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on Transition Economics |
| By: | Natalie Dvorakova; Tomas Sestorad |
| Abstract: | This paper examines the drivers of the post-pandemic surge in inflation in four small open economies: Czechia, Hungary, Poland, and Slovakia. For this purpose, a Bayesian structural vector autoregressive model with sign-zero restrictions and block exogeneity is employed. The results show that both foreign demand and foreign supply shocks have contributed significantly to inflation in the post-2020 period across countries, alongside notable contributions from domestic factors explaining differences among economies. Specifically, supply-side shocks are identified as the primary domestic factor across all countries, whereas domestic demand shocks were much less influential. Exchange rate shocks were pronounced in Hungary only, while monetary policy shocks have had a minimal impact on inflation since 2022 in all the countries considered. Additionally, we provide decompositions of core inflation, highlighting the predominance of domestic factors. |
| Keywords: | Bayesian VAR, extraordinary events, inflation, sign-zero restrictions, small open economies |
| JEL: | C32 E31 E32 E52 F41 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cnb:wpaper:2024/5 |
| By: | Gaygysyz Ashyrov; Nicolas Gavoille; Kjetil Haukås; Rasmus Bøgh Holmen; Jaan Masso |
| Abstract: | While attracting foreign direct investment (FDI) has been at the core of the economic policy of many countries since the 1980s, existing evidence of a causal foreign ownership effect on firm-level productivity is mixed. This paper revisits the productivity effect of foreign takeovers on domestic firms. Leveraging administrative firm-level data from Estonia, Latvia and Norway, we shed light on the following key questions: 1) Does the magnitude of the effect of foreign ownership depend on the host country's level of development?; 2) Does spatial, cultural, and economic proximity between the sending and receiving countries play a role in the foreign ownership effect?; and 3) To what extent are these effects heterogeneous across industries? By implementing a propensity score matching procedure, combined with a difference-in-differences approach, our results indicate that the productivity effect of foreign ownership greatly varies across host countries, sectors and the region of origin for the FDI. We document an overall positive but heterogeneous effect of foreign acquisitions on domestic firms, with a stronger productivity boost in Estonia and Latvia than in Norway. The effects in each country are concentrated on FDI from particular regions and specific economic sectors. These results suggest that the positive effect of FDI on receiving companies is conditional on both the characteristics of the investor and the acquisition target. |
| Keywords: | Productivity, foreign direct investment, foreign ownership, Northern Europe |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:mtk:febawb:148 |
| By: | Mathias Juust; Urmas Varblane |
| Abstract: | This paper investigates the resources and capabilities that determine firm-level adjustments after a sudden unexpected closure of a major export market. We focus on the effects of the 2014 Russian embargo on Western food exporters using the example of Estonian firms. The paper applies a novel multimethod approach consisting of Study I quantifying the embargo effect on the exports of all embargoed firms, and Study II conducting a multiple case study into three dairy exporters highly affected by the embargo. Study I employs a difference-in-difference model with matched embargoed firms as treatment. Study II builds on extensive document analysis that serves as input for interviews with the CEOs of the sample dairy firms. We find that pre-shock productivity is on average a good predictor of post-shock firm resilience (Study I), however, we specify that the key firm-level resources and capabilities necessary for successful post-shock adjustments might not be reflected in the standard quantitative productivity level measures (Study II). We conclude that key firm-level resources and capabilities for embargo-resilience are the quality of exporting experience, competitive product-market matching, absorptive capacity, and managerial vision and empowerment. |
| Keywords: | negative export shock, embargo, firm-level capabilities, trade barriers, trade diversion, trade policy |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:mtk:febawb:145 |
| By: | Matthias Morys (University of York); Martin Ivanov (Sofia University) |
| Abstract: | We challenge the view that Centrally Planned Economies functioned well until the early 1970s, delivering high economic growth and better living standards. Judged by real wages as the most widely used historical living standard indicator, only in the 1970s did Bulgarian living standards surpass levels achieved already four decades earlier. Our findings are particularly discomforting for the rural population which was the big loser of collectivization and forced industrialization policies after 1947. Wages increased throughout the 1970s and the 1980s, but far less so than Maddison’s GDP per capita estimates which are often used as a proxy for living standards. |
