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Economics of Transition / The Economics of Transition

Impact factor: 0.782 5-Year impact factor: 1.091 Print ISSN: 0967-0750 Online ISSN: 1468-0351 Publisher: Wiley Blackwell (Blackwell Publishing)

Subject: Economics

Most recent papers:

  • How house price appreciation affects homeowners' labour force participation.
    Jianmei Zhao, Lin Liu, Ruihan Liu.
    Economics of Transition / The Economics of Transition. October 20, 2017
    This paper investigates the effects of house price appreciation on homeowners' labour force participation (LFP). Although economic theories predict that housing capital gains will reduce labour supply, empirical evidence from urban China revealed that house price appreciation significantly boosts homeowners' LFP. Heterogeneous analyses indicate that LFP behaviour is more likely to be affected by house price appreciation for female and younger homeowners. Furthermore, homeowners living in provinces with greater house price appreciation tend to be more active in job participation than those living in provinces with lower price appreciation.
    October 20, 2017   doi: 10.1111/ecot.12138   open full text
  • Post‐socialist transition and intergenerational educational mobility in Kyrgyzstan.
    Tilman Brück, Damir Esenaliev.
    Economics of Transition / The Economics of Transition. September 07, 2017
    We investigate long‐term trends in intergenerational educational mobility in a lower middle‐income transition economy. We draw on evidence from Kyrgyzstan using data from three household surveys collected in 1993, 1998 and 2011. We find that Kyrgyzstan, like Eastern European middle‐income transition economies, maintained high educational mobility, comparable to levels during the Soviet era. However, we find that the younger cohorts, exposed to the transition during their school years, experienced a rapid decline in educational mobility. We also document that gender differences in schooling and educational mobility, found among older‐aged individuals, disappeared in the younger cohorts.
    September 07, 2017   doi: 10.1111/ecot.12136   open full text
  • Innovations, ICT and ICT‐driven labour productivity in Poland.
    Lukasz Arendt, Wojciech Grabowski.
    Economics of Transition / The Economics of Transition. September 01, 2017
    In this paper, we describe and develop a two‐step model, based on the CDM approach and the new firm paradigm, to link innovation outputs and ICT to productivity gains, using micro‐level data from 1,000 Polish companies. Our study confirmed the mediating role of innovations and ICT complementarities with respect to productivity gains. However, the main finding is that the strength of this relationship depends on the company's distance to the technological frontier. We show that the more productive a company is, the more important are co‐innovative sources of productivity. Thus, support programmes should also be provided to highly productive companies, which require a higher level of ICT complementarities to boost productivity. This finding may hold true for other CEE countries as well.
    September 01, 2017   doi: 10.1111/ecot.12135   open full text
  • The curse of low expectations.
    Marianna Battaglia, Lara Lebedinski.
    Economics of Transition / The Economics of Transition. September 01, 2017
    We examine how a remedial education programme for primary school‐age children affects parental expectations about their children's future. Using original survey data we collected in Serbia, we investigate whether expectations on labour market prospects and educational attainment change as a consequence of exposure to the Roma Teaching Assistant programme. Our results show that parents of pupils in treated schools expect higher returns to education for their children and are more likely to expect them to achieve a secondary level of education. We also investigate the possible mechanisms in place due to the characteristics of the programme: remedial education and role model.
    September 01, 2017   doi: 10.1111/ecot.12134   open full text
  • Converging in divergent ways.
    Ernest Dautović, Lucia Orszaghova, Willem Schudel.
    Economics of Transition / The Economics of Transition. August 21, 2017
    This paper focuses on intra‐industry trade (IIT) between Central, Eastern and South‐Eastern European (CESEE) countries and the EU‐15. It assesses the determinants of intra‐industry trade by combining a detailed product‐level (HS‐6) trade‐flow database with country‐level structural, monetary and institutional variables. Estimates are obtained with System‐GMM and dynamic fractional response models. Our results suggest that structural factors driving IIT differ in the region, notably perceptions of corruption and the distance in the stock of physical capital from the EU‐15. On the other hand, nominal variables such as the competitiveness of corporate taxation and the flexibility of exchange rate regimes contribute to the increase in intra‐industry trade in the whole region.
    August 21, 2017   doi: 10.1111/ecot.12132   open full text
  • Measuring the end of the European financial crisis.
    Ya‐Chi Lin, Kuo‐Chun Yeh.
    Economics of Transition / The Economics of Transition. August 09, 2017
    In 2013 it was declared that ‘the eurozone crisis is over’. However, in fact, the series of financial crises since 2008 may have interrupted the process of EMU enlargement, which in turn triggered a continuing crisis of confidence in the euro. In this paper we extend the sigma‐convergence test to provide a more precise understanding of real interest rate parity (RIP) convergence. On the basis of this, we predict the timing for eliminating the cost of economic asymmetric shocks. Our estimation indicates the RIP among EMU members and accessions were still valid after the disruptions of the 2008 financial crisis. However, the situation has been even worse since the 2010 European sovereign debt crisis, and ceteris paribus, symmetry cannot be achieved without further policy actions. This implies that the EMU authority must do its best to strengthen symmetry and thereby solidify the EMU, at which point it will be better able to re‐start the process of enlargement.
    August 09, 2017   doi: 10.1111/ecot.12133   open full text
  • Location choice of German multinationals in the Czech Republic.
    Veronika Hecht.
    Economics of Transition / The Economics of Transition. July 14, 2017
    This paper analyzes the location choice of German investors in the Czech Republic based on a unique dataset covering all Czech companies with a German equity holder. Using a nested logit approach the impact of agglomeration economies, labour market conditions and distance on location choice is investigated. The main result of the paper is that apart from a low distance to the location of the parent company the attractiveness of a Czech district for German investors is mainly driven by agglomeration economies. Besides localization economies the agglomeration of German companies in a region plays a decisive role. The importance of labour market characteristics differs between investment sectors, sizes and periods.
    July 14, 2017   doi: 10.1111/ecot.12131   open full text
  • The impact of higher education expansion on intergenerational mobility.
    Zhi Li, Hai Zhong.
    Economics of Transition / The Economics of Transition. June 23, 2017
    The persistent correlations between parents and children's outcomes have long been investigated. From a policy perspective, it is important to understand the underlying causes of those correlations. Educational policy changes may have significant impacts on intergenerational mobility. The last several decades have witnessed a remarkable expansion of higher education around the world. In this paper, we examine the effect of higher education expansion on intergenerational mobility in China. We find that the higher education expansion in China has weakened the advantage of cadres’ children in higher education participation, and has strengthened the intergenerational educational correlation. One explanation for these results might be that, along with the process of economic reform started in 1979, the cadre selection mechanism has placed more and more weight on candidate's education and abilities.
