of parameters for policy analysis.
    Keywords: Exchange rate commitment, exchange rate pass-through, time-varying parameters, VAR, zero lower bound
    JEL: C32 E52 F41
    Date: 2019–02
  17. By: Knobel, Alexander (Кнобель, Александр) (The Russian Presidential Academy of National Economy and Public Administration); Kuznetsov, Dmitriy (Кузнецов, Дмитрий) (The Russian Presidential Academy of National Economy and Public Administration); Sedalischev, Vladimir (Седалищев, Владимир) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: Assessment of risks and benefits for the Russian economy from various integration strategies in modern conditions To find the best ways for Russia to liberalize trade between EAEU and other countries of the world, taking into account the hostile actions of third parties (the sanctions confrontation with the EU and the USA, etc.), we used the GLOBE v1 computable general equilibrium model. We have limited ourselves to considering five integration sites, the formation of which, in our opinion, is most likely due to the current state of their negotiation progress: TPP without the USA, SCO, ASEAN, RCEP and TTIP. It was assumed that with each of these sites the EAEU may or may not create an FTA, which led us to consider 243 different scenarios. As shown by the calculations, the inaction of the EAEU has, as a rule, a weak positive effect on the countries of the EAEU both at the level of industries and at the level of the economy as a whole. At the same time, the participation of the EAEU countries in the integration processes can give noticeable gains in terms of GDP (up to 1.2% from Russia) and trade. Nevertheless, participation in these processes creates noticeable industry risks (decline in output to 1.9%) in some sectors.
    Date: 2019–04
  18. By: Minh Thị Hải Võ and Karl Löfgren
    Abstract: This paper explores the fiscal autonomy of Vietnam's public hospitals through analysing the formal autonomy rules and the actual autonomy practices among selected hospitals. We argue that Vietnam's autonomisation of public hospitals underpins the increasing switch of healthcare costs from the state onto society alongside the transition from the universal and free healthcare services to a mix of state subsidy and fees†for†services. Utilised as a strategic instrument, hospital autonomy is reinforced in service provision, capital mobilisation, and allocation of net revenues, leaving autonomy in other dimensions increase incrementally. Consequently, Vietnam's hospital autonomisation has occasioned various revenue†maximising practices including the provision of “patient†requested†services, provider†induced supply of unnecessary services, excessive use of high†tech diagnostic equipment, inappropriate prescription of drugs, increase in patients' length of stay, and receipt of informal payments. While discerning healthcare reform in a country context, this paper expects to offer lessons to policy†makers in developing countries, which reform their healthcare services along the market principle.
    Keywords: autonomy, health care, institutions, public hospitals, Vietnam
    Date: 2019–01–22
  19. By: Barinova, Vera (Баринова, Вера) (The Russian Presidential Academy of National Economy and Public Administration); Zemtsov, Stepan (Земцов, Степан) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The main objective of the study, the results of which are presented in this paper, is to identify the regional and structural features of the high-tech support policy in Russia. The database on the financing of innovative projects by the main federal development institutions and departments was analyzed, and the main practices of high-tech support in the regions of Russia were systematized. The paper formulates recommendations for creating incentives for the development of high technologies.
    Date: 2019–05
  20. By: Gołaś, Zbigniew Jan
    Abstract: Labour productivity is commonly considered as one of the most important parameters of development of economies, because it is conductive to reduction of costs, increase in supply of cheaper goods and services, higher dynamics of the market and higher purchasing power of societies, their wealth and competitive ability. But labour productivity is – at the backdrop of the EU countries – highly diversified, including in particular in agriculture where its level is much lower than in other sectors of the economy. The main objective of the presented paper is to examine and assess the changes in labour productivity in the EU agriculture in the context of the diversity of its level and dynamics of change underlying the identification of labour productivity convergence/divergence processes taking place in agriculture. The labour productivity convergence processes in the EU agriculture were analysed based on data from the period between 2005 and 2016, by testing two its basic types, namely sigma and beta convergence. The analysis applied statistical measures describing the degree of labour productivity differentiation in agriculture of the EU countries and cross-sectional regression function. The research showed that sigma and beta convergence exist in general in the EU-28 countries and in the group of the new Member States (UE-13). In the group of old Member States, however, no sigma convergence/divergence was identified, but statistically significant beta divergence was noted.
    Keywords: Agricultural Finance, International Development, International Relations/Trade, Labor and Human Capital
    Date: 2019
  21. By: Maracha, Vyacheslav (Марача, Вячеслав) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: Based on the formation of innovative clusters and ecosystems in Russia, the network organization and system principles for transforming the relationship between the state and innovative business are considered. The focus focuses on the formation of innovation clusters and ecosystems as collaborative communities, the transition to a “cluster management organization” as a new advanced form of organization of the innovation process, as well as government policy to support such a transition along with government and business relations in this context.
