nep-tra New Economics Papers
on Transition Economics
Issue of 2022‒02‒07
seven papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Can the diligent governance increase subjective wellbeing? New evidence from environmental regulations in China By Shu Guo; ZhongXiang Zhang
  2. What drives the risk of European banks during crises? New evidence and insights By Ion LAPTEACRU
  3. Trade, Misallocation, and Capital Market Integration By Laszlo Tetenyi
  4. Currency Carry Trade by Trucks: The Curious Case of China's Massive Imports from Itself By Xuepeng Liu; Heiwai Tang; Zhi Wang; Shang-Jin Wei
  5. Incrimination of Freedom of Conscience or How “Life Beats the Movie†By Dragos Penca
  6. Using geolocation data in spatial-econometric construction of multiregion input-output tables: a Bayesian approach By Andrzej Torój
  7. Romanian Communist State Persecution on Neoprotestant Children, Youngsters and Teachers By Ciprian Corneliu Ciurea

  1. By: Shu Guo (Tianjin University); ZhongXiang Zhang (China Academy of Energy)
    Abstract: With the appearance of “wellbeing stagnation”, the Chinese government has gradually realized the negative impact of increasingly severe environmental problem on people’s wellbeing, and has then has formulated a series of environmental policies. Based on the balanced panel data from2014 to 2018 from China Family Panel Studies (CFPS)and by means of the fixed effects model, we analyze the relationships between heterogeneous environmental regulations (ERs) and subjective wellbeing (SWB) from the perspective of diligent governance. Our results show that command-control environmental regulation (CER) and voluntary environmental regulation (VER)have positive effects on SWB, but there exist the heterogeneity effects in the links between ERs and SWB. Vulnerable populations, including those with rural hukou, less educated, have paidmore attention to VER, whereas the view of other groups is the opposite. Similarly, the people with low incomes or living in economically underdeveloped areas or western region, are sensitive to VER, while the others only pay attention to CER.The SWB of those with better health can be enhanced by CER, and the SWB of those with poor health are unaffected by CER and VER.Further channel analysis illustrates that CER can improve SWB by increasing people’s evaluation of the government, while VER cannot. Our results imply that the people would place more weight on environmental governance as their income rises, and can help the government institute more flexible environmental policies to improve people’s wellbeing.
    Keywords: Subjective wellbeing, environmental regulations, heterogeneity, balanced panel data, China
    JEL: Q53 Q56 O13 R11 P28 H11
    Date: 2021–12
  2. By: Ion LAPTEACRU
    Abstract: Based on an extensive dataset of 1,156 European banks over the 1995-2015 period, we aim to provide new insights on the determinants of European banks’ risk-taking during crisis events, employing a novel asymmetric Z-score. Our results suggest that more capital, lower ratios of loans to deposits and of liquid assets to total assets and lower share of non-deposit and short-term funding in total funding are associated with lower bank risk and this relationship is stronger during the crises. Moreover, having low costs compared to their revenues reduces the risk of European banks in normal times and has the same impact during the crises. Being involved in non-interest-generating activities makes banks riskier. Finally, being large and having higher net interest margin make banks more stable, but this positive effect is diminished for the size and vanished for the profitability during crisis times. And some differences are observed between Western and Eastern European countries. countries exhibit less regulatory intensity than developed countries. This result suggests that it will require more technical and financial resources for developing countries to comply with measures imposed by developed countries that adopt more stringent technical measures than they do.
    Keywords: European banking; bank risk; financial crisis; Z-score
    JEL: G21
    Date: 2022
  3. By: Laszlo Tetenyi
    Abstract: Developing countries typically integrate into the world economy by first opening up to trade and then later, if at all, by integrating their capital markets. I study the effects of postponing the opening of capital markets in a standard trade model with financial frictions and firm dynamics. As trade barriers fall, the model predicts that capital misallocation declines in the aggregate, but increases among exporters. Allowing capital inflows helps all firms but it also magnifies the losses from misallocation. In the quantitative experiment calibrated to the Hungarian integration episode of the 90s, the benefit of cheaper capital dominates the adverse effect of growing capital misallocation on productivity, leading to higher output, consumption, and welfare than under closed capital markets. Moreover, Hungary could have gained an extra 1 % in welfare, on top of the overall gain of 7 %, by immediately allowing capital inflows after the reduction in trade barriers.