    June 23, 2017   doi: 10.1111/ecot.12130   open full text
  • Pious populists at the gate.
    Erik Meyersson.
    Economics of Transition / The Economics of Transition. April 17, 2017
    In this paper, I evaluate the economic track record of the Justice and Development Party (AKP) in Turkey, using the synthetic control method (SCM). This methodology compares the post‐AKP development trajectory of Turkey with that of a weighted combination of similar but untreated countries. The SCM is particularly useful in this setting as it allows construction of a synthetic control to Turkey that replicates the pre‐AKP development dynamics. I find that Turkey under AKP grew no faster in terms of GDP per capita when compared with a synthetic counterpart from a wide pool of other countries. Restricting the pool of control units to only include Muslim countries shows Turkey growing slower than its Muslim counterparts. Moreover, analysis of post‐crisis recovery periods shows Turkey growing no faster than comparable post‐crisis cases across time. However, expanding the outcome set to health and education reveals large positive differences in both infant and maternal mortality as well as university enrolment, consistent with stated AKP policies to improve access to health and education sectors for the relatively poorer segments of the population. Nonetheless, increased access in these fields is not matched by improved labour market access, as both labour force participation as well as unemployment have deteriorated, and especially so for women. As for measures of institutions, I fail to find any durable positive differences in measures related to democracy or human rights early on during the post‐intervention period, and in several instances there is evidence of significant declines over the long run. A particularly salient feature of the AKP's reign is reduced political power of the military, consistent with the military in Turkey receiving lower economic rents than its synthetic counterpart during AKP's reign.
    April 17, 2017   doi: 10.1111/ecot.12125   open full text
  • Not so different from non‐traders.
    David C. Francis, Helena Schweiger.
    Economics of Transition / The Economics of Transition. April 17, 2017
    This paper uses a unique, comparable firm‐level dataset covering more than 80 developing middle‐income economies to provide a novel set of stylized facts on firms engaging in international trade, focusing on the Middle East and North Africa (MENA) region. We show that firms in MENA are more likely to export and/or import than their counterparts elsewhere. However, we only find the expected positive and significant productivity premia for exporters outside of MENA. While MENA's larger exporters are indeed more productive than non‐exporters, a large share of exporters – the comparatively low‐volume ones – are not. We also confirm positive and significant size and productivity premia for manufacturers that import only, with productivity premia in MENA at least double of those in middle‐income economies elsewhere. In contrast, we find no size or productivity premia for MENA's manufacturers that export, but do not import. These patterns are consistent with substantial distortions in the relative fixed and variable costs of trading, likely a reflection of selectively applied policies.
    April 17, 2017   doi: 10.1111/ecot.12122   open full text
  • A ‘new’ economic history of the Middle East and North Africa (MENA) region.
    Mohamed Saleh.
    Economics of Transition / The Economics of Transition. April 17, 2017
    This article argues that there is a need to develop a ‘new’ economic and social history of the Middle East and North Africa (MENA) region that is based on exploiting novel sources of data, including (a) primary papyrological sources from the medieval period, (b) primary sources at the region's local archives and European (colonial) archives, and (c) primary sources from the ancient (pre‐Islamic) period. The proposed ‘new’ history of the MENA region must be inter‐disciplinary for two reasons: (a) digitizing and employing these novel data sources in research requires the collaboration of social scientists, historians, archaeologists, anthropologists, demographers and papyrologists, as well as the co‐operation of MENA‐based scholars who have better access to MENA's local archives, and (b) even if these novel sources are digitized, data limitations are likely to impose a constraint on the reach of quantitative analysis and thus necessitate an inter‐disciplinary methodology that combines quantitative evidence with historical analysis.
    April 17, 2017   doi: 10.1111/ecot.12128   open full text
  • Credit booms and busts in emerging markets.
    Alin Marius Andries, Martin Brown.
    Economics of Transition / The Economics of Transition. April 12, 2017
    We investigate to what extent corporate governance and risk management mitigate the involvement of banks in credit boom and bust cycles. We study a unique, hand‐collected dataset covering 156 banks from Central and Eastern Europe during 2005–2012. We document that stronger risk management is associated with more moderate pre‐crisis credit growth but not with fewer credit losses in the crisis. With respect to bank governance, we find that a higher share of foreign members on the supervisory board is associated with less rapid credit growth in the pre‐crisis period and a lower level of credit losses during the crisis period.
    April 12, 2017   doi: 10.1111/ecot.12127   open full text
  • Gender gap, capital accumulation and the demographic transition.
    Kaiming Guo, Jingwen Yu.
    Economics of Transition / The Economics of Transition. April 12, 2017
    This paper focuses on explaining the demographic transition and some of the broad patterns that are associated with it. We present an endogenous growth model that incorporates altruism and son preference within the family as well as gender wage gap and gender wage discrimination in the labour market. We show that with the accumulation of physical capital and human capital, the output share of mental labour increases and the gender wage gap narrows. In the early stages of economic development, gender discrimination is becoming prevalent and the substitution effect of capital accumulation, which raises the cost of child rearing, is dominated by the income effect, so the growth rate of population increases with income. When the degree of gender wage discrimination starts to decline, the increased cost of child rearing induces families to invest more in the human capital of children and the growth rate of the population falls. The quantitative analysis shows that gender wage discrimination is indeed an important contributor to the demographic transition.
    April 12, 2017   doi: 10.1111/ecot.12126   open full text
  • The explosive combination of religious decentralization and autocracy.
    Emmanuelle Auriol, Jean‐Philippe Platteau.
    Economics of Transition / The Economics of Transition. April 07, 2017
    The relationship between religion and politics is explored from a theoretical standpoint. Religious clerics can be seduced by an autocrat and political stability is at stake. The autocrat's decisions consist of two measures both capable of antagonizing religious clerics: adopting secular reforms and unduly appropriating part of the national wealth, which generally are complements. Compared to centralized religions, decentralized religions, such as Islam, tend to discourage secular reforms and corruption but those effects are not guaranteed if the autocrat accepts political instability. The main hypotheses and the central results of the theory are illustrated with regime case studies that refer to contemporary times.
    April 07, 2017   doi: 10.1111/ecot.12123   open full text
  • Governors matter.
    Gulnaz Sharafutdinova, Jevgenijs Steinbuks.
