Showing papers in "Post-communist Economies in 2015"
TL;DR: In this article, the authors investigated both community and household determinants of poverty among ethnic minorities in the Northwest region of Vietnam and found that fixed assets, education and off-farm employment, among other household factors, have a strongly reducing effect on both the intensity and incidence of poverty.
Abstract: This article is the first to investigate both community and household determinants of poverty among ethnic minorities in the Northwest region of Vietnam. Results of a fractional logit and a logit model show that fixed assets, education and off-farm employment, among other household factors, have a strongly reducing effect on both the intensity and incidence of poverty. Furthermore, some commune characteristics were found to be closely linked to poverty. Notably, the presence of means of transport and post offices significantly reduces both poverty intensity and incidence. However, other commune and household factors affect only poverty incidence or intensity but not both. Hence, a typical approach using a logit/probit model that only examined the determinants of poverty incidence did not adequately evaluate or even ignored important impacts of some factors on poverty intensity. We draw both socio-economic household and commune level implications for poverty alleviation in the study area.
36 citations
TL;DR: In this article, the authors analyse financial and ownership data of 13,603 companies operating in the Czech Republic, including multinational corporations (4124), some of which have links to tax havens (528), and present empirical evidence suggesting that the effect of the multinational corporations' links with tax havens on the debt ratio of companies in Czech Republic is positive.
Abstract: This article contributes to the growing systematic evidence of corporate tax base erosion and profit shifting out of most countries into other countries, including tax havens, by analysing the situation in one of the post-communist economies. We analyse financial and ownership data of 13,603 companies operating in the Czech Republic, including multinational corporations (4124), some of which have links to tax havens (528). We present empirical evidence suggesting that the effect of the multinational corporations’ links with tax havens on the debt ratio of companies in the Czech Republic is positive. The evidence on profits and taxes is not so conclusive. We provide policy implications and conclude with questions for further research.
33 citations
TL;DR: Wang et al. as discussed by the authors showed that Chinese investors are attracted to countries with large market size, rich resources and strategic assets, and demand a sound legal system but avoid countries with the best rule of law.
Abstract: Using recent Chinese data on outward foreign direct investment (OFDI) (2003–11), this study shows that Chinese OFDI has expanded in both distant developing and developed countries. Statistical analysis suggests that Chinese investors are attracted to countries with large market size, rich resources and strategic assets, and demand a sound legal system but avoid countries with the best rule of law. Chinese investors do not directly respond to political risk and corruption. However, they favour politically stable locations when seeking markets and care about political stability and corruption control when seeking resources. Institutional factors play a more significant role in the investment decision making prior to the actual investments, but the moderating role of institutions is influential for the actual investments. Chinese investors are more likely to seek markets and resources in developing countries, with careful evaluation of institutional quality.
29 citations
TL;DR: In a 2013 special Eurobarometer survey conducted in 11 Central and Eastern European countries using multilevel mixed-effects logistic regression analysis, the finding is that although some marginalised populations (e.g., the unemployed, those having difficulties paying their household bills, younger age groups) are significantly more likely to participate in the informal economy, others are not as mentioned in this paper.
Abstract: To evaluate the ‘marginalisation thesis’, which holds that marginalised populations are more likely to participate in the informal economy, this article reports a 2013 special Eurobarometer survey conducted in 11 Central and Eastern European countries Using multilevel mixed-effects logistic regression analysis, the finding is that although some marginalised populations (ie the unemployed, those having difficulties paying their household bills, younger age groups) are significantly more likely to participate in the informal economy, others are not (eg those in poorer countries, living in rural areas, with less formal education) Yet others (eg women) are significantly less likely to participate in the informal economy The outcome is a call for a more nuanced understanding of the marginalisation thesis as valid for some marginalised populations but not others The article concludes by discussing the implications for theory and policy of this more variegated assessment of the marginalisation thesis
21 citations
TL;DR: In this article, the authors investigated price and quality competitiveness and comparative advantage in the new and old European Union member states' agri-food trade on the global market between 2000 and 2011.
