nep-tra New Economics Papers
on Transition Economics
Issue of 2022‒07‒18
nine papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. The perils of Kremlin's influence: evidence from Ukraine By Chiara Natalie Focacci; Mitja Kovac; Rok Spruk
  3. Public sentiment towards economic sanctions in the Russia-Ukraine war By Vu M. Ngo; Toan L.D. Huynh; Phuc V. Nguyen; Huan H. Nguyen
  4. The case of financial and banking integration of Central, Eastern and South Eastern European countries: a gravity model approach By Léonore Raguideau-Hannotin
  5. The role of ESG in the decision to stay or leave the market of an invading country: The case of Russia By Anup Basnet; Emilios Galariotis; Magnus Blomkvist
  6. Financialization in emerging Europe By Kazandziska, Milka
  7. The Impact of Exchange Rates, the COVID-19 Pandemic, and the Ukraine War on the Turkish Economy By Willem THORBECKE; Ahmet SENGONUL
  8. Does an effective government lower COVID-19's health impact?: Evidence from Viet Nam By Duc Anh Dang; Ngoc Anh Tran
  9. Programme-135: addressing poverty and inequality in Viet Nam By Tung Duc Phung; Thanh Minh Pham

  1. By: Chiara Natalie Focacci; Mitja Kovac; Rok Spruk
    Abstract: We examine the contribution of institutional integration to the institutional quality. To this end, we exploit the 2007 political crisis in Ukraine and examine the effects of staying out of the European Union for 28 Ukrainian provinces in the period 1996-2020. We construct novel subnational estimates of institutional quality for Ukraine and central and eastern European countries based on the latent residual component extraction of institutional quality from the existing governance indicators by making use of Bayesian posterior analysis under non-informative objective prior function. By comparing the residualized institutional quality trajectories of Ukrainian provinces with their central and eastern European peers that were admitted to the European Union in 2004 and after, we assess the institutional quality cost of being under Russian political influence and interference. Based on the large-scale synthetic control analysis, we find evidence of large-scale negative institutional quality effects of staying out of the European Union such as heightened political instability and rampant deterioration of the rule of law and control of corruption. Statistical significance of the estimated effects is evaluated across a comprehensive placebo simulation with more than 34 billion placebo averages for each institutional quality outcome.
    Date: 2022–06
  2. By: Kharshiladze, Giorgi
    Abstract: The main problem of how to transform a centrally planned market into a market economy has emerged as one of the most influential and challenging issues in modern times. Nowadays, post-Soviet republics and nations of Central and Eastern Europe are in a transformation process and seek to capture claimed efficiency and advantages of market mechanisms for their economies. This is a very complex issue, because a rapid transition from socialism to a market economy is an unprecedented phenomenon and requires fundamental restructuring of a nation’s economic, political, social and legal institutions as well as its physical infrastructure.
    Date: 2022–02–08
  3. By: Vu M. Ngo; Toan L.D. Huynh; Phuc V. Nguyen; Huan H. Nguyen
    Abstract: This paper introduces novel data on public sentiment towards economic sanctions based on nearly one million social media posts in 109 countries during the Russia-Ukraine war by using machine learning. We show the geographical heterogeneity between government stances and public sentiment. Finally, political regimes, trading relationships, and political instability could predict how people perceived this inhumane war.
    Keywords: democracy,public sentiment,Russia-Ukraine
    JEL: F51 H77
    Date: 2022
  4. By: Léonore Raguideau-Hannotin (Université Paris Nanterre)
    Abstract: The motivation of this article is to better understand the determinants of international banking integration of non-Euro CESEE EU Members. One stylized fact for these economies is the building up of external financial vulnerabilities since the beginning of the Transition period, with a large weight of cross-border banking,particularly with the European Union. In relation with the literature on the impact of gross financial flows on financial stability, we therefore estimate the long-term historical, geographical and cultural determinants of cross-border banking claims with a bilateral financial gravity model. We then analyze the impact of domestic(pull), foreign (push) and global factors using the gravity framework. Our results first show that cross-border banking in these economies is significantly driven by geographical proximity and common historical links, particularly with EU Member States. Second, we find that banking sector health variables are more significant as push factors, while structural banking system variables are more significant as pull factors. These results provide evidence in favor of an impact of European banking systems on financial liabilities in this region, in relation with the very high level of EU ownership of banking assets. Finally, US global liquidity factor matters more than exchange rate stability, which points towards policy dilemma effect in the region.