    Economics of Transition / The Economics of Transition. April 06, 2017
    This study uses the latest 2011 round of the Business Environment and Enterprise Performance Survey for the Russian Federation to take a closer look at regional‐level factors influencing the business environment in Russia. Specifically, the study explores the role of regional administrations and variables of administrative continuity and governor origin in shaping regional business environment. The findings reveal that regional businesses in Russia are (1) acutely anxious about administrative transitions (as expressed in gubernatorial replacements) and favour administrative continuity, and (2) favour government officials that are locally embedded. The analysis suggests that many localities in Russia have witnessed the emergence of mutually beneficial state‐business arrangements that are inimical to economic competition.
    April 06, 2017   doi: 10.1111/ecot.12124   open full text
  • What is the role of innovation in productivity growth in Central and Eastern European countries?
    Dragan Tevdovski, Katerina Tosevska‐Trpcevska, Elena Makrevska Disoska.
    Economics of Transition / The Economics of Transition. March 20, 2017
    The paper uses company level data from the Eurostat's Community Innovation Survey 2008 and applies CDM model in order to estimate the links between R&D engagement, R&D intensity, innovation output and productivity in selected Central and Eastern European Countries – Bulgaria and Romania, and compares their performance with Germany. The results showed that different processes drive company's decision to engage in R&D in Bulgaria and Romania in comparison to Germany; R&D intensity is an important factor of product innovation in the observed CEE countries and product innovation leads to higher productivity in Bulgaria and Romania, while process innovation leads to higher productivity in Bulgaria, but not in Romania.
    March 20, 2017   doi: 10.1111/ecot.12121   open full text
  • Accounting for failures to reform in the Arab world.
    Simon Commander.
    Economics of Transition / The Economics of Transition. March 07, 2017
    Arab regimes have struggled to reform effectively and, as a consequence, have continued to perform poorly in terms of output and employment growth. Some Arab autocracies have experimented with partial liberalization, yielding benefits mainly for connected parties or cronies. There has been a chronic inability to craft policies capable of commanding widespread support in the population. Instead, the main groups in the economy have coalesced around the preservation of rents at the cost of achieving wider benefits. The paper attributes this not only to a combination of lack of credibility as well as issues of time consistency, but also to the failure to develop and present a coherent case for reforms capable of conferring benefits on the wider population, rather than concentrated benefits for a few.
    March 07, 2017   doi: 10.1111/ecot.12120   open full text
  • Do city–county mergers in China promote local economic development?
    Wei Tang, Geoffrey J.D. Hewings.
    Economics of Transition / The Economics of Transition. February 24, 2017
    Municipal mergers have become a worldwide phenomenon in the past few decades, primarily advanced to exploit economies of scale. While most evaluations of municipal mergers have focused on the efficiency of local public goods provision, it is rare in the literature to explore how such mergers promote economic growth in a developing country context. This research investigates the economic consequences of a policy experiment of city–county mergers (che xian she qu) in China during the period 2000–2004. Using comprehensive datasets at city, county and firm levels, we present evidence that the merger significantly increases local economic development, and the magnitude of the effect depends on local endowments related to agglomeration forces. The results are robust to a number of different model specifications. We further verify that improved transport infrastructure and urban agglomeration economies after merger are potential contributors to the positive merger effects.
    February 24, 2017   doi: 10.1111/ecot.12118   open full text
  • Institutional quality and new firm survival.
    Yi Che, Yi Lu, Zhigang Tao.
    Economics of Transition / The Economics of Transition. February 21, 2017
    The existing literature on firm survival focuses almost exclusively on firm‐ and industry‐level determinants. What is generally overlooked, albeit extremely important for firm survival in developing countries, is the impact of institutional quality. Using data from manufacturing firms in China for the 1998–2005 period, we find that institutional quality has a significant and positive impact on the survival of private enterprises. Specifically, a one‐standard‐deviation increase in the security of property rights protection leads to an 8.8 percent decrease in the hazard rate of private enterprises. Our results are robust to the inclusion of control variables and to various checks.
    February 21, 2017   doi: 10.1111/ecot.12119   open full text
  • Entrepreneurship in the shadows.
    Semih Tumen.
    Economics of Transition / The Economics of Transition. December 26, 2016
    I develop a dynamic model of forward‐looking entrepreneurs, who decide whether to operate in the formal economy or informal economy and choose how much to invest in their businesses, taking government policy as given. The government has access to two policy tools: taxes on formal business activity and enforcement (or policing) discouraging informality. The main focus of the paper is on transitional dynamics under different initial wealth levels. Whether an initially small business will be trapped in the informal economy and remain small forever or grow quickly and become a large formal business depends on tax and enforcement policies. High tax rates accompanied by loose enforcement – which is mostly the case in less‐developed countries (LDCs) – induce tax avoidance, discourage investment in formal businesses, and drive the entrepreneurial activity towards the informal sector even though the initial wealth level is high. Lowering taxes on formal activity joined with strict enforcement can help reducing the magnitude of poverty traps in LDCs – such as the MENA region, Latin America and developing Asia.
    December 26, 2016   doi: 10.1111/ecot.12117   open full text
  • Human capital and life satisfaction in economic transition.
    Hannah C. Silver, Steven B. Caudill, Franklin G. Mixon.
    Economics of Transition / The Economics of Transition. December 26, 2016
    This study explores the life satisfaction of Egyptians – with a particular focus on the impact of higher education on happiness – both before and after that country's Arab Spring of 2011. Ordered logit results point to positive and significant relationships between life satisfaction and both perceived high incomes and the human capital variable, good health, for the pre‐ and post‐Arab Spring periods in Egypt, thus confirming prior studies of transition economies. For a second human capital variable – secondary education – the results indicate a positive and significant relationship with happiness in pre‐Arab Spring Egypt, while that relationship for post‐Arab Spring Egypt is negative and significant. This particular finding is probably the result of the failure of educated Egyptians to achieve a better life despite their investments in human capital – due to the lack of opportunity that accompanied the failure of the country's Arab Spring to change the political and social environment.
    December 26, 2016   doi: 10.1111/ecot.12116   open full text
  • Immigration policy index.
    Dmytro Vikhrov.
    Economics of Transition / The Economics of Transition. December 17, 2016
    The immigration policy index is based on three types of entry visa restrictions: visa required, visa not required for short stays and visa not required. I identify country pairs which changed their visa regime during 2000–2010 and find that the weakening of visa policy is associated with a 10 percent increase in migrant stocks and a significant shift towards male and less skilled migration from policy affected source countries. In contrast, the tightening of visa policy is not related to a significant change in migrant stocks, their gender or skill composition. The result suggests the existence of immigration policy hysteresis.
    December 17, 2016   doi: 10.1111/ecot.12115   open full text
  • Schumpeterian and semi‐endogenous productivity growth explanations.
