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on Transition Economics |
| By: | Tongtong Hao; Ruiqi Sun; Trevor Tombe; Xiaodong Zhu |
| Abstract: | Between 2000 and 2015, China's aggregate income quadrupled, its provincial income inequality fell by a third, and its share of employment in agriculture fell by half. Worker migration is central to this transformation, with almost 300 million workers living and working outside their area or sector of hukou registration by 2015. Combining rich individual-level data on worker migration with a spatial general equilibrium model of China's economy, we estimate the reductions in internal migration costs between 2000 and 2015, and quantify the contributions of these cost reductions to economic growth, structural change, and regional income convergence. We find that over the fifteen-year period China's internal migration costs fell by forty-five percent, with the cost of moving from agricultural rural areas to non-agricultural urban ones falling even more. In addition to contributing substantially to growth, these migration cost changes account for the majority of the reallocation of workers out of agriculture and the drop in regional inequality. We compare the effect of migration policy changes with other important economic factors, including changes in trade costs, capital market distortions, average cost of capital, and productivity. While each contributes meaningfully to growth, migration policy is central to China's structural change and regional income convergence. We also find the recent slow-down in aggregate economic growth between 2010 and 2015 is associated with smaller reduction in inter-provincial migration costs and a larger role of capital accumulation. |
| Keywords: | Migration, Structural Change, Regional Income Convergence, China |
| JEL: | E24 J61 O15 O41 O47 R12 R23 |
| Date: | 2020–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-659&r=all |
| By: | Mkrtchan, Nikita (Мкртчян, Никита) (The Russian Presidential Academy of National Economy and Public Administration); Florinskaya, Yulia (Флоринская, Юлия) (The Russian Presidential Academy of National Economy and Public Administration) |
| Abstract: | Based on a standardized interview method, a representative survey of 2,400 households in four medium-sized cities (600 households each) - Velikiye Luki, Pskov Region, Michurinsk, Tambov Region, Buzuluk, Orenburg Region, and Chistopol, Republic of Tatarstan, revealed estimates of the prevalence of labor migration in households of cities of this type. The main comparative characteristics of the households of labor migrants and households whose members do not participate in labor migration are analyzed, to assess the role of field work as a source of household income. The results are compared with a similar method of interviewing households in small towns conducted in 2015 by the INSAP RANEPA. The study also used the results of a survey of 285 labor migrants from medium-sized cities conducted as part of the same study and materials from semi-structured in-depth interviews with 40 labor migrants from the same medium-sized cities. Their analysis revealed the costs of labor migration and the reasons for the refusal of residents of medium-sized cities to work away. |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:012002&r=all |
| By: | Aleksandar Vasilev (Lincoln International Business School, UK) |
| Abstract: | We introduce Epstein-Zin (1989, 1991) preferences into a real-business-cycle setup augmented with a detailed government sector. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999- 2018). We investigate the quantitative importance of the presence of Óearly resolution of uncertaintyÓ motive for the propagation of cyclical fluctuations in Bulgaria. Al- lowing for Epstein-Zin preferences improves the model performance against data, and in addition this extended setup dominates the standard RBC model framework, e.g., Vasilev (2009). |
| Keywords: | Business fluctuations, Epstein-Zin preferences, Bulgaria. |
| JEL: | E32 E22 E37 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:sko:wpaper:bep-2020-01&r=all |
| By: | Christian Fisch (University of Trier); Michael Wyrwich (University of Groningen, and FSU Jena); Thi Lanh Nguyen; Jörn H. Block (University of Trier) |
| Abstract: | We study the case of Vietnam to assess the long-lasting role of institutional and historical legacy on entrepreneurial outcomes. In particular, we investigate the detrimental effect of socialist institutions on entrepreneurship. Vietnam offers a unique quasi-experimental setting because the country was divided into the socialist North and the nonsocialist South for a relatively short period of two decades. After re-unification the South adopted the institutional framework conditions of the North. To assess the relationship between socialist history and entrepreneurship in this unique setting, we survey more than 3,000 North and South Vietnamese individuals more than four decades after the re-unification of the country. We find that North Vietnamese respondents have lower entrepreneurship intention, are less likely to select into entrepreneurship education programs, and are less willing to engage in business takeover. These patterns indicate the persistence of a long-lasting influence of historical differences in institutional framework conditions on entrepreneurship. The long-run effect of socialism on entrepreneurship is apparently deeper than previously discovered in the prominent case of Germany, where differences in institutional treatment lasted for much longer and ended more recently. |
| Keywords: | Socialism, Vietnam, entrepreneurship intention, entrepreneurship education, takeover vs. new venture startup |
| JEL: | D02 L26 M13 P30 |
| Date: | 2020–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2020-002&r=all |
| By: | Mao, Ruipeng |
| Abstract: | As China deepens its engagement in global governance and development, its strategic motivation and rising influence within the UN and on international rules and norms are attracting the world's attention. This paper focuses on China's engagement with the UNDS, specifically Chinese funding and allocation decisions. China's UNDS funding has risen rapidly since 2008 and even accelerated in 2013. Between 2013 and 2017, Chinese funding (excluding local resources) grew at an annual average rate of 33.8 per cent. In 2017, its total contribution reached USD 325.869 million. China's shares of core funding and assessed contribution in its total UNDS funding are much higher than traditional donor countries. However, the share of non-core funding has also jumped. While China tends to mostly provide funds for UNDS development projects, in recent years it has also been hiking funding for humanitarian assistance. This paper also examines three cases of China's earmarked funding - to the UNDP and the WFP, which receive the largest share of its UNDS funds, as well as for UNPDF operations, which count as a voluntary contribution. There are several reasons for China's growing engagement with the UNDS, from evolving perception of foreign aid and appreciating the UN's multilateral assets to fostering the reputation of "responsible great nation" and pushing forward the Belt and Road Initiative (BRI) through cooperation with the UNDS. In general, China continues to integrate into the global development system, and can be expected to maintain its support for the UN and continue to contribute to the UNDS. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:diedps:22020&r=all |
