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on Transition Economics |
| By: | Yuriy Gorodnichenko; Jorge Martinez-Vazquez (Andrew Young School of Policy Studies); Klara Sabirianova Peter (Andrew Young School of Policy Studies) |
| Abstract: | Using micro-level data, we examine the effects of Russia’s 2001 flat rate income tax reform on consumption, income, and tax evasion. We use the gap between household expenditures and reported earnings as a proxy for tax evasion with data from a household panel for 1998-2004. Utilizing difference-in-difference and regression-discontinuity-type approaches, we find that large and significant changes in tax evasion following the flat tax reform are associated with changes in voluntary compliance and cannot be explained by changes in tax enforcement policies. We also find the productivity response of taxpayers to the flat tax reform is small relative to the tax evasion response. Finally, we develop a feasible framework to assess the deadweight loss from personal income tax in the presence of tax evasion based on the consumption response to tax changes. We show that because of the strong tax evasion response the efficiency gain from the Russian flat tax reform is at least 30% smaller than the gain implied by conventional approaches. |
| Keywords: | tax evasion, consumption-income gap, personal income tax, flat tax, difference-in-difference, regression discontinuity, deadweight loss, transition, Russia. |
| Date: | 2007–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper0720&r=tra |
| By: | Sergei Guriev (New Economic School (NES), Center for Economic and Financial Research (CEFIR), Center for Economic Policy Research (CEPR)); Ekaterina Zhuravskaya (New Economic School (NES), Center for Economic and Financial Research (CEFIR), Center for Economic Policy Research (CEPR)) |
| Abstract: | Despite the strong growth performance in transition countries in the last decade, residents of transition countries report abnormally low levels of life satisfaction. Using data from multiple sources including a recent survey in 28 post-communist countries, we study various explanations of this phenomenon. We find that deterioration in public goods provision, an increase in macroeconomic volatility, and a mismatch of human capital explain a great deal of the difference in life satisfaction between transition countries and other countries with similar income. The rest of the gap is explained by the difference in the quality of the samples. As in other countries, life satisfaction in transition is strongly related to income; but due to a higher non-response of highincome individuals in transition countries, the effect of GDP growth on the increase in life satisfaction estimated using survey data is biased downwards. The evidence suggests that if the region keeps growing at current rates, the life satisfaction in transition countries will catch up with the “normal” level in the near future. |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:cfr:cefirw:w0111&r=tra |
| By: | Tilman Brück; Alexander M. Danzer; Alexander Muravyev; Natalia Weißhaar |
| Abstract: | The paper analyzes the incidence, the severity and the determinants of household poverty in Ukraine during transition using two comparable surveys from 1996 and 2004. We measure poverty using income and consumption and contrast the effects of various poverty lines. Poverty in both periods follows some of the determinants commonly identified in the literature, including greater poverty among households with children and with less education. We also identify specific features of poverty in transition, including the relatively low importance of unemployment and the existence of poverty even among households with employment. Poverty determinants change over time in line with the experience of transition and restructuring. |
| Keywords: | Poverty, transition, survey, Ukraine |
| JEL: | P20 I32 J20 O15 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp748&r=tra |
| By: | Marina Tsygankova (Statistics Norway) |
| Abstract: | In the late 1990s, several proposals for a structural reform that would bring competition and market prices to the Russian gas industry were intensely debated. Splitting up Russian gas monopolist Gazprom into several producing companies was a considered option. In this paper, I examine theoretically and numerically how a split-up of Gazprom would affect Russian national welfare. Results show that under the current gas market structures in Europe and Russia, the split-up of Gazprom’s monopoly might not be beneficial for Russia. The market share of Russia in the European market is important in determining whether Gazprom’s dominance is supported under the national welfare criteria. |
| Keywords: | Russia; Natural gas; restructuring reform; market share; national welfare |
| JEL: | D43 L13 L11 L22 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:526&r=tra |
| By: | Jan Rutkowski (World Bank and IZA) |