    Johannes W. Fedderke, Yang Liu.
    Economics of Transition / The Economics of Transition. November 11, 2016
    This paper examines the nature and sources of productivity growth in South African manufacturing sectors, from an international comparative perspective. On panel data estimations, we find that the evidence tends to support Schumpeterian explanations of productivity growth for a panel of countries including both developed and developing countries, and a panel of South African manufacturing sectors. By contrast, semi‐endogenous productivity growth is supported for a panel of OECD (Organisation for Economic Cooperation and Development) manufacturing sectors. However, we also report evidence that suggests that sectors are not homogeneous. For this reason, time series evidence may be more reliable than panel data. Time series evidence for South Africa suggests that prospects for the sustained productivity growth associated with Schumpeterian innovation processes, is restricted to a narrow set of sectors. For the OECD manufacturing sectors, both semi‐endogenous and Schumpeterian growth finds support. Schumpeterian growth is present for a larger number of sectors than for South Africa, and is most prevalent in the North American economies.
    November 11, 2016   doi: 10.1111/ecot.12114   open full text
  • Fear of floating.
    Neven Valev.
    Economics of Transition / The Economics of Transition. November 02, 2016
    This paper uses unique household survey data to investigate the expected effects of a switch from a fixed exchange rate regime to a floating exchange rate regime in Bulgaria during the global financial crisis. The data show that the public associated such a switch with a contraction of output, higher prices, a decline in exports, and an overall deterioration of economic welfare. These expectations fuelled a strong opposition to removing the fixed exchange rate. Thus, the survey data allow us to investigate why a switch from a fixed exchange rate to a floating exchange rate did not take place.
    November 02, 2016   doi: 10.1111/ecot.12112   open full text
  • The minimum wage and the Lithuanian labour market.
    Algirdas Bartkus.
    Economics of Transition / The Economics of Transition. October 17, 2016
    This paper presents a comprehensive and non‐standard labour market analysis based on univariate and multivariate models for wages. The novelty of this paper lies in the use of non‐normalized cointegrating vectors for labour market analysis. Wages are the basis of labour market models, as well as the key factor for employees and employers; therefore, the central analytical axis is a classical wage bargaining process, where one side requires and the other side proposes a certain level of wages. Analysis is divided into two parts: foremost, a careful analysis of Lithuanian wages is conducted and a univariate model for the investigation of interactions between the minimum wage and the rest of the wages is proposed; only after the minimum wage model is drafted can the multivarate model for the whole economy be built up. Briefly, the methodology used in this article can be annotated as a synthesis of sequential theoretical and empirical considerations that combine the results of theoretical macroeconomics with data‐generating patterns and stylized facts. The model is considered as the final one only if macro‐theory preconditions, statistical prerequisites, and stylized real‐world requirements are met and fulfilled. In addition, this article gives an example and a quantitatively, as well as qualitatively, motivated suggestion as to how to incorporate minimum wages into econometric models and puts forward an explanation for why it is necessary to include minimum wage dynamics into labour market analysis. The article is nothing but an empirical case study that demonstrates how many minor details have to be taken into account until a realistic labour market model is built up. Although the paper deals with the labour market, the suitable application of time series methods is the main subject of the analysis.
    October 17, 2016   doi: 10.1111/ecot.12111   open full text
  • The impact of China's imports on European Union industrial employment.
    Martina Basarac Sertić, Anita Čeh Časni, Valentina Vučković.
    Economics of Transition / The Economics of Transition. October 06, 2016
    As the EU's biggest supplier of imported goods and a second trading partner, China has become an increasingly important actor on the global economic scene. This paper reports new evidence through analyzing whether the EU labour market is affected by exposure to imports from China. Drawing on a panel dataset of 27 EU countries, over the 2003–2013 period, and using the pooled mean group estimator, the results show that imports from China have a negative effect on industrial employment. This result holds separately for the all analyzed categories: all products, manufactured products as well as for the sub‐groups.
    October 06, 2016   doi: 10.1111/ecot.12113   open full text
  • Employment adjustment in the global crisis.
    Álmos Telegdy.
    Economics of Transition / The Economics of Transition. September 04, 2016
    This paper analyzes the employment adjustment of domestic, foreign and state‐owned companies before and during the global crisis. Using Hungarian firm‐level data for the period between 2006 and 2012 and matching foreign and state‐owned firms to domestic enterprises by industry and employment, it finds that the net job creation rate is similar in domestic and state‐owned firms while it is larger by 3.5 percent in foreign‐owned enterprises before the crisis. Domestic and foreign‐owned firms react to the crisis in very similar fashion by dropping net job creation by about 4 percentage points. Contrary to this behaviour, state‐owned enterprises do not decrease net job creation in some, and increase it by 3.5‐6 percent in other regressions.
    September 04, 2016   doi: 10.1111/ecot.12103   open full text
  • Trade credit use and competition in the value chain.
    Niels Hermes, Robert Lensink, Clemens Lutz, Uyen Nguyen Lam Thu.
    Economics of Transition / The Economics of Transition. August 20, 2016
    Trade credit is a major source of finance in value chains in developed and emerging economies. Despite its ubiquitous use, this is one of the first empirical studies that analyzes why the use of trade credit varies along the value chain. We argue that competition faced by firms at different stages in the value chain and enforcement mechanisms that stimulate repayment jointly determine the use of trade credit. We distinguish two dimensions of competition, that is, rivalry and customer bargaining power. Competition may stimulate firms to provide trade credit to keep customers from switching to other suppliers. Yet, high contract enforcement costs relative to the value of the transactions, reduce the willingness to offer trade credit. We find empirical evidence showing that competition does not (strongly) influence the use of trade credit in the retail market, whereas it does in the markets for wholesalers and millers. We interpret these results as suggestive evidence that the retail, wholesale and milling market segments differ in terms of the enforcement costs involved in the provision of trade credit. Rivalry at the retail market segment makes switching easy for customers, even in case of default. As enforcement of repayment in this market segment is difficult and costly, trade credit appears to be a risky and less attractive marketing instrument for retailers. In contrast, in the wholesale and milling market segment, trade credit is widespread as stakeholders know each other, making informal mechanisms effective in supporting the enforcement of trade credit repayment.
    August 20, 2016   doi: 10.1111/ecot.12106   open full text
  • Incentives and teacher effort.
    Hai‐Anh H. Dang, Elizabeth M. King.
