nep-tra New Economics Papers
on Transition Economics
Issue of 2021‒03‒08
sixteen papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Offspring Migration and Nutritional Status of Left-behind Older Adults in Rural China By Chang Liu; Tor Eriksson; Fujin Yi
  2. How Does Development Aid Impact Trade Performance and Margins? Evidence from China By Camelia Turcu; Yunzhi Zhang
  3. The impacts of the COVID-19 crisis on the automotive sector in Central and Eastern European Countries By Caroline Klein; Jens Høj; Gabriel Machlica
  4. Non-linear Incentives, Worker Productivity, and Firm Profits: Evidence from a Quasi-Experiment By Freeman, Richard B.; Huang, Wei; Li, Teng
  5. Intangible Capital and Innovation: An Empirical Analysis of Vietnamese Enterprises By Qing Li; Long Hai Vo
  6. Technical efficiency of Vietnamese manufacturing firms: do FDI spillovers matter? By Canh Nguyen; Minh Le; Khoa Cai; Michel Simioni
  7. Assessement of competitiviness of moldovan agri-food products at the regional level By Lucasenco, Eugenia; Ceban, Alexandru
  8. Top economics universities and research institutions in Vietnam: evidence from the SSHPA dataset By , AISDL
  9. Efficiency in rewarding academic journal publications. The case of Poland By Wojciech Charemza; Michal Lewandowski; Lukasz Wozny
  10. Empirical investigation into market power, markups and employment By Vladimír Peciar
  11. Bride Kidnapping and Labour Supply Behaviour of Married Kyrgyz Women By Arabsheibani, Reza; Kudebayeva, Alma; Mussurov, Altay
  12. Patience, Cognitive Abilities, and Cognitive Effort: Survey and Experimental Evidence from a Developing Country By Stefania Bortolotti; Thomas Dohmen; Hartmut Lehmann; Frauke Meyer; Norberto Pignatti; Karine Torosyan
  13. Take me with you! Economic Incentives, Nudging Interventions and Reusable Shopping Bags: Evidence from a Randomized Controlled Trial By Armenak Antinyan; Luca Corazzini
  14. Employment vs. homestay and the happiness of women in the South Caucasus By Karine Torosyan; Norberto Pignatti
  15. Is money demand really unstable? Evidence from divisia monetary aggregates By William A. Barnett; Taniya Ghosh; Masudul Hasan Adil
  16. FRM Financial Risk Meter for Emerging Markets By Ben Amor, Souhir; Althof, Michael; Härdle, Wolfgang Karl

  1. By: Chang Liu (Nanjing Forestry University); Tor Eriksson (Department of Economics and Business Economics, Aarhus University); Fujin Yi (Nanjing Agricultural University)
    Abstract: Improvements in nutritional status is a principal pathway to good health. This study examines the effect of migration of adult children on the nutrient intake of left-behind older adults in rural China. We use data from four waves (2004–2011) of the China Health and Nutrition Survey and utilize individual fixed effects methods to panel data. Results show that the migration of offspring is associated with significantly higher nutritional status of their left-behind parents, especially higher intake of proteins, carbohydrates, vitamins B1–B3, phosphorus, magnesium, iron, selenium, and copper. The intake of some of these nutrients is below recommended levels. The magnitude of the estimated effects vary between 4% and 24%. Older adults who live with their grandchildren in rural households or have a low income benefit more from having adult child migrants in the household. The improvement of nutrition outcomes of left-behind older adults is mainly due to increased consumption of cereals, meat, eggs, and fish.
