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on Transition Economics |
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Issue of 2014‒05‒24
twenty-two papers chosen by J. David Brown IZA (Institute for the Study of Labor) |
| By: | Mohajan, Haradhan |
| Abstract: | During the last 30 years Chinese economy has increased rapidly. The pollution of air in many Chinese cities exceeds both national and international standards due to rapid urbanization, industrialization and increased energy consumption. At present China becomes the highest sulphur dioxide emitter in the world due to its reliance on coal for energy generation. The Government of China has taken different steps to reduce sulphur dioxide and succeeded from the 11th Five-Year Plan. Breathing in sulphur dioxide can irritate the nose, throat and the lungs, causing phlegm, coughing, shortness of breath, development of bronchitis and other respiratory diseases, as well as aggravation of existing cardiovascular disease. Long-term contact to sulphur dioxide at lower concentrations can cause temporary loss of smell, headache, nausea and dizziness. In this paper an attempt has been taken to discuss sulphur dioxide emissions of China and stresses on desulphurization processes. |
| Keywords: | SO2 control policy, Human health, Acid rain, Desulphurization. |
| JEL: | I15 |
| Date: | 2014–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55953&r=tra |
| By: | Robert J R Elliott; Puyang Sun; Tong Zhu |
| Abstract: | In March 2014 China announced its long awaited plan for managing the migration of the rural population into already overcrowded urban areas. The so called "new style" of urbanization has potentially important implications for China's energy use although the relationship between urbanization and energy intensity is not straight-forward. In this paper we investigate the impact of urbanization and industrialization on the intensity of energy use in China using a balanced panel of 29 provinces for the period 1997 to 2010. Our empirical approach is to use three alternative measures of urbanization and employ augmented mean group (AMG) estimators to allow for heterogeneity in the estimation of the slope coefficients and cross sectional dependence. We demonstrate that the impact of urbanization on energy intensity is sensitive to the econometric modelling approach. Our preferred AMG results show, in contrast to earlier studies, that for this time period urbanization appears to have little or no short or long run impact on energy intensity athough in further results we find that urbanization does appear to have a negative impact on energy intensity in the more developed east but a sometimes positive effect for the western and central regions. Our results suggest that China's recent policy to encourage greater urbanization may not necessarily lead to a significant increase in province level energy intensities but nor will it lead to some of the energy efficiency gains some expect. |
| Keywords: | Energy intensity, Income per capita, Industrialization, Urbanization |
| JEL: | Q43 R11 O14 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:14-05&r=tra |
| By: | Ariel BenYishay (School of Economics, Australian School of Business, the University of New South Wales); Pauline Grosjean (School of Economics, Australian School of Business, the University of New South Wales) |
| Abstract: | This study explores how initial endowments at the start of transition have shaped reform outcomes and reform trajectories in 27 former communist countries in Europe andCentral Asia. Countries of the former Russian Empire that had a large resources sector at the start of transition underperformed other countries in terms of the speed and the depth of economic reforms. The effect is particularly strong for privatization, enterprise restructuring and competition policy. Within country, Ottoman or Russian provinces that had a large natural resources sector in 1989 have a lower share of entrepreneurs and of small and medium sized enterprises today and also experience endemic corruption. Our results indicate that the propensity, or ability, of special interest groups to capture the reform process that would erode their rents were facilitated by the quality of institutions whose foundations go back centuries; and that the effects on the local economy are real. |
| Keywords: | corruption, initial endowments, natural resources, persistence, transition |
| JEL: | H11 O57 P26 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2014-22&r=tra |
| By: | Murillo Campello; Rafael P. Ribas; Yan Wang |
| Abstract: | The 2005 split-share reform in China mandated the conversion of nontradable stocks into tradable status. This paper examines the effects of stock markets on corporate outcomes exploiting multiple institutional features of the Chinese conversion program. Using a generalized propensity score matching approach, we identify increases in corporate profitability, investment, value, and productivity as a result of the reform. We also identify changes in firms likelihood to issue shares and engage in mergers, as well as changes in dividend and capital structure policies. Our findings provide insights on the role of stock markets in shaping corporate activity and on the impact of regulation on economic growth. |
| JEL: | C21 D22 F30 G31 O16 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20121&r=tra |
| By: | Dmitry Nechiporuk |