    Economics of Transition / The Economics of Transition. July 27, 2016
    Few would contest that teachers are a very important determinant of how much students learn in school, and how to improve teacher performance has been the focus of lively policy debate in both rich and poor countries. This paper examines how teacher incentives, both pecuniary and non‐pecuniary, correlate with teacher effort. Using school survey data from Lao PDR, we estimate measures of teacher effort, including the number of hours that teachers spend preparing for classes and teacher provision of private tutoring outside of class hours, which are not the typical measures used in previous research. Estimation results fit well under the standard labour supply framework and indicate that greater teacher effort is associated with non‐pecuniary incentives such as more teacher autonomy over teaching materials and monitoring as measured by the existence of an active parent–teacher association and the ability of school principals to dismiss teachers. Methodologically, this paper provides a detailed derivation of a simultaneous OLS‐probit model with school random effects that can jointly estimate teacher work hours and tutoring provision.
    July 27, 2016   doi: 10.1111/ecot.12101   open full text
  • “I even met happy gypsies”.
    Laetitia Duval, François‐Charles Wolff.
    Economics of Transition / The Economics of Transition. July 22, 2016
    Economic studies of the Roma population, which is the largest and the poorest ethnic minority in Europe, remain sparse due to the limited availability of appropriate micro level data. This paper provides a comparative analysis of life satisfaction between Roma and non‐Roma young adults aged between 15 and 24 years using survey data collected from Serbia in 2010 and from Bosnia and Herzegovina in 2011. Results from raw answers show that the young Roma population living in settlements is less satisfied with life than non‐Roma. However, we find instead that the former group is more satisfied once we account for the fact that Roma have more disadvantaged characteristics on average. Also, Roma young adults expect a better life within one year compared to the non‐Roma in Serbia while there is no difference in Bosnia and Herzegovina.
    July 22, 2016   doi: 10.1111/ecot.12105   open full text
  • For some mothers more than others.
    Krzysztof Karbownik, Michał Myck.
    Economics of Transition / The Economics of Transition. July 18, 2016
    We estimate the effect of family size on female labour supply using data from Poland and instrumenting for family size with twinning at first and second birth. To the best of our knowledge, this is the first study to causally address this relationship in a post‐communist country. We identify the average causal effect of an additional child on mother's employment to be −7.0 pp, but we do not find significant effects of additional children on female employment among families with two or more children. Furthermore, we identify a positive bias of OLS in the estimates among highly educated mothers and those from younger cohorts.
    July 18, 2016   doi: 10.1111/ecot.12104   open full text
  • Individual wages and regional market potential.
    Andrzej Cieślik, Bartłomiej Rokicki.
    Economics of Transition / The Economics of Transition. July 07, 2016
    In this article, we study wage determinants in Poland by employing the augmented NEG wage equation that controls for individual worker characteristics. Our analysis is based on the Labor Force Survey (LFS) conducted by the Polish Central Statistical Office (CSO) for the period 1999–2009. Using annual data on about 10,000 Polish workers in 16 regions, we find that a significant fraction of inter‐individual wage differences can be explained by the geography of access to markets.
    July 07, 2016   doi: 10.1111/ecot.12102   open full text
  • Is high‐tech care in a middle‐income country worth it?
    Dzhamilya Nigmatulina, Charles Becker.
    Economics of Transition / The Economics of Transition. June 14, 2016
    How much does a dramatic increase in technology improve healthcare quality in an upper middle‐income country? Using rich vital statistics on infant health outcomes, this study evaluates the effect of introducing technologically advanced perinatal hospitals in 24 regions of Russia on infant mortality during the period 2009–2013. A 7‐year aggregate panel dataset reveals that opening a perinatal centre corresponds to infant mortality reduction by 3.8 percent from the baseline rate, neonatal (0–28 day) mortality by 7 percent and early neonatal (0–6 day) mortality by 7.3 percent. We find that the perinatal centres help to save 263 additional infant lives annually, ranging from 3 to 25 lives in regions with different birth rates. However, we further find that an average cost per life saved is 52 million rb (or 2.6 million 2014 PPP USD), which is much higher than the cost of similar interventions in the United States.
    June 14, 2016   doi: 10.1111/ecot.12098   open full text
  • Foreign banks, financial crises and macroeconomic fluctuations.
    Zeynep Önder, Süheyla Özyıldırım.
    Economics of Transition / The Economics of Transition. June 08, 2016
    Understanding the implications of increased foreign bank presence is especially compelling in periods of financial crisis. In this paper, we explore this issue by examining the relationship between the involvement of foreign banks in the banking systems and the volatility of key macroeconomic variables in normal and crisis periods. Using a sample of 20 Emerging European countries from 1998 to 2013, we find that an increase in the assets of foreign banks in the banking system reduces output and consumption growth volatility in general but does not significantly affect the volatility of investments. However, these banks were found to play a significant role in increasing output, consumption and investment volatility in 2009. Our findings suggest that foreign banks’ harmful impact during the global crisis was only temporary and that they seem to help Emerging European countries stabilize macroeconomic volatility in normal times and after the global crisis.
    June 08, 2016   doi: 10.1111/ecot.12096   open full text
  • Remittances during crises.
    Zsoka Koczan.
    Economics of Transition / The Economics of Transition. June 03, 2016
    This paper begins by examining the characteristics and determinants of remittances sent from Germany to ex‐Yugoslavia, and then takes a first look at how they were affected by the war and later political and economic crises in the first half of the 1990s. The findings tentatively suggest that the propensity to send among ex‐Yugoslavs increased in the early 1990s, despite a breakdown in formal remittance channels and in contrast with the roughly stable and even decreasing propensity to send among Turkish guest workers.
    June 03, 2016   doi: 10.1111/ecot.12099   open full text
  • Innovation, competition and productivity.
    Klaus Friesenbichler, Michael Peneder.
    Economics of Transition / The Economics of Transition. May 28, 2016
    We investigate the drivers of firm‐level productivity in catching‐up economies by jointly estimating its relationship to innovation and competition using data from the EBRD‐WB Business Environment and Enterprise Performance Survey (BEEPS) in Eastern Europe and Central Asia. The findings confirm an inverted‐U shaped impact of competition on R&D. Both competition and innovation have a simultaneous positive effect on labour productivity in terms of either sales or value added per employee, as does a high share of university graduates and foreign ownership. Further positive impacts come from firm size, exports or population density. Innovation and foreign ownership appear to be the strongest drivers of multifactor productivity.
    May 28, 2016   doi: 10.1111/ecot.12100   open full text
  • Attitudes about EU expansion and zero‐sum thinking.
    John E. Jackson, Bogdan W. Mach, Jennifer L. Miller‐Gonzalez.
