nep-tra New Economics Papers
on Transition Economics
Issue of 2023‒03‒20
eight papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Does voluntary disclosure of polarizing information make polarization deeper? An online experiment on Russo-Ukrainian War By Chapkovski, Philipp; Zakharov, Alexei
  2. A Glimpse of Freedom: Allied Occupation and Political Resistance in East Germany By Luis R. Martinez; Jonas Jessen; Guo Xu
  3. Migration Restrictions Can Create Gender Inequality: The Story of China's Left-Behind Children By Xuwen Gao; Wenquan Liang; Ahmed Mushfiq Mobarak; Ran Song
  4. Spillovers in Childbearing Decisions and Fertility Transitions: Evidence from China By Pauline Rossi; Yun Xiao
  5. Localisation economies, intellectual property rights protection and entrepreneurship in China: a Bayesian analysis of multi-level spatial correlation By Gao, Xing; Meng, Jing; Ling, Yantao; Liao, Maolin; Cao, Mengqiu
  6. From contractors to investors? Evolving engagement of Chinese state capital in global infrastructure development and the case of Lekki Port in Nigeria By Zhang, Hong
  7. Back For Business: The Link Between Foreign Experience and Entrepreneurial Activity in Latvia By Kata Fredheim; Marija Krumina; Anders Paalzow; Zane Varpina
  8. Crossing Borders: Labor Market Effects of European Integration By Illing, Hannah

  1. By: Chapkovski, Philipp; Zakharov, Alexei
    Abstract: Does the animosity toward a holder of an opposite political opinion or the behavior toward someone whose opinion on a divisive issue is unknown depends on whether that opinion was disclosed or withheld voluntarily? In order to study this question, we conducted a pre-registered study in Russia, measuring the pro-war dictators' behavior towards their partners with aligned or conflicting views on the war in Ukraine using give-or-take modification of Dictator Game. In the presence of a large polarisation gap (outgroup discrimination), we did not find that intentional vs. unintentional disclosure of the recipients' positions affected the transfers of the dictators; at the same time, dictators' beliefs about the share of war supporters among experiment participants and the donations made by other dictators were causally affected. Our study is the first one to consider this dimension of social interactions, and contributes to the quickly growing literature on political polarisation.
    Keywords: disclosure; transparency; polarization; dictator game; war in Ukraine; Russia
    JEL: C91 C92 D64 D74 D82 D83
    Date: 2023–02–12
  2. By: Luis R. Martinez; Jonas Jessen; Guo Xu
    Abstract: This paper exploits the idiosyncratic line of contact separating Allied and Soviet troops within East Germany at the end of WWII to study political resistance in a non-democracy. When Nazi Germany surrendered, 40% of what would become the authoritarian German Democratic Republic was initially under Allied control but was ceded to Soviet control less than two months later. Brief Allied exposure increased protests during the major 1953 uprising. We use novel data on the appointment of local mayors and a retrospective survey to argue that even a “glimpse of freedom” can foster civilian opposition to dictatorship.
    Keywords: East Germany, political resistance, protest, autocracy, spatial RDD, World War II
    JEL: F51 H10 N44 P20
    Date: 2022
  3. By: Xuwen Gao; Wenquan Liang; Ahmed Mushfiq Mobarak; Ran Song
    Abstract: About 11% of the Chinese population are rural-urban migrants with a rural hukou that severely restricts their children's access to urban schools. As a result, 69 million children are left behind in rural areas. We use two regression-discontinuity designs - based on school enrollment age cutoffs and a 2014 policy change that more severely restricted migrants' access to schooling - to document that migrants become discontinuously more likely to leave middle-school-aged daughters (but not sons) behind in poor rural areas without either parent present exactly when schooling becomes expensive and restricted. The effect is larger when the daughter has a male sibling. Migrant parents send significantly less remittances back to daughters than sons. Although China's hukou mobility restrictions are not gender-specific in intent, they have larger adverse effects on girls. Rural residents adjacent to cities that experience shocks to labor demand after China's accession to the WTO are more likely to separate from children to take advantage of new opportunities in cities. Those workers earn much more and advance economically, but longitudinal data reveals that their children complete fewer years of schooling, remain poor, and have worse mental and physical health later in life.
    JEL: J13 J16 R23
    Date: 2023–02
  4. By: Pauline Rossi (CREST, Ecole Polytechnique, Palaiseau, France); Yun Xiao (University of Gothenburg, Göteborg, Sweden)
    Abstract: This article uses China’s family planning policies to quantify and explain spillovers in fertility decisions. We test whether ethnic minorities decreased their fertility in response to the policies, although only the majority ethnic group, the Han Chinese, were subject to birth quotas. We exploit the policy rollout and variation in pre-policy age-specific fertility levels to construct a measure of the negative shock to Han fertility. Combining this measure with variation in the local share of Han, we estimate that a woman gives birth to 0.63 fewer children if the average completed fertility among her peers is exogenously reduced by one child. The fertility response of minorities is driven by cultural proximity with the Han and by higher educational investments, suggesting that spillovers operate through both social and economic channels. These results provide evidence that social multipliers can accelerate fertility transitions.