| Abstract: | Labor markets in the transition economies of Central and Eastern Europe underwent a dramatic transformation. Notably, this transformation took place within just a few years. Until the mid-2000s job opportunities were scarce and unemployment was high. But since then labor demand has picked up and unemployment has dropped substantially. In contrast to the earlier period of weak labor demand, it is now the supply side of the labor market that constrains job creation. These spectacular improvements can hardly be attributed to the greater labor market flexibility or to the more efficient matching of workers with jobs because no major reforms to labor market institutions were recently implemented in the region. Instead, the main cause was a strong increase in labor demand, as evidenced by the increase in the job vacancy rates and real wages. The surge in labor demand is likely to reflect successful enterprise restructuring supported by the improvements in the investment climate and access to global markets associated with the EU accession. For a long time enterprises in transition economies were improving competitiveness by shedding of redundant labor. Now they use productivity gains to invest, expand output and hire more workers. However, the emerging skills shortages may constrain firm growth. Thus the transition economies face a challenge of mobilizing effective labor supply. This requires improving labor supply incentives and investing in education. This paper documents the recent changes in labor market conditions in the transition economies, suggests tentative explanations, and finally suggests policies to address the emerging challenges. |
| Keywords: | transition economies, labor market, unemployment, skill shortages |
| JEL: | J21 J23 J63 J64 P23 O52 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3202&r=tra |
| By: | Aleksey Oshchepkov |
| Abstract: | Interregional differentials in nominal wages in the Russian Federation are huge compared to other countries. Using the NOBUS micro-data and a methodology based on the estimation of the wage equation augmented by aggregate regional characteristics, we show that these differentials have a compensative nature. Russian workers receive wage compensations for living in regions with a higher price level and worse non-pecuniary characteristics, such as a relatively low life expectancy, a high level of air pollution, poor medical services and a colder climate. After adjusting for these regional characteristics, the relative ranking of regions in terms of average wages changes considerably. Moreover, regional nominal wages become positively correlated with interregional migration flows. According to our estimates, half of the interregional wage variation between workers with similar productive characteristics should be considered to be compensative. These results support the view that the best policy reaction to the current high interregional wage differentials should be the removal of migration barriers and a reduction in migration costs. In general, our results show that wage compensations for regional disamenities along with differences in employment composition are able to account for about three fourths of the observed interregional variation in wages. |
| Keywords: | compensating differentials, regional wages, wage equation, interregional migration, transition, Russia |
| JEL: | J3 J6 P2 R1 R2 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp750&r=tra |
| By: | Arjan Lejour (CPB Netherlands Bureau for Economic Policy Analysis); Andrea Mervar (The Institute of Economics, Zagreb); Gerard Verweij (CPB Netherlands Bureau for Economic Policy Analysis) |
| Abstract: | We explore the economic implications of Croatia's possible accession to the European Union. We focus on two main changes associated with the EU-membership: accession to the internal European Market and institutional reforms in Croatia triggered by the EU-membership. GDP per capita in Croatia is estimated to rise by about 1.1 percent as a result of accession to the internal market. In particular the textile and wearing apparel sectors expand. If Croatia succeeds in reforming its domestic institutions in response to the EU-membership, income levels in Croatia could increase even more. In particular, tentative estimates suggest that GDP per capita in Croatia could even rise by additional 8 percent. Overall, the macroeconomic implications for the existing EU countries are negligible. |
| Keywords: | regional economic integration, general equilibrium model, gravity equations, institutional reform, Croatia |
| JEL: | F13 F15 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:iez:wpaper:0705&r=tra |
| By: | Jin, Songqing; Deininger, Klaus |
| Abstract: | This paper is motivated by the emphasis on secure property rights as a determinant of economic development in recent literature. The authors use village and household level information from about 800 villages throughout China to explore whether legal reform increased protection of land rights against unauthorized reallocation or expropriation with below-average compensation by the state. The analysis provides nation-wide evidence on a sensitive topic. The authors find positive impacts, equivalent to increasing land valu es by 30 percent, of reform even in the short term. Reform originated in villages where democratic election of leaders ensured a minimum level of accountability, pointing toward complementarity between good governance and legal reform. The paper explores the implications for situations where individuals and groups hold overlapping rights to land. |
| Keywords: | Common Property Resource Development,Municipal Housing and Land,Access to Finance,Political Economy,Land and Real Estate Development |
| Date: | 2007–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4447&r=tra |
| By: | Charles Yuji Horioka; Junmin Wan |
