nep-tra New Economics Papers
on Transition Economics
Issue of 2023‒07‒17
eight papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. The Covid-19 pandemic, Russia-Ukraine War, and Price Uncertainty of Staples: An Application of the VECM-Asymmetric GARCH-M BEKK Method By Urak, Faruk; Bilgic, Abdulbaki; Florkowski, Wojciech J.
  2. War and Entrepreneurship: A Synthetic Control Study of the Russia-Ukraine Conflict By David B. Audretsch; Paul P. Momtaz; Hanna Motuzenko; Silvio Vismara
  3. The Anatomy of the Financial Inclusion Gap in the Caucasus and Central Asia By Mr. Tigran Poghosyan
  4. Conditionalities in international organization accession processes: spreading business and human rights norms in central and Eastern Europe? By Higham, Ian
  5. (Trade) War and Peace: How to Impose International Trade Sanctions By Gustavo de Souza; Naiyuan Hu; Haishi Li; Yuan Mei
  6. Job Quality Gaps between Migrant and Native Gig Workers: Evidence from Poland By Kowalik, Zuzanna; Lewandowski, Piotr; Kaczmarczyk, Pawel
  7. Sparse Warcasting By Mihnea Constantinescu
  8. Forced Migration and Local Economic Development: Evidence from Postwar Hungary By Daniel Borbely; Ross Mckenzie

  1. By: Urak, Faruk; Bilgic, Abdulbaki; Florkowski, Wojciech J.
    Keywords: International Development, Agribusiness, Marketing
    Date: 2023
  2. By: David B. Audretsch; Paul P. Momtaz; Hanna Motuzenko; Silvio Vismara
    Abstract: Entrepreneurs are often situated in extreme environments characterized by violent conflict. Yet, war is largely a blind spot in entrepreneurship scholarship. As a first step to closing this gap, we offer a well-identified synthetic control study of entrepreneurial dynamics in the Russo-Ukrainian war. Relative to the synthetic counterfactual, Ukraine’s number of self-employed dropped by 20%, and the number of Ukrainian SMEs temporarily dropped by 14% but recovered within five years of the start of the conflict. In contrast, Russia had lost more than 1.4 million SMEs (42%) five years into the conflict. The disappearance of entrepreneurs is driven by both fewer new SMEs created and more existing SME closures. To pave the way for systematic scholarship on “war and entrepreneurship, ” our study proposes a conceptual framework integrating conflict into the theory of entrepreneurial choice and suggests numerous avenues for future research.
    Keywords: entrepreneurship, war, Russia-Ukraine conflict
    JEL: D74 L26 N44 O17
    Date: 2023
  3. By: Mr. Tigran Poghosyan
    Abstract: This paper analyses how financial inclusion in the Caucasus and Central Asia (CCA) compares to peers in Central and Eastern Europe (CEE). Using individual-level survey data, it shows that the probability of being financially included, as proxied by account ownership in financial institutions, is substantially lower across gender, income groups, and education levels in all CCA countries relative to CEE comparators. Key determinants of this financial inclusion gap are lower financial and human development indices, weak rule of law, and physical access to bank branches or ATMs. This suggests that targeted policies aimed at boosting financial and human development, strengthening the rule of law, and supporting fintech solutions can broaden financial inclusion in the CCA.
    Keywords: Caucasus and Central Asia; financial inclusion; financial access; estimation result; CEE comparator; CCA country; IMF working paper 23/109; CEE peer; Financial sector development; Financial account; Financial sector; Income; Global; Central Asia and the Caucasus
    Date: 2023–05–26
  4. By: Higham, Ian
    Abstract: Governments sometimes adopt policies that are not aligned with their preferences or have not come onto their agendas when doing so is linked to a reward. International organizations can therefore set conditions for coveted membership that include adopting new human rights and regulatory policies. As international organizations increasingly converge around the UN Guiding Principles on Business and Human Rights, how might they promote national uptake of these guidelines? This article considers the prospects of accession conditionality in answering this question. The focus of the article is on European Union and Organization for Economic Cooperation and Development (OECD) expansion in Central and Eastern Europe, where uptake of business and human rights policies remains comparatively low. The article argues that while these organizations increasingly include business and human rights conditionalities in accession negotiations, there remains significantly greater scope for promoting the Guiding Principles.