    Keywords: Fertility, Family planning, China, Spillovers, Peer Effects, Partial population experiment.
    JEL: C36 D1 J11 J13 O15 O53
    Date: 2022–10–21
  5. By: Gao, Xing; Meng, Jing; Ling, Yantao; Liao, Maolin; Cao, Mengqiu
    Abstract: Entrepreneurship is an important determinant of innovation and growth with an uneven spatial distribution. In addition, the mechanism of entrepreneurship is affected by administrative hierarchies. However, the driving forces behind the spatial differences are not clear. Therefore, this study aims to examine the key determinants of entrepreneurship by clarifying the roles of localisation economies and intellectual property rights (IPRs) protection from 2008 to 2017 using a Bayesian analysis of multi-level spatial correlation. The empirical results indicate that localisation economies and IPRs protection have a major influence on entrepreneurship. In particular, although it is insignificant, the role of localisation economies at prefecture level is important, because the impact of supplier linkages at provincial level is negative. The effects of IPRs protection at both prefecture and provincial levels are significant in all the models, and its effect increases with the improvement in model performance. Moreover, these determinants vary across different spatial scales.
    Keywords: entrepreneurship; IPRs protection; localisation economies; multi-level models; spatial random effects; 51808392; 72173133; EP/R035148/1; chool Funding from the University of Westminster; and National Conditions Research Project of Research Institute for Eco-civilization; Chinese Academy of Social Sciences (Taicang 2022) .
    JEL: J1 C1
    Date: 2022–06–01
  6. By: Zhang, Hong
    Abstract: This paper introduces and critically analyzes an emerging form of global infrastructure development by China's infrastructure construction companies, known as "integrated investment, construction, and operation" (IICO). This model has been promoted by the Chinese infrastructure industry, financial institutions, and policymakers in recent years, as a response to the moral hazard problems exposed in the past sovereign loan-based infrastructure engagements, the industry's need to upgrade, and the global rise of PublicPrivate Partnerships. IICO can be understood as a form of market-seeking foreign direct investment. Compared to past forms of globalization of Chinese state capital, it has a much more complicated risk profile and less clear pay-off. While Chinese state capital actors are not yet well equipped to manage such new risks, they have been driven to make such attempts by the political pressure to become globally leading firms. A case study of Lekki Port in Nigeria serves to illustrate the challenges in the transition toward IICO. This paper calls for continued attention to this emerging form of Chinese state capital's engagement in global infrastructure development, especially on how risks are managed and the implications for the relationships between Chinese actors and host country stakeholders.
    Date: 2023
  7. By: Kata Fredheim (Stockholm School of Economics in Riga; Baltic International Centre for Economic Policy Studies); Marija Krumina (Baltic International Centre for Economic Policy Studies); Anders Paalzow (Stockholm School of Economics in Riga; Baltic International Centre for Economic Policy Studies); Zane Varpina (Stockholm School of Economics in Riga; Baltic International Centre for Economic Policy Studies)
    Abstract: Research shows that return migrants have a higher propensity to set up an entrepreneurial activity or be self-employed compared to non-migrants. We take a multidisciplinary approach and empirically study the case of Latvia as a migration donor country to learn how re-migrants participate in entrepreneurship back at home. We are interested if foreign experience can be seen as a vehicle for entrepreneurial activity and if it is worth looking at return migrants as agents of business growth and innovation. Not only we measure the fact of being entrepreneurial, but also explore sources that contribute to the higher propensity, attitudes to creating own business venture, level of ambitions and population sentiment towards entrepreneurs. Based on a nationally representative adult population survey of 8000 observations, we find that early-stage entrepreneurial activity, established business ownership as well as intrapreneurship for return migrants exceed that of non-migrant population. We find that self-perceived capabilities to start business is higher for those who have lived abroad, and fear of failure is lower; re-migrants also have better businesses networks and have higher growth and export ambitions. The return migrant entrepreneurship in Latvia is not necessity driven, rather motivated by opportunities. Migration experience, length of stay aboard and capital accumulated abroad are found to be significant predictors of probability to become entrepreneur when controlled for socioeconomic and personal factors.
    Date: 2022–08
  8. By: Illing, Hannah (University of Bonn)
    Abstract: This paper studies the labor market effects of out- and in-migration in the context of cross-border commuting. It investigates an EU policy reform that granted Czech citizens full access to the German labor market, resulting in a Czech commuter outflow across the border to Germany. Exploiting the fact that the reform specifically impacted the Czech and German border regions, I use a matched difference-in-differences design to estimate its effects on local labor markets in both countries. Using a novel dataset on Czech regions, I show that municipalities in the Czech border region experienced a decrease in unemployment rates due to the worker outflow, and a corresponding increase in vacancies. For German border municipalities, I find evidence for slower employment growth (long-term) and slower wage growth (short-term), but no displacement effects for incumbent native workers.
    Keywords: out-migration, in-migration, local labor markets
    JEL: J61 J15 R23
    Date: 2023–02

This nep-tra issue is ©2023 by Maksym Obrizan. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.