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on Transition Economics |
| By: | Apostolos Serletis (University of Calgary); Nahiyan Azad (University of Calgary) |
| Abstract: | This paper explores for spillovers from monetary policy in the United States to a number of emerging market economies. We estimate the Elder and Serletis (2010) bivariate structural GARCH-in-Mean VAR in the U.S. monetary policy rate and the policy rate of each of six emerging economies that target the inflation rate — Brazil, Chile, Mexico, Romania, Serbia, and South Africa. We also estimate the same model in the U.S. monetary policy rate and the exchange rate (against the U.S. dollar) of each of six emerging economies that target the exchange rate — Bosnia and Herzegovina, Bulgaria, Comoros, Croatia, the Former Yugoslav Republic of Macedonia, and Montenegro. Our evidence suggests that positive (negative) U.S. monetary policy shocks tend to appreciate (depreciate) the currencies of the exchange rate targeting emerging economies, but have an ambiguous effect on the policy rates of the inflation-targeting emerging economies. Moreover, monetary policy uncertainty in the United States leads to an increase in policy rates in those emerging economies that target the inflation rate and to a depreciation of the currencies of those emerging economies that target the exchange rate. |
| Date: | 2019–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:clg:wpaper:2019-14&r=all |
| By: | Shuonan Zhang (Portsmouth Business School) |
| Abstract: | In this paper, we build and estimate a DSGE model to study how state-owned enterprises (SOEs) and entrusted lending affect growth and business cycles in China. Our model is featured SOEs being bank-favoured firms as well as policy tools, and more productive private firms (POEs) who can borrow from SOEs through entrusted lending. Our findings suggest SOEs dampen output volatility at the cost of TFP volatility. As policy tools, SOEs cause the expense larger than the dampening effect while a reverse case is found for SOEs being bank-favoured firms. In contrast, entrusted lending could dampen variations of both output and TFP by reallocating credits between SOEs and POEs, hence mitigating the cost of SOEs. Focusing on the recent growth slowdown in China, we further show that entrusted lending was conducive to both economic growth and TFP growth by mitigating capital misallocation. |
| Keywords: | State-owned Enterprises, Shadow Lending, Resource Allocation, Financial Friction, Business Cycles |
| JEL: | C32 E32 E44 |
| Date: | 2020–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:pbs:ecofin:2020-01&r=all |
| By: | Pastore, Francesco; Semerikova, Elena |
| Abstract: | This paper aims to assess the role of migration as an adjustment mechanism device to favor convergence across states and regions of Russia. In contrast to previous studies, we use variations in the population of a region as a proxy of its net migration rate and apply spatial econometric methodology in order to distinguish the effect from the neighbouring regions. We provide descriptive statistical evidence showing that Russia has more/less/the same intense migration flows than the USA and EU. The econometric analysis shows that migration flows are sensitive to both regional income and regional unemployment differentials. Nonetheless, we find that internal migration is sensitive to regional unemployment and income differentials of neighbouring regions. Dependent on the welfare, pre- or after-crisis period, income in neighbouring regions can create out- or in-migration flows. The relatively high degree of internal mobility coupled with the low sensitivity of migration flows to the local unemployment rate of distant regions might explain why migration flows tends not to generate convergence, but rather divergence across Russian regions. |
| Keywords: | Internal and International migration,Adjustment mechanism,spatial econometrics,Russia |
| JEL: | F15 F22 J61 R23 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:445&r=all |
| By: | Duan, Wenjing; Martins, Pedro S. |
| Abstract: | Do firms in China share rents with their workers? We address this question by examining firm-level panel data covering virtually all manufacturing firms over the period 2000-2007, representing an average of 52 million workers per year. We find evidence of rent sharing (RS), with wage-profit elasticies of between 4% and 6%. These results are based on multiple instrumental variables, including firm-specific international trade shocks. We also present a number of complementary findings to understand better the nature of RS in the country: it involves an element of risk sharing, as wages also decrease when profits fall; RS is lower in regions with more latent competition from rural workers; higher minimum wages tend to reduce RS; and, while employer labour market power reduces wages, it increases RS. Overall, despite its importance, RS in China is smaller and more symmetric than in developed economies, which re ects the weaker bargaining power of its workers and the different nature of its labour market institutions. |
| Keywords: | Wages,Bargaining,Monopsony |
| JEL: | J31 J41 J50 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:448&r=all |
| By: | Mathilde Maurel (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique); Thomas Pernet (UP1 UFR02 - Université Panthéon-Sorbonne - UFR d'Économie - UP1 - Université Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Zhao Ruili (SUIBE - Shangai University of International Business and Economics) |
