nep-tra New Economics Papers
on Transition Economics
Issue of 2022‒03‒21
nine papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Economic Situation of Organic Farms in Poland on the Background of the European Union By Sadowski, Arkadiusz; Wojcieszak-Zbierska, Monika; Zmyślona, Jagoda
  2. Market Output as a Criterion for the Use of Agricultural Potential in Different Regions of Poland By Krasowicz, Stanisław; Matyka, Mariusz
  3. What Gets Measured Gets Managed: Investment and the Cost of Capital By Zhiguo He; Guanmin Liao; Baolian Wang
  4. Accumulation and Depreciation in the Case of Individual Farms of the Polish FADN By Juchniewicz Monika; Podstawka Marian
  5. Food Service Industry Response to the COVID-19 Pandemic By Podstawka, Łukasz
  6. A comparison of institutional quality in the South Caucasus: Focus on Azerbaijan By Niftiyev, Ibrahim
  7. The Long-Term Effects of War on Foreign Direct Investment and Economic Development: Evidence from Vietnam By Nguyen, Cuong Viet; Tran, Tuyen Quang; Vuc, Huong Van
  8. The Role of Agribusiness in Polish Economy: An Analysis Based on the Input-Output Tables By Ambroziak, Łukasz
  9. What if? The Economic Effects for Germany of a Stop of Energy Imports from Russia By Ruediger Bachmann; David Baqaee; Christian Bayer; Moritz Kuhn; Andreas Löschel; Benjamin Moll; Andreas Peichl; Karen Pittel; Moritz Schularick

  1. By: Sadowski, Arkadiusz; Wojcieszak-Zbierska, Monika; Zmyślona, Jagoda
    Abstract: Organic agriculture is a relatively new production system, which is growing in importance worldwide. As in all enterprises, economic results are important for organic farms. This article aims to determine the economic situation of organic farms against the background of conventional entities on the example of Poland by comparing production potential and relations between production factors, production volume, and the economic results. The analysis was based on the data of the Polish FADN. Since organic farms in Poland are subject to the special EU support, the economic results were presented in two variants, i.e. with and without subsidies for operating activities. Such an approach constitutes an attempt to assess to what extent the two analyzed groups (i.e. organic and conventional farms) can function on the market without public support. The analysis was conducted for two extreme periods, i.e. 2007-2009 and 2016-2018. The first one marks the moment of launching the first Rural Development Programme in Poland for a full seven-year implementation period. The year 2018 provides the latest data available. According to the results, organic farms have lower production potential than conventional farms and less favourable relationships between production factors. Yields and animal productivity are also lower. More importantly, they achieve much lower economic results, which are in large part generated by direct payments. In conclusion, the study showed a high production and income inefficiency of organic farms and their significant dependence on public support.
    Keywords: Agricultural Finance
    Date: 2021–06–21
  2. By: Krasowicz, Stanisław; Matyka, Mariusz
    Abstract: The aim of the study was to present agricultural market output as a criterion for using agricultural potential in various regions of Poland. The analysis was conducted taking into account selected indicators characterizing the natural, agrotechnical, organizational, and economic conditions of agriculture in individual voivodeships. The average for Poland was used as the basis for comparisons. The basic sources of information were the statistical data of Statistics Poland, the research results of the Institute of Soil Science and Plant Cultivation – State Research Institute in Puławy, and the research results presented in the literature. According to our hypothesis, the environmental, agrotechnical, organizational, and economic conditions determine the level and structure of agricultural market output in Poland as a criterion for using the agricultural potential in the regions. The research conducted so far shows that the impact of individual groups of conditions is clearly differentiated and visible in the production specialization and their share in agricultural market output in Poland. Regional diversification of agricultural market output in Poland should be basis for directing scientific research and advisory activities. It also reflects the regional differentiation of the effects of the EU Common Agricultural Policy.
    Keywords: Agricultural and Food Policy, Crop Production/Industries
    Date: 2021–06–21
  3. By: Zhiguo He; Guanmin Liao; Baolian Wang
    Abstract: We study the impact of government-led incentive systems by examining a staggered reform in the Chinese state-owned enterprise (SOE) performance evaluation policy. To improve capital allocative efficiency, in 2010, regulators switched from using return on equity (ROE) to economic value added (EVA) when evaluating SOE performance. This EVA policy adopts a one-size-fits-all approach by stipulating a fixed cost of capital for virtually all SOEs, ignoring the potential heterogeneity of firm-specific costs of capital. We show that SOEs did respond to the performance evaluation reform by altering their investment decisions, more so when the actual borrowing rate was further away from the stipulated cost of capital. Our paper provides causal evidence that incentive schemes affect real investment and sheds new light on challenges faced by economic reforms in China.
    JEL: G31 G38
    Date: 2022–02
  4. By: Juchniewicz Monika; Podstawka Marian
    Abstract: The aim of the paper is to identify and evaluate the development opportunities for farms in Poland in terms of area groups. The analysis covered the 2015-2019 period and was based on the results of individual farms keeping agricultural accounts under the Polish FADN. The paper determined the level and rate of accumulation, as well as the level of depreciation, taxes and fees, operating subsidies, and the ratio of operating subsidies to public accumulation and support that the farms receive under the Common Agricultural Policy (CAP). The results indicate the financial and organizational diversity of the group of farms. Very small, medium-large, large, and very large farms had a positive accumulation rate. In this group of farms, the accumulation in terms of value covered the depreciation, and even in the case of large and very large farms it exceeded the depreciation. By contrast, small and medium-small farms were characterized by negative accumulation rates, which was associated with the lack of reproduction of fixed assets. These farms have no development opportunities. In conclusion, the ratio of subsidies to public accumulation is the most beneficial in the case of medium-large farms, where the ratio of subsidies to fiscal burden was over 20:1. Very small farms receive the least benefits under the CAP in terms of public accumulation. In this case, the ratio of subsidies to public accumulation is approximately 2:1 throughout the entire research period.