Abstract: This article investigates price and quality competitiveness and comparative advantage in the new and old European Union member states' agri-food trade on the global market between 2000 and 2011. The empirical results show that the new and old member states have become more similar in successful agri-food competitiveness and comparative advantages. The shares of successful price and successful quality competition were greater in the structure of the two-way matched agri-food trade than the shares of unsuccessful price and unsuccessful quality competition. Only the one-way export share or the one-way import share was less important in their agri-food trade structures. Successful price competition and successful quality competition were consistent with revealed comparative advantage as confirmed by the duration analysis.
20 citations
TL;DR: In this paper, the authors proposed to improve the description of the middle class using an innovative approach combining an economic approach (based on income) and a sociological approach based on education and occupation.
Abstract: This article aims to identify and characterise the Chinese urban middle class. We propose to improve the description of the middle class using an innovative approach combining an economic approach (based on income) and a sociological approach (based on education and occupation). The empirical investigations conducted as part of this research are based on the China Health and Nutrition Survey (2009). First, we define the middle income class as households with an annual per capita income between 10,000 yuan and the 95th percentile. On this basis, approximately 50% of urban households may be said to belong to the middle class. Second, we use information on employment and education to characterise the heterogeneity of the middle income class. Using clustering methods, we identify four groups: (i) the elderly and the inactive middle class, mainly composed of pensioners; (ii) the old middle class, composed of self-employed workers; (iii) the marginal middle class, composed of skilled and unskilled workers; and ...
19 citations
TL;DR: In this paper, the authors investigated the growth trajectories of farms affiliated to agro-holdings vis-a-vis independent farms by applying a quantile regression approach and found that any advantages of affiliated farms appear to be due to extramural factors; i.e., it is all about how to link in.
Abstract: The transition process did not affect the organisation of agricultural production as originally anticipated. Since the late 1990s, in Russia and some other CIS countries, numerous large-scale agro-holdings emerged which agglomerated multiple farms, entities of the upstream and downstream sectors of agribusiness, as well as non-agricultural industries. Owing to the common practice of registering such affiliated farms/firms as independent business units, data on agro-holdings' aggregate group performance are extremely scarce. It is therefore difficult to capture their emergence, determinants of growth and developmental prospects.This study is based on a unique panel dataset from Moscow and Belgorod regions. The growth trajectories of farms affiliated to agro-holdings vis-a-vis independent farms were investigated by applying a quantile regression approach. Overall, only minor differences were found. Any advantages of affiliated farms appear to be due to extramural factors; i.e. it is all about how to link in...
18 citations
TL;DR: The recent experience of the Agency for Strategic Initiatives (ASI) in Russia provides a valuable example of establishing a new government agency to advance economic deregulation in an environment where the political appetite for reform is limited.
Abstract: This article addresses sustainable institutional arrangements to support economy-wide improvements in the investment climate in the context of a middle-income economy. The recent experience of the Agency for Strategic Initiatives (ASI) in Russia provides a valuable example of establishing a new government agency to advance economic deregulation in an environment where the political appetite for reform is limited. In our view, ASI has been the most successful institutional innovation to emerge in Russia since the 2008–09 financial crisis. Rather than engage in the traditional tussle over budget funds and benefits, ASI's mandate has been to organise a strategic dialogue with the private sector and build consensus within the government. We consider ASI's institutional set-up in light of the good practice principles adopted under Russia's ‘new industrial policy’. Our findings suggest other middle-income economies may find ASI's experience applicable when designing institutions to support a deregulation reform...
17 citations
TL;DR: In this article, the authors examine the experience of the 10 Central and Eastern European countries which joined the EU in 2004 and 2007 (CEE-10) and ask how austerity influenced growth in the region.
Abstract: Within the context of international debates on fiscal consolidation this article examines the experience of the 10 Central and Eastern European countries which joined the EU in 2004 and 2007 (CEE-10) and asks how austerity influenced growth in the region. By looking at the composition of adjustment, the analysis confirms the pre-crisis consensus – from the perspective of economic growth and competitiveness, expenditure-based consolidations are superior to consolidations which are based on raising revenue. The mechanisms behind this outcome are examined by comparing the fiscal consolidations in Latvia and Hungary, which represent two different approaches to fiscal consolidation. While Latvia followed the textbook approach, Hungary aimed to save households from the burden of adjustment and stimulate the economy. Although both achieved substantial improvements in their fiscal balance, competitive gains and dynamic growth appeared only in the case of Latvia. In explaining this outcome, the article emphasises ...