| Abstract: | In this paper, we conduct a dynamic panel analysis of the determinants of the household saving rate in China using a life cycle model and panel data on Chinese provinces for the 1995-2004 period from China's household survey. We find that China's household saving rate has been high and rising and that the main determinants of variations over time and over space therein are the lagged saving rate, the income growth rate, and (in some cases) the real interest rate and the inflation rate. However, we find that the variables relating to the age structure of the population usually do not have a significant impact on the household saving rate. These results provide mixed support for the life cycle hypothesis as well as the permanent income hypothesis, are consistent with the existence of inertia or persistence, and imply that China's household saving rate will remain high for some time to come. |
| Keywords: | Saving and investment - China |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2007-28&r=tra |
| By: | Jorge Martinez-Vazquez (Andrew Young School of Policy Studies); Baoyun Qiao (Andrew Young School of Policy Studies, Georgia State University); Li Zhang (Andrew Young School of Policy Studies) |
| Abstract: | In this paper, we use pooled data for central-provincial and provincial-local governments in 2000-01, overall involving over 4000 sub-provincial governments, to assess China 's sub-national fiscal equalization practices and outcomes. Our goal is to explain horizontal fiscal disparities between and within provinces, with a special focus on the role played by intermediate-level governments, particularly the provincial governments, on overall equalization outcomes in China . The significant policy implication of our findings is that if the goal of the central government is to improve equity in the distribution of fiscal resources throughout the entire national territory, it will not be enough to improve the design and size of central-provincial transfers. There will be a need to re-structure and control the structure and practices of provincial-local government transfers. |
| Keywords: | Fiscal Equalization, central-Provincial, China, sub-national fiscal equalization |
| Date: | 2007–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper0705&r=tra |
| By: | Patrick A. Imam |
| Abstract: | We analyze the effect of IMF programs on economic agents' expectations about the economy in transitional countries using survey data from the Central and Eastern Eurobarometer poll, an annual general public survey monitoring the evolution of public opinion from 1990 to 1997. Previous studies, in contrast, have looked at indirect measures, such as capital flows or yield spreads, to assess the impact of IMF programs on economic expectations. Using a multinomial probit model, we find that IMF loans appear to have a strong effect on agent expectations in the early years, through the inflow of real money, and through the signaling effect. IMF programs during periods of collapsing growth appear to reinforce underlying expectations for the future; they are associated with positive expectations for those with an optimistic outlook and negative expectations for those with a negative outlook. Once recovery is underway, and economic uncertainty diminishes, it appears that IMF programs cease to have a statistically significant effect on the expectations of economic agents. This suggests that IMF programs have the biggest impact on expectations during periods of great uncertainty and less of an impact when countries are subject to minor shocks. |
| Keywords: | Structural adjustment , Transition economies , Capital flows , |
| Date: | 2007–11–14 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/261&r=tra |
| By: | Maurizio Michael Habib (European Central Bank, Directorate General International and European Relations, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Margarita Manolova Kalamova (Social Science Research Center Berlin (WZB), Reichpietschufer 50, D-10178 Berlin, Germany.) |
| Abstract: | This paper investigates whether the real oil price has an impact on the real exchange rates of three main oil-exporting countries: Norway, Russia and Saudi Arabia. We create our measure of the real effective exchange rates for Norway and Saudi Arabia (1980-2006) and for Russia (1995-2006), testing if real oil prices and productivity differentials against 15 OECD countries influence exchange rates. In the case of Russia it is possible to establish a positive long-run relationship between the real oil price and the real exchange rate. However, we find virtually no impact of the real oil price on the real exchange rates of Norway and Saudi Arabia. The diverse exchange rate regimes cannot help in explaining the different empirical results on the impact of oil prices across countries, which instead may be due to other policy responses, namely the accumulation of net foreign assets and their sterilisation, and specific institutional characteristics. JEL Classification: F31, C22. |
| Keywords: | Real exchange rate, oil price, purchasing power parity, terms of trade, oil exporting countries. |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20070839&r=tra |
| By: | Edda Zoli |
| Abstract: | This paper assesses the status of financial development in Emerging Europe, analyzes the factors that have shaped it, and discusses policy priorities. Financial development has progressed to varying degrees across the region. Macroeconomic stability and institutional quality have been important factors. Going forward, the EU integration process is likely to propel further reforms and shape financial development in EU members. In non-EU emerging economies the focus should be on maintaining macroeconomic stability and strengthening law enforceability. Creating a well-functioning government securities market, reinforcing corporate governance and creditor rights protection, and promoting the emergence of institutional investors would be beneficial. |
| Keywords: | Emerging markets , Europe , Securities markets , Governance , |
