nep-tra New Economics Papers
on Transition Economics
Issue of 2024–11–18
eight papers chosen by
Maksym Obrizan, Kyiv School of Economics


  1. Decomposing Return and Volatility Connectedness in Northwest European Gas Markets: Evidence from the 𝑅2 connectedness approach By Farag, Markos; Ruhnau, Oliver
  2. Spatial heterogeneity in factors misallocation: European evidence By Francesca Ghinami
  3. Agricultural Production as a Coping Strategy during the Covid-19 Pandemic? Evidence from Rural Viet Nam By Hai-Anh H. Dang; Cuong Viet Nguyen
  4. Quantitative Analysis of Optimal Investment Scale and Timing for Flood Control Measures by Multi-Regional Economic Growth Model: Case Studies in Viet Nam By Hiroaki Ishiwata; Masashi Sakamoto; Makoto Ikeda; Venkatachalam Anbumozhi
  5. COVID-19 and Firm Response: Evidence from China By Dongmin KONG; Chen LIU; Mengxu XIONG
  6. Astrology and Matrimony: Social Reinforcement of Religious Beliefs on Marriage Matching in Vietnam By Edoardo Ciscato; Quoc-Anh Do; Kieu-Trang Nguyen
  7. Poverty imputation in contexts without consumption data: a revisit with further refinements By Dang, Hai-Anh H.; Kilic, Talip; Abanokova, Kseniya; Carletto, Calogero
  8. Underutilized land and sustainable development: effects on employment, economic output, and mitigation of CO2 emissions By Seymur Garibov; Wadim Strielkowski

  1. By: Farag, Markos (Faculty of Management, Economics and Social Sciences, University of Cologne); Ruhnau, Oliver (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI))
    Abstract: Regulatory reforms by the European Commission have facilitated the integration of the European gas market, increasing interdependence in prices and associated risks across gas hubs. Recent external shocks, including the COVID-19 pandemic and the Russian invasion of Ukraine, have disrupted market interconnectedness, as evidenced in the literature. However, whether the nature of shock transmission — contemporaneous or delayed — changes during market instability, how quickly price and volatility connectedness recover afterward, and whether spot and futures prices are affected differently remain unclear. This paper analyzes the connectedness of natural gas hubs in Northwest Europe from 2020 to 2024 using the R2 decomposition connectedness method. Our findings show that contemporaneous spillovers dominate lagged ones, even during external shocks, indicating rapid market adjustments. Moreover, while market connectedness significantly decreased during major disruptions, it promptly returned to pre-crisis levels once these disruptions subsided. Regression results indicate a significant link between reduced market connectedness and pipeline congestion, particularly when combined with higher future price expectations. Futures markets showed higher connectedness than spot markets during tight conditions, suggesting alignment with broader expectations and reduced susceptibility to physical constraints.