    Economics of Transition / The Economics of Transition. May 28, 2016
    EU expansion can be seen as a positive‐sum process benefiting all countries by creating larger markets that stimulate more productive economies through increased specialization and economies of scale, implying that the general public in all countries should favour expansion. Contrarily, expansion can be perceived as zero‐sum. Capital and production relocate from higher to lower wage regions while labour does the opposite, possibly raising unemployment and reducing wages in the higher wage regions. The general public in these countries may come to oppose EU expansion attributing any deterioration in their work situation to the gains of new citizens of the European Union. Analysis of changes in Irish attitudes towards EU expansion in 2002, 2007 and 2009 finds no evidence of a link from lowered economic conditions to increased opposition to EU expansion. The only evidence for zero‐sum thinking is that diminished economic circumstances are associated with increased opposition to immigration, but this is not associated with increased opposition to further EU expansion.
    May 28, 2016   doi: 10.1111/ecot.12097   open full text
  • The impact of privatization on efficiency and profitability.
    Wendong Shi, Jingwei Sun.
    Economics of Transition / The Economics of Transition. March 30, 2016
    Over the past three decades, China has undergone tremendous economic and social change as a consequence of the transition from a centrally planned to a market economy. This paper examines a key feature of this transition – the privatization of the state‐owned enterprises (SOEs) – through both a theoretical model and empirical analysis. Using newly collected primary data from a variety of sources, we study how privatization of listed SOEs affects employment, wages, profits and other aspects of economic performance at the firm level. Our major finding is that privatization results in substantial downsizing of employment, increased labour productivity and rising profitability.
    March 30, 2016   doi: 10.1111/ecot.12094   open full text
  • The impact of sub‐national institutions.
    Carol S. Leonard, Zafar Nazarov, Elena S. Vakulenko.
    Economics of Transition / The Economics of Transition. March 24, 2016
    This paper assesses the effect of sub‐national institutions on the economic performance of Russia's regions (oblasts, republics, krais and okrugs) from 2001 to 2008, a period of rapid economic advancement and recentralization. Approximating sub‐national institutions with the RA Expert index of investment risk, we find that a reduction in investment risk by one standard deviation increases output by 1.4 percent in the short run and 11.9 percent in the long run, suggesting a substantial regional performance gap in government practices, despite intensive political recentralization. Assuming that the main components of effective governance are running satisfactory public health programmes aimed at decreasing overall mortality among the working‐age population, creating fair labour market conditions and improving the regional institutional climate to encourage investment in fixed assets, we argue that sub‐national institutions remain important for growth in post‐Soviet Russia after 2000. This paper contributes to the literature on institutional persistence.
    March 24, 2016   doi: 10.1111/ecot.12095   open full text
  • China's housing bubble burst?
    Tie‐Ying Liu, Hsu‐Ling Chang, Chi‐Wei Su, Xu‐Zhao Jiang.
    Economics of Transition / The Economics of Transition. March 04, 2016
    In this paper, we developed the recursive unit root tests to identify the beginning and end of potential speculative bubbles in the Chinese housing price cycles during 2006–2013 for the 70 major cities of China. The method is best suited for a practical implementation with a time series and delivers a consistent date‐stamping strategy for the origination and termination of multiple bubbles. Simulations demonstrate that the test significantly improves discriminatory power and leads to distinct power gains when multiple bubbles occur. Overall, the results indicate that the speculative housing price bubbles in China are not bursting, and they indicate that the stationarity of the housing price level varies across the different city sizes. Between the cities, approximately one‐fourth of the bubbles have burst up to December 2013, while the first‐tier city bubble may not burst due to the urbanization process.
    March 04, 2016   doi: 10.1111/ecot.12093   open full text
  • The drivers of foreign currency‐based banking in Central and Eastern Europe.
    Judit Temesvary.
    Economics of Transition / The Economics of Transition. February 11, 2016
    Foreign currency (FX)‐based loans and deposits became very popular in Central and Eastern European countries (CEECs) over the 2000–2011 period. In this paper, I simultaneously examine the demand‐side (consumer‐related) and supply‐side (bank‐related) determinants of the quick spread of FX banking. I use a newly constructed dataset on FX and domestic currency loans, deposits and interest rates, covering 16 CEECs overtime. Local‐FX interest rate and market share spreads are: (1) lower in managed currency regimes; (2) strongly affected by the prevalence of FX funding, currency mismatch and FX banking restrictions, and (3) wider after economic crises.
    February 11, 2016   doi: 10.1111/ecot.12089   open full text
  • Did rent deregulation alter tenure choice decisions in the Czech Republic?
    Ashot Tsharakyan, Petr Zemčík.
    Economics of Transition / The Economics of Transition. February 09, 2016
    Our study is the first that explicitly links rent deregulation and the choice between owning and renting (the tenure choice) using household decisions over a 1‐year period. The rent deregulation process in the Czech Republic started in 2006, two years after joining the European Union. By design, the maximum regulated rent appreciation depended explicitly on real estate prices, which accelerated the pace of deregulation due to rapidly rising prices at the time. A unique dataset enables us to track the tenure choice of households from consumption surveys for subsequent years. The proportion of households that switched from renting to owning sharply increased among renters of regulated apartments. We show that this change was caused by the deregulation process. In contrast, rent deregulation makes owners and renters paying market rent less likely to change ownership status.
    February 09, 2016   doi: 10.1111/ecot.12092   open full text
  • Learning from exporting in China.
    Cui Hu, Faqin Lin, Xiaosong Wang.
    Economics of Transition / The Economics of Transition. February 09, 2016
    Do exports increase the firm's productivity causally? Focusing on the matched information of highly disaggregated transaction and firm‐level data from 2000 to 2006 in China, we construct a new measure of firm‐specific demand shock as an instrument for firm exports, based on the GDP growth rate of destination countries. We find that a one percentage point expansion in exports raises firm total factor productivity (estimated by the Olley–Pakes method) by approximately 0.224 percentage points on average. Moreover, we find that exports to high‐income countries, more processing exports and scope expansion about variety contribute to the learning effect.
    February 09, 2016   doi: 10.1111/ecot.12091   open full text
  • Are children driving the gender wage gap?
    Ewa Cukrowska‐Torzewska, Anna Lovasz.
    Economics of Transition / The Economics of Transition. February 01, 2016
    We examine how much children and the responsibilities related to them contribute to the divergence of men's and women's wages, and consequently, to the formation of the gender wage gap. To derive the relative contribution of gender‐specific parent gaps to the overall gender wage gap, we provide a modification of the Oaxaca–Blinder decomposition and include simultaneous corrections for selection into employment and parenthood. The results show that the fatherhood wage premium contributes most significantly to the gender wage gap, especially in Poland. The motherhood penalty is also significant, while the role of the gender gap among childless individuals is small.
