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on Transition Economics |
| By: | Biswajit Banerjee (Ashoka University); Juraj Zeman (National Bank of Slovakia) |
| Abstract: | Motor vehicle production in the Visegrád Four economies (Czechia, Hungary, Poland, Slovakia) has undergone a profound structural transformation since their EU accession. This transformation has unfolded along two fronts: ever-deepening integration into European and global value chains, and, more recently, the industry's shift to electrification. This paper examines both over 2010–2023. We test a prominent claim in the recent literature: that since 2018, global value chains have been reshoring, regionalising and shortening in response to pandemic disruption and geopolitical risk. Decomposing Eurostat FIGARO input-output tables and measuring production-chain length, we find no support for reshoring, shortening or derisking: backward linkage and chain length both rose in every country; where domestic sourcing increased, it was not matched by additional domestically generated value; and diversification away from EU suppliers occurred alongside longer, not shorter, chains. Testing a monthly Comext series on lithium-ion battery imports for structural breaks, we find the EV transition offers no exception: battery-import growth and break timing diverge sharply by country, tracking individual firm investments more closely than EU or national policy. These findings are consistent with the Dependent Market Economy framework, which predicts persistent foreign dependence rather than upgrading. But the four countries do not follow one shared trajectory. Slovakia, Czechia and Hungary form a cluster of increasingly import-dependent assembly platforms with lengthening, internationalising chains, while Poland retains a structurally deeper domestic base than the other three, though this gap narrows as all four countries' chains internationalise. The paper's central contribution is to show that a shared institutional exposure to foreign capital does not imply a shared national trajectory, and that treating the V4 as a single regional production platform obscures the differentiated way dependence is deepening within it. |
| Date: | 2026–10–06 |
| URL: | https://d.repec.org/n?u=RePEc:ash:wpaper:172 |
| By: | OECD |
| Abstract: | This paper forms part of a series of annual OECD monitoring reports that track developments in plastic waste and scrap trade and identify trends that may warrant policy attention. Incorporating trade data for 2024, the analysis shows that global trade volumes continued to decline, recording the largest year-on year decrease since 2020, while intra-regional trade became increasingly important. At the same time, exports from OECD to non-OECD countries continued to increase, extending the rebound observed in 2023 and reversing part of the decline that followed the introduction of international controls in 2021. Several OECD countries continued to export a large share of their plastic waste and scrap to non-OECD destinations, notably Malaysia, Viet Nam and Indonesia. The analysis also highlights a continued value gap between intra-OECD trade and exports to non-OECD countries, with the former commanding higher average prices. Overall, the findings underline the importance of continued monitoring of evolving trade patterns and destination countries. |
| Keywords: | circular economy, plastics, trade, waste management |
| JEL: | F18 L65 Q53 Q56 |
| Date: | 2026–10–09 |
| URL: | https://d.repec.org/n?u=RePEc:oec:envaaa:279-en |
| By: | Betcherman, Gordon; Honorati, Maddalena; Moessinger, Martin |
| Abstract: | While the literature on the minimum wage is largely retrospective, analyzing impacts of past policy changes, this paper is uniquely forward-looking, forecasting how a proposed reform in Ukraine would affect future employment, earnings, and social contributions. The analysis simulates these effects by mimicking a proposal that would set a minimum wage floor equal to 40 percent of the previous year’s average wage once martial law is over and increasing the minimum wage by two percentage points annually until reaching 50 percent of the previous year’s average wage. The analysis draws on a 10 percent random sample of 2023 worker-level data from the Pension Fund of Ukraine, covering all jobs with pension contributions in the private sector and nonmilitary public sector. The results indicate that, under the proposal, by the end of the five-year transition period, the minimum wage would be 45 percent above the level it would have reached if adjusted only for wage inflation, which serves as the counterfactual. Projected job losses would be modest (0.51–1.03 percent), while total earnings would increase by up to 3.24 percent. The effect on social contributions and taxes would be the same as the effect on earnings since they are a fixed percentage of earnings in Ukraine. Applied to an administrative data set covering all formal sector workers, the methodology developed in the paper offers a useful tool for policy makers to anticipate the likely effects of the minimum wage reforms that are being considered. The paper concludes by discussing policy implications. |
| Date: | 2026–09–08 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11443 |
| By: | István Boza (ELTE Centre for Economic and Regional Studies); László Czaller (Corvinus University of Budapest; ELTE Centre for Economic and Regional Studies) |
| Abstract: | This paper examines how workers and employers jointly shape spatial wage disparities across Hungarian local labor markets. We combine longitudinal linked employer–employee administrative data for 2012–2022 with functional local labor markets constructed from district-to-district commuting flows in the 2022 Hungarian Census. Our preferred delineation contains 29 commuting zones and raises the share of employed residents working within the same unit above 90 percent, compared with 72 percent for districts and 81 percent for counties. We estimate an additive worker–employer fixed-effect wage model and decompose wage variation at the individual level, between commuting zones, and within commuting zones. Differences in commuting-zone mean wages account for 2.8 percent of national log-wage variance and 1.1 percent when the Budapest commuting zone is excluded. Although the between-zone component is modest, its structure is systematic: zones with higher average worker effects also tend to have higher average employer wage premia, so the spatial alignment of worker and employer components accounts for an important part of spatial wage differences. Wage dispersion and the relative importance of worker heterogeneity, employer premia, and worker–employer sorting within local labor markets also vary substantially across the country. The results indicate that spatial wage disparities in Hungary reflect not only differences in workers’ earnings potential and the employer premia attached to their jobs, but also how these components are combined across local labor markets. |