    Keywords: Offspring migration, Nutrient intake, Food composition, Left-behind older adults
    JEL: J61 I15 O12
    Date: 2021–03–01
  2. By: Camelia Turcu (University of Orleans - LEO); Yunzhi Zhang (Jinan University and University of Orleans - LEO)
    Abstract: We study the impact of China’s foreign aid on exports at the product level. To do this, we use a sample of 159 countries and a trade decomposition on 1366 HS4 products over the period 2000-2014. We employ a PPML methodology in a gravity framework. We find that the return on Chinese exports of every dollar spent on foreign aid is rather small, on average, at the HS4 product level, for the whole period. Moreover, we disentangle between difierent categories of international aid and find that the aid related to infrastructure, productive capacity, and other aid categories has positive effects on trade. Our results also indicate that the Chinese foreign aid enhances, at product level, the trade in new varieties but does not help the country to export more of the already traded products. In other words, at product level, the trade extensive margins are strengthened, while the intensive margins are not. We also find that, at geographical level, aid helps China exporting more towards the countries that are already its trade partners (the geographical trade intensive margins are boosted), but does not promote trade relations with new partners (no effect on the geographical trade extensive margins).
    JEL: F
    Date: 2020
  3. By: Caroline Klein; Jens Høj; Gabriel Machlica
    Abstract: This paper aims at investigating the impact of the COVID-19 crisis on the automotive sector in Central and Eastern Europe. It details the effects of the pandemic and subsequent lockdown measures on the activity in the sector. It also discusses the prospects for car sales in the short to medium run, potential spillover effects in the region, and new risks to the supply chains posed by the pandemic. It shows that disruptions to the supply chains had limited impact so far and that the sector has been mainly affected by low level of demand. Going forward, the pandemic might have a significant negative impact on investment capacity, while the transition to alternative powertrains and the digital transformation of the industry require large investment and restructuring. The long-term impact on CEE economies is highly uncertain, but will depend on the capacity to maintain a comparative advantage, while the sector transforms deeply.
    Keywords: automobile industry, car sales, Covid-19, supply chains
    JEL: F15 L62
    Date: 2021–03–04
  4. By: Freeman, Richard B. (Harvard University); Huang, Wei (National University of Singapore); Li, Teng (National University of Singapore)
    Abstract: Using administrative data from a major Chinese insurance firm that raised its sales targets and rewards for insurance agents in a highly non-linear incentive system, we find that the improvement in productivity far outweighed the costs associated with bunching distortions and other gaming behaviors. Labor turnover decreased, which suggests that the extra pay for workers exceeded the non-pecuniary cost of extra effort by workers, and thus improved their well-being. The firm gained about two-thirds of the higher net output, making the reform profitable. Analysis of non-linear incentive systems should accordingly focus more on the productivity-enhancing than on the distortionary effects.
    Keywords: non-linear incentives, insurance commission, strategic gaming behavior, productivity, turnover rates
    JEL: J33 M52
    Date: 2021–02
  5. By: Qing Li (Department of Economics and Finance, SILC Business School, Shanghai University.); Long Hai Vo (Economics Department, Business School, the University of Western Australia; Research Centre in Business, Economics and Resources, Ho Chi Minh City Open University; Faculty of Finance, Banking and Business Administration, Quy Nhon University)
    Abstract: Intangible capital is an important growth driver in the modern knowledge-based and innovation-driven economy. While there seems to be sufficient support for the role of intangible capital from developed economies, evidence from fast-growing developing countries is much more limited. This paper explores the heterogeneous pattern and potential determinants of firm-level intangible capital investment in Vietnam. We found that firm size, human capital, and information and communication technology increase the likelihood to invest in intangible capital. Additionally, an inverted-U shaped relation is identified between market competition and intangible capital investment: Moderate levels of market competition induce firms in Vietnam to invest more in innovative activities, but the effect of stronger competition diminishes.
    Keywords: Intangible capital investment; innovation; Vietnamese firms
    JEL: O34 O12 R11
    Date: 2021
  6. By: Canh Nguyen (VNU-HCM - Vietnam National University - Ho Chi Minh City); Minh Le (Banking University of Hochiminh city); Khoa Cai (Industrial University); Michel Simioni (UMR MoISA - Montpellier Interdisciplinary center on Sustainable Agri-food systems (Social and nutritional sciences) - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: This paper investigates the spillover effect (backward, forward, and horizontal linkage) of foreign direct investment (FDI) firms on the technical efficiency of local firms. This research extends the literature by employing meta-frontier framework analysis which is superior to single stochastic analysis because each industry has a different combination of inputs (or dissimilar production technology). Using a large data set (178,700 firm-year observations), this paper finds evidence on the negative impact of the horizontal and forward linkages on the meta-technical inefficiency for the data set as a whole as well as in three economic regions, in private owned firms, and capital and labor-intensive sectors in Vietnam.