    February 01, 2016   doi: 10.1111/ecot.12090   open full text
  • The urban–rural divide.
    Chiara Binelli, Matthew Loveless.
    Economics of Transition / The Economics of Transition. January 04, 2016
    A vast literature has related perceptions of income inequality to individuals' income: the higher the level of income, the less inequality is perceived. Here, examining the perceptions of income and social inequality, we argue that rural or urban residence affects both inequality perceptions and the impact of income on these perceptions. We test the theory using survey data from 12 Central and Eastern European countries and we find that income negatively affects inequality perceptions but only in urban areas. These findings confirm the importance of accounting for urbanity to understand what drives individuals' perceptions of inequality.
    January 04, 2016   doi: 10.1111/ecot.12087   open full text
  • Migration, self‐selection and income distributions.
    C. Xing.
    Economics of Transition / The Economics of Transition. March 29, 2014
    Self‐selection in rural–urban migration is examined using three datasets from rural and urban China in 2002. We construct a migrant sample including both migrants who converted their hukou status from rural to urban (permanent migrants) and those who did not (temporary migrants). We find a strong positive selection for permanent migrants, but the selection for temporary migrants is ambiguous. We reach these conclusions by comparing migrants' counterfactual wage densities, assuming they are paid as rural local workers, to actual wage densities of rural local workers. Our results imply that permanent migration has negative effects on rural human capital accumulation and income levels.
    March 29, 2014   doi: 10.1111/ecot.12041   open full text
  • FDI into transition economies.
    S. Estrin, M. Uvalic.
    Economics of Transition / The Economics of Transition. March 14, 2014
    The article explores the determination of foreign direct investment (FDI) into the Balkan transition economies – Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Montenegro, Romania and Serbia. Detailed FDI inflows to Southeast Europe are analysed to determine the main differences in the volume, timing and sectoral structure of FDI within the region and in comparison to the Central East European countries. A gravity model for all transition economies during 1990–2011 is then estimated to assess whether the factors driving FDI to the Western Balkans are different. They are found to be so; even when the size of their economies, distance from the source economies, institutional quality and prospects of EU membership are taken into account, Western Balkans countries receive less FDI than other transition countries. These issues are of policy relevance for the Balkan economies and ought to contribute to the current debate on the ‘new growth model’.
    March 14, 2014   doi: 10.1111/ecot.12040   open full text
  • Beyond Dutch disease.
    Erik Marel, Iana Dreyer.
    Economics of Transition / The Economics of Transition. February 28, 2014
    How does the deterioration of rule of law in Russia in recent years affect its ability to move away from an export pattern dominated by natural resources? We investigate this question using three datasets for Russia's bilateral trade relations for goods, services and investment at disaggregated level with its partner countries over the world. Our empirical analysis shows that the deterioration of the rule of law in Russia since 2003 has affected the long‐run trade performance of Russia in sophisticated and technology‐intensive manufactured goods, as well as its inward investments with advanced economies. It is precisely this type of trade that Russia should nurture to diversify away from hydrocarbons export dependence. Our statistical analysis also shows that Russia remains to a large extent an outlier within the multilateral trading system. It exports disproportionately less to partner countries which are or had become members of the WTO over our period of analysis. Russia's trade appears to have been negatively affected by the accession of these countries to the WTO. Russia itself finally acceded to the WTO in July 2012 amidst signs of a modest improvement of its rule‐of‐law indicators.
    February 28, 2014   doi: 10.1111/ecot.12039   open full text
  • The Vietnam reforms, change in wage inequality and the role of the minimum wage.
    Chris Sakellariou, Zheng Fang.
    Economics of Transition / The Economics of Transition. January 22, 2014
    The Vietnam ‘renovation’ reforms were implemented during the 1990s, but their full effect was only felt several years later. We present evidence on the developments in real wage growth and inequality in Vietnam from 1998 to 2008. Using a variety of approaches (traditional measures of inequality, comparison of density functions, decomposition of the change in real wage by sector as well as a detailed decomposition of the change in the Gini), we present a consistent picture: contrary to what one might have expected given the nature of the reforms, inequality declined sharply in the private sector (but not in the state sector). This study links these developments to the policy of aggressively increasing the minimum wage over the past several years, differences in implementation by sector as well as variation in the over‐time changes in minimum wage.
    January 22, 2014   doi: 10.1111/ecot.12037   open full text
  • The impact of private vs. public ownership on the level and structure of employment.
    Paulo Bastos, Natália P. Monteiro, Odd Rune Straume.
    Economics of Transition / The Economics of Transition. January 22, 2014
    We examine the effects of private vs. public ownership on the level and structure of employment using uncommonly rich data on the population of Portuguese firms from 1991 to 2009. We find that private ownership is associated with sizeable job losses. This occurs whether we consider privatizations or nationalizations, and the relationship tends to be stronger in the presence of foreign capital. We also find some evidence that private ownership is associated with higher skill utilization, particularly following privatizations and when foreign investment is present. The estimated job losses associated with private ownership are consistent with a theory in which the shift in ownership increases the degree of profit orientation and leads to lower job security.
    January 22, 2014   doi: 10.1111/ecot.12038   open full text
  • Does democratization spur growth?
    Andreas Assiotis, Kevin Sylwester.
    Economics of Transition / The Economics of Transition. January 06, 2014
    Many studies have considered how democratization affects economic growth. We expand this work by allowing short‐ and long‐run effects of democracy upon growth to differ since effects during political transitions need not coincide with those under established democracies. We also allow these short‐ and long‐run effects to differ across world regions since history, demography and geography vary across regions. Using annual, cross‐county data from 1960 to 2010, we find that democratizations increased growth rates in sub‐Saharan Africa both in the short run and in the long run but lowered them in Europe. Effects in other regions appear less strong. Our results suggest that democracy could be most beneficial for growth in poorer, less stable regions. We also do not find any evidence of a transitional cost. Stronger evidence arises that these effects come from rising productivity rather than through greater investment. Finally, some support though mixed suggests that democracy's ability to mitigate the effects of ethnic heterogeneity provides a partial explanation for the cross‐regional heterogeneity.
    January 06, 2014   doi: 10.1111/ecot.12036   open full text
  • Clustering of cultural industries in Chinese cities.
    Kwan Wai Ko, Kin Wai Patrick Mok.