| Keywords: | commuting zones; regional wage inequality; linked employer–employee data |
| JEL: | J31 R12 R23 C23 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:has:discpr:2615 |
| By: | Zoltan Bartha |
| Abstract: | This paper examines the post-2010 expansion of the Hungarian construction sector as a case study of large-scale government intervention in a single market. A political economy framework conceptualises the intervention as two mutually reinforcing policies - expansionary demand (public procurement and housing subsidies) and preferential allocation towards politically connected firms - operating under inelastic supply through two mechanisms: market-level subsidy capitalisation and firm-level rent extraction. Using a structured descriptive case study design, the paper draws on Hungarian Central Statistical Office and Eurostat macroeconomic statistics, firm-level data on Hungary's largest companies (CrefoPort), policy documents, and a regional comparison to assess four propositions derived from the framework. The evidence supports all four: real construction output grew faster than in any regional peer except Romania; construction producer prices persistently outpaced the GDP deflator; ownership of the leading firms shifted towards politically connected domestic owners, whose profitability rose sharply while their exports remained negligible; labour productivity per hour worked returned by 2024 to roughly its 2000 level; and connected firms captured a rising share of sector profits, as the subsidies' value was partly eroded by the price increases they induced. Competing explanations do not jointly account for this configuration. The findings illustrate how combined demand stimulus and favouritism produce extensive growth without efficiency gains. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.03791 |
| By: | Filip Premik (Department of Economics, Monash University, Melbourne, Australia; Group for Research in Applied Economics (GRAPE), Warszawa, Poland); Dan Yu (Department of Resource Economics and Environmental Sociology, University of Alberta, Edmonton, Canada) |
| Abstract: | We study how heterogeneity in capital inputs affects firm performance. Drawing on detailed data on municipal bus fleets in Poland, we exploit plausibly exogenous variation generated by public procurement and nationally coordinated sales behavior of bus manufacturers to identify the causal effects of variety in fleet composition across brands and other technical dimensions. More heterogeneous fleets exhibit lower vehicle utilization and, for a fixed level of output, require more units of capital and generate higher costs. Our results emphasize that the productive capacity of capital depends on its internal structure, not only on its aggregate quantity or value. |
| Keywords: | Heterogeneous capital; capital utilization; productivity; fleet composition; organization of production |
| JEL: | D24 L23 L62 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:fme:wpaper:121 |
| By: | Irina Balteanu (Banco de España); Maximiliano Moreno (Banco de España and Paris School of Economics); Francesca Viani (Banco de España) |
| Abstract: | This paper investigates whether US tariffs on China diverted Chinese exports towards the EU, exploiting the first US-China trade war as a setting that permits clean identification of trade diversion effects. Applying difference-in-differences local projections to highly disaggregated tariff, import and unit value data, it shows that trade diversion occurred but was limited in size. For each dollar reduction in US imports from China, 9 cents were redirected to the EU market in real terms. The effects varied substantially across products and destination markets. Trade diversion was strongest for complex capital goods and homogeneous intermediate inputs, and was more pronounced in EU markets with greater import exposure to China and weaker competition from alternative suppliers. Products experiencing effective diversion also exhibited significant price declines, with competitive pressures concentrated in lower-price market segments. These findings suggest that tariffs of a magnitude comparable to those imposed by the United States in 2025 could redirect Chinese exports towards the EU, potentially contributing to a second “China shock” in Europe. While the aggregate effects are modest, diversion and price pressures may be considerably stronger in specific product categories and destination markets. |
| Keywords: | trade diversion, tariffs, trade war, EU imports, import prices, China shock |
| JEL: | F14 F6 E31 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2634e |
| By: | Johann Caro-Burnett; Sebastian Galiani; Gustavo Torrens |
| Abstract: | Why do rising powers survive periods in which established states can still suppress them? Existing theories of preventive war emphasize commitment problems between declining and rising states, which can make adverse power shifts especially dangerous. We show that commitment problems among established rivals can have the opposite effect. Preventive action against a rising power can alter the incumbent’s relationship with another state. Under opportunistic rivalry, prevention temporarily exposes the incumbent to exploitation by an existing rival. Under defensive rivalry, successful prevention strengthens the incumbent by eliminating a potential counterweight, giving its rival an incentive to protect the rising state. In both cases, third-party responses can deter preventive action that would occur in an otherwise identical dyadic setting. Cooperation among established powers can reverse this result when credible arrangements allow them to manage the strategic consequences of suppression. Historical evidence from the American Revolution, China’s nuclear emergence, and U.S.–Soviet bargaining over West German nuclear capabilities illustrates the mechanisms and their limits. The analysis shows how rivalry among established powers can protect vulnerable rising states and thereby facilitate changes in the international distribution of power. |
| JEL: | P0 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35862 |