nep-tra New Economics Papers
on Transition Economics
Issue of 2020‒08‒24
eleven papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Going Bankrupt in China By Bo Li; Jacopo Ponticelli
  2. Are Poles stuck in overeducation? Individual dynamics of educational mismatch in Poland By Jan Aleksander Baran
  3. Shaping the Directionality of Sustainability Transitions: The Diverging Development Patterns of Solar PV in Two Chinese Provinces By Kejia Yang; Johan Schot; Bernhard Truffer
  4. Can Technology Solve the Principal-Agent Problem? Evidence from China’s War on Air Pollution By Michael Greenstone; Guojun He; Ruixue Jia; Tong Liu
  5. Mask wars: China's exports of medical goods in times of COVID-19 By Fuchs, Andreas; Kaplan, Lennart; Kis-Katos, Krisztina; Schmidt, Sebastian S.; Turbanisch, Felix; Wang, Feicheng
  6. China’s Economic Demography Transition Strategy: A Population Weighted Approach to the Economy and Policy By Johnston, Lauren A.
  7. Inequality of Opportunity in Bodyweight among Middle-Aged and Older Chinese: A Distributional Approach By Nie, Peng; Ding, Lanlin; Jones, Andrew M.
  8. Regional Underdevelopment and Less Developed Business Ecosystems: The Case of Eastern Macedonia and Thrace By Vlados, Charis; Chatzinikolaou, Dimos; Katimertzopoulos, Fotios; Koutroukis, Theodore
  9. The Heterogenous Regional Effects of Minimum Wages in Poland By Albinowski, Maciej; Lewandowski, Piotr
  10. Small households’ efficiency in typical steppe in Inner Mongolia By Li, Ping; Behrendt, Karl
  11. Examining the drivers of business cycle divergence between Euro Area and Romania By Ionut Jianu

  1. By: Bo Li; Jacopo Ponticelli
    Abstract: Using new case-level data we document a set of stylized facts on bankruptcy in China and study how the staggered introduction of specialized courts across Chinese cities affected insolvency resolution and the local economy. For identification, we compare cases handled by specialized versus traditional civil courts within the same city. Specialized courts hire better-trained judges and cut case duration by 35%. State-owned firms experience larger declines in case duration relative to privately-owned firms, consistent with higher judicial independence. Cities introducing specialized courts experience faster firm entry, larger increase in average capital productivity and reallocation of employment out of "zombie" firms-intensive sectors.
    JEL: G33 K22 O16
    Date: 2020–07
  2. By: Jan Aleksander Baran (Faculty of Economic Sciences, University of Warsaw)
    Abstract: The paper investigates persistency of overeducation from individual perspective. Following aspects of mobility are analysed: probability of staying in employment, upward occupational mobility and wage dynamics. Data for Poland are used. The results show that overeducated individuals are more likely to stay in employment compared to their properly matched colleagues. The overeducated workers as well as undereducated ones tend to move toward jobs for which they are more properly matched. However, the rate of this adjustment is low and one can fairly claim that in Poland overeducation is a persistent phenomenon from individual perspective. In line with other studies, the overeducated workers are found to experience faster wage growth compared to properly matched individuals. However, it can be largely attributed to overeducated workers improving their match status over time. It means that initially overeducated workers can expect faster wage growth than properly matched workers especially when they move to jobs requiring more schooling.
    Keywords: overeducation, educational mismatch, occupational mobility, earnings mobility
    JEL: I21 J24
    Date: 2020
  3. By: Kejia Yang (Science Policy Research Unit (SPRU), University of Sussex); Johan Schot; Bernhard Truffer
    Abstract: A limited set of studies have addressed how actors shape the directionality of sustainability transitions. Building on recent institutional work literature, this article explores how specific institutional activities developed by both niche and regime actors across spatial levels shape the directions of transition. We examine two cases with contrasting directionalities: solar PV in the provinces of Inner Mongolia and Jiangsu, both located in China. The former developed PV as part of the large-scale centralised power system and the latter focused on PV development as a core element of an alternative distributed form of power generation. We investigate provincial differences as well as the state-provincial dynamics. The article therefore develops a multi-scalar understanding of institutional work. Our research findings suggest three aspects have been key for understanding the divergent patterns: the specific portfolios of enacted institutional work, the type of interactions between niche and regime actors and the selective leveraging of institutional conditions at national by provincial actors. Based on these findings we formulate four propositions and propose a novel conceptual framework to investigate how actors shape the directionality of sustainability transition.