| Date: | 2007–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/245&r=tra |
| By: | Jahangir Aziz; Xiangming Li |
| Abstract: | China's sectoral trade composition, product quality mix, and import content of processing exports have all changed substantially during the past decade. This has rendered trade elasticities estimated using aggregate data highly unstable, with more recent data pointing to significantly higher demand and price elasticities. Sectoral differences in these parameters are also very wide. All this suggests greater caution in using historical data to simulate the response of the China's economy to external shocks and exchange rate changes. Analyses based on models whose estimated coefficients largely reflect the China of the 1980s and 1990s are likely to turn out to be wrong, perhaps even dramatically. |
| Keywords: | Trade , China, People's Republic of , Balance of trade , Exchange rates , |
| Date: | 2007–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/266&r=tra |
| By: | Victoria Gunnarsson; Sergio Lugaresi; Marijn Verhoeven |
| Abstract: | The paper assesses the financial situation of the health sector in the Slovak Republic. It also evaluates the efficiency of health expenditures and service delivery in comparison to the OECD and other new EU member states and suggests avenues for cost recovery and reform. The health sector of the Slovak Republic is plagued by financial problems. To turn around health system finances and achieve larger gains in health outcomes, the efficiency of health spending needs to increase and the mix and quality of real health resources need to be improved. Although Slovak's overall health spending efficiency is on par with that of the OECD, substantial inefficiencies occur in the process of transforming intermediate health inputs into health outcomes. Efficiency may be enhanced by containing the cost of drugs and reducing reliance on hospital care. Also, although cost-effectiveness may be relatively high at present, its sustainability in the future is an issue. |
| Keywords: | Working Paper , Health care , Slovak Republic , |
| Date: | 2007–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/226&r=tra |
| By: | Li Cui; Murtaza H. Syed |
| Abstract: | This paper uses disaggregated trade data to assess how the expansion of China's production capacity and its changing production structure may be affecting its trade linkages with other countries. It finds that China is moving away from traditional assembly operations in its processing activities and its exports have started to rely more on domestically sourced components. In turn, China's imports and exports have begun to delink, with increased domestic sourcing contributing to the recent increase in its trade balance. In addition, as China moves up the value chain, both its imports and exports have become more sophisticated than in the past. As a result of these shifts, China may be becoming more exposed to fluctuations in the strength of the global economy, and changes in its exchange rate could have a bigger impact on the trade balance and the domestic economy than commonly believed. |
| Keywords: | Working Paper , Balance of trade , China , Production , Exchange rates , Imports , Exports , Exchange rate instability , Industrial structure , |
| Date: | 2007–09–07 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/214&r=tra |
| By: | Juan Luís Gómez (Andrew Young School of Policy Studies); Jorge Martinez-Vazquez (Andrew Young School of Policy Studies); Cristian Sepúlveda (Andrew Young School of Policy Studies) |
| Abstract: | Romania has been actively reforming its intergovernmental transfer system during the last years. The new Law on Local Public Finance, which will come into force in January 2007, will involve substantial modifications both to the institutional arrangements and to the formula employed to distribute equalization funds across counties and communes. As with the former transfer mechanism, the new system is characterized by a high level of complexity and an emphasis on within-county equalization of communes instead of a more desirable nationwide approach. Overall, we argue that the equalization potential of the reformed 2007 system does not improve in any significant way over its predecessor. This report outlines the principles that should shape an efficient equalization transfer system and provides five proposals for reform based the concept of fiscal disparity and a bifurcated distribution scheme. The proposals represent feasible alternatives to improve the equalization potential of the system in place, as shown by the simulation analysis on each of the alternative transfer systems. The paper concludes offering a critical path to reform the Romanian transfer system. |
| Keywords: | Romania, Equalization Transfers, reform |
| Date: | 2007–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper0701&r=tra |
| By: | Hiroko Uchimura; Johannes P. Jütting |