    Keywords: Gravity model, cross-border banking, Central Eastern and South EasternEuropean countries, European Union, push factors
    JEL: F
    Date: 2022
  5. By: Anup Basnet (UNIS - University of Surrey); Emilios Galariotis (Audencia Business School); Magnus Blomkvist (Audencia Business School)
    Abstract: We study firms' decisions to stay or leave the Russian market amid the invasion of Ukraine. Lower ESG scores increase the likelihood of keeping the Russian operations unchanged. Higher scores lead to less negative stock market reactions following complete exits.
    Date: 2022
  6. By: Kazandziska, Milka
    Abstract: This paper contributes to the financialization literature exploring the dynamics of financialization in eight emerging European economies (EEEs) compared to the Anglo-Saxon countries. Our analysis encompasses the decade before and the years following the financial crisis in 2008, including the latest developments in conjunction with the Covid-pandemic. Hungary, Bulgaria, Croatia, Turkey, and to a lesser extent, Czech Republic and Poland experienced strong financial inflows, and an accumulation of foreign liabilities. Foreign financial flows in Russia were not as significant for the process of financialization, but rather the state itself. In this paper we identify two types of financialization: 'foreign-finance-led' and 'state-led' financialization, where 'foreign-finance-led' financialization is characterized by increase in net capital inflows and subsequently, foreign indebtedness, whereas the government (the state) in the 'state-led' financialization has a predominant role in the financialization process. Most of the EEEs fit the 'foreign-finance-led' financialization, but with a tendency of a significant state involvement in the financial systems during the Covid-pandemic. Based on the analysis of financialization in EEEs, our findings show that EEEs had variegated financialization dynamics. Financialization in the EEEs was less pronounced compared to United States and United Kingdom. Despite this fact, the dynamics of financialization took a significant pace in the EEEs in the years following the financial crisis of 2008, with rising debt levels during the Covid-pandemic.
    Keywords: financialization,financial crises,emerging countries,Central Eastern Europe
    JEL: E44 F34 F36 F65 G01 G20 P51 P52
    Date: 2022
  7. By: Willem THORBECKE; Ahmet SENGONUL
    Abstract: The Turkish lira depreciated by 200% against the U.S. dollar and the euro between 2012 and 2022. We investigate how depreciations affect Turkish imports, exports, and stock prices. We find that depreciations cause large decreases in imports but do not stimulate exports. We also find that they decrease stock prices for most sectors of the Turkish economy. In spite of the weak currency, economic growth in Turkey has remained resilient during the COVID-19 pandemic and the beginning of the Russia-Ukraine war. A stronger lira can strengthen this resilience by increasing the purchasing power of Turkish residents and the profitability of Turkish firms.
    Date: 2022–05
  8. By: Duc Anh Dang; Ngoc Anh Tran
    Abstract: Government effectiveness has played an important role in tackling the crisis caused by the coronavirus (COVID-19) pandemic. This paper discusses the different aspects of government effectiveness in explaining the variation in the COVID-19 confirmed cases and death levels in Viet Nam. We use the Provincial Governance and Public Administration Performance Index in 2019 to measure the quality of government effectiveness at the local level. The findings show the importance of health system capacity in the battle against COVID-19.
    Keywords: COVID-19, Pandemic, State effectiveness, Viet Nam, healthcare capacity, Transparency, Political participation
    Date: 2022
  9. By: Tung Duc Phung; Thanh Minh Pham
    Abstract: Viet Nam has achieved remarkable economic growth and poverty reduction since the Doi Moi. However, ethnic minorities and the ethnic majority do not benefit equally from the national economic progress. The proportion of poor households that are ethnic minority-headed soared from 18 per cent in the early 1990s to 56 per cent in 2008. The disparity exists in their access to crucial basic infrastructure and public services, including transportation, education, healthcare, electricity supply, markets, and justice services.
    Keywords: Poverty reduction, Inequality, Ethnic minorities, Viet Nam
    Date: 2022

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