    Keywords: Actors; Institutional work; Directionality; Sustainability transition; Solar PV development
    Date: 2020–08
  4. By: Michael Greenstone; Guojun He; Ruixue Jia; Tong Liu
    Abstract: We examine the introduction of automatic air pollution monitoring, which is a central feature of China’s “war on pollution.” Exploiting 654 regression discontinuity designs based on city-level variation in the day that monitoring was automated, we find that reported PM 10 concentrations increased by 35% immediately post–automation and were sustained. City-level variation in underreporting is negatively correlated with income per capita and positively correlated with true pre-automation PM 10 concentrations. Further, automation’s introduction increased online searches for face masks and air filters, suggesting that the biased and imperfect pre-automation information imposed welfare costs by leading to suboptimal purchases of protective goods.
    JEL: Q53 Q55
    Date: 2020–07
  5. By: Fuchs, Andreas; Kaplan, Lennart; Kis-Katos, Krisztina; Schmidt, Sebastian S.; Turbanisch, Felix; Wang, Feicheng
    Abstract: The COVID-19 outbreak has cut China's supply of and raised the world's demand for face masks, disinfectants, ventilators, and other critical medical goods. This article studies the economic and political factors that are associated with China's exports of medical equipment during the first two months of the global pandemic. Regression results show that - controlled for demand factors - countries with stronger past economic ties with China import more critical medical goods from China at both the national level and the level of Chinese provinces. Friendly political relations, such as the twinning of provinces, appear to work as a substitute for pre-existing economic ties at the provincial level. These findings imply that, to secure access to medical equipment in crises, countries are well advised to either diversify their sources or to develop closer relations with Beijing and China's provinces.
    Keywords: COVID-19,crisis management,medical equipment,face masks,strategic exports,disaster aid
    JEL: F14 F59 H12 H77 H84 P33
    Date: 2020
  6. By: Johnston, Lauren A.
    Abstract: The first pandemic of the 21st century has brought Pyrrhic attention to one of the era’s greatest megatrends – population ageing. Today rich countries are disproportionately affected but increasingly the world’s elderly are residents of developing countries. In rich and poor countries alike, a policy approach that explicitly accounts for the interdependence of economic and demographic change – an economic demography transition approach - has never been more pressing. Thanks partly to the tragedy of history’s greatest Malthusian stagnation, that of mid-20th century China, Chinese policymakers implemented draconian population control measures alongside dramatic economic reforms from around 1980. This paper elaborates China’s consequential and ongoing economic demography transition strategy within the economic and development policy discourse. Amid epochal demographic, public health, and geo-economic change, this economic demography perspective is timely, unique and useful in extrapolation across all economies.
    Keywords: Population ageing,Economic Demography,Demographic Transition,China
    JEL: J11 J18 N35 O20
    Date: 2020
  7. By: Nie, Peng (Xi’an Jiaotong University); Ding, Lanlin (Xi’an Jiaotong University); Jones, Andrew M. (University of York)
    Abstract: Using the 2011 and 2015 waves of the China Health and Retirement Longitudinal Study (CHARLS) linked with the 2014 CHARLS Life History Survey, we provide a comprehensive analysis on inequality of opportunity (IOp) in both body mass index (BMI) and waist circumference (WC) among middle-aged and older Chinese. We find that IOp ranges from 65.5% to 74.6% for BMI (from 82.1% to 95.5% for WC). Decomposition results show that spatial circumstances such as urban/rural residence and province of residence are dominant. Health status and nutrition conditions in childhood are the second largest contributor. Distributional decompositions further reveal that inequality in bodyweight is not simply a matter of demographic (age and gender) inequalities; our set of spatial and health and nutrition conditions in childhood become much more relevant towards the right tails of the bodyweight distribution, where the clinical risk is focused.