| Abstract: | This paper analyses the effect of fiscal decentralisation on health outcomes in China using a panel data set with nationwide county-level data. We find that counties in more fiscally decentralised provinces have lower infant mortality rates than counties where the provincial government remains the main spending authority, if certain conditions are met. Spending responsibilities at the local level need to be matched with county governments’ own fiscal capacity. For county governments that have only limited revenues, the ability to spend on local public goods such as health care depends crucially upon intergovernmental transfers. The findings of this paper, therefore, support the common assertion that fiscal decentralisation can lead to more efficient production of local public goods, while also highlighting the conditions required for this result to be obtained. <BR>Ce papier analyse l’effet de la décentralisation fiscale sur la santé en Chine, à partir d’une analyse de panel avec des données de district recueilli au niveau national. Les auteurs trouvent que, sous certaines conditions, les districts aux systèmes plus décentralisés ont des taux de mortalité infantiles moins élevés que ceux où le gouvernement provincial reste la principale autorité. Les responsabilités pour les dépenses au niveau local doivent toutefois être accompagnées de capacités fiscales adéquates. Pour les gouvernements de districts à bas revenus, la capacité à investir dans des biens publics comme les services de santé, dépend principalement des transferts intergouvernementaux. Les analyses confirment l’argument selon lequel la décentralisation fiscale peut mener à une plus grande efficacité des biens publics, en soulignant les conditions nécessaires pour atteindre ce résultat. |
| Keywords: | health, santé, fiscal decentralisation, décentralisation fiscale, China, Chine, Health-care finance, financement des services de santé |
| JEL: | H51 H72 H75 I18 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:oec:devaaa:264-en&r=tra |
| By: | Jin, Songqing; Deininger, Klaus |
| Abstract: | The importance of land rental for overall economic development has long been recognized in theory, yet empirical evidence on the productivity and equity impacts of such markets and the extent to which they realize their potential has been scant. Representative data from China ' s nine most important agricultural provinces illustrate the impact of rental markets on households ' economic strategies and welfare, and the productivity of land use at the plot level. Although there are positive impacts in each of these dimensions, transaction costs constrain participation by many producers, thus preventing rental markets from attaining their full potential. The paper identifies factors that increase transaction costs and provides a rough estimate of the productivity and equity impacts of removing them. |
| Keywords: | Banks & Banking Reform,Political Economy,Economic Theory & Research,Rural Development Knowledge & Information Systems,Labor Policies |
| Date: | 2007–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4454&r=tra |
| By: | Irena Jindřichovská (Department of Accounting, Business School, The University of Buckingham, United Kingdom); Pavel Körner (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | This paper investigates the empirical evidence on determinants of financing decisions on the pool of respondents among financial managers of Czech firms. The theoretical section provides an overview of prominent contemporary theories on capital structure. Employing Chi-square Sign Test and Logit regression the empirical analysis provides the evidence how the financial managers perceive particular instruments of internal and external financing. We find, that firms follow pecking order theory for working capital financing, however the arguments for pecking order theory in investment financing are not that strong. Firms prefer retained earnings among internal financing instruments and bank loans and leasing among external financing instruments. Finally, the paper discusses the links with practice and some limitations of the results. |
| Keywords: | corporate finance, capital structure, trade-off theory, pecking order theory, transition economies, survey |
| JEL: | G32 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2008_1&r=tra |
| By: | Andrea, SILVESTRINI |
| Abstract: | Fiscal sustainability is a central topic for most of the transition economics of Eastern Europe. This paper focuses on a particular country : Poland. The main purpose is to investigate, empirically, whether the post-transition fiscal policy is consistent with the intertemporal budget constraint, used as a formal theoretical framework. To test debt stabilization, the empirical analysis is made in two steps in which different inferential approaches are adopted. In the first step we perform the preliminary unit roots analysis and the selection of the cointegation rank using parametric and bootstrap procedures. In the second step we apply Bayesian inference to the estimation of the cointegrating vector and of the adjustment parameters. In this way, we experiment the usefulness of Bayesian inference in precisely assessing the magnitude of the cointegrating vector. Moreover, we show to what extent the likelihood of the data is important in revising the available prior information, relying on numerical integration techniques. |
| Keywords: | Bayesian inference, fiscal sustainability, cointegration, bootstrap |
| JEL: | C11 C32 E62 |
| Date: | 2007–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvec:2007040&r=tra |
| By: | Palanisamy , Saravanan; Ramamoorthy, Nagarajan |
| Abstract: | The current work aims at investigating the Housing Finance System in India and china with the follwoing major objectives. (i) To study the structural characteristics of housing finance system such as housing market and housing finance, borrowing contract types, lending and funding and regulations across the countries. (ii) To compare and contrast the evolution and recent trends in housing finance system in India and China. (iii) To assess the potential risk implications including the default, recovery, non-performing advances in this sector, the reasons and the recovery. |
| Keywords: | Housing Finance; India; China |
| JEL: | G21 |