| Keywords: | real wages, state socialism, structural transformation |
| JEL: | E01 N14 N54 N64 P2 P51 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:hes:wpaper:0267 |
| By: | Anastasiia Pustovalova; Priit Vahter |
| Abstract: | This paper explores the complementarity of automation with social and problem-solving skills, focusing on the wage effects. The results based on detailed firm- and individual-level data from Estonia show that in manufacturing firms which recently adopted automation tools, there is additional wage premium for employees’ social skills. This effect is even more pronounced for the low-skilled workers, emphasizing both the importance of soft skills on low-wage jobs and how innovation at firms can have significant positive effects on some sub-groups of the low-skilled. The role of skills is different depending on how persistent the automation investments are at the firm. First-time automating firms start valuing the social skills first, while persistently automating firms reward the problem-solving skills instead. |
| Keywords: | automation, technological change, social skills, problem-solving skills, wage differentials |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:mtk:febawb:146 |
| By: | Viktor Zinchenko (Institute of Higher Education of the National Academy of Educational Sciences of Ukraine, Kyiv-city, Ukraine); Mykhailo Boichenko (Taras Shevchenko National University of Kyiv) |
| Abstract: | Ecological approach gives new meaning to the original concept of economic rationality that was created by representatives of the Ukrainian school of physical economy – Serhii Podolinskyi (1850-1891), Volodymyr Vernadskyi (1863-1945) and Mykola Rudenko (1920-2004). It propose a theory of the sustainable development of mankind, which included an original version of thermodynamics, in which labor energy is the result of the transformation of solar energy. Humanity is gradually taking control of the changes in the balance of energy exchange between humanity and the rest of nature, and physical economics is a tool for discovering the limits of such control. The cycles of global energy transformation include cosmic, biological, social and spiritual stages, and the economy acts as the material basis and the place of concentration of these transformations. The threat of technogenic self-destruction of humanity actualizes the need to establish a dynamic and harmonious self-reproduction by humanity of these cycles. |
| Keywords: | Ukrainian philosophy of physical economy, Ecological approach, Global energy transformation, Energy balance in the economy, Economic rationality |
| Date: | 2024–09–16 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04698733 |
| By: | Gianluigi Nico; Thanh Hai Nguyen; Annabelle Bladon; Anna Ducros; Nga Thi Nguyen |
| Abstract: | Vietnam’s fisheries sector faces complex challenges, requiring a multifaceted approach for resolution. Fishing capacity in coastal, inland, and offshore fisheries should be reduced to rebuild fish stocks. Additionally, measures are needed to address the vulnerabilities of workers, such as income instability and health risks due to climate impacts and regulations. This necessitates coordinated efforts across various government levels and ministries. Social assistance, social insurance, and active labor market programs can enable and incentivize households to engage in more sustainable practices and more resilient livelihoods. Leveraging digitalization can improve data sharing and registration processes, thereby facilitating the extension of social protection to informal workers who present majority among fishery households. Furthermore, this integration of databases can enhance fisheries management through better-informed decision-making which is vital for sustainable development in Vietnam’s fisheries industry. |
| Date: | 2024–06–01 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:hdnspu:193886 |
| By: | Amaresh K Tiwari |