16 citations
TL;DR: In this paper, the authors identify and explain the reasons for Hitrorez's failure and reflect on the influence of path dependence on reform implementation in a fresh capitalist state, and provide a transitional society perspective on the duration of reforms, their reversal, and the primacy of personal ties and interests over organisational forms and norms.
Abstract: Hitrorez was an initiative that was supposed to significantly reduce the regulatory burden and improve the business climate. Yet, despite all the institutional and policy transfer lessons applied, this large-scale reform attempt finished abruptly. This article seeks to identify and explain the reasons for its failure and reflect on the influence of path dependence on reform implementation in a fresh capitalist state. Moreover, it provides a transitional society perspective on the duration of reforms, their (ir)‐reversibility and the primacy of personal ties and interests over organisational forms and norms. It confirms the persistence and the lack of ‘ability to fight against’ deeply embedded informal constraints in a post-socialist socio-economic system.
16 citations
TL;DR: In this article, the authors look at the rise and fall of outward foreign direct investment (OFDI) by Russian steel companies and determine what drove the expansion and what might be the implications of the retrenchment.
Abstract: In this article we look at the rise and fall of outward foreign direct investment (OFDI) by Russian steel companies – a big expansion abroad from the mid-2000s and a major retrenchment since the end of the decade. We try to determine what drove the expansion and what might be the implications of the retrenchment. We look at the commercial motivations that are the staples of the general OFDI literature but also, given the peculiar if not unique features of Russian business and state, we consider political explanations – whether business invests abroad in order to escape a predatory state or alternatively to serve the foreign policy objectives of the state. We also consider ‘psychological’ explanations, specifically the possible ‘irrational’ if not ‘irresponsible exuberance’ of hard-driving Russian oligarchs. It is expected that the discussion will allow some significant, albeit tentative, conclusions on Russian big business and its place in the global economy.The article is structured as follows: an outlin...
TL;DR: In this paper, the authors investigated the determinants of Mongolian export demand and supply using a panel data set covering 1995-2012 for the mining, manufacturing and primary sectors, and found that higher world income, higher prices for Mongolian exports and increased FDI inflows have led to improved export performance in Mongolia.
Abstract: The exposure of the Mongolian economy to international trade in the early 1990s has led to its export growth exceeding GDP growth and a dramatic increase in inflows of foreign direct investment (FDI). Although FDI can act as a powerful channel for export expansion in a developing country like Mongolia, improved export performance could also be due to other factors, such as movements in prices, competitive exchange rates and world income. In spite of Mongolia's superior export performance, as yet, no study has been conducted to investigate the determinants of Mongolian export demand and supply. Using a panel data set covering 1995–2012 for the mining, manufacturing and primary sectors, we analyse the determinants of export performance. Empirical results suggest that higher world income, higher prices for Mongolian exports and increased FDI inflows have led to improved export performance in Mongolia. There is no statistical evidence to suggest that trade liberalisation and improved provision of basic infras...
TL;DR: In this article, the authors investigate whether a parallel process of tertiarisation has been taking place in the Visegrad Four (V4) countries (Poland, Hungary, Czech Republic and Slovakia).
Abstract: After several decades of planned economy and manufacturing-oriented economic policy, during the last 20 years the Visegrad Four (V4) countries (Poland, Hungary, the Czech Republic and Slovakia) have been experiencing a shift towards a market economy combined with intensification of services activity. This has resulted in increasing participation in international services trade and in becoming an important destination for services foreign direct investment. In addition to analysis of the changes services trade has been experiencing in the V4 countries, the objective of this article is to investigate whether a parallel process of tertiarisation has been taking place. In other words, we aim to find out whether the V4 production systems have been intensifying the employment of services intermediate inputs.
TL;DR: In this article, the authors investigated the effect of corruption on the aggregate price level in 32 European countries and found that corruption in emerging economies also increases the general price level, thus in turn affecting the overall cost of living.