    Date: 2019–05
  22. By: Lauren A. Johnston
    Abstract: China's outbound investment exceeded inbound investment for the first time in 2015. In years leading up this transition, a maturing demographic transition alongside slowing internal migration and diminishing returns to physical capital investment, all had a role in China's diminished competitiveness in low†wage manufactured exports and the fading of the related growth model. In that context, the 2013 launch of the Belt and Road Initiative (BRI) took place in two stages in two developing countries, Kazakhstan and Indonesia. These launch choices, and the BRI in general are herein elaborated in terms of economic history, geography, and demography. The BRI in turn is considered to be aiming to foster the ongoing development of China, and in doing so also seeks to instigate new era development opportunity for other developing countries. One facilitation channel for the latter is China's concept of “patient capital,†essentially concessional capital, or foreign aid. For China that offers a means via which to internationalise the financial sector and also the Renminbi. Lessons from China's own use of foreign aid and economic development hence serve as an important reference for ongoing scoping of the shape and trajectory of the BRI. To that end, this article sheds light on what is in the BRI for China.
    Keywords: Belt and Road Initiative, China, development, economic demography, RMB internationalisation
    Date: 2019–01–22
  23. By: Kaukin, Andrey (Каукин, Андрей) (The Russian Presidential Academy of National Economy and Public Administration); Tomaev, Aleksandr (Томаев, Александр) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The main objective of this study is to identify factors affecting the routing and intensity of Russian rail trade flows. Using the gravity model and relying on the information on interregional freight traffic during the period from 2012 to 2016, we estimate the degree of influence of certain variables on the volume of trade.
    Date: 2019–05
  24. By: Borisova, Larisa (Борисова, Лариса) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The purpose of this study was to identify effective management systems for small and medium-sized Russian companies, taking into account the peculiarities of the Russian mentality. As a result of the analysis of data obtained in the course of questioning and interviewing managers of small and medium-sized enterprises, the dependence of the organizational design on the cultural parameters of the managers and teams was revealed. The most effective management systems for small and medium-sized businesses are identified, taking into account the phase of their life cycle, management style, and organizational culture. The results of a comparative analysis of organizational design of successfully operating small and medium-sized enterprises with nationally homogeneous and nationally diverse teams are presented.
    Date: 2019–05
  25. By: Hiroyuki Kasahara; Heiwai Tang
    Abstract: Using transaction-level data for all Chinese firms exporting between 2000 and 2006, we find that on average 78% of exporters to a country in a given year are new exporters. Among these new exporters, an average of 60% stopped serving the same country the following year. These rates are higher if the destination country is a market with which Chinese firms are less familiar. We build a simple two-period model with imperfect information, in which beliefs about their foreign demand are determined by learning from neighbors. In the model, a high variance of the prior distribution of foreign demand induces firms to enter new markets. This is because the profit function is convex in perceived foreign demand due to the option of exiting, which insures against the risk of low demand realization. We then use our micro data to empirically examine several model predictions, and find evidence to support the hypothesis that firms' high entries and exits are outcomes of their rational self-discovery of demand in an unfamiliar market.
    JEL: D8 F1 F2
    Date: 2019–05
  26. By: Rod Tyers (Economics Programme, University of Western Australia); Yixiao Zhou (Crawford School of Public Policy, Australian National University)
    Abstract: China's financial openness, as measured by cross border flows and asset ownership, peaked during its 2000s growth surge, as did downward pressure on global interest rates and price levels. This was despite China's restriction of financial inflows to approved FDI and tight controls on private outflows. We analyze the global effects of the growth surge and their dependence on these financial policies by employing a global macro model with national portfolio rebalancing, in which flexibility in asset differentiation is used to index financial integration. The results suggest that, globally, the growth surge raised asset prices, reduced yields and bolstered deflationary pressures, while improving aggregate economic welfare. It is shown that, without capital controls, most surge effects on China would have been moderated substantially while the global impacts would have been larger.
    Keywords: Financial integration, China, imbalances, saving, monetary policy, spill-overs
    JEL: F42 F43 F47
    Date: 2019
  27. By: Dang, Hai-Anh H.; Hiraga, Masako; Nguyen, Cuong Viet
    Abstract: Little literature currently exists on the effects of childcare use on maternal labor market outcomes in a developing country context, and recent studies offer mixed results. We attempt to fill these gaps by analyzing several of the latest rounds of the Vietnam Household Living Standards Survey spanning the early to mid-2010s. Addressing endogeneity issues with a regression discontinuity estimator based on children’s birth months, we find a sizable effect of childcare attendance on women’s labor market outcomes, including their total annual wages, household income, and poverty status. The effects of childcare attendance differ by women’s characteristics and are particularly strong for younger, more educated women. Furthermore, childcare has a medium-term effect and positively impacts men’s labor market outcomes as well.
    Keywords: Gender equality,child care,maternal employment,women’s empowerment,Vietnam
    JEL: J13 J16 J22 H42
    Date: 2019

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