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on Transition Economics |
| By: | Nguyen, Cuong; Tran, Tuyen; Vu, Huong |
| 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: | O12 R12 |
| Date: | 2021–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111891&r= |
| By: | Ritsa Panagiotou; Nikolaos Tzifakis |
| Abstract: | From the mid-1990s and for over a decade Greece developed a very important and dynamic trade and investment relationship with most Western Balkan countries. The economic crisis in 2009 broke this momentum and led to massive declines in both trade and FDI. While trade transactions rebounded after 2016 and almost reached pre-crisis levels, the decline of Greek FDI has shown no signs of recovering, its most definitive sign being the departure of many Greek banks from the region. The objective of this project is to delve into the intricacies of Greek economic diplomacy, focusing on its conduct in the Western Balkan countries (Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia) and exploring paths that could improve economic and business practices in the region. It does so by mapping out the multi-layered dimensions of Greek economic relations with the Western Balkans, highlighting problems and challenges that have emerged over the years, identifying key actors and stakeholders in the process, and making policy recommendations based on an evaluation of all the above. |
| Keywords: | Western Balkan countries, Greek Economic Diplomacy, Actors, Processes, Challenges |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:hel:greese:169&r= |
| By: | Markus K. Brunnermeier (Princeton University); Michael Sockin (University of Texas at Austin); Wei Xiong (Princeton University) |
| Abstract: | China's economic model involves active government intervention in financial markets. We develop a theoretical framework in which interventions prevent a market breakdown and a volatility explosion caused by the reluctance of short-term investors to trade against noise traders. In the presence of information frictions, the government can alter market dynamics since the noise in its intervention program becomes an additional factor driving asset prices. More importantly, this may divert investor attention away from fundamentals and totally toward government interventions (as a result of complementarity in investors' information acquisition). A trade-off arises: government's objective to reduce asset price volatility may worsen, rather than improve, information efficiency of asset prices. |
| Keywords: | China, financial markets |
| JEL: | G01 G14 G28 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2020-45&r= |
| By: | Zuzana Zavarská (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | The organisation of business activities into global value chains was a defining component of the significant advancements in globalisation witnessed in the three decades leading up to the Great Recession. In the years that followed the speed of global trade integration slowed down, and the COVID-19 pandemic exacerbated the uncertainty surrounding internationally fragmented production processes. More importantly, it made nation states keener to build up greater autonomy in the production of strategic goods, which resulted in notable increases in the scale of restrictive trade policies adopted by countries in the wake of the pandemic. Hence, the ‘new normal’ is likely to see a greater regionalisation of FDI flows and may lead to some restructuring of existing value chains. This presents an opportunity for transition economies in the Western Balkans, as it implies that firms from major FDI sources in Western Europe will be less inclined to look beyond the continent, giving geographically closer locations a competitive edge over traditional offshoring superpowers like China or India. While it is too early to tell whether the current relatively strong rebound in FDI inflows in the Western Balkans can indeed be attributed to the restructuring of value chains, it paints a relatively optimistic picture regarding the prospects of these economies to establish a firmer FDI presence, particularly in the areas of business services and logistics, which have gained momentum following the pandemic. To reap the full benefits of these opportunities, however, the countries of the Western Balkans must first and foremost step up their investment promotion activities, above all by focusing on improving their infrastructure and education systems and by enhancing their institutional capacities. |
| Keywords: | FDI, global value chains, value chain restructuring, near-shoring, Western Balkans, COVID-19 |
| JEL: | F21 F6 O24 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:wii:pnotes:pn:58&r= |
| By: | Hai-Anh Dang (World Bank); Cuong Nguyen (Vietnam National University); Calogero Carletto (World Bank) |