Abstract: We use panel data models on a dataset covering 32 European countries in order to investigate the effect of corruption on the aggregate price level. Along with modeling the overall price level, we also separately model the price levels of consumer goods and consumer services, controlling for other factors that commonly influence the price level in an economy, such as income, trade openness, fiscal dominance, the intensity of local market competition and real money supply. Our results suggest that, in addition to already established adverse economic outcomes of corruption (such as lower growth, an inefficient public sector, underinvestment and increased cost of doing business), corruption in emerging economies also increases the general price level, thus in turn affecting the overall cost of living. This effect of corruption is twice as strong for consumer services as for consumer goods. Unlike in emerging countries, in developed countries corruption does not seem to affect price level determination.
TL;DR: In this paper, the authors provided a micro-analysis of land market development after two decades of Albanian transition using data from a survey conducted in four Albanian villages during May 2013 and found that land markets are highly rigid with almost no structural changes occurring over the last two decades.
Abstract: This article provides a micro-analysis of land market development after two decades of Albanian transition. We use data from a survey conducted in four Albanian villages during May 2013. The results indicate that land markets are highly rigid with almost no structural changes occurring over the last two decades. Sale markets are almost non-existent owing to formal and informal regulations and prevalence of subsistence farming in rural Albania. The status quo established by the 1991 land reform determines the present ownership structure. Rental markets are more sizable but, owing to property rights insecurity and monitoring problems of absentee landowners, the vast majority of rental arrangements are between family relatives.
TL;DR: In this paper, the effects of increasing the statutory pension age on pension take-up and on employment before and after pension takeup in Estonia in 2002-11 were investigated. And the results reveal a relatively successful adjustment to the increase in pension age.
Abstract: This article looks into the effects of increasing the statutory pension age on pension take-up and on employment before and after pension take-up in Estonia in 2002–11. We use individual-level administrative data from the pension register of the Estonian National Social Insurance Board and a set of analytical indicators to capture the pension take-up and employment exit processes. The results reveal a relatively successful adjustment to the increase in pension age. The age gap between take-up of normal and early retirement (old-age) pension has not widened and the increase in the statutory pension age has moved exit from employment proportionally towards a later age. At the same time, a marked increase in the take-up of incapacity pensions, accelerated during the economic recession, has significantly reduced the overall effect of pension age reform.
TL;DR: In this article, the effects of partial state ownership of private sector enterprises (PSEs) on firm performance were investigated in terms of easier access to resources such as credit and industries to which entry is restricted by formal barriers.
Abstract: This article highlights a certain dimension of political connection, namely partial state ownership in private sector enterprises (PSEs). Using a dataset of publically listed PSEs in China, we empirically investigate the effects of partial state ownership of PSEs upon firm performance. We demonstrate channels through which the benefits of partial state ownership are realised in terms of easier access to resources such as credit and industries to which entry is restricted by formal barriers, which ultimately increases the performance of firms. We also find some evidence that political participation of private sector entrepreneurs, another dimension of political connection, becomes less valuable when partial state ownership of PSEs is present.
TL;DR: In this article, the authors examine the reasons behind the remarkable export performance of transition economies in the last two decades and decompose export performance into the gains due to the advantageous access to foreign markets and export gains on the basis of internal supply capacity.
Abstract: This article examines the reasons behind the remarkable export performance of transition economies in the last two decades. Following Redding and Venables and Fugazza, we decompose export performance into the gains due to the advantageous access to foreign markets and export gains on the basis of internal supply capacity. We find that size of the economy, inward FDI penetration, most notably in the manufacturing sector, export unit values, denoting the structural changes of CEECs' exports, and the quality of institutions and infrastructure had a significant positive impact on exporting countries' supply capacity, while productivity had a negative impact. The latter is mostly due to unfavourable trends in ULC since EU accession. Unlike in EU-15 and BRIC countries, internal supply capacity is becoming decreasingly important as a basis of CEECs' export performance. At the same time, trends in cost competitiveness are worsening relative to competing countries, while benefits of EU accession have been mostly e...
TL;DR: In this paper, the authors examined the characteristics of organisational structures in Central and Eastern Europe using the example of Estonia and observed that the formalization level of the structures as a subject of path-dependent developments is observed.