    Keywords: Forward and horizontal linkage,Vietnam.,Foreign direct investment,Backward,Meta translog inefficiency,Meta-frontier framework
    Date: 2021–02–01
  7. By: Lucasenco, Eugenia; Ceban, Alexandru
    Abstract: The paper aims to assess the competitiveness of Moldovan agri-food products at the regional level, with an emphasis on neighbouring countries. Taking into account the latest trends in export of agri-food products, it is becoming necessary to analyze what are the most competitive Moldovan products on the regional EU market. In order to carry out the proposed assessment, the Revealed Comparative Advantage index has been used. This index helps calculating the relative advantage or disadvantage of a specific country in a certain class of goods as evidenced by trade flows. As a result, products with a significant comparative advantage have been identified, meaning the existence of the competitive potential at the regional level. At the same time, several proposals have been formulated in order to increase the competitiveness’ level of selected Moldovan agri-food products.
    Keywords: trade, Revealed Comparative Advantage index (RCA), Republic of Moldova, agri-food products.
    JEL: Q17
    Date: 2020–11–19
  8. By: , AISDL
    Abstract: Economic research is vital for creating more suitable policies to facilitate economic growth. Employing a combination of descriptive and Bayesian analyses, this paper investigates the research landscape of the economics discipline in Vietnam, in particular, the leading affiliations in the field and how these institutions compare to each other in terms of productivity, the number of lead authors, new authors and publications' journal impact factor. We also examine the differences in the authors' productivity based on their age and gender. The dataset extracted from the SSHPA database includes 1,444 articles. The findings show that among top producers of economic research in Vietnam, seven are universities, leaving only one representative of research institutes. These top producers account for 52% of research output among 178 institutes recorded in the database. We also find a correlation between a researcher's affiliation, sex, and scientific productivity in Vietnam's economic discipline. Overall, publications by male researchers outnumber those by female ones in most of the top affiliations. The findings also indicate that 40–44 is the age group with the highest scientific productivity. Researchers' collaboration, which is observed through co-authorship, is on the rise in all of the top eight economic research affiliations. However, the quality of current Vietnam's scientific works in the discipline is questionable. Therefore, it is suggested that in order to sustain scientific productivity, economic researchers might need to balance the quantity and quality of their contributions.
    Date: 2021–02–15
  9. By: Wojciech Charemza; Michal Lewandowski; Lukasz Wozny
    Abstract: We consider the efficiency of a mechanism for incentivising publication in academic journals where a research supervisory body awards points for papers that appear in quality publications. Building on the principal-agent literature with hidden types, we assume that such a body wants to maximise the expected prestige of academic disciplines. It sets up a reward system so that researchers who are aiming to maximise their own rewards also maximise the objective function of the research supervisory body, through their submission decisions. The model is calibrated to the reward scheme introduced within the Polish higher education reform in 2018, for which a series of policy recommendations is given
    Keywords: academic publications; efficient mechanisms; optimal categorisation
    JEL: I23 C55 O31 C53
    Date: 2021–02
  10. By: Vladimír Peciar (Masaryk University, Czech Republic, Ministry of Finance of the Slovak Republic)
    Abstract: In this paper I use the production function approach popularized by De Loecker et al. (2020) to analyze the evolution of market power in Slovakia and some of its micro and macro implications. In contrast to other studies, I calculate markups from both value added and sales and empirically test whether some of the global trends in market power can be seen in Slovak firm level data as well. I find that the markups in Slovakia in fact declined since 2010, both in terms of value added and sales. Although the decrease in sales markups is negligible, the value added aggregate markup declined by 25% from 2.35 in 2012 to 1.78 in 2018. Value added markups tend to be higher for relatively value-added larger firms and they are also higher in larger sectors. Smaller firms (size indicated by number of employees) tend to have higher markups. It seems that a typical high markup firm is relatively small (in terms of number of employees) but produces relatively larger output. Correlations between markups and various measures of profitabality show that there is indeed a relationship between markups and market power. Markups strongly correlate with profits and they do not significantly react to changes in costs. Markups in Slovakia evolve in excess of marginal costs. Slovak firm data shows that markups are also inversely associated to labor shares. Correlation is statistically strong and empirically well established.