| Abstract: | The aim of this paper is to study the current state and the prospects of ecological collaboration activities to protect the Baltic Sea including both the EU and Russia. The researchers, studying the EU environmental policy in the Baltic Sea region often ignore Russia since this country has separate environmental policy concerning the Baltic Sea area. However, Russia is a member of Helsinki Commission (HELCOM) a supranational body which was established forty years ago to safeguard the marine environment of the Baltic Sea strengthening interstate cooperation. The main focus is the investigation of new patterns of interaction on environmental issues that influence the allocation of space and meaning of societal time in the Baltic Sea region. Relying on multi-level governance theory, three dimensions of space (natural, national and trans-boundary) and five levels of societal time (regional, EU, national, municipal, cross-border) are analyzed. While space is regarded as a politico-social object, which should be subjected to transformation, the societal time is used to plan required environmental changeovers. Both aspects encompass not only area of the EU littoral members in the Baltic Sea region but all states of the Baltic Sea catchment area (Belarus, Czech Republic, Russia, Slovak Republic and the Ukraine). |
| Keywords: | multilevel governance |
| Date: | 2014–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0373&r=tra |
| By: | Guonan Ma; Robert N. McCauley |
| Abstract: | See comment by Guonan Ma China's financial liberalisation: interest rate deregulation or currency flexibility first? In this working paper we gauge the de-facto capital account openness of the Chinese and Indian economies by testing the law of one price on the basis of onshore and offshore price gaps for three key financial instruments. Generally, the three measures show both economies becoming more financially open over time. Over the past decade, the Indian economy on average appears to be more open financially than the Chinese economy, but China seems to be catching up with India in the wake of the global financial crisis. Both have more work to do to open their capital accounts. Our price-based measures suggest strong inward pressure on Chinese money markets, in contrast to the consensus projection that China is likely to experience net private capital outflows when it thoroughly opens up financially. Policymakers need to monitor and to manage the risks along the dynamic path of capital account liberalization. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:bre:wpaper:827&r=tra |
| By: | Yu Chen (University of Macau - University of Macau); Sylvie Démurger (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure (ENS) - Lyon - PRES Université de Lyon - Université Jean Monnet - Saint-Etienne - Université Claude Bernard - Lyon I) |
| Abstract: | Despite the dramatic reduction of poverty in China over the past thirty-five years, poverty has not been fully eradicated in rural areas, and in the context of growing inequalities, it remains a national concern. This paper examines a local cash-for-work program launched in mountainous areas of Beijing municipality in December 2004, with a view to understanding both the challenges and achievements of pro-poor programs in China. Using original household survey data, we first highlight the fairly good targeting performance of the program towards the local poor. Second, participation equations provide evidence of increasing local income without crowding out local agricultural activities. Finally, a decomposition of household income inequality by source highlights the strongly equalizing effect of the program on peasants' income. |
| Keywords: | cash-for-work program; income source diversification; agricultural households; income inequality; China |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00993574&r=tra |
| By: | Irina N. Ilina (National Research University Higher School of Economics.); Carol S. Leonard (National Research University Higher School of Economics.); Evgenij E. Plisetskij (National Research University Higher School of Economics.) |
| Abstract: | This paper, part of a larger project on governance and growth in Russia, examines regional financial resilience in Russia in the period following the global financial crisis. The level of risk is rising, as government emergency finance is withdrawn and regions face rising debt to cover even operational expenses, but “resource” regions seem securely well off, despite having been most affected by the financial crisis. This paper examines one region, Khanty-Mansiysk autonomous okrug (KhMAO), the largest “donor” to the federal budget, against the background of other mineral resource abundant regions. It traces developments since the dramatic budget reforms (late 1990s through 2005), including centralization of revenues and rationalized program expenditure (Alexeev and Weber 2013). It assesses regional budget and debt management in response to pressures from increased federal required expenditures, post-crisis withdrawal of subsidies, and the roll-out of new debt guidelines. It describes and explains KhMAO’s stability and relative autonomy in these crisis conditions. The key questions are: Why are these “donor” regions, more affected by the crisis than others, also more resilient? Is Russia’s growth core of regions financially stable because of federal intervention? How vulnerable is the resource region to future oil price shocks? Our findings are tentative, since there remain questions about transparency and soft budget constraints (Plekhanov 2006). We show federalism at its most cooperative: among other factors, regional collaborative action fosters flexible budgeting. |
| Keywords: | regional governance, oil-producing regions, fiscal federalism, economy, Russia, federal budget, federal and regional programs, budget reforms, investment strategies. |
| JEL: | R58 R51 H70 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:15/pa/2014&r=tra |