| Abstract: | Little evidence exists on the adverse effects of COVID-19 on the labor market for poorer countries. Despite its low middle-income status, Vietnam has been widely praised for its success in the fight against early waves of the COVID-19 pandemic, with a low mortality rate of around 100 deaths out of a population of less than 100 million by the end of 2020. We rigorously estimate the pandemic effects on employment outcomes in Vietnam, applying difference-in-differences and regression discontinuity design models to rich individual-level data from the Labor Force Surveys spanning 2015 to 2020. We find post-pandemic increased unemployment and temporary layoff rates and decreased employment quality. Monthly wages reduced but the proportion of workers receiving below-minimum wages substantially increased, contributing to sharply rising wage inequality. Our findings suggest that more resources can be allocated to protect vulnerable workers, especially as the pandemic prolongs and likely results in more severe damages to the economy. |
| Keywords: | COVID-19, employment, wage inequality, differences-in-differences, RDD, Vietnam |
| JEL: | E24 I30 J21 O12 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2022-607&r= |
| By: | Giao, Ha Nam Khanh; Tuan, Huynh Quoc |
| Abstract: | The study aimed to identify and measure the factors affecting the intention to buy air ticket online in Vietnam by surveying 331 consumers aged 18 and over who bought air ticket online. The SPSS 20 tool was used to analyze the reliability of the scale through the Cronbach's Alpha coefficient, EFA exploratory factor analysis, and linear regression analysis. Research results show that positive impact factors, decreasing by their strength, include: Perceived Benefit, Reliability, Reputation, Subjective Norm, Perceived Ease of Use. Meanwhile, Perceived Risk has a negative impact on the intention to buy air ticket of consumers. The results also help managers recognize the importance of the factors that affect the buying behavior of the consumers, and consequently make appropriate strategic adjustments and actions in the competitive process for air ticket online presently. |
| Date: | 2021–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:867s5&r= |
| By: | Rahmetov, Anvar; Rakhmetova, Malika |
| Abstract: | This article is an assessment of the current state of affairs in Uzbekistan’s SDG policies. It is based on an analysis of UN compiled data on SDGs, as well as an overview of Uzbekistan’s key SDG-related strategies, as well as unstructured interviews with a dozen respondents. Desk research suggests that Government’s key SDG priorities remain in export promotion, job creation and increased economic competitiveness. Interviews suggest that sustainability is understood as political and economic stability, economic growth, environmental conservation and rule of law. From the SDG issues, respondents identified SME and female entrepreneur support, employment generation and e-commerce as the ones with the highest priority, while concurring that corruption, monopolies and market distortions, low policy implementation capacity and limited public awareness of sustainability were the greatest obstacles. The greatest strength of Uzbekistan in integrating international trade into SDGs is the current reform momentum. Significantly improved relations with neighbors is another strength, with a window of opportunity to improve on regional trade, transit, connectivity, as well as water management and water-energy nexus. The greatest challenge, on the other hand, remains the government’s focus on exports, FDI, job creation and GDP growth, even if at the expense of the other SDGs. The other significant challenge is the insistence on import substitution and local production, and economic mercantilism in general, at the expense of the free-trade, value-chain-integration-based development model. Agriculture and food production, energy and e-commerce will be the sectors with highest potential in scaling up sustainable trade principles. |
| Keywords: | sustainable trade, SDGs, international trade, Uzbekistan, sustainability, energy, economy, agriculture, e-commerce |
| JEL: | O19 O24 O53 |
| Date: | 2022–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111941&r= |
| By: | Taguchi, Hiroyuki |
| Abstract: | This study aims to examine the energy-use inefficiency in the Central Asian (CA) countries by using the analytical framework of the energy-environmental Kuznets curve (EEKC). This study’s contribution to the literature is to explicitly target the CA countries in the EEKC analysis in the first place. The empirical analyses identified the energy-use inefficiency of Turkmenistan, Uzbekistan, and Kazakhstan, and could show the contributions of the weak policy governance as well as the natural resource abundance to their energy-use inefficiency. This analytical result could also be endorsed by the Uzbekistan case. Thus, the policy implication is that there would be much room for these countries to improve their energy-use efficiency by enhancing their performances of energy policies. |
