|
on Transition Economics |
| By: | Heinrich, Torsten; Yang, Jangho; Dai, Shuanping |
| Abstract: | Understanding the microeconomic details of technological catch-up processes offers great potential for informing both innovation economics and development policy. We study the economic transition of the PR China from an agrarian country to a high-tech economy as one example for such a case. It is clear from past literature that rapidly rising productivity levels played a crucial role. However, the distribution of labor productivity in Chinese firms has not been comprehensively investigated and it remains an open question if this can be used to guide economic development. We analyze labor productivity and the dynamic change of labor productivity in firm-level data for the years 1998-2013 from the Chinese Industrial Enterprise Database. We demonstrate that both variables are conveniently modeled as Lévy alpha-stable distributions, provide parameter estimates and analyze dynamic changes to this distribution. We find that the productivity gains were not due to super-star firms, but due to a systematic shift of the entire distribution with otherwise mostly unchanged characteristics. We also found an emerging right-skew in the distribution of labor productivity change. While there are significant differences between the 31 provinces and autonomous regions of the P.R. China, we also show that there are systematic relations between micro-level and province-level variables. We conclude with some implications of these findings for development policy. |
| Keywords: | structural change; China; labor productivity; heavy-tailed distributions; microdata |
| JEL: | J24 L11 O10 O3 O53 R12 |
| Date: | 2020–12–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:105011&r=all |
| By: | Mitsuru Katagiri |
| Abstract: | The legacy of non-performing loans and high opportunity cost of government financing of bank recapitalization impeded the efficiency of financial intermediation and are an important policy issue in Vietnam. This paper presents a theoretical and empirical analysis of the issue. An empirical analysis using corporate data indicates credit misallocation between state owned enterprises and private firms in Vietnam. On the theoretical side, a micro-founded banking model is embedded in a political economy setting to assess the factors determining the size of bank recapitalization and its effects on the efficiency of financial intermediation, economic growth and welfare. The analysis suggests that recapitalization depends on an array of factors, including the tightness of the government budget and the decision maker’s concern for the favored sector. |
| Keywords: | Credit;Nonperforming loans;Banking;Bank credit;Countercyclical capital buffers;WP,public funds |
| Date: | 2019–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/189&r=all |
| By: | Erlend Nier; Radu Popa; Maral Shamloo; Liviu Voinea |
| Abstract: | We provide empirical evidence to support the calibration of a limit on household indebtedness levels, in the form of a cap on the debt-service-to-income (DSTI) ratio, in order to reduce the probability of borrower defaults in Romania. The analysis establishes two findings that are new to the literature. First, we show that the relationship between DSTI and probability of default is non-linear, with probability of default responding to increases in DSTI only after a certain threshold. Second, we establish that consumer loan defaults occur at lower levels of DSTI compared to mortgages. Our results support the recent regulation adopted by the National Bank of Romania, limiting the household DSTI at origination to 40 percent for new mortgages and consumer loans. Our counterfactual analysis indicates that had the limit been in place for all the loans in our sample, the probability of default (PD) would have been lower by 23 percent. |
| Keywords: | Loans;Mortgages;Consumer loans;Personal income;Credit;WP,probability of default,DSTI ratio,DSTI limit |
| Date: | 2019–08–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/182&r=all |
| By: | Marin Kukoc (University of Zagreb, Faculty of Agriculture); Bruno Skrinjaric (The Institute of Economics, Zagreb); Josip Juracak (University of Zagreb, Faculty of Agriculture) |
| Abstract: | The EU pre-accession funds available to EU candidate countries play an important role in their adjustment for membership. Croatia, as a candidate country, used the Special Pre-Accession Program for Agriculture and Rural Development and the Instrument for Pre-Accession Assistance - Rural Development, one of the goals of which was to strengthen the competitiveness of businesses in the agriculture and food production sectors. The usage period covered two EU programming periods, as well as a recession period in Croatia that lasted from 2009 to 2014. An insight into the available literature reveals a lack of rigorous research and evaluation of the results of using these funds in Croatia as well as in other beneficiary countries. This paper evaluates the effect of pre-accession EU grants on beneficiaries in the agri-food sector using a quasi-experimental approach on the case of Croatia. The grants were shown to have a positive effect on firm survival, as well as positive effects on obtaining bank loans and increasing turnover, value added, employment, and total factor productivity. Heterogeneous treatment effects show that the grants resulted in the greatest additionality for micro-sized firms located in Central Croatia. Cost-benefit analysis estimates an increase in the value added, which outweighs scheme-induced costs by 120 percent in the short run and 90 percent in the mid run. |
