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on Transition Economics |
| By: | Kamila Kuziemska-Pawlak (Narodowy Bank Polski; University of Lodz); Jakub Mućk (Narodowy Bank Polski; SGH Warsaw School of Economics) |
| Abstract: | This paper proposes an extension of the fundamental equilibrium exchange rate (FEER) model that accounts for the trade linkages within the Global Value Chains (GVCs). In the modified FEER framework, both backward and forward linkages are taken into consideration. To demonstrate the empirical relevance of the complex nature of existing trade linkages, the proposed FEER model is applied to analyze exchange rate fluctuations of the selected Central and Eastern European countries against the euro. It is documented that in Czechia, Hungary, and Poland the standard FEER framework predicts rapid appreciation of the equilibrium exchange rate after 2010, which implies deepening undervaluation of the actual real exchange rate towards the end of the analysed period. Instead, when the GVCs’ linkages are taken into account in the framework, actual real exchange rates are broadly in line with the fundamental equilibrium exchange rates, and hence the missing real appreciation of the Czech krone, the Hungarian forint and the Polish zloty is to a large extent an equilibrium phenomenon. |
| Keywords: | exchange rate, current account, foreign trade, Global Value Chains |
| JEL: | C32 C33 F12 F31 F32 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:nbp:nbpmis:354&r=tra |
| By: | Eristian Wibisono; ; |
| Abstract: | Macroeconomic and microeconomic literature has raised the impact of FDI knowledge and technology spillovers in the host economy. However, there is still a research gap in addressing this topic in the knowledge economy. Based on a comprehensive literature review, this paper demonstrates the performance of FDI spillovers and their impact on the productivity of domestic firms in emerging and transition economies in Europe. Poland is the largest country in the Visegrad group but provides limited studies on FDI experience. The paper then shows the geographic distribution of FDI across Polish regions, where the western and eastern regions appear very different. There is a significant positive impact of FDI presence on the productivity of foreign-affiliated domestic firms. Unfortunately, the presence of FDI in these regions is not significant enough to induce knowledge and technology spillovers to improve firm productivity. The effectiveness of FDI knowledge and technology in boosting the productivity of the local economy may be worth questioning. Therefore, comparable spatial studies are encouraged to be conducted in future research with a more complete and robust data structure which is recognized as a limitation of this study. |
| Keywords: | FDI; knowledge and technology; spillovers; Visegrad; Poland; spatial dependencies |
| JEL: | B27 E22 O52 R11 R12 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2301&r=tra |
| By: | Han-Sol Lee; Sergey U. Chernikov; Szabolcs Nagy |
| Abstract: | Considering the growing significance of Eurasian economic ties because of South Korea s New Northern Policy and Russia s New Eastern Policy, this study investigates the motivations and locational factors of South Korean foreign direct investment (FDI) in three countries in the Commonwealth of Independent States (CIS: Kazakhstan, Russia, and Uzbekistan) by employing panel analysis (pooled ordinary least squares (OLS), fixed effects, random effects) using data from 1993 to 2017. The results show the positive and significant coefficients of GDP, resource endowments, and inflation. Unlike conventional South Korean outward FDI, labour-seeking is not defined as a primary purpose. Exchange rates, political rights, and civil liberties are identified as insignificant. The authors conclude that South Korean FDI in Kazakhstan, Russia, and Uzbekistan is associated with market-seeking (particularly in Kazakhstan and Russia) and natural resource-seeking, especially the former. From a policy perspective, our empirical evidence suggests that these countries host governments could implement mechanisms to facilitate the movement of goods across regions and countries to increase the attractiveness of small local markets. The South Korean government could develop financial support and risk sharing programmes to enhance natural resource-seeking investments and mutual exchange programmes to overcome the red syndrome complex in South Korean society. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2212.13841&r=tra |
| By: | Jan K. Brueckner; Wenhua Liu; Wei Xiao; Junfu Zhang |
| Abstract: | We examine the effect of a large-scale administrative reorganization in China, where counties are annexed into cities to accommodate urban growth. We present a simple model to illustrate how this annexation may affect firm entry decisions and in turn land market outcomes. Using nationwide data on land-lease transactions, we find that annexation raises industrial land prices in the annexed counties by 7 percent but does not reduce land prices in neighboring counties and central cities. We show that the annexed counties experienced increases in firm entry and investment, offering a plausible mechanism for the effect on industrial land prices. |
| Keywords: | urban growth, industrial land prices, annexation, China |
| JEL: | R11 R12 R14 R33 R58 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10181&r=tra |
| By: | John Ammer; John H. Rogers; Gang Wang; Yang Yu |
| Abstract: | We study how professional fund managers' growth expectations affect the actions they take with respect to equity investment and in turn the effects on prices. Using novel data on China's mutual fund managers' growth expectations, we show that pessimistic managers decrease equity allocations and shift away from more-cyclical stocks. We identify a strong short-run causal effect of growth expectations on stock returns, despite statistically significant delays in price discovery from short-sale constraints. Finally, we find that an earnings-based measure of price informativeness is increasing in fund investment. |