| Date: | 2007–12–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6454&r=tra |
| By: | Gianni De Nicoló; Elena Loukoianova |
| Abstract: | This paper presents a model of a banking industry with heterogeneous banks that delivers predictions on the relationship between banks' risk of failure, market structure, bank ownership, and banks' screening and bankruptcy costs. These predictions are explored empirically using a panel of individual banks data and ownership information including more than 10,000 bank-year observations for 133 non-industrialized countries during the 1993-2004 period. Four main results obtain. First, the positive and significant relationship between bank concentration and bank risk of failure found in Boyd, De Nicolò and Al Jalal (2006) is stronger when bank ownership is taken into account, and it is strongest when state-owned banks have sizeable market shares. Second, conditional on country and firm specific characteristics, the risk profiles of foreign (state-owned) banks are significantly higher than (not significantly different from) those of private domestic banks. Third, private domestic banks do take on more risk as a result of larger market shares of both state-owned and foreign banks. Fourth, the model rationalizes this evidence if both state-owned and foreign banks have either larger screening and/or lower bankruptcy costs than private domestic banks, banks' differences in market shares, screening or bankruptcy costs are not too large, and loan markets are sufficiently segmented across banks of different ownership. |
| Keywords: | Working Paper , Banks , Corporate sector , Financial risk , Bankruptcy , Industrial structure , |
| Date: | 2007–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/215&r=tra |
| By: | Pham, T. Hung; Reilly, Barry |
| Abstract: | This paper complements earlier studies on ethnic minority underdevelopment in Vietnam by empirically examining the ethnic wage gap in the Vietnamese labour market, using data from a large-scale household survey conducted in 2002. The paper uses the ‘index number’ decomposition method suggested by Oaxaca (1973) to decompose the ethnic wage gap into treatment and endowment effects at both the mean and at selected quantiles of the conditional wage distribution. The results confirm the existence of an ethnic wage gap in the labour market, through this gap is found to be substantially narrower than the ethnic gap observed using household living standard measures for Vietnam. Decomposition results reveal that the ethnic wage gap is largely attributable to differentials in the returns to endowments, a finding invariant to whether the mean or selected quantiles of the conditional wage distribution is examined. |
| Keywords: | Wage inequality; ethnic minority; quantile regression; Vietnam |
| JEL: | J3 J7 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6477&r=tra |
| By: | Miller, Marcus; Smith, Jennifer C |
| Abstract: | An ‘efficiency wage’ model developed for Western economies is reinterpreted for Soviet Russia assuming that it was the Gulag not unemployment that acted as a ‘worker-discipline device’. Archival data now available allows for a basic account of the dynamics of the Gulag to be estimated. When this is combined with a dictatorship wishing to maximise the ‘investible surplus’ subject to an efficiency wage incentive constraint, what does it imply? That to secure resources for investment or war, consumption must be compressed; and making the Gulag harsher helps reduce incentive problems in the workplace. This is the cruel logic of coercion. But this economic rationale for the Gulag does not, we find, encompass randomised mass terror. Why did Stalin’s system of coercion ultimately fail? The paper concludes with comparisons of Western and Soviet systems from an efficiency wage perspective. |
| Keywords: | asymmetric information; efficiency wage; Labour-discipline; Soviet Gulag |
| JEL: | D82 P23 P26 P27 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6621&r=tra |
| By: | Mico, Apostolov |
| Abstract: | The idea for this report was the seminar for civil society organizations organized by the IMF at the JVI in cooperation with the Stability Pact for South Eastern Europe took place in Vienna at October 31 – November 2, 2007. Mr. Mico Apostolov attended the seminar as a CEA member and he has prepared a report upon which this report to USAID was prepared. The seminar was organized on the bases of the constant effort of IMF to introduce as much as possible transparency into its work with the wider sector of the civil society. The Civil Society Organizations (CSOs) are in the core and in fact shape the civil society. Thus, it is a perfect target group for transmission of the already achieved, the present engagements and the future projects and intentions of IMF. The quality of presented / learned was at the highest level, knowing that all of the presenters are key decision-makers and policy-creators for IMF and the region of Southeast Europe. Hence, the output was of importance, setting up the foundations of the current macroeconomic policies and giving indicators that are important milestones for national governments and CSOs in their day-to-day work. In a conclusion, it is evident that the overall macroeconomic parameters of the Southeast Europe show that this region is in phase of rapid convergence and the national economies will continue to grow rapidly, as expected, in the years to follow. Although second-generation (structural and institutional) reforms are underway in Southeastern European economies, the unprecedented levels and large variations of external imbalances