Abstract: This study examines the characteristics of organisational structures in Central and Eastern Europe using the example of Estonia. In particular, the formalisation level of the structures as a subject of path-dependent developments is observed. Quantitative and qualitative research methods are combined for the empirical evidence and data from three different sources are employed: the European Social Survey, the survey of Estonian managers and interviews with managers from Estonian software companies. The authors show that the communist past still affects organisational life today. The path this past created affects the organisational structures in the present in two ways: first, a kind of structural inertia can be observed, where the Soviet style of management with its high formalisation is still present today and limits employees' freedom to deal with their work. Second, an opposite trend can be revealed for the other actors in the same game, the managers, as another kind of path dependency exists – a proc...
TL;DR: In 2001, the Tax Department replaced a three-band progressive tax schedule with a flat personal income tax rate of 13%. as mentioned in this paper evaluated the employment response to the flat income tax using the data from the Russia Longitudinal Monitoring Survey.
Abstract: In 2001 Russia's Tax Department replaced a three-band progressive tax schedule with a flat personal income tax rate of 13%. This article evaluates the employment response to the flat income tax using the data from the Russia Longitudinal Monitoring Survey. With these data, employment can be classified along two dimensions: primary vs. secondary and official vs. unofficial. This article finds that individuals respond to lower taxes by devoting less time to secondary employment. Official and unofficial employment, on the other hand, remain unaffected by the flattening of the tax schedule. These results are robust to various specifications.
TL;DR: In this paper, the conduct of monetary policy in some new member states of the EU and some EU candidates over the period 2000-13 was analyzed and it was shown that monetary policy has been ineffective in insulating domestic liquidity from capital inflows and why some countries from emerging Europe have been especially constrained in responding to the crisis.
Abstract: We analyse the conduct of monetary policy in some new member states of the EU and some EU candidates over the period 2000–13. We investigate why monetary policy has been ineffective in insulating domestic liquidity from capital inflows and why some countries from emerging Europe have been especially constrained in responding to the crisis. Our contribution is threefold. First, we show that countries with fixed exchange rate regimes have encountered significant obstacles to conducting monetary policy to cope with large capital inflows and credit booms during the period preceding the financial crisis. Second, we illuminate how pegged countries have been more constrained in responding to the global financial crisis than non-pegged economies. Third, countries with high currency mismatch and financial vulnerabilities seem unable to adopt monetary policy dedicated only to macroeconomic stabilisation.
TL;DR: In this article, the authors employed a new database containing the accounting data from 108 Serbian-listed companies to document the peculiarity of the relationship between liquidity and capital structure characteristics during the crisis period (from 2008 to 2011).
Abstract: This article employs a new database containing the accounting data from 108 Serbian-listed companies to document the peculiarity of the relationship between liquidity and capital structure characteristics during the crisis period (from 2008 to 2011). We find a significant negative impact of the quick ratio, the cash gap and the revenue quality on leverage and a positive and statistically significant impact of the free cash flow variable and its volatility on leverage. The main finding of this research, relevant to both firm managers and policy makers, is that during the crisis period companies transferred a significant part of the financing burden to their suppliers. Since suppliers are exposed to similar problems during a crisis, the problem of liquidity spirals and the risk of bankruptcy threatens both individual companies and the whole economy.
TL;DR: In this article, the impact of labour tax cuts through a reduction in social security contributions on the employment rate for workers of different skill types was analyzed and the results indicated that it could be more effective to focus on selective tax reductions instead of applying across the board tax cuts.
Abstract: During the years preceding the current crisis Serbia had relatively high GDP growth rates. It seems, however, that these growth rates did not have much impact on the employment growth rate, which has been rather low and even negative since 2000. Given that there is quite a high tax wedge in the country, we analyse the impact of labour tax cuts through a reduction in social security contributions on the employment rate for workers of different skill types. Results show that tax shifting is higher, that is, wages will increase more as a result of reduced social contributions for high-skilled than for low-skilled workers. From a policy perspective our results indicate that it could be more effective to focus on selective tax reductions instead of applying across-the-board tax cuts.
TL;DR: In this paper, the authors examined the economic impact of Croatian accession to the EU and found that agricultural transfer payments were a key component of the accession deal, whilst a 'deep integration' scenario yields significant Croatian real income gains.