| Abstract: | We study how a bank's involvement in a firm's financing may be in line with environmental policies pursued by the Chinese central government. Specifically, we evaluate the effectiveness of credit reallocation away from polluting projects when the government imposes stringent environmental policies. We combine the industries' financial dependencies with time, including cross-cities variation in policy intensity to identify the causal effect on the sulfur dioxide (SO2) emission. We find that SO2 emissions are lower in industries with high reliance on credits and stricter environmental regulations. Furthermore, our results suggest that locations with strong environmental policies lead firms to seek funding in less regulated areas, which confirms the pollution haven hypothesis. |
| Keywords: | Banks,Financial Dependency,Environmental regulation,China |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02423350&r=all |
| By: | Victor Gorshkov (Faculty of International Liberal Arts, Kaichi International University) |
| Abstract: | Russia’s banking sector has increasingly become more nationalized and monopolized in recent years as the result of the Central Bank of Russia’s policies. In the present paper, we have demonstrated how policies of the Bank of Russia since 2013 have enhanced the level of nationalization and monopolization of Russia’s banking sector and have provided even more favorable conditions for state-controlled banks. The paper outlined the ‘clearance campaign’ of the Central Bank of Russia and summarized major disturbing trends, such as the increased amount of license revocations, the split within the Association of Russian banks, enhanced state support towards state-controlled banks, that are reshaping the institutional structure of Russia’s banking sector. The strengthening of supervisory and regulatory functions of the Bank of Russia can be viewed as a positive sign as they help create the healthy environment within the sector and aim to establish market discipline, however, current policies simultaneously cause significant market distortions and further suppress competition. |
| Keywords: | Russia, state, banking sector |
| JEL: | P29 P52 O16 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:1015&r=all |
| By: | Paul Minard |
| Abstract: | Robust assessment of the institutionalist account of comparative development is hampered by problems of omitted variable bias and reverse causation, since institutional quality is not randomly assigned with respect to geographic and human capital endowments. A recent series of papers has applied spatial regression discontinuity designs to estimate the impact of institutions on incomes at international borders, drawing inference from the abrupt discontinuity in governance at borders, whereas other determinants of income vary smoothly across borders. I extend this literature by assessing the importance of sub-national variation in institutional quality at provincial borders in China. Employing nighttime lights emissions as a proxy for income, across multiple specifications I find no evidence in favour of an institutionalist account of the comparative development of Chinese provinces. |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2001.02804&r=all |
| By: | Quang Tran, Tuyen; Van Vu, Huong |
| Abstract: | Our study provides evidence that land fragmentation has negative consequences for household income, possibly because of its negative effects on crop income in ruralVietnam. Notably, using the Instrumental Variables (IV) method, we find that the negative effect is much greater after addressing the endogeneity of land fragmentation. IV analysis, therefore, suggests that a conventional approach which often uses the Ordinary Least Squares (OLS) method is likely to underestimate the impact of land fragmentation on rural households. Also, the finding implies that reducing land fragmentation would minimize its negative consequences for household income by reducing its negative effect on crop income. |
| Keywords: | Cropland; Endonegeity; Land law 1993; Land reform; Fragmentation; Household income, rural Vietnam |
| JEL: | Q1 Q12 Q18 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:98171&r=all |
| By: | Qinxin Guo (Graduate School of Economics, Kobe University, Japan); Junyi Shen (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan) |
| Abstract: | In this study, a stated choice survey was conducted in Anhui Province, China. The best-worst scaling method, an alternative method to the discrete choice experiment, was used to value rural residents' attitude toward agri-environmental policy. Using the multinomial logit and random parameter logit model, the results showed that respondents thought the best policy included protecting underground water quality as the objective, straw recycling as the method, technological support provided by the government, a supervision level of 30% of farmers, and a 6,000 RMB subsidy directly disbursed by the government. Conversely, respondents thought the worst policy included protecting biodiversity as the objective, purchasing pesticides and fertilizers from the prescribed list as the method, no technological support provided by the government, an increased supervision level of 50% of farmers, and a 4,500 RMB subsidy requiring a contract with the government. The results of the latent class logit model suggested the respondents who are older, have fewer children under middle school age, less agree with the rural environment will have a large impact on agriculture production, have more knowledge of agricultural and environmental 2 protection would show more sensitivity to the attributes of agri-environmental policies. |