| By: | Andrey Lovakov (National Research University Higher School of Economics); Elena Agadullina (National Research University Higher School of Economics) |
| Abstract: | The aim of this study is to examine the validity and reliability of the Leach et al. model of in-group identification in 2 studies of Russian samples. In study 1, the confirmatory factor analysis revealed that the hierarchical model of in-group identification, which included the second-order factors of self-definition (individual self-stereotyping, and in-group homogeneity) and self-investment (satisfaction, solidarity, and centrality) fitted the data well for all four group identities (ethnic, religious, university, and gender) and was a better fit than the alternative models. In study 2, we examined the construct validity and reliability of the Russian version of in-group identification measure. Results show that these measure have adequate psychometric properties. In short, our results show that the Leach et al. model is reproduced in Russian culture. The Russian version of this measure can be used in future in-group research conducted using Russian-language samples. |
| Keywords: | identity, identification, social identity, group. |
| JEL: | Z |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:18psy2014&r=tra |
| By: | Georgy Idrisov (Gaidar Institute for Economic Policy); Sergey Sinelnikov-Murylev (Gaidar Institute for Economic Policy) |
| Abstract: | The paper analyzes the inconsequence and problems of Russian economic policy to accelerate economic growth. Authors consider three components of growth rate (potential, Russian and world business cycles) and conclude that in order to pursue an effective economic policy to accelerate growth, it has to be addressed to the potential (long-run) growth component. The main ingredients of this policy are the government spending restructuring |
| Keywords: | long-run economic growth, TFP, government spending, restructuring. |
| JEL: | O1 O4 H5 J2 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:gai:wpaper:0096&r=tra |
| By: | Iancu, Aurel (Institutul National de Cercetari Economice al Academiei Române) |
| Abstract: | In this study I review the main scientific contributions of Minsky and other scholars to the financial instability and crisis issues, and the role of institutions in modeling the medium and long business and financial waves. The topics developed in this paper are the following: the relationships between financial instability, business and financial crisis and institutions; the thwarting of the explosive instability by the specific institutions' actions and regulations; the impact of the institutional changes on the business and financial cycles; the empiric approach to the business and financial cycles and their synchronization in the Central and Eastern Europe countries / members of the EU, taking into account the main characteristics of the changes in these countries' institutions. |
| Keywords: | financial instability, business cycles, financial cycles, institutions, long waves, basic cycles, supercycles, Central and Eastern Europe countries |
| JEL: | B52 B52 D53 G01 G2 L51 P11 P21 P31 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:ror:seince:140423&r=tra |
| By: | Flavio Bazzana; Anna Zadorozhnaya; Roberto Gabriele |
| Abstract: | This study examines the use and determinants of covenants in public debt issued by Russian companies. On the basis of issue characteristics, firm characteristics and systemic risk variables, we investigate that the likelihood of including covenants clause in financial contracts is positively related to the riskiness of bond issues. Us- ing a hand-collected database of Russian firms that place bonds both in domestic and Eurobond market, we provide evidence that the covenant protection in Euro- bond market has a positive impact for those firms that issue in Russian market, with a reduction in covenant intensity. We document that a negative relation be- tween offering yield and the presence of covenants which is consistent with the costly contracting hypothesis (CCH) is registered only in Eurobond market. We al- so find a non linear relation between investment and covenant protection for the firm that issue in Russian market, indicating a possible optimal covenant protec- tion for a bond issue. |
| Keywords: | covenants, bond, Russian companies |
| JEL: | G32 G31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpem:2014/05&r=tra |
| By: | Doan, Dung |
| Abstract: | Recent studies on income and nutrition suggest that income growth plays either a small or even a negative role in influencing diet quality in China, especially for low income households. Such arguments cast doubt on the conventional reliance on income as a policy tool to improve public health through better diets. They, however, have been drawn mostly from analysis of income effect on nutrient intakes and diet adequacy. No research has been done on how income affects diet diversity in China, despite its unambiguous health benefits. This paper tests if income growth improves diet diversity, and, thus, can enhance public health in China, using data from the China Health and Nutrition Survey 2004-2009. For the first time, potential endogeneity of income, most likely due to omitted variables, is addressed in the estimation of income effect on diet diversity by instrumental variables. This study finds that, regardless of estimation methods, income effect is significant and positive, but diminishes along the income distribution and over time. When endogeneity of income is controlled in 2SLS estimation, estimated income effect is considerably larger than the corresponding OLS estimate. OLS regression shows that education has significant and positive effects on diet diversity, with larger effects at higher education levels. Nevertheless, education effects diminish in terms of both magnitude and statistical significance in the 2SLS estimation. The stark differences between OLS and 2SLS estimates suggest that it is important to account for endogeneity of income. The OLS estimation seemingly understates income effects and overstates education effects. It, therefore, might mislead resource allocation in designing food and health policies. |