    Keywords: accession conditionality; European Union; international organizations; organization for economic cooperation and development; CUP deal
    JEL: J1
    Date: 2023–06–13
  5. By: Gustavo de Souza; Naiyuan Hu; Haishi Li; Yuan Mei
    Abstract: Trade sanctions are a common instrument of diplomatic retaliation. To guide current and future policy, we ask: What is the most cost-efficient way to impose trade sanctions against Russia? We build a quantitative model of international trade with input-output connections. Sanctioning countries choose import tariffs to simultaneously maximize their income and minimize Russia’s income, with different weights placed on these objectives. We find, first, that for countries with low willingness to pay for sanctions against Russia, the most cost-efficient sanction is a uniform tariff on all Russian products of about 20%. Second, if countries that are willing to pay at least US$0.70 for each US$1 drop in Russian welfare, an embargo on Russia’s mining and energy products – with tariffs above 50% on other products – is the most cost-efficient policy. Finally, if countries target politically relevant sectors, an embargo on Russia’s mining and energy sector is the cost-efficient policy, even when there is low willingness to pay for sanctions.
    Keywords: trade sanctions, tariff, tariff competition
    JEL: F13 O24
    Date: 2023
  6. By: Kowalik, Zuzanna (Institute for Structural Research (IBS)); Lewandowski, Piotr (Institute for Structural Research (IBS)); Kaczmarczyk, Pawel (Warsaw University)
    Abstract: The gig economy has grown worldwide, opening labour markets but raising concerns about precariousness. Using a tailored, quantitative survey in Poland, we study taxi and delivery platform drivers' working conditions and job quality. We focus on the gaps between natives and migrants, who constitute about a third of gig workers. Migrants take up gig jobs due to a lack of income or other job opportunities much more often than natives, who mostly do it for autonomy. Migrants' job quality is noticeably lower regarding contractual terms of employment, working hours, work-life balance, multidimensional deprivation, and job satisfaction. Migrants who started a gig job immediately after arriving in Poland are particularly deprived. They also cluster on taxi platforms which offer inferior working conditions. Poland is a New Immigration Destination where ethnic economy is poorly developed, institutions to support migrants are weak and access to migrant networks is limited to several nationalities only. The gig economy can be an arrival infrastructure, but its poor working conditions may exacerbate the labour market vulnerabilities of migrants and hinder mobility to better jobs.
    Keywords: gig jobs, platform economy, job quality, immigrant workers
    JEL: J28 J61 J21
    Date: 2023–06
  7. By: Mihnea Constantinescu (National Bank of Ukraine; University of Amsterdam)
    Abstract: Forecasting economic activity during an invasion is a nontrivial exercise. The lack of timely statistical data and the expected nonlinear effect of military action challenge the use of established nowcasting and short-term forecasting methodologies. This study explores the use of Partial Least Squares (PLS) augmented with an additional sparsity step to nowcast quarterly Ukrainian GDP using Google search data. Model outputs are benchmarked against both static and dynamic factor models. Preliminary results outline the usefulness of PLS in capturing the effects of large shocks in a setting rich in data, but poor in statistics.
    Keywords: nowcasting, quarterly GDP, Google Trends, machine learning, partial, least squares, sparsity, Markov blanket
    JEL: C38 C53 C55 E32 E37
    Date: 2023–06
  8. By: Daniel Borbely (University of Dundee); Ross Mckenzie (Department of Economics, University of Strathclyde)
    Abstract: We investigate the persistent effects of forced migration on sending economies using the postWW2 expulsion of German minorities from Hungary as a natural experiment. We combine historical and contemporary data sources to show that, while towns heavily affected by the expulsions were quite similar to other areas in terms of economic activity and labour market composition before the war, the forced migrations led to lasting reductions in economic activity, and an increasing reliance on agricultural labour. We further show long-term negative correlations between forced migration and local trust levels, suggesting that the expulsion of Germans also affected the local social fabric. Our analysis reveals that forced migration can cause lasting regional inequalities in sending economies.
    Keywords: forced migration, economic development, minorities, trust, persistence, regional inequality
    JEL: N34 N94 R11 O12 O15
    Date: 2021–11

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