| Keywords: | Agri-environmental policy; Best-worst scaling; Latent class model; Random parameter logit model; Multinomial logit model |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2020-01&r=all |
| By: | Bradley, Elizabeth; Chen, Xi; Tang, Gaojie |
| Abstract: | Grants and services provided by the government may crowd out informal arrangements, thus weakening informal caring relations and networks. In this paper, we examine the impact of social security expansion on neighborhood cohesion of elders using China’s New Rural Pension Scheme (NRPS), one of the largest existing pension program in the world. Since its launch in 2009, more than 400 million Chinese have enrolled in NRPS. We use two waves of China Health and Retirement Longitudinal Study (CHARLS) to examine the effect of pension receipt on two dimensions of neighborhood cohesion among older adults, i.e. participation in collective recreational activities (e.g., socializing and organizational activities) and altruistic activities (e.g., helping those in need in the community), and the frequencies of these activities. Employing an instrumental variable approach, our empirical strategy addresses the endogeneity of pension receipt via exploiting geographic variation in pension program roll-out. We find evidence that receiving pension only slightly reduces collective recreational activities while significantly crowding out altruistic activities in the communities. |
| Keywords: | neighborhood cohesion,pension,crowd out,diversity |
| JEL: | H55 I38 O22 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:453&r=all |
| By: | Annelies Deuss (OECD); Marcel Adenauer (OECD) |
| Abstract: | In 2016, the People’s Republic of China removed its support prices for maize and started destocking its large public reserves of maize. This paper investigates what would happen if China were to also eliminate its support prices for rice and wheat and reduce its public stocks of these two commodities. The analysis examines domestic and international market impacts over the next ten years by comparing a baseline (or business-as-usual scenario) with three scenarios that each assume support prices are eliminated but incorporate different assumptions about China’s import policies. To account for the uncertainty about China’s actual stock levels, the baseline and three scenarios are conducted under a minimum and maximum stock level assumption. The results show that the impacts will be most pronounced during the first years when temporary public stocks are depleted, with strong drops in domestic prices and reduced production. Over the medium term, domestic prices are projected to recover but will remain below baseline levels. The analysis also shows that even though the actual size of stocks has no significant impact over the medium term, its impact can be substantial during the first years a new policy is implemented, which underscores the importance of transparency when reporting on stock levels and stockholding policies. |
| Keywords: | agricultural policy reform, cereals, China, partial equilibrium model, stocks, TRQ |
| JEL: | F13 F14 Q11 Q17 Q18 |
| Date: | 2020–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:oec:agraaa:138-en&r=all |
| By: | Ngoc Mai, Anh; Vu Van, Huong; Bui Xuan, Bien |
| Abstract: | This study is the first to study the lasting effects of innovation on firm profitability in Vietnam. Using a unique panel dataset for the period 2005-2015, our results show that innovators achieve higher profit in comparison with non-innovating firms. The positive effects of innovation on firm profitability are observed not only in the short term but also in the longer term. The benefits of innovation for firm profitability can be seen in higher export probability, better productivity, better access to formal credit, and the ability to secure government support, but only after innovation. |
| Keywords: | Innovation, firm profitability, and SMEs |
| JEL: | D2 D21 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:98168&r=all |
| By: | Satoshi Mizobata (Kyoto University); Norio Horie (University of Toyama) |
| Abstract: | The concept “path dependency” helps understanding the institutional changes and has given a logical basis which explains not convergence of the evolutionary path of transition economies but their diversified path. Based on “the base simplified literature”, in short random sampling papers from the EconLit database through a keyword search that examine the transition economies from the angle of path dependency, this paper empirically investigates the development trends with regard to path dependency arguments in economics of transition, the theoretical trends on which the economics of transition has been discussed and others. As a consequence, the theoretical and empirical characteristics of path dependency arguments in the economics of transition can be elucidated and the paper clarifies that the papers of David Stark has occupied the important position as a source of path dependency approach’s development, through an analysis of encoding a series of literature attributes the degree of support for path dependency, the relevant reasoning factors and other influential factors based on our own methodology. A systematic / analytical review clarifies the following points: support for path dependency has declined in 2000s; while path dependency approach covers all the transition economies, South-East European countries and Russia have comparatively been stronger supporters of path dependency influence than other EU joining East European countries; researches on institutions, regions and local identities have relatively strongly support path dependency arguments |
| Keywords: | path dependency, institution, transition, legacy, economics |