occupy relatively high positions on the policymakers agenda. Widening external imbalances reflect either rapid capital formation or private consumption booms, but there are country-specific thresholds beyond which market participants are unwilling to finance these deficits. Even if the growth potential of these economies justifies the large and persistent deficits, in case of sudden shift in the market sentiment, the inevitable adjustment could have devastating macroeconomic implications. The ensuing reduction of current account deficits could lead to a slowdown in medium term growth and reduction of long run per capita income. Hence, despite the strengthened macroeconomic management, SEE economies must continue their cooperation with the Fund, particularly in terms of regular surveillance of macroeconomic and financial market developments. This report was prepared under the contract provisions signed between CEA and USAID for nonexclusive services to USAID as part of a grant agreement. |
| JEL: | E5 E6 |
| Date: | 2007–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6545&r=tra |
| By: | Ilie, Livia; Horobet , Alexandra |
| Abstract: | The effective management of Romanian companies can represent an advantage in a competitive business environment, shaped by the end of transition, the EU membership and the globalization process. MBA programs represent, in our view, the key for the implementation of management theories and practices whose effectiveness has been validated by Western countries experience. The Romanian market developed slowly since 1993, with three major players dominating it: the Romanian-Canadian MBA, ASEBUSS Executive MBA and CODECS. These programs and the more recent entrants are facing legal recognition uncertainties and competition from the new professional master programs that will be developed under the Bologna framework, in addition to competition from European and American MBAs. The responses of Romanian MBAs to these challenges are critical for their future in an increasingly competitive environment. |
| Keywords: | management; MBA; competition; education |
| JEL: | I2 M1 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6430&r=tra |
| By: | Tiiu Paas; Andres Kuusk; Friso Schlitte; Andres Võrk |
| Abstract: | The paper estimates equations for regional income convergence in selected EU countries and their NUTS 3 level regions during the European Union pre-enlargement period (1995–2002), using both spatial and non-spatial approaches. There has been absolute income convergence between regions in both the groups of countries looked at, the countries of the EU15, or the old member states, and the new member states or NMS. When national effects are included in convergence equations using country dummies, no evidence of regional income convergence can be observed. The results of the analysis assert the importance of regional policies in inhibiting the increase of regional income disparities and improving conditions for income growth, particularly within the new member states. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:mtk:febawb:60&r=tra |
| By: | Chen Xiang Liu |
| Abstract: | SMEs have a great contribution in China’s economic expansion. However, the financing predicament currently faced by SMEs constitutes a great bottleneck for their development. Banks are reluctant to lend to them, mainly due to the lack of collateral and their poor capability in pricing risk. This is the reason why credit guarantee institutions play a key role in SME financing and the perfection of the credit guarantee system is important for promoting their access to credit. In addition, the lifting of the ceiling on lending rates as well as other steps taken by banking authorities will encourage bank lending to SMEs. Finally, informal finance has a significant part in SME financing. |
| Keywords: | SME financing, credit guarantee, informal finance |
| JEL: | E26 E51 G21 O53 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2007-29&r=tra |
| By: | GŸl, ERTAN …ZG†ZER |
| Abstract: | We examine the dynamics that may compensate the cost of redistribution policy in the European Union (EU), which is one of the obstacles for a candidate member country, namely Turkey to be admitted. We adress two main issues : i) may a total factor productivity (TFP) increases in the candidate country due to the positive effect of accession on institutional development compensate the cost of redistribution policy and ii) may free capital mobility before accession decrease EUÕs incentive for admitting the candidate country. In a two-country model we assume that after Turkish accession, the European household gives a transfer to the Turkish household whereas an upwart TFP shift arises in Turkey due to the positive effect of accession on institutional development. We first find that a TFP increase in Turkey compensates the cost of transfer. Second, allowing for free capital mobility before accession turns out to be unfavorable for admission to the EU. |
| Keywords: | EU accession, Turkey, capital mobility |
| JEL: | F15 F36 |
| Date: | 2007–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvec:2007035&r=tra |
| By: | Arkadiusz Wisniowski (Warsaw School of Economics) |
| Abstract: | We employ Bayesian approach to the analysis of economic growth in Poland. The results of estimation of a stochastic frontier model applied to production function of Polish voivodships in 2000 - 2004 are presented. Stochastic frontier approach allows to decompose growth into technological change, input change and efficiency change. In order to compute the posterior characteristics of the growth components we employ the Gibbs MCMC sampler. |