| Keywords: | mutual fund managers; chinese financial markets; economic growth expectations; price informativeness; textual analysis |
| JEL: | D80 E66 G11 G12 G23 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1362&r=tra |
| By: | Alícia Adserà (Princeton University); Francesca Dalla Pozza (EBRD - European Bank for Reconstruction and Development - EBRD); Sergei Guriev (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Lukas Kleine-Rueschkamp (University of Oxford [Oxford], OCDE - Organisation de Coopération et de Développement Economiques = Organisation for Economic Co-operation and Development); Elena Nikolova (UCL - University College of London [London]) |
| Abstract: | Using newly available data, we re-evaluate the impact of transition from plan to market in former communist countries on objective and subjective well-being. We find clear evidence of the high social cost of early transition reforms: cohorts born around the start of transition are about 1 cm shorter than their older or younger peers. We provide suggestive evidence on the importance on mechanisms that partially explain these results: the decline of GDP per capita and the deterioration of healthcare systems. On the bright side, we find that cohorts that experienced transition in their infancy are now better educated and more satisfied with their lives than their counterparts. Taken together, our results imply that the transition process has been a traumatic experience, but that its negative impact has largely been overcome. |
| Keywords: | Transition from plan to market, Structural reforms, Height, Well-being |
| Date: | 2021–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:spmain:hal-03878624&r=tra |
| By: | Guglielmo Maria Caporale; Nieves Carmona-González; Luis Alberiko Gil-Alana |
| Abstract: | This paper applies fractional integration methods to investigate the behaviour of various pollutants (PM10, PM25, SO2 and NO2) in seven Chinese cities (Shanghai, Beijing, Chongqing, Tianjin, Shenzhen, Nanjing and Xian) using daily data over the period January 1, 2014 – November 18, 2022. The results suggest that the steps recently taken by the Chinese authorities to reduce emissions and improve air quality have already had some effect: in most cases the air pollutant series are in the stationary range, with mean reversion occurring and shocks only having temporary effects, and there are significant downward trends indicating a decline over time in the degree of pollution in Chinese cities. It is also interesting that in the most recent period the Zero-Covid policy of the Chinese authorities has led to a further fall. On the whole, it would appear that the action plan adopted by the Chinese government is bringing the expected environmental benefits and therefore it is to be hoped that such policies will continue to be implemented and extended to improve air quality even further. |
| Keywords: | China, pollution, trends, persistence, long-range dependence |
| JEL: | C22 Q53 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10161&r=tra |
| By: | An Huang (Monash University); Paulo Santos (Monash University); Russell Smyth (Monash University) |
| Abstract: | This paper examines the role of agricultural technology, in the form of paddy rice cultivation, on contemporary levels of prejudice. Using environmental suitability for paddy as an instrumental variable, we find that people living in areas where paddy rice farming has been long practiced exhibit lower prejudice towards outgroup members. This relationship is mediated by greater exposure to markets and trade, itself derived from paddy’s higher land productivity, likely reflecting the opportunities for interpersonal contact created by markets. In contrast, the irrigation needs and high labour demands of paddy galvanize local cooperation, likely fostering prejudice directed to outsiders. |
| Keywords: | paddy rice, prejudice, market, contact hypothesis, group identity |
| JEL: | J15 N55 Z1 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2023-02&r=tra |
| By: | Rosa Weber (INED - Institut national d'études démographiques, Stockholm University); Louisa Vogiazides (Stockholm University) |
| Abstract: | Migrant integration is theoretically conceived as a multidimensional process where integration in one life domain does not necessarily imply integration in another domain. An expanding literature analyses several aspects of the lives of migrants and their children. However, to date research has mainly assessed how attainment in one life domain influences attainment in another domain. This study analyses the extent to which attainment across multiple life domains–socioeconomic, social and residential–coincides among second-generation migrants. Using Swedish register data, we compare 10, 450 children of migrants from six regions of origin, who were aged 30–40 in 2015, to individuals born in Sweden with two Swedish-born parents. Multigenerational linkages moreover allow us to control for parental socioeconomic status as well as residential characteristics when growing up. Our analyses reveal considerable disparities in social and residential outcomes between second-generation migrants and the Swedish majority group, as well as across origin groups. Differences in socioeconomic attainment are comparatively small once we account for parental characteristics and residential background. Second-generation Turkish and Middle Eastern migrants differ in terms of their social and residential outcomes when compared to the Swedish majority group, but have commensurate socioeconomic attainment. In contrast, we find overall consistency across domains for Polish, ex-Yugoslav and Latin American second-generation migrants. Our findings underline the importance of studying outcomes in multiple domains in order to gain a more comprehensive understanding of the life situation of second-generation migrants. |
| Keywords: | attainment, second-generation migrants, integration, socioeconomic background, register data, Sweden |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03899393&r=tra |