    Keywords: markups, market power, firm data
    JEL: D22 L11
    Date: 2021–02
  11. By: Arabsheibani, Reza (London School of Economics); Kudebayeva, Alma (KIMEP); Mussurov, Altay (KIMEP)
    Abstract: Using data from the 2011 and 2016 Life in Kyrgyzstan surveys, we examine Kyrgyz women's labour supply elasticities at the extensive margin. We use Heckman's two-step approach to predict earnings for the non-participating women and then use these predictions to estimate the participation equation. We find that women's labour supply decision is not influenced by their earnings. We also show that there exists a significant gap in employment propensities among ethnic Kyrgyz women in consensual or arranged marriages compared to women in kidnapped-based marriages. This finding suggests that the practice of bride abduction adversely affects women's probability of employment and might have negative consequences on their economic well-being.
    Keywords: labour supply, women, bride kidnapping, Kyrgyzstan
    JEL: J01 J16 J22
    Date: 2021–02
  12. By: Stefania Bortolotti (University of Bologna, IZA); Thomas Dohmen (University of Bonn, IZA, Maastricht University, ROA, DIW); Hartmut Lehmann (National Research University Higher School of Economics, Russia, IZA, University of Bologna); Frauke Meyer (Forschungszentrum Julich); Norberto Pignatti (International School of Economics at Tbilisi State University (ISET), Tbilisi; IZA); Karine Torosyan (International School of Economics at Tbilisi State University, Tbilisi (ISET);)
    Abstract: We shed new light on the relationship between cognition and patience, by providing documenting that the correlation between cognitive abilities and delay discounting is weaker for the same group of individuals if choices are incentivized. We conjecture that the exertion of higher cognitive effort, which induces higher involvement of the cognitive system, moderates the relationship between patience and cognition. To test this hypothesis, we analyze the relationship between various measures of cognitive ability, including the cognitive reflection test (CRT), a symbol-correspondence test, a numeracy test, as well as self-reported math ability and the interviewer’s assessment of the respondent’s sharpness and understanding, and di↵erent measures of patience, including incentivized choices between smaller sooner and larger later monetary payments and hypothetical inter-temporal trade-offs, for 107 subjects drawn from the adult population in Tbilisi (Georgia).
    Date: 2021
  13. By: Armenak Antinyan (Wenlan School of Business, Zhongnan University of Economics and Law, China); Luca Corazzini (Department of Economics and VERA, University Of Venice Cà Foscari)
    Abstract: Little is known about the impact of policy interventions other than taxes and bans to reduce the demand for single use plastic bags. More specifically, the influence of environmental nudges and financial bonuses to curb the single use plastic bag purchase and consumption is largely understudied. To fill this gap, we run an RCT with loyalty card holders of one of the biggest supermarket chains in Yerevan (Armenia) to test and compare interventions based on environmental nudges and financial bonuses. We manipulate the type of the intervention – either a financial bonus or a nudge –, the presence of a reusable bag – either provided for free or not provided –, and the size of the bag – either small or big. Compared with the baseline setting with no intervention, both the financial bonus and the environmental nudge serve as effective policy instruments to reduce disposable plastic bag purchase. Moreover, reusable bags in combination with the environmental nudge or the financial bonus are more effective than the environmental nudge or the financial bonus alone. Finally, the financial bonus is substantially more effective than the environmental nudge, irrespective of the absence/presence of reusable bags.