    Economics of Transition / The Economics of Transition. November 04, 2013
    This study is the first empirical research on understanding the determinants of the concentration of cultural industries (CIs) in cities in China. What factors of the urban environment are important for attracting the location of CIs? How is the development of CIs in a city influenced by its neighbouring cities and its early development? To answer these questions, three types of spatial panel models – the spatial lag model, the spatial error model and the spatial dynamic panel model – are employed using the urban statistics for China from 2003 to 2009. Human capital, diversified industrial structure and transportation and communication infrastructure are significant factors contributing to the development of CIs. The empirical findings reveal the presence of positive spatial spillovers among cities, which suggests that promoting CIs in one city benefits other cities. Also, the evidence suggests the presence of temporal spillovers, implying that the early concentration of CIs in a city tends to attract more CIs in that city.
    November 04, 2013   doi: 10.1111/ecot.12031   open full text
  • The impact of minimum wages on employment of low‐wage workers.
    Cuong Viet Nguyen.
    Economics of Transition / The Economics of Transition. June 20, 2013
    This study provides empirical evidence on the impact of a minimum wage increase on employment of workers in the formal sector who have wages below the minimum level in Vietnam. Using the difference‐in‐differences with propensity score matching and the Vietnam Household Living Standard Surveys of 2004 and 2006, the article finds that the minimum wage increase in 2005 reduced the proportion of workers having a formal sector job among low‐wage workers. Most workers who lost formal sector jobs became self‐employed.
    June 20, 2013   doi: 10.1111/ecot.12022   open full text
  • A model of Chinese central government.
    Mario Gilli, Yuan Li.
    Economics of Transition / The Economics of Transition. June 14, 2013
    Why was the Chinese State able to promote economic growth during the reform era, yet has been unable to do so over the previous 30 years? In this article, we focus on a specific aspect of the question, which will contribute to the development of a more comprehensive explanation: the specific institutional arrangement that may induce the autocratic government to adopt growth‐enhancing policies. We consider a standard political‐agency model (Besley, 2006) where the incumbent leader may or may not be congruent, and where, to maintain power, both leader types need the support of the selectorate, an elite group having a say in selecting the leader, as well as associated access to special privileges. Primarily, we find that in autocracies, without electoral discipline to restrain the opportunistic behaviour of a leader, the size of the selectorate should be intermediate; if it is too small, the selectorate is captured by the leader and has no disciplinary role, but if too big, the leader's incentives are diluted.
    June 14, 2013   doi: 10.1111/ecot.12021   open full text
  • Shocks and rigidities as determinants of CEE labour markets’ performance.
    Maciej Bukowski, Grzegorz Koloch, Piotr Lewandowski.
    Economics of Transition / The Economics of Transition. June 03, 2013
    In this article, the impact of real wage, productivity, labour demand and supply shocks on eight Central and Eastern European (CEE) economies from 1996–2007 is analysed with a panel structural vector error correction model. A set of long‐run restrictions derived from the dynamic stochastic general equilibrium (DSGE) model is used to identify structural shocks, and fluctuations in foreign demand are controlled for. We find that the propagation of shocks on CEE labour markets resembles that found for OECD countries. Labour demand shocks emerge as the main determinant of employment and unemployment variability in the short‐to‐medium run, but wage rigidities were equally important for observed labour market performance, especially in Poland, Czech Republic and Lithuania. We associate these rigidities with collective bargaining, minimum wage, active labour market policies and employment protection legislation.
    June 03, 2013   doi: 10.1111/ecot.12017   open full text
  • Reforming corporate law in an emerging market.
    Timo Korkeamäki, Elina Rainio, Tuomas Takalo.
    Economics of Transition / The Economics of Transition. May 29, 2013
    A sweeping and protracted reform of corporate law took place in Finland in the 1970s. We document how the reform brought significant improvements to investor protection and tightened disclosure rules at the cost of increasing the workload in corporate reporting. To study the economic consequences of the reform we develop a simple coordination game where the effects of investor protection on corporate valuation vary with equilibria. Then, using firm‐level daily stock return data, we find that the Finnish stock market generally reacts negatively to news of increased investor protection and workload, whereas news of delays in implementation of reform generate largely positive market responses. These results raise the question of whether stronger investor protection and greater transparency unambiguously promote development of stock markets.
    May 29, 2013   doi: 10.1111/ecot.12020   open full text
  • The determinants of cross‐border bank flows to emerging markets.
    Sabine Herrmann, Dubravko Mihaljek.
    Economics of Transition / The Economics of Transition. May 29, 2013
    This paper studies the determinants of cross‐border bank lending on a panel dataset comprising 17 advanced and 28 emerging market economies from 1993 to 2008. The empirical framework is based on a gravity model of financial flows. Our main findings are that the decrease in cross‐border lending in the 2007–2008 crisis was mostly due to global rather than country‐specific risk factors, and that central and eastern Europe was less affected by this decrease than other emerging market regions because of its stronger financial and monetary ties with creditor countries, and its relatively sound banking systems. These results are fairly robust to several different specifications, sub‐samples and econometric methodologies.
    May 29, 2013   doi: 10.1111/ecot.12019   open full text
  • Growth in transition countries.
    Roberto Dell'Anno, Stefania Villa.
    Economics of Transition / The Economics of Transition. May 14, 2013
    This study analyzes the impact of the speed of transition reforms on economic growth in transition countries in the context of the debate on ‘big‐bang vs. gradualist approach’. It builds a new indicator for the speed of transition reforms based on a three‐way principal component analysis. It shows that: (i) the speed of transition reforms Granger‐causes economic growth and there is no reverse causation; (ii) the impact of contemporaneous speed of transition reforms on economic growth is negative, but becomes positive in the longer horizon; and (iii) other factors, such as initial conditions and macroeconomic stabilization programmes, also drive economic growth. Although the first two results are robust to different estimators, the impact of control variables depends on the econometric specification.
    May 14, 2013   doi: 10.1111/ecot.12018   open full text
  • Testing creative destruction in an opening economy.
    Philippe Aghion, Johannes Fedderke, Peter Howitt, Nicola Viegi.
    Economics of Transition / The Economics of Transition. April 05, 2013
    This paper analyses the relationship between trade liberalization and economic growth using a Schumpeterian framework of technological innovation and applies it to sector‐level South African data. The framework examines direct and indirect effects of trade liberalization on productivity growth. Indirect impacts operate through a differential impact of trade liberalization on firms conditional on their distance from the international technological frontier. Results confirm positive direct impacts of trade liberalization. Results confirm also that the greatest positive impact of trade liberalization will be on sectors that are close to the international technological frontier and that experienced a low level of product market competition before liberalization.
    April 05, 2013   doi: 10.1111/ecot.12015   open full text