| Keywords: | nutrition, diet diversity, health economics, income, endogeneity, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, I10, I15, D12, C12, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare14:165836&r=tra |
| By: | Xiangyi Meng; Jian-Wei Zhang; Jingjing Xu; Hong Guo |
| Abstract: | We investigate the behavior of stocks in daily price-limited stock markets by purposing a quantum spatial-periodic harmonic model. The stock price is presumed to oscillate and damp in a quantum spatial-periodic harmonic oscillator potential well. Complicated non-linear relations including inter-band positive correlation and intra-band negative correlation between the volatility and the trading volume of stocks are derived by considering the energy band structure of the model. The validity of price limitation is then examined and abnormal phenomena of a price-limited stock market (Shanghai Stock Exchange) of China are studied by applying our quantum model. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1405.4490&r=tra |
| By: | Shawkat Hammoudeh; Duc Khuong Nguyen; Ricardo M. Sousa |
| Abstract: | This paper examines the effects of the monetary policy of China on commodity prices. Using a Bayesian Structural VAR, we identify shocks to the interest rate as a price rule and to the monetary aggregate (M2) as a quantity rule, and then evaluate their impacts on commodity prices. Those prices include the aggre- gate commodity price index and all its major constituents. Our results suggest that a positive interest rate (contractionary) shock has a negative and persistent effect on commodity prices. Additionally, the bever- ages and metals are the commodities whose prices fall by most in response to changes in the Chinese monetary policy. In what concerns the positive shock to the growth rate of the monetary aggregate, we find that although it does not have a significant impact on the commodity price aggregate, such result “hides” important heterogeneity across different types of commodity prices. Finally, we show that while adjusting the growth rate of the monetary aggregate and changing the interest rates appear to be macroe- conomic stabilizing tools of similar power, the price instrument seems more effective in explaining the dynamics of commodity prices than the quantity one. |
| Keywords: | monetary policy, commodity prices, Bayesian Structural VAR, China |
| JEL: | E37 E52 |
| Date: | 2014–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-298&r=tra |
| By: | Yoshihiko Kadoya; Yoshio Sano |
| Abstract: | Many claim that Chinese people born after the one-child policy of 1979 are very individualistic or even selfish. This research tested the hypothesis that Chinese workers of the one-child-policy generation have difficulty working in a team, addressing the absence of nation-wide evidence. Using workersf surveys, for the first time, across six major Chinese cities, the results denied the hypothesis, at least in the workplace. |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:0900&r=tra |
| By: | Barbara Blaszczyk |
| Abstract: | This paper is an overview of the achievements in the area of employee financial participation (EFP) during the last fifty years. It addresses the question of the extent to which EFP is relevant in today’s world. EFP is distinguished from participation in management (industrial democracy), and the various types of EP are discussed. The major arguments for EFP are presented and discussed critically. The evolution of major forms of EFP, the scale of their operation in several advanced economies, and the legal and tax incentives for EFP are described. The efforts of European Union bodies to popularise this idea in all member countries are illustrated. Showing that EFP has become a broadly recognised principle of modern management in thousands of enterprises, we consider opportunities for disseminating these solutions on a wider scale, in particular in Poland. Finally, a number of directions for further research on financial participation are considered. |
| Keywords: | Financial participation, industrial democracy, employee saving plans, profit sharing, employee share ownership, employee share ownership plans, legal regulations, incentives, European countries, USA |
| JEL: | A13 D02 G32 J54 M52 P12 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:sec:cnstan:0472&r=tra |
| By: | Marina Mastrorillo; Giorgio Fagiolo |
| Abstract: | We study the impact of international migration on enrollment of the left-behinds in Albania using the 2008 and 2012 Living Standard Measurement Survey. We employ a 2-stage Probit model controlling for endogeneity with an instrumental-variable approach. We find that migration has a negative and significant impact on enrollment in both waves. This result holds across different sub-samples and alternative ways to proxy within-household migration. Our findings strengthen results for previous years and cast doubts on the effectiveness of recent educational reforms and migration-oriented policies in Albania. |
| Keywords: | Migration; Left-behinds; Albania; Enrollment; Education |
| Date: | 2014–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2014/13&r=tra |
| By: | Botezat, Alina; Pfeiffer, Friedhelm |