| By: | Agarwal, Isha (University of British Columbia); Gu, Grace Weishi (University of California, Santa Cruz); Prasad, Eswar (Cornell University) |
| Abstract: | We analyze shifts in the structure of China's capital outflows over the past decade. The composition of gross outflows has shifted from accumulation of foreign exchange reserves by the central bank to nonofficial outflows. Unlocking the enormous pool of domestic savings could have a significant impact on global financial markets as China continues to open up its capital account and as domestic investors look abroad for returns and diversification. We analyze in detail the allocation patterns of Chinese institutional investors (IIs), which constitute the main channel for foreign portfolio investment outflows. We find that, relative to benchmarks based on market capitalization, Chinese IIs underweight developed countries and high-tech sectors in their international portfolio allocations but overinvest in high-tech stocks in developed countries. To further examine Chinese IIs' joint decisions on destination country-sector pairs, we construct continuous measures of revealed relative comparative advantage and disadvantage in a sector for a country based on trade patterns. We find that, in their foreign portfolio allocations, Chinese IIs overweight sectors in which China has a comparative disadvantage. Moreover, Chinese IIs concentrate such investments in countries that have higher relative comparative advantage in those sectors. Diversification and information advantages related to foreign imports to China seem to influence patterns of foreign portfolio allocations, while yield-seeking and learning motives do not. |
| Keywords: | capital account liberalization, international investment position, portfolio flows, institutional investors, revealed comparative (dis)advantage |
| JEL: | F2 F3 F4 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13001&r=all |
| By: | Svilena Mihaylova (University of Economics Ð Varna, Bulgaria) |
| Abstract: | The paper enhances the discussion about the determinants of foreign direct investment (FDI) in Central, Eastern and South-Eastern European countries and the ability of public policy to influence their FDI attractiveness. Based on data for 15 countries in 2013 and 2017, we build a composite index, which allows us to rank countries in terms of their overall FDI attractiveness, as well as its most important dimensions, such as institutional framework, infrastructure endowment, labour force quality and cost competitiveness. In addition to allowing comparison between economies across these dimensions, the results reveal areas in which some countries need improvement so that they can attract more FDI. |
| Keywords: | foreign direct investment, FDI, public policy, economic comparison, composite index. |
| JEL: | F21 H11 O57 C43 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:sko:wpaper:bep-2019-07&r=all |
| By: | Teodor Sedlarski (Sofia University St. Kliment Ohridski, Faculty of Economics and Business Administration); Oxana Bezler (Karaganda Economic University of Kazpotrebsoyuz, Karaganda, Kazakhstan) |
| Abstract: | Supply of the countryÕs economy with highly qualified personnel has the crucial role in effective interaction of the labor market and the higher professional education institutions, integration of their main goals and objectives. Mistakes in the market coordination of these most important market subsystems lead to nonreversible economic losses and negative social consequences since within the market conditions the economy development and the countryÕs competitiveness are largely determined by a high-quality human capital and its employment. In modern science, lots of scientific works are devoted to the interaction of the labor market and the higher education services market, while the analysis of scientific articles has shown this interaction is considered by scientists depending on the study direction, and only individual works Ð by the issues of integration between domestic markets. In this regard, the authors aim to assess the integration of the labor markets and the higher education services. However, for today, there is no clear methodology for integration the processes assessment, and the authors have attempted to adapt the assessment method proposed by Russian scientists of labor markets and professional education. The used method is based on economic-statistical analysis of the labor market development dynamics and the higher education services with defining integration type under the influence of individual factor of these markets and the use of system and structural-group data analysis. The assessment has revealed an unstable relationship between universities and potential employers which leads to personnel shortage in certain specialties. |
| Keywords: | flabor market; higher education services market; integration; integration factor. |
| JEL: | A10 I2 J6 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:sko:wpaper:bep-2019-08&r=all |
| By: | Patrik Kupkovic (Narodna banka Slovenska, Bratislava, Slovakia) |
| Abstract: | The aim of this paper is to estimate the equilibrium real interest rate in Slovakia by means of a semi-structural unobserved components model. The equilibrium real interest rate is understood here as a short-term, risk-free real interest rate consistent with output at its potential level, and inflation at its target level after the effect of all cyclical shocks have disappeared. Contribution to the literature is in two ways: i) development of a modelling framework for small, open, and converging economies which can be used for other transition economies, and (ii) assessment of the adoption of the euro and its effect on the equilibrium real interest rate. Based on the estimates, the equilibrium real interest rate fell from the positive pre-euro (also pre-crisis) level into to the negative territory. |
| Keywords: | equilibrium real interest rate, unobserved components model, open economy, monetary policy |
| JEL: | E43 E52 E58 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:svk:wpaper:1071&r=all |