| Keywords: | Bayesian analysis, Gibbs sampler, economic growth, stochastic frontier analysis |
| JEL: | C11 C33 O49 |
| Date: | 2008–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wse:wpaper:23&r=tra |
| By: | Badi H. Baltagi (Center for Policy Research, Maxwell School, Syracuse University, Syracuse, NY 13244-1020); Peter Egger (University of Munich and CESifo, Poschingerstr. 5, 91679 Munich, Germany); Michael Pfaffermayr (Department of Economics, University of Innsbruck, Universitaetsstrasse 15, 6020 Innsbruck, Austrai; Austrian Institute of Economic Research, and CE Sifo) |
| Abstract: | Recent research on trade and multinationals highlights a novel issue with multinational firms. In particular, their integration strategies are complex and the degree of vertical integration varies in a multilateral world with many possible locations of activity. Multinationals may choose some plants to serve consumers locally only, whereas others engage in trade. Overall, this may explain the fact that a high percentage of world trade is actually controlled by multinational firms, although most of the foreign direct investment (FDI) occurs within the block of developed countries. The most important regional trade agreements (RTAs) are signed beween members of the very same block of economies. This gives rise to the question asked in the present paper: what is the impact of RTAs on FDI in an interdependent world? The paper focuses on the role of the Europe Agreements between the member countries of the European Union and ten Central and Eastern European countries. In doing so, recent spatial HAC estimation techniques are applied to both estimation and testing. |
| Keywords: | Regional trade agreements; Multinational firms; Spatial econometrics; Generalized moments (GM) estimators |
| JEL: | C23 F14 F15 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:max:cprwps:100&r=tra |
| By: | Francesco Pastore (Seconda Università di Napoli and IZA) |
| Abstract: | The EU experience with youth unemployment has changed over recent years with the launch and re-launch of the Lisbon Strategy and the Bologna process. A dramatic shift has taken place from the 1990s emphasis on labour market flexibility as a tool to abate youth long term unemployment to the more recent stress on the importance of increasing the human capital endowment via a deep reform of education and training systems. This shift is also taking place worldwide, since, as recent studies show, labour market flexibility can increase employability when the human capital level of young people is sufficiently high. To reduce the "experience gap" between young and adult people, the education systems should become of a higher quality, more inclusive to reduce the dropout rate, homogeneous to other EU countries to favour labour mobility, flexible to allow young people to better find the best match, and contemplate the duality principle, by providing training together with education, to favour smoother school-to-work transitions. Apprenticeships schemes, fiscal incentives to hire the youth unemployed as well as on-the-job training schemes should help reach objectives that cannot be guaranteed simply via an increase in labour market flexibility. |
| Keywords: | Lisbon strategy, employment policy, young people, economic transition |
| JEL: | I2 J24 J68 P3 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3209&r=tra |
| By: | Horobet , Alexandra; Ilie, Livia |
| Abstract: | The theoretical linkages between exchange rates and stock prices are microeconomic as well as macroeconomic in nature and may be observed on the short- and long-run. The paper examines the interactions between the exchange rates and stock prices in Romania, after 1997, taking into account the change in the monetary regime occurred in 2005 – the shift towards inflation targeting. The analysis uses bivariate cointegration and Granger causality tests, applied on daily and monthly exchange rates and stock prices data collected over the 1999 to 2007 period. Three types of exchange rates are used: the nominal effective exchange rates of the Romanian leu, the bilateral nominal exchange rates of the leu against the US dollar and the euro, and the real effective exchange rates of the leu. In terms of stock prices, the BET and BET-C indices of the Bucharest Stock Exchange are used, denominated in the local currency. |
| Keywords: | exchange rates; stock exchange; cointegration; Granger causality |
| JEL: | F30 G10 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6429&r=tra |
| By: | Pham, Hung T; Reilly, Barry |
| Abstract: | This paper uses mean and quantile regression analysis to investigate the gender pay gap for the wage employed in Vietnam over the period 1993 to 2002. It finds that the Doi moi reforms appear to have been associated with a sharp reduction in gender pay gap disparities for the wage employed. The average gender pay gap in this sector halved between 1993 and 2002 with most of the contraction evident by 1998. There has also been a narrowing in the gender pay gap at most selected points of the conditional wage distribution, an effect most pronounced at the top end of the conditional wage distribution. However, the decomposition analysis suggests that the treatment effect is relatively stable across the conditional wage distribution and little evidence of a ‘glass-ceiling’ effect is detected for Vietnamese women in the wage employment sector in any of the years examined. |
| Keywords: | Gender pay gap; Quantile regression; Vietnam |
| JEL: | J3 J7 C1 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6475&r=tra |