| Abstract: | Many children grow up with parents working abroad. Economists are interested in the achievement and well-being of these home alone children to better understand the positive and negative aspects of migration in the sending countries. This paper examines the causal effects of parents' migration on their children left home in Romania, a country where increasingly more children are left behind in recent years. Using samples from a unique representative survey carried out in 2007 instrumental variable and bivariate probit estimates have been performed. Our initial evidence demonstrates that in Romania home alone children receive higher school grades, partly because they increase their time allocation for studying. However, they are more likely to be depressed and more often suffer from health problems especially in rural areas. -- |
| Keywords: | parent migration,home alone children,well-being,Romania |
| JEL: | I12 I21 J13 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14029&r=tra |
| By: | Hien Thu Tran; Enrico Santarelli; Enrico Zaninotto |
| Abstract: | Considering the case of diversified firms within a transition country such as Vietnam, this paper investigates diversification relatedness taking into account both firm-specific and industry-level components. Two measures of relatedness, the survivor-based and the SIC distances approach, are used to investigate the choice of destination industry by diversifying firms. The conflicting result between these two relatedness index suggests that there has been a trend of imitation and follow-up among inexperienced firms that resemble the direction and intensity of diversification of dominating players within the industry (herd behavior). Accordingly, a higher survivor-based index does not lead to a superior entrepreneurial performance. However, diversified firms gain experience overtime and choose more efficient business combinations in subsequent entries. Consistently with our previous findings, the classical SIC-based approach affirms again that greater diversification raises profitability, but just to an optimum relatedness point beyond which the positive effect starts to fade away. To control for the endogeneity of diversification relatedness and serial correlation of error terms we adoptinstrumental-variable two-stage least-squares estimation (IV-2SLS) with GMM treatment. |
| Keywords: | Firm diversification, firm performance, bounded rationality, transition economy |
| JEL: | L25 L29 P23 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpem:2014/04&r=tra |
| By: | Funk, Lothar (Department of Economics of the Duesseldorf University of Applied Sciences) |
| Abstract: | The ordo-liberal inspired Social Market Economy that emerged from west German economists and lawyers of the second half of the 1940s has perhaps attracted more attention in the international academic debate. Than prior to the financial crisis that became obvious to a wider public in 2008. Prior to this even the approach of ‘German neo-liberalism’ (i.e. ordo-liberalism) was neglected by many mainstream economists outside of Germany. Unexpectedly, Ge3rmany coped with turbulent economic times since 2008 much better than many spectators particularly in the Anglo-Saxon economies that support ‘free market’-principles more than the German establishment have anticipated. Simultaneously, these latter economies have lost much of their former appeal as a result of their decreased dynamism and problems to cope with the current problems in recent years. The renaissance of German ordoliberal concepts during both the financial crisis and the crisis in the euro area leads to the question whether the principles of the Social Market Economy can also serve as a guide for reforms in Russia. According to the author, an appropriate implementation of these principles would lead to lastingly superior prospects of prosperity in Russia. |
| Abstract: | Die ordoliberal inspirierte Soziale Marktwirtschaft, die in Westdeutschland seit dem Ende der 1940er Jahre entstanden war, hat in jüngster Zeit erheblich mehr Beachtung in der wissenschaftlichen Debatte gefunden als vor der Finanzkrise, die 2008 einer größeren Öffentlichkeit bewusst wurde. Zuvor wurde der Ansatz von Mainstream-Ökonomen außerhalb des deutschsprachigen Raums hingegen weitgehend vernachlässigt. Deutschland hat unerwartet die Wirtschaftsturbulenzen seit 2008 besser überstanden, als vielfach gerade im englischsprachigen Raum erwartet worden ist. Gleichzeitig haben freiere Marktwirtschaften wie die USA und Großbritannien den Glanz früherer (vermeintlicher) dauerhaft besserer Wirtschaftsdynamik verloren. Die Renaissance von ordoliberalen Konzepten auch im Zuge der Bekämpfung der Krise im Euroraum lässt es als angemessen erscheinen zu prüfen, wie relevant das Modell Sozialer Marktwirtschaft auch für Russland sein könnte. Aus Sicht des Autors würde eine angemessene Übertragung dieser Prinzipien auch zu besseren Aussichten auf dauerhaften Wohlstand in Russland beitragen. |
| Keywords: | Deutschland, Ordoliberalismus, Russland, Soziale Marktwirtschaft, Typologie, Wirtschaftssysteme, Wirtschaftsbeziehung, Germany , Ordo-Liberalism, Russia, Social Market Economy, Typology, Economic Systems, Economic Relation |
| JEL: | P10 P11 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ddf:wpaper:fobe24&r=tra |
| By: | Gros, Daniel |
| Abstract: | Notes Regardless of whether Ukraine is ‘lost’, or who lost it, Daniel Gros finds in this new Commentary that the country can still offer an attractive future for all of its citizens if unavoidable economic reforms can be made compatible with regional cohesion. He urges the EU to play an essential role in the process by opening its market and providing funding and technical assistance in crucial areas. |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:eps:cepswp:9152&r=tra |