    JEL: F15
    Date: 2021
  4. By: Xuepeng Liu; Heiwai Tang; Zhi Wang; Shang-Jin Wei
    Abstract: With capital controls, the standard financial market transactions needed for currency carry trade are hard to implement. Using detailed trade data reported by both the mainland Chinese and Hong Kong’s governments, we present evidence that indirect currency carry trade likely takes place via round-trip reimports. We also show that greater state control in terms of more state-owned firms does not reduce such “carry trade by trucks.”
    JEL: F14 F3 G15
    Date: 2022–01
  5. By: Dragos Penca (Legal Adviser, Bucharest, Romania, Ovidius University, Constanta, Romania)
    Abstract: During the communist dictatorship in Romania, many citizens fulfilling their compulsory military service were criminally convicted of insubordination on the grounds that they refused to join the army or because they refused to take the military oath. Among these young people, many were condemned for refusing to work on Saturday, considering the Sabbath as a day of rest. Following the December 1989 revolution, Romania compensated people sentenced to prison or other forms of persecution for political reasons through material means. In 2009, amid tensions between the Romanian state and the Religious Organization Jehovah's Witnesses, the High Court of Cassation and Justice, the Supreme Court in Romania, described the crime of insubordination in the army as a common law crime and not a political one, thus condemning all forms of manifestation of freedom of thought or freedom of religion as a crime of common law.
    Keywords: Hacksaw Ridge, Jehovah’s Witness, conscientious objector, Romanian law, freedom of conscience
    Date: 2021–10
  6. By: Andrzej Torój
    Abstract: Interregional input-output tables for Poland at NUTS-3 level are built by using the Bayesian approach to spatial econometric analysis. I apply the multi-equation Durbin specification proposed by Torój (2021) to derive the sample density and Statistics Finland (2006) regional I–O tables to derive the prior hyperparameters. This prior aims to introduce additional information in the presence of noisy spatial data, but also to avoid the areas where the spatial decay profiles representing the supply geography become insensitive to the parameter values of the selected functional form. To measure the distance, the real-world driving distance between the most populated cities of the regions from Google Maps is used. Posterior distrubutions indicate that the agricultural commodities and advanced services are supplied to the most distant locations, whereas the simple services – to the least distant ones; the result for the former group of sectors is characterized with the highest uncertainty. The illustrative simulation indicates that 82.2% of the indirect effects occur in the home region, with a posterior-based confidence interval from 71.5% to 92.4%. The results do not change qualitatively when I use the driving time (averaged over 42 equidistant moments in a 7-day week) as the alternative measure of distance, but the hybrid time- and distance-based model is strongly preferred in the Bayes factor comparison, since for all sectors except industry (NACE sections B-E), the time-based metric turned out to be dominant. When commuting is taken into account in the induced effect calculation (measured with mobile geolocation data), 4.9% of the induced effects are relocated from the home region (central point in a big agglomeration) to the other regions, especially the surrounding ''ring''.
    Keywords: input-output, interregional input-output tables, spatial econometrics, Bayesian estimation, regional economic impact assessment
    JEL: C31 C67 R12 R15
    Date: 2022–01
  7. By: Ciprian Corneliu Ciurea (Aurel Vlaicu University, Arad, Romania)
    Abstract: While Adventist pupils and students suffered because of the communist regime, particularly because of not attending classes on Saturday, other neo-Protestant children and young people suffered because of their faith too. Although they had Sunday as a day of worship and did not skip classes, they, along with their parents and teachers belonging to these cults, had to endure furious repressive measures.
    Keywords: church, neoprotestant, students, youngsters, teachers, communism, persecutions
    Date: 2021–10

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