    Keywords: European natural gas market; Dynamic linkages; R2 decomposition; volatility
    JEL: C11 C32 F14 L71 Q31 Q43
    Date: 2024–10–24
    URL: https://d.repec.org/n?u=RePEc:ris:ewikln:2024_006
  2. By: Francesca Ghinami (Gran Sasso Science Institute)
    Abstract: This study investigates the spatial heterogeneity that factors misallocation reveals in nine EU-member countries (Germany, France, Austria, Italy, Spain, Portugal, Czech Republic, Slovenia and Poland) during the years 2011-2020. Misallocation, as in the degree of efficiency with which inputs are allocated across firms, is increasingly regarded as one main source of aggregate productivity differences across countries. Nevertheless, its within-country spatial and regional dimensions are still largely overlooked, notwithstanding numerous reasons for allocative efficiency to vary across different administrative units. This article aims at filling this gap by firstly performing an exploratory analysis of allocative efficiencies at different levels of territorial aggregation (NUTS0-3). Secondly, it provides evidence for the across-regions disparities in allocative efficiency to account for large shares of aggregate misallocation for all the examined European countries. Finally, it investigates and finds support for the hypothesis that variations in local institutional quality may help explaining regional differences in allocative efficiencies
    Keywords: Total factor productivity, Misallocation, Regional disparities, Institutional Quality
    JEL: D24 L25 O47
    Date: 2023–12
    URL: https://d.repec.org/n?u=RePEc:ahy:wpaper:wp43
  3. By: Hai-Anh H. Dang (World Bank); Cuong Viet Nguyen (Viet Nam National University, and the Mekong Development Research Institute, Hanoi, Viet Nam)
    Abstract: We examine the Covid-19 pandemic-induced negative effects on household welfare in rural Viet Nam. Analysing recent Viet Nam Household Living Standard Surveys spanning 2016–2021, we find robust evidence that lockdown measures resulted in a 3.9% reduction in per capita income and a 2.6 percentage-point increase in the headcount poverty rate of rural households. It also had severe effects on rural households’ wages and self-employed non-farm income, but rural households appeared to have relied on farm income to cope with the lockdowns. Each additional month under lockdown reduced wage income and non-farm income by 2.8% and 6.3% respectively but increased.
    Keywords: Covid-19, urban-rural gap, income, poverty, rural households, Viet Nam
    JEL: E24 I30 J21 O12
    Date: 2024–01–31
    URL: https://d.repec.org/n?u=RePEc:era:wpaper:dp-2023-23
  4. By: Hiroaki Ishiwata (Pacific Consultants Co., Ltd., Tokyo, Japan); Masashi Sakamoto (Tohoku University); Makoto Ikeda (Kobe University); Venkatachalam Anbumozhi (Economic Research Institute for ASEAN and East Asia (ERIA))
    Abstract: This study aims to develop and utilise a multi-regional economic growth model that can take into account flood damage and investment in disaster risk reduction, and, through case studies in Viet Nam, quantitatively analyse the long-term effects of investment in disaster risk reduction on the national and local economy, as well as the optimal scale and timing of investments in flood protection, to gain a better overview of these factors. The results indicate that additional investment in disaster risk reduction could stimulate economic growth, and that the optimal range of the disaster risk reduction budget rate was around 0.3% to 0.5% of GDP, assuming a constant budget rate throughout the total 25-year calculation period. In the case of a variable disaster risk reduction budget rate, we observed that a variable budget rate that gradually reduces the disaster risk reduction budget rate from a higher level than the current rate could further promote economic growth than if the budget rate were fixed. In both cases, we verified that with excessive investment in disaster risk reduction, the high tax burden had the risk of reducing investment in production capital and lead to stagnating economic growth. By region, the long-term effects of investment in disaster risk reduction were most seen in the Central region, where the rate of flood damage is the highest.
    Keywords: disaster risk reduction investment, extensive flood risk, multi-regional economic growth model, Viet Nam
    JEL: C68 E17 H21 H54 O11 O41 O53 R12
    Date: 2024–02–02
    URL: https://d.repec.org/n?u=RePEc:era:wpaper:dp-2023-24
  5. By: Dongmin KONG (School of Economics, Huazhong University of Science and Technology); Chen LIU (School of Economics, Huazhong University of Science and Technology); Mengxu XIONG (School of Economics, Huazhong University of Science and Technology)
    Abstract: This paper explores the effects of the coronavirus disease (COVID-19) pandemic on firm response. Using a novel COVID-19 sentiment index, our estimation shows that the pandemic significantly reduced the overseas revenue and profits of firms listed on the Chinese A-share market. Moreover, we observe that an increase in loans, and a drop in debt financing cost and trade credit, were prominent during the pandemic. We contend that reduced cash flows, which damaged firm operations; government support, which provided more financing channels; and increased default risks, which placed barriers on trade credit, are the plausible mechanisms through which the COVID-19 pandemic affects firm performance. Profit contraction was more pronounced for firms with a lower ratio of domestic content in exports and state-owned enterprises, while external financing was easier for firms subject to stringent financial constraints despite their lowered trade credit.
