nep-tra New Economics Papers
on Transition Economics
Issue of 2021‒02‒15
eleven papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Current Situation of Corruption Offenses and Measures for Improvement of Anti-Corruption Effectiveness in Vietnam’s Economy By , AISDL
  2. Poverty in China since 1950: A Counterfactual Perspective By Martin Ravallion
  3. Trade Liberalization, Input Intermediaries and Firm Productivity: Evidence from China By Fabrice Defever; Michele Imbruno; Richard Kneller
  4. Internal Capital Markets in Business Groups and the Propagation of Credit Supply Shocks By Yu Shi; Robert M. Townsend; Wu Zhu
  5. Intellectual property and the organization of the global value chain By Stefano Bolatto; Alireza Naghavi; Gianmarco Ottaviano; Katja Zajc Kejzar
  6. Six years after Ukraine’s Euromaidan- reforms and challenges ahead By Marek Dabrowski; Marta Domínguez-Jiménez; Georg Zachmann
  7. Consumption Vouchers during COVID-19: Evidence from E-commerce By Wu, Di; Nair, Harikesh S.; Geng, Tong
  8. COVID-19 and Global Income Inequality By Angus Deaton
  9. Does the Rise of China Lead to the Fall of European Welfare States? By Barth, Erling; Finseraas, Henning; Kjelsrud, Anders; Moene, Karl Ove
  10. Measuring Social Progress By Koen Decancq; Erik Schokkaert
  11. Pandemic Economics and the Transformation of Health Policy By Chen, Xi; Fan, Annie

  1. By: , AISDL
    Abstract: Along with the promulgation of 2008 Law on Anti-Corruption, thanking to the comprehensive solutions and determinations of the whole governmental apparatus, there are signals of a positive change in the fight against corruption in Vietnam’s market economy. However, compared to other countries around the world, the corruption in Vietnam is still a national problem. The number of corruption cases may decline, but the scale and severity has been increasing. Many cases has involved high-ranking officials in the government with more than 20 general officers in the armed forces to be sentenced. On the basis of analysing the current situation of corruption in recent years, the author hereby recommends some synchronous solutions to improve the effectiveness of anti-corruption.
    Date: 2020–12–26
  2. By: Martin Ravallion
    Abstract: The other side of the coin to post-reform success is often pre-reform failure, and the policy lessons are found on both sides. The paper estimates how much of China’s poverty rate around 1980—near the outset of Deng Xiaoping’s pro-market reforms—is attributable to the prior Maoist regime. Based on the history, it is argued that South Korea and Taiwan provide a relevant counterfactual. Then a difference-in-difference estimate using historical data indicates that about two thirds of China’s poverty in 1980 is attributed to the impact of the Maoist path since 1950. Further checks and tests suggest that (if anything) this is likely to be an underestimate. It took 10-20 years for China’s post-reform economy to make up the lost ground. The impact of the Maoist path had begun to fade in the 1970s, and half or more of the catch-up was in period up to 1990, under Deng’s rule.
    JEL: I32 N35 O53
    Date: 2021–01
  3. By: Fabrice Defever; Michele Imbruno; Richard Kneller
    Abstract: We investigate theoretically and empirically the role of wholesalers in mediating the productivity effects of trade liberalization. Intermediaries provide indirect access to foreign produced inputs. The productivity effects of input tariff cuts on firms that do not directly import therefore depends on the extent that wholesalers are a feature of input supply within an industry. Using firm level data from China, we document that wholesalers play no such role for direct importers. However, other firms experience productivity gains from reducing input tariffs if trade intermediation of foreign inputs within their sector is high. They suffer efficiency losses otherwise.
    Keywords: firm heterogeneity, trade liberalization, intermediate inputs, productivity, intermediaries, China
    JEL: F12 F13
    Date: 2019–12
  4. By: Yu Shi; Robert M. Townsend; Wu Zhu
    Abstract: Using business registry data from China, we show that internal capital markets in business groups can propagate corporate shareholders’ credit supply shocks to their subsidiaries. An average of 16.7% local bank credit growth where corporate shareholders are located would increase subsidiaries investment by 1% of their tangible fixed asset value, which accounts for 71% (7%) of the median (average) investment rate among these firms. We argue that equity exchanges is one channel through which corporate shareholders transmit bank credit supply shocks to the subsidiaries and provide empirical evidence to support the channel.
    Keywords: Credit;Supply shocks;Bank credit;Stocks;Capital markets;WP,subsidiary firm,trade credit,bank financing condition,profit margin
    Date: 2019–05–21
  5. By: Stefano Bolatto; Alireza Naghavi; Gianmarco Ottaviano; Katja Zajc Kejzar
    Abstract: This paper introduces the concept of intangible assets in a property rights model of sequential supply chains. Firms transmit knowledge to their suppliers to facilitate input customization. Yet, to avoid knowledge dissipation, they must protect the transmitted intangibles, the cost of which depends on the knowledge intensity of inputs and the quality of institutions protecting intellectual property rights (IPR) in supplier locations. When input knowledge intensity increases (decreases) downstream and suppliers' investments are complements, the probability of integrating a randomly selected input is decreasing (increasing) in IPR quality and increasing (decreasing) in the relative knowledge intensity of downstream inputs. Opposite but weaker predictions hold when suppliers' investments are substitutes. Comprehensive trade and FDI data on Slovenian firms' value chains provide evidence in support of our model's predictions. They also suggest that, in line with our model, better institutions may have very different effects on firm organization depending on whether they improve the protection of tangible or intangible assets.