| JEL: | P26 B25 O17 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:1014&r=all |
| By: | Toma Lankauskiene (Vilnius Gediminas Technical University) |
| Abstract: | The article aims to apply the growth accounting methodology to the Baltic countries in order to obtain detailed productivity growth determinants in the aggregated market economy with a particular focus to capital input. To this end, a new database following the KLEMS methodology for tangible and intangible capital indicators is constructed. The paper analyses determinants’ genesis and growth tendencies in the context of more developed countries and uncovers the productivity gains associated with different types of capital assets. First, an overview of the economies during the period researched is presented. Second, a methodology is developed to derive new intangibles and EU KLEMS data for the Baltic countries. Third, statistical data are constructed for all economies and the growth accounting method is applied in order to obtain comparable results. Finally, economic analysis is conducted to detect certain aspects of the growth determinants for differently developed and structured economies. |
| Keywords: | productivity growth; KLEMS methodology; growth accounting; tangible capital; intangible capital; national accounts |
| JEL: | O47 E22 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasec:2020-02&r=all |
| By: | Rostislav Turovsky (National Research University Higher School of Economics); Koroteeva P.P. (National Research University Higher School of Economics); Rusanova K.A. (National Research University Higher School of Economics) |
| Abstract: | This research analyzes the nationalization of Russian party system and presidential candidates from 1996 till 2018 based on the index of nationalization, coefficient of variation, and Euclidean distance, proposing the new method of assessing the aforementioned measurements. The method includes using not the regional level data, but the lower unit of analyses – territorial electoral commissions, which improves the overall precision of the nationalization assessment. Furthermore, the regions themselves are compared to one another in the aspect of their “inner” nationalization |
| Keywords: | Russian federal elections, regional comparisons, electoral support, party system nationalization, Euclidean distance, coefficient of variation, Gini index, territorial electoral commissions. |
| JEL: | D72 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:72/ps/2020&r=all |
| By: | Görg, Holger; Mao, Haiou |
| Abstract: | This paper evaluates firms' exporting responses to BRI and considers their heterogeneity in ownership types, product types, regional origin and trade mode. This is done by analyzing firm-product-destination level customs data from 2011 to 2015 in a gravity model framework. Our empirical results show that aggregate export behavior did not change significantly after BRI. However, ownership matters when evaluating firms reactions. SOEs increase their total exporting and average export value (the intensive margin) to BRI countries, while private domestic firms show no reaction to BRI at any margin. Further, our results on regional heterogeneity suggests that "open through the west", i.e., boosting the development of western regions in China, did not appear to work in the short term. Our findings show clearly the implications of BRI's impact from firm level perspective. |
| Keywords: | belt and road Initiative,firm's export,extensive margin,intensive margin,state-owned firms |
| JEL: | F10 O24 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kcgwps:21&r=all |
| By: | Sirovátka, Tomáš; Guzi, Martin; Saxonberg, Steve |
| Abstract: | Since the fall of the communist regimes in Central and Eastern Europe in 1989, a neoliberal discourse has dominated the thinking of the political elite in the post-communist countries, paving the way for unprecedented mass privatisation, economic deregulation, and other market reforms. In this article, we study the development of public support for market economy principles in post-communist countries compared to other European countries during the 1999-2008 period, which is the period that directly followed the initial stage of market transformation. We use data from the European Value Survey covering 22 European countries for the years 1999/2000 and 2008/2009. In addition to analysing the trends, we apply multilevel regression models to study the determinants and levels of support for the market economy in post-communist and other European countries. We find that, when controlling for individual and country-level variables, a significant increase in support for market economy principles has taken place in the post-communist cluster, which is not the case in the other countries. There is some inconsistency in support for the individual principles of market economics: support exists in post-communist countries for the notion that the state should be responsible for the social and economic well-being of its inhabitants and for state regulation of the economy, while support is high for some market economy principles, such as free competition and private ownership. In other words, support for some kind of social market seems to prevail among those living in post-communist countries, based on the notion that the state should combine a market economy with relatively generous social policies. |
| Keywords: | market economy, post-communist countries, free competition, private ownership, state regulation of economy, welfare attitudes |
| JEL: | A13 B20 D02 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:97585&r=all |