    Keywords: inequality of opportunity, body mass index, waist circumference, CHARLS, Shapley-Shorrocks decomposition, unconditional quantile regressions
    JEL: D63 I12 I14
    Date: 2020–06
  8. By: Vlados, Charis (Democritus University of Thrace, Department of Economics); Chatzinikolaou, Dimos (Democritus University of Thrace, Department of Economics); Katimertzopoulos, Fotios (Democritus University of Thrace, Department of Economics); Koutroukis, Theodore (Democritus University of Thrace, Department of Economics)
    Abstract: This article aims to highlight the different facets of the relative socio-economic underdevelopment of the Greek region of Eastern Macedonia and Thrace. It explores initially regional analysis data, leading to the conclusion that the region does indeed face comparative weaknesses as it exhibits multiplier results and specialization in areas with the lowest value-added and employment. It then presents the main conclusions about small and micro firms of this less developed business ecosystem. It concludes that the region has structural competitiveness problems that are primarily due to the competitiveness of the firms that can host and nurture. The strengthening of competitiveness of this regional business ecosystem requires the improvement of the innovative potential that, in a triple helix condition, is the result of the evolutionary interconnection between local-regional firms, government, and academia. To this end, the proposal to establish a Local Development and Innovation Institute constitutes a new regional policy that can be applied to the region and strengthen the innovative potential of the entire regional business ecosystem.
    Keywords: Underdeveloped regional business ecosystem; Eastern Macedonia and Thrace (REMTh); Stra.Tech.Man Lab research team; Regional triple helix; Local Development and Innovation Institutes
    JEL: O19 R11 R58
    Date: 2019–12–31
  9. By: Albinowski, Maciej (Institute for Structural Research (IBS)); Lewandowski, Piotr (Institute for Structural Research (IBS))
    Abstract: Since 2008, Poland has been among the EU countries that have increased their minimum wage levels the most, following period in the mid-2000s during which the country's minimum wage was barely raised. We evaluate the impact of these minimum wage hikes on employment and wage growth in Poland between 2004 and 2018. We estimate panel data models utilising the considerable variation in wage levels, and in minimum wage bites, across 73 Polish NUTS 3 regions. We find that minimum wage hikes had a significant positive effect on wage growth and a significant negative effect on employment growth only in regions of Poland that were in the first tercile of the regional wage distribution in 2007. These effects were moderate in size, and appear to be more relevant for wages. Specifically, we show that if the ratio of minimum wage to average wage had remained constant after 2007, by 2018, the average wages in these regions would have been 3.4% lower, while employment would have been 1.2% higher. On the other hand, in the remaining two-thirds of Polish regions, we find no significant effects of minimum wage hikes on average wages or on employment. We also find indicative evidence that the effects on employment growth differ between groups of workers: i.e., that they are negative for men and for workers in industry, but they are positive for women and for workers in services.
    Keywords: minimum wage, spatial heterogeneity, panel data
    JEL: J21 J23 J38
    Date: 2020–06
  10. By: Li, Ping; Behrendt, Karl
    Abstract: Livestock production has increased in Inner Mongolia, China, despite widespread documentation of grassland degradation. To begin investigating the relationship that produces these trends, we studied farm level decisions of herder households. We estimated herders’ household economic efficiency in typical steppe in Inner Mongolia in 2009 and 2014 using household survey data. During this 5-year period, herders’ operating cash margins decreased, but not significantly. However, their enterprise trading profit, enterprise gross margin, operating profit, net profit, and return on sheep unit all increased significantly. The correlation between stocking rate and the economic variables were all significant, except cash margin and return on sheep unit. The ANOVA analysis showed that as the stocking rate increased, the return per sheep unit increased first and then decreased, although the return per hectare grassland kept increasing.
    Keywords: Farm Management, Livestock Production/Industries
    Date: 2019–10
  11. By: Ionut Jianu
    Abstract: This research aims to provide an explanatory analyses of the business cycles divergence between Euro Area and Romania, respectively its drivers, since the synchronisation of output-gaps is one of the most important topic in the context of a potential EMU accession. According to the estimates, output-gaps synchronisation entered on a downward path in the subperiod 2010-2017, compared to 2002-2009. The paper demonstrates there is a negative relationship between business cycles divergence and three factors (economic structure convergence, wage structure convergence and economic openness), but also a positive relationship between it and its autoregressive term, respectively the GDP per capita convergence.
    Date: 2020–07

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