    Keywords: sequential production, intellectual property, intangible assets, appropriability, stage complementarity, upstreamness, firm organization, outsourcing, vertical integration
    JEL: F12 F14 F21 F23 D23 L22 L23 L24 O34
    Date: 2020–01
  6. By: Marek Dabrowski; Marta Domínguez-Jiménez; Georg Zachmann
    Abstract: Since the Euromaidan protests (2013-2014), Ukraine has had two presidents and four governments. They have initiated various reforms in the economic, institutional and political spheres, with the aim of bringing the country closer to the European Union, boosting economic growth and international competitiveness, and building a liberal democracy. Reforms have been implemented in a difficult environment of external aggression, which has led to human and material losses and has caused...
    Date: 2020–06
  7. By: Wu, Di ( American Technologies Corporation); Nair, Harikesh S. (Stanford U); Geng, Tong ( American Technologies Corporation)
    Abstract: As households reduce discretionary spending in response to the COVID-19 pandemic, concerns are high that a resulting fall in aggregate demand can lead to a lasting recession post-COVID-19. Consequently, policies aimed at stimulating consumer spending are of key interest to governments working to mitigate the economic costs of the pandemic. While some governments have relied on direct household cash transfers, others have used consumption vouchers, which are cash discounts for purchases of goods. Compared to cash, which can be saved, consumption vouchers expire if not utilized within a deadline; are available only if utilized for targeted goods; and as such, have the potential to be more efficacious at stimulating spending. We evaluate consumption vouchers leveraging randomized controlled experiments implemented at, a large e-commerce platform based in China. The scale of the experimentation--comprising about 110 million users--allow us to causally evaluate a range of vouchers on their digital distribution, targetability, money value and contractual restrictions. We find that the design of the vouchers is key to their efficacy, and that best designed vouchers stimulate incremental spending of about 2X the expenditure incurred on the voucher. These results can help drive public policy and also underscore the value of distribution, transaction and testing of vouchers via digital platforms such as e-commerce, making them private sector facilitators of public policy goals.
    JEL: D12 L81 M31
    Date: 2020–08
  8. By: Angus Deaton
    Abstract: There is a widespread belief that the COVID-19 pandemic has increased global income inequality, reducing per capita incomes by more in poor countries than in rich. This supposition is reasonable but false. Rich countries have experienced more deaths per head than have poor countries; their better health systems, higher incomes, more capable governments and better preparedness notwithstanding. The US did worse than some rich countries, but better than several others. Countries with more deaths saw larger declines in income. There was thus not only no trade-off between lives and income; fewer deaths meant more income. As a result, per capita incomes fell by more in higher-income countries. Country by country, international income inequality decreased. When countries are weighted by population, international income inequality increased, not because the poorest countries diverged from the richest countries, but because China—no longer a poor country—had few deaths and positive economic growth, pulling it away from poor countries. That these findings are a result of the pandemic is supported by comparing global inequality using IMF forecasts in October 2019 and October 2020.
    JEL: F01 I14 O11
    Date: 2021–01
  9. By: Barth, Erling (Institute for Social Research, Oslo); Finseraas, Henning (Norwegian University of Science and Technology (NTNU)); Kjelsrud, Anders (University of Oslo); Moene, Karl Ove (University of Oslo)
    Abstract: Have recent trends in globalization changed the positive link between trade openness and social insurance? The consensus view - that voters want better social insurance against income loss the more open the economy - is seemingly contested by the rise of populism and the China shock. We present a theoretical framework of risk and income effects of globalization that captures the conventional view, but also shows when it will be modified: When the income effect is negative, the political support for social insurance can decline in spite of the risk effect. We construct an empirical measure of welfare state support across European regions and leverage the rapid integration of China into the world economy to show that higher import competition reduces the support for social insurance. Consistent with our framework, we decompose the overall effect of the shock into a (weak) positive risk effect and a (strong) negative income effect.
    Keywords: regional labor demand, welfare state support, social insurance, China shock, trade exposure
    JEL: J21 J23 H55 F16 F6
    Date: 2021–01
  10. By: Koen Decancq; Erik Schokkaert
    Abstract: In this chapter, we provide a critical review of the literature on social progress from a prioritarian perspective. We give special attention to the choice of the measure of individual well-being and the aggregation method across individuals in our discussion of various methods that have been proposed in the literature. We present the “growth incidence curve” as a useful device to chart social progress. We illustrate with empirical results for Russia in the period 1995-2005.
    Keywords: Social progress, social condition, prioritarian social evaluations, preferences, growth incidence curve
    Date: 2021–01–14
  11. By: Chen, Xi (Yale University); Fan, Annie (China Health Policy and Management Society)
    Abstract: The Coronavirus Disease 2019 (COVID-19) pandemic is bringing about once-in-a-century changes to human society. This article summarizes key characteristics of the COVID-19 pandemic that should be incorporated in economics and health policy analyses. We then review the literature on the importance of public health measures, including taking early, targeted, and coordinated actions, enhancing social safety nets for vulnerable populations, and strengthening public communications. In the long term, addressing misallocation of health resources and improving health governance are critical. Drawing on evidence from past and present epidemics as well as comparing cross-country variations in their responses to the current public health emergency, we navigate long-awaited health reforms in areas that help optimize epidemics response and realign incentives of the major players in the health sector in preparation for the next pandemic.
    Keywords: COVID-19, pandemic, healthcare reform, health governance, global health policy
    JEL: I18 J24 H12 P41 H51
    Date: 2021–01

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