| Keywords: | energy-use inefficiency, policy governance, Central Asia, energy-environmental Kuznets curve, and Uzbekistan |
| JEL: | O53 Q43 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111932&r= |
| By: | Jin, Cheng; Razzaq, Asif; Saleem, Faiza; Sinha, Avik |
| Abstract: | The present study investigates the dynamic and asymmetric impacts of eco-innovation and human capital development on ambient pollution by validating the Environment Kuznets Curve (EKC) hypothesis in China from 1988Q1 to 2018Q4. The findings confirm non-normality and structural breaks in data. Thus, Quantile Autoregressive Distributive Lag (QARDL) model and Granger Causality-in-Quantiles are applied to address non-linearity and structural breaks. The long-run results exhibit that eco-innovation and human capital have a significant negative relationship with carbon emissions, mainly from lower (0.05) to medium (0.5) quantiles and medium (0.50) to higher (0.95) emissions quantile. Moreover, economic growth contributes to higher emissions across all quantiles. In contrast, the square of economic growth has a significant negative association with emissions, confirming the validity of EKC from medium (0.40) to higher (0.95) quantiles. Lastly, Granger causality confirms a two-way causality between eco-innovation, human capital, and carbon emissions, and a one-way causality from human capital, economic growth to carbon emissions. These findings offer valuable policy recommendations. |
| Keywords: | Eco-innovation; Human capital; Environmental sustainability; Carbon emissions; Quantile ARDL |
| JEL: | Q5 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111922&r= |
| By: | Alari Paulus |
| Abstract: | The sensitivity of business fixed investment to one of its key determinants, the user cost of capital, has been little investigated with firm-level data that captures firm heterogeneity to the full extent. I study the determinants of business fixed investment in Estonia, using the universe of business statements for non-financial firms in 1994-2020 from administrative records. The results with various panel data models provide strong support for a theoretical long-term relationship between the gross investment rate, and changes in production output and the user cost of capital. I find that the capital stock is modestly responsive to changes in output and the user cost of capital, with elasticities less than 0.5 in absolute size, and that different estimation strategies yield broadly similar results. Elasticities differ by firm size, but sectoral variation is relatively limited. User cost elasticities also exhibit notable variation over time, while output elasticities are much more stable. I also find that investments in machinery and equipment are more elastic than investments in buildings and structures. |
| Keywords: | business investment, user cost of capital, corporate taxation, firm panel data |
| JEL: | D22 E22 H32 |
| Date: | 2022–03–24 |
| URL: | http://d.repec.org/n?u=RePEc:eea:boewps:wp2022-2&r= |
| By: | Ludmila Fadejeva (Bank of Latvia); Boriss Siliverstovs (Bank of Latvia); Karlis Vilerts (Bank of Latvia); Anete Brinke (Bank of Latvia) |
| Abstract: | We use a novel card transaction data from the Latvijas Banka to study the consumption response to the Covid-19 pandemic in Latvia throughout three separate waves of the pandemic. We find that card transaction activity fell similarly in all three waves. There is also some suggestive evidence that during the second and third waves of the pandemic, the consumption response was largely caused by the containment measures instead of the behavioural adjustment of consumers. The consumption response varied greatly across different sectors with the Airlines and Entertainment sectors faring the worst. However, the situation was not homogeneous during the three waves of the pandemic, given the changing composition of the containment measures. We show that merchants with a higher share of online transactions in the prepandemic period fared better than others during the second and the third waves of the pandemic. Similarly, we also find evidence that investment in online platforms during the initial phases of the pandemic seems to have resulted in better resilience in the following waves. Finally, we show that the nowcasting model with card transaction data outperforms all benchmark models when it comes to retail nowcasting and yields a notable improvement in forecasting metrics. |
| Keywords: | card transactions, consumer spending, Covid-19, retail trade nowcasting |
| JEL: | E21 E27 C32 C53 |
| Date: | 2022–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:ltv:dpaper:202201&r= |