    Keywords: Agricultural and Food Policy, Agricultural Finance
    Date: 2021–06–21
  5. By: Podstawka, Łukasz
    Abstract: The aim of the paper is to present the ways in which entrepreneurs in the food service industry react to the pandemic, evaluate the efficiency of their actions, and suggest the most effective solutions to the market disruptions caused by the COVID-19 pandemic in Poland. The study used the descriptive analysis method, Pearson correlation survey method, and logical inference. Based on literature analysis and observations, questions were formulated for a survey for Polish entrepreneurs in the food service industry. The sample of surveyed entrepreneurs was selected by systematic random sampling from a group of entrepreneurs who promoted their enterprises through social media channels between 2019 and 2020. Among the surveyed enterprises, there is a positive correlation with undertaking activities concerning online brand image development and satisfaction with profits. Introducing their own deliveries during the pandemic, food service enterprises showed a negative correlation with profit growth. Enterprises that chose not to run their own supply networks, but consistently develop their brand image online, showed a positive correlation with increased satisfaction with earned profits. Analyzing the results of the study one can find some correlations. Enterprises which do not run their own supply networks, but instead consistently work on their brand image in the network and cooperate with enterprises operating in accordance with the sharing economy model, are doing well in times of the crisis. Enterprises that conduct their activities in accordance with the described assumptions showed a strong positive correlation with increased satisfaction with their net income.
    Keywords: Consumer/Household Economics, Food Consumption/Nutrition/Food Safety
    Date: 2021–06–21
  6. By: Niftiyev, Ibrahim
    Abstract: Much has happened in the three countries of the South Caucasus-namely, Azerbaijan, Georgia, and Armenia-since the collapse of the Soviet Union. Political events, institutional reforms, and economic development have resulted in greater economic welfare in these countries after the painful transition period of the 1990s. However, it remains to be seen whether they have achieved any solid results or whether they still have much to accomplish. While the answer is ambiguous, each country has followed a different political, geopolitical, economic, and institutional path and achieved different economic outcomes despite their close geographical proximity to each other. This paper compares the available data on economic and institutional quality in Azerbaijan, Georgia, and Armenia to portray the overall situation in terms of changes in institutional patterns. Then, special attention is given to Azerbaijan, as the country is considered to be oil-rich and thus resource-dependent. A comparative perspective on institutional quality suggests that Georgia has been a leading country in terms of institutions and effective bureaucracy-building, despite having lower economic indicators compared to Azerbaijan. Moreover, while Armenia is positioned between Georgia and Azerbaijan in terms of institutional quality, its economic growth is similar to Georgia's. Lastly, institutional variables (e.g., control of corruption, rule of law, and government effectiveness, and human rights) in Azerbaijan are negatively correlated with oil-related variables. This result aligns with the natural resource curse and Dutch disease theories, which posit that oil boom periods in mineral-rich countries are associated with a deterioration in institutional quality, thereby leading to slower growth. Also, the results are important to build up analytical frameworks to address the Dutch disease or resource curse studies in the case of Azerbaijan in a comparative manner with oil-poor countries even if the scope is limited to the South Caucasian former Soviet Union countries.
    Keywords: South Caucasus,Azerbaijan economy,oil boom,institutional quality,correlation analysis
    Date: 2022
  7. By: Nguyen, Cuong Viet; Tran, Tuyen Quang; Vuc, Huong Van
    Abstract: In this study, we find that the negative effect of unexploded ordnance (UXO) on the geographical density of foreign direct investment and large firms is a new channel through which the war legacy impedes local development in Vietnam. A 1% increase in the proportion of UXO-contaminated area leads to a 0.78% relative decrease in the density of FDI firms within districts. Point estimates for the elasticity of the density of joint-venture FDI firms and state-owned enterprise (SOEs) due to UXO are smaller, equal to -0.56 and -0.54. Consequently, a 1% increase in the proportion of UXO-contaminated areas leads to a 0.46% relative decrease in the intensity of nighttime light.
    Keywords: War,FDI, unexploded ordnance,local development,Vietnam
    JEL: R12 O12 O15
    Date: 2022
  8. By: Ambroziak, Łukasz
    Abstract: The aim of this paper is to evaluate changes in the role of agribusiness in the Polish economy, the relationships between various spheres of agribusiness and its links with othersectors of the national economy. The research was conducted on the basis of the input-output tables for 2005, 2010, and 2015 published by Statistics Poland. The analysis also confirmed most of the relationships formulated so far between the agribusiness development path and the level of economic development of a given country. From 2005-2015, the share of agri-business in creating the gross value added of the Polish economy decreased, similarly as the role of internal turnover in the material supply of agriculture, while the food sector became the leading link in the agri-food sector. The agri-business sector also showed strong links with the other sectors of the economy. The changes in the food economy were caused by the intensified relations of this sector with the other countries, which translated into benefits from the international division of labor.
    Keywords: Agribusiness, Agricultural and Food Policy
    Date: 2021–09–23
  9. By: Ruediger Bachmann; David Baqaee; Christian Bayer; Moritz Kuhn; Andreas Löschel; Benjamin Moll; Andreas Peichl; Karen Pittel; Moritz Schularick
    Abstract: This article discusses the economic effects of a potential cut-off of the German economy from Russian energy imports. We show that the effects are likely to be substantial but manageable. In the short run, a stop of Russian energy imports would lead to a GDP decline in range between 0.5% and 3% (cf. the GDP decline in 2020 during the pandemic was 4.5%).
    Date: 2022

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