    Keywords: COVID-19 pandemic, firm response, external financing
    Date: 2024–02–16
    URL: https://d.repec.org/n?u=RePEc:era:wpaper:dp-2023-29
  6. By: Edoardo Ciscato; Quoc-Anh Do; Kieu-Trang Nguyen
    Abstract: This paper demonstrates the prevalence, pervasiveness, persistence, and resilience of a system of non-Big God religious beliefs, in absence of religious organizations and moralizing prescriptions, thanks to a self-fulfilling mechanism based on social insurance. We focus on the Vietnamese’s beliefs in marriage fortune predictions by the Taoist astrological system Tử Vi. First, we estimate a structural model of assortative marriage matching and show that such beliefs’ importance in marriage formation amounts to 6.5% of that of the entire age and education profile. Second, we estimate the effect of auspiciousness on couples’ outcomes while controlling for selection into marriage using the structural model’s predictions. Auspicious couples receive 11% more social transfers from their extended family, and up to 28% under hardship, because they are believed to be more harmonious and lucky. They further enjoy more consumption, income, and other welfare measures. We link the system’s long-term persistence and resilience to its potential role as a commitment device between families.
    Keywords: non-Big God religion, traditional beliefs, self-fulfilling prophecy, marriage market, social transfers, social insurance, second-order belief, commitment device
    JEL: Z12 J12 D64 G52 O15 D83 D16
    Date: 2024
    URL: https://d.repec.org/n?u=RePEc:ces:ceswps:_11272
  7. By: Dang, Hai-Anh H.; Kilic, Talip; Abanokova, Kseniya; Carletto, Calogero
    Abstract: Survey-to-survey imputation has been increasingly employed to address data gaps for poverty measurement in poorer countries. We refine existing imputation models, using 14 multi-topic household surveys conducted over the past decade in Ethiopia, Malawi, Nigeria, Tanzania, and Vietnam. We find that adding household utility expenditures to a basic imputation model with household-level demographic and employment variables provides accurate estimates, which even fall within one standard error of the true poverty rates in many cases. The proposed imputation method performs better than several commonly used multiple imputation and machine learning techniques. Further adding geospatial variables improves accuracy, as does including additional community-level predictors (available from data in Vietnam) related to educational achievement, poverty, and asset wealth. Yet, within-country spatial heterogeneity exists, with certain models performing well for either urban areas or rural areas only. These results offer cost-saving inputs into future survey design.
    Keywords: Ethiopia; Malawi; Nigeria; Tanzania; Vietnam; consumption; household surveys; poverty; Sub-Saharan Africa; survey-to-survey imputation
    JEL: N0
    Date: 2024–10–06
    URL: https://d.repec.org/n?u=RePEc:ehl:lserod:125798
  8. By: Seymur Garibov; Wadim Strielkowski
    Abstract: Climate change, deforestation, and biodiversity loss are calling for innovative approaches to effective reforestation and afforestation. This paper explores the integration of artificial intelligence and remote sensing technologies for optimizing tree planting strategies, estimating labor requirements, and determining space needs for various tree species in Gabala District of Azerbaijan. The study employs YOLOv8 for precise identification of potential planting sites and a Retrieval-Augmented Generation approach, combined with the Gemini API, to provide tailored species recommendations. The methodology incorporates time-series modeling to forecast the impact of reforestation on CO2 emissions reduction, utilizing Holt-Winters for predictions. Our results indicate that the AI model can effectively identify suitable locations and species, offering valuable insights into the potential economic and environmental benefits of large-scale tree planting thus fostering sustainable economic development and helping to mitigate the adverse effects of global warming and climate change.
    Date: 2024–10
    URL: https://d.repec.org/n?u=RePEc:arx:papers:2410.09136

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