    Keywords: Pro-environmental behavior, nudge, financial bonus, reusable plastic bag, randomized controlled trial
    JEL: C93 D12 D91 H23
    Date: 2021
  14. By: Karine Torosyan (International School of Economics at Tbilisi State University, Tbilisi (ISET);); Norberto Pignatti (International School of Economics at Tbilisi State University (ISET), Tbilisi; IZA)
    Abstract: Modern women often face an uneasy choice: dedicating their time to reproductive household work, or joining the workforce and spending time away from home and household duties. Both choices are associated with benefits, as well as non-trivial costs, and necessarily involve some trade-offs, influencing the general feeling of happiness women experience given their decision. The trade-offs are especially pronounced in traditional developing countries, where both the pressure for women to stay at home and the need to earn additional income are strong, making the choice even more controversial. To understand the implications of this choice on the happiness of women in these types of countries we compare housewives and working women of the South Caucasus region. The rich data collected annually by the Caucasus Research Resource Center allows us to match working women with their housewife counterparts and to compare the level of happiness across the two groups – separately for each country as well as for Armenian and Azerbaijani minorities residing in Georgia. We find a significant negative happiness gap for working women in Armenia and in Azerbaijan, but not in Georgia. The absence of such a gap among the Armenian and Azerbaijani minorities of Georgia indicates that the gap is mostly a country- rather than an ethnicity-specific effect.
    Keywords: Female employment, reproductive housework, life satisfaction and happiness, propensity score matching.
    Date: 2020
  15. By: William A. Barnett (University of Kansas); Taniya Ghosh (Indira Gandhi Institute of Development Research); Masudul Hasan Adil (Flame University)
    Abstract: We revisit the issue of stable demand for money, using quarterly data for the European Monetary Union, India, Israel, Poland, the UK, and the US. We use the same linear modeling and specification approach that had previously cast doubt on money demand stability. Autoregressive distributed lag (ARDL) cointegration models are used in the study to establish a long-term relationship between real money balances and real output, interest rate, and real effective exchange rate. For all the countries analyzed, evidence of the existence of stable demand for money is found. Broad money in general is better at capturing a stable demand for money than narrow money. The stability results are especially strong, when broad Divisia money is used instead of its simple sum counterpart.
    Keywords: Narrow money demand, broad money demand, simple-sum monetary aggregates, Divisia monetary aggregates, ARDL cointegration approach
    JEL: C23 E41 E52
    Date: 2021–02
  16. By: Ben Amor, Souhir; Althof, Michael; Härdle, Wolfgang Karl
    Abstract: The fast-growing Emerging Market (EM) economies and their improved transparency and liquidity have attracted international investors. However, the external price shocks can result in a higher level of volatility as well as domestic policy instability. Therefore, an efficient risk measure and hedging strategies are needed to help investors protect their investments against this risk. In this paper, a daily systemic risk measure, called FRM (Financial Risk Meter) is proposed. The FRM@ EM is applied to capture systemic risk behavior embedded in the returns of the 25 largest EMs' FIs, covering the BRIMST (Brazil, Russia, India, Mexico, South Africa, and Turkey), and thereby reflects the financial linkages between these economies. Concerning the Macro factors, in addition to the Adrian & Brunnermeier (2016) Macro, we include the EM sovereign yield spread over respective US Treasuries and the above-mentioned countries' currencies. The results indicated that the FRM of EMs' FIs reached its maximum during the US financial crisis following by COVID 19 crisis and the Macro factors explain the BRIMST' FIs with various degrees of sensibility. We then study the relationship between those factors and the tail event network behavior to build our policy recommendations to help the investors to choose the suitable market for investment and tail-event optimized portfolios. For that purpose, an overlapping region between portfolio optimization strategies and FRM network centrality is developed. We propose a robust and well-diversified tail-event and cluster risk- sensitive portfolio allocation model and compare it to more classical approaches.
    Keywords: FRM (Financial Risk Meter),Lasso Quantile Regression,Network Dynamics,Emerging Markets,Hierarchical Risk Parity
    JEL: C30 C58 G11 G15 G21
    Date: 2021

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