| Keywords: | public grants, policy evaluation, SAPARD, IPARD |
| JEL: | B54 J16 H81 L26 L38 H43 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iez:wpaper:2002&r=all |
| By: | Jakub Grossmann |
| Abstract: | This paper analyzes employment effects of four minimum wage increases implemented in the Czech Republic during 2012-2017, which cumulatively increased the national minimum wage by 37 percent. We analyze outcomes at the level of firm-occupation-county-specific job cells and apply an intensity-treatment estimator similar to that of Machin et al. (2003). Our preferred specifications suggest that minimum wage increases led to higher wages for low-paid workers and did not have significant impacts on their employment. |
| Keywords: | minimum wage; intensity treatment; job cells; Czech Republic; |
| JEL: | J31 J38 J68 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp679&r=all |
| By: | Paustyan, Ekaterina |
| Abstract: | This paper studies the distribution of politically motivated intergovernmental transfers in Russia focusing on the case of the 2018 FIFA World Cup. It investigates what factors have accounted for the selection of the 2018 FIFA World Cup venues. Qualitative Comparative Analysis of 14 cases reveals that well-connected political elites were able to secure the right for their regions to host the championship and, as a result, to extract additional funds from the center. These findings are in line with the argument that the regional governments in Russia play an important role in the distribution of politically sensitive transfers. Taking into account that these transfers have been increasing over the past years, there is no surprise that the regional elites have developed various lobbying strategies and mechanisms for attracting them. |
| JEL: | E62 L83 O23 P26 R11 |
| Date: | 2021–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2021_002&r=all |
| By: | Hung Ly-Dai (Vietnam Central Economic Commission, Hanoi, Vietnam) |
| Abstract: | On one monthly time-series dataset of Vietnam economy over 02/2008-09/2018, the Time-Varying-Coefficient VAR model records that the trade-off between inflation and output growth is mitigated by the foreign capital inflows. The inflation is mostly determined by credit supply growth, while output growth is largely driven by foreign direct investment (FDI) capital inflows. A monthly increase of FDI by 1 billion USD can raise 1.77 percent of monthly output growth rate. The result also holds on accounting for exchange rate fluctuation. |
| Keywords: | Economic Growth,Inflation,Foreign Capital Inflows,Exchange Rate,Time Varying Coefficients Vector Autoregression (TVC-VAR) model |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03112746&r=all |
| By: | Ivan Sutoris |
| Abstract: | When consumers optimize intertemporally, a true cost of living index will depend on changes in both current and future prices as well as rates of return on financial assets. This paper aims to construct a measure of such "dynamic inflation" for the Czech Republic from a solution to the household's intertemporal consumption-saving problem. Dynamic inflation is derived to be a function of current movements in consumption and house prices as well as revisions to forecasts of the future paths of inflation and interest rates. The resulting series constructed from Czech data roughly follows CPI inflation, but is more volatile and less persistent. Housing booms can cause persistent upward deviations, while changes in expected interest rates have a stabilizing effect. In addition, the intertemporal cost of living can also potentially be affected by low-frequency structural shifts in the economy. |
| Keywords: | Cost of living, CPI, dynamic inflation, intertemporal optimization |
| JEL: | C43 D15 E31 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2020/9&r=all |
| By: | Artem Kochnev |
| Abstract: | The paper investigates determinants of investments in state capacity and institutional change in contemporary Ukraine. After formulating a simple sequential two-stage model of investments in state capacity, the paper estimates autoregressive distributed lag and vector autoregressive models to verify its predictions. The paper finds little evidence for the impact of conflict intensity and access to international credit on the pace of reform progress. It finds a statistically significant effect for the intensity of political competition and changes of real wages, albeit these results are sensitive to robustness checks. |
| Keywords: | cost of war, political cycles, transition economics, Ukraine crisis, political economy, state capacity |
| JEL: | D74 E01 E20 F51 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:192&r=all |