| Abstract: | Using the universe of firms in Estonia, we study the implications of imports-led and FDI- facilitated automation for productivity and factor shares of tasks and value-added. First, in contrast to the findings for developed economies, we find that the aggregate labour share of value-added for automation adopting firms is higher than that for non-adopters, and has grown, among others, through the reallocation of economic activities towards adopting firms. Second, the aggregate total factor productivity of the adopters concurrently grew faster than that of the non-adopters. Third, from the micro-level study, we find that the estimated labour share of tasks has declined over time among the adopting firms and is lowest in firms that automate frequently, where the frequency of automation provides rich information on firm automation characteristics. The study emphasizes international spillovers and the creation of productive new jobs by multinational adopters among the reasons for the increase in the labour share of value-added for adopters, even as their labour share of tasks declined. Fourth, the productivity impact of automation is heterogeneous: (a) firms that automate regularly, (b) multinational adopters, and (c) firms that realize complementarities between automation and innovative management practices are among the most productive adopters. The latter establishes that the innovative management practices instituted by adopters are those that help discover and facilitate complementarities be- tween automation and human labour. |
| Keywords: | Imports-Led Automation, Foreign Direct Investment (FDI), Productivity, Labour Share, Factor Task Content of Production, Complementarities |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:mtk:febawb:144 |
| By: | Thomas-Agnan, Christine; Mondon, Camille; Trinh, Thi-Huong; Ruiz-Gazen, Anne |
| Abstract: | ICS (Invariant coordinate selection) is a method aimed at dimension reduction as a preliminary step for clustering and outlier detection. It can be applied on multivariate or functional data. This work introduces a coordinate-free definition of ICS and extends the ICS method to distributional data. Indeed the inherent constraints of density functions imply a necessary adaptation of functional ICS. Our first achievement is a coordinate-free version of ICS within the framework of Hilbert spaces, assuming that the data lies almost surely in a finite dimensional subspace. Using the Bayes space framework tailored for density functions, we express the centred log-ratio of the density curves in a subspace of L2 0(a, b) of zero-integral spline functions and conduct ICS in this finite dimensional subspace. We describe the different steps of the procedure for outlier detection and study the impact of some parameters of this procedure on the results. The methodology is then illustrated on a sample of daily maximum temperatures densities recorded across northern Vietnamese provinces between 1987 and 2016. |
| Keywords: | Bayes spaces, distributional data, functional data, invariant coordinate selection, outlier detection, Vietnam temperature densities |
| Date: | 2024–10–14 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:129830 |
| By: | Jaan Masso; Jaanika Meriküll; Liis Roosaar; Kärt Rõigas; Tiiu Paas |
| Abstract: | This paper focuses on two mechanisms that could explain the persistence of the gender pay gap – child penalty and bargaining. We concentrate on academia and use administrative data from the University of Tartu, the largest university in Estonia. The context of the academic sector allows us to control for worker productivity through indicators of research and teaching activities. Administrative data on academic staff from 2012 to 2021 has been linked with the population register and web-scraped data from SCOPUS. We follow the quasi-experimental approach proposed by Kleven et al. (2019a) to identify child penalty and derive outside option wages for all the detailed institutes to estimate the role of bargaining. Despite no penalty in hourly wages, the decrease in the working hours for mothers equals two years of full-time work spread over four years after childbirth. Compared to the penalty for the whole population, the child penalty in academia is shorter-lived, and no statistically significant effect on women's publications or citations was found. Men, in contrast, do not experience any penalties related to children. Women's worse bargaining skills seem to be an important factor behind the gender pay gap in academia, whereas the institute's higher outside option wage is related to relatively higher wages for men and is a less important factor for the wages of women. |
| Keywords: | Gender wage gap, child penalty, event study, bargaining, outside option, academic sector |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:mtk:febawb:147 |
| By: | Marcus Dejardin (University of Namur); Luca Farè (University of Bergamo); Éric Toulemonde (University of Namur) |
| Abstract: | This study examines the impact of a bankruptcy system reform process implemented in Slovenia on access to credit conditions and investments in innovation by small businesses. The reform process increased the recovery rate and reduced the time to resolve insolvency procedures, thus improving the efficiency of the bankruptcy system. Leveraging a dataset of 1, 245 Slovenian micro-, small-, and medium-sized enterprises, our results document an increase in innovation investments by small businesses after the reform process due to more accommodating access to credit conditions. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:nam:defipp:2405 |