Abstract: Over the last 25 years Croatia's transition from a war-torn region of the former Yugoslavia to a fully independent nation has left a lasting mark. In 2013 Croatia took another step toward peace and stability by becoming the 28th member of the European Union (EU). Employing a quantitative framework to examine the economic impact of Croatian accession, results show that agricultural transfer payments are a key component of the accession deal, whilst a ‘deep integration’ scenario yields significant Croatian real income gains. Finally, comparing EU market access via tariff and non-tariff shocks, in Croatian agro-food sectors the former has a greater impact on output.
TL;DR: In this article, the authors draw on the surveys of the European Values Study of 1991, 1999 and 2008 to describe the trends in life satisfaction in 13 Western and 11 Eastern countries and find that life satisfaction levels in transition countries have come to approach those in the West: the ‘rather unhappy’ 1990s were followed by the "rather happy" 2000s.
Abstract: This article contributes to the debate about the impact of the transition on subjective well-being. After reviewing the relevant literature the authors draw on the surveys of the European Values Study of 1991, 1999 and 2008 to describe the trends in life satisfaction in 13 Western and 11 Eastern countries. The analysis finds that life satisfaction levels in transition countries have come to approach those in the West: the ‘rather unhappy’ 1990s were followed by the ‘rather happy’ 2000s. The strengthening correlation between life satisfaction and GDP reflects this process of convergence. The characteristics of respondents, however, are more important than the national GDP, and a regression of life satisfaction with basic demographic and stratification variables shows their reinforcing effect, especially in Eastern countries. The findings of other surveys reporting on developments of attitudes since 2008 vary but are far from proving a uniform negative impact of economic recession on life satisfaction.
TL;DR: In this paper, the determinants of impaired loans in the Ukrainian banking sector using bank balance sheet data at the micro level were investigated using dynamic panel regression methods on a unique dataset of Ukrainian banks with quarterly frequency from 2005 to 2013.
Abstract: This article investigates the determinants of impaired loans in the Ukrainian banking sector using bank balance sheet data at the micro level. The case of Ukraine is exceptionally interesting because the particularly severe contagion from the global financial crisis turned into a prolonged economic crisis resulting in large loan loss provisions. It seems, however, that both macroeconomic and bank-specific variables have an effect on loan quality as the banks have not been uniformly affected by the crisis. It seems that banks that do not specialise in loans were particularly affected with deteriorating asset quality. The authors’ estimation results are based on dynamic panel regression methods on a unique dataset of Ukrainian banks with quarterly frequency from 2005 to 2013 to avoid problems associated with using samples from the BankScope database.
TL;DR: In this article, the authors compare gatekeeping and public choice theory with data from an emerging market, Russia, and argue that the former theory produces riskier predictions than the latter one.
Abstract: This article compares an original theory of gatekeeping and public choice theory, confronting them with data from an emerging market, Russia. It argues that the former theory produces riskier predictions than the latter one. The Popperian criteria for falsification of a theory suggest that the riskier the predictions the theory produces, the more confidence we have in the outcomes of its falsification. Theory of public choice predicts that either the government wins and business loses (the tollbooth hypothesis) or business wins and the government loses (regulatory capture theory). The theory of gatekeeping predicts that both the government and business win. Furthermore, the third agent's (the population's) pecuniary interests are also supposedly associated with the interests of the first two agents. A series of econometric tests using sub-national data from Russia show that the gatekeeper's interests are indeed positively associated with the interests of the businesses that manage to get admitted to the f...
TL;DR: In this article, the authors find that the privatisation of firms can help households improve their welfare and reduce poverty, albeit by a small magnitude, and that the agglomeration of firms, as a result of privatisation, increases employment and wages of individuals and thus has a positive effect on per capita income, per capita expenditure and poverty reduction.
Abstract: Although most countries follow a market economy, they still maintain a number of state-owned firms. In Vietnam the process of firm privatisation has been going on since the early 1990s. However, state-owned firms and joint-venture firms with public capital still account for nearly 40% of total firm output. In this article we find that the privatisation of firms can help households improve their welfare and reduce poverty, albeit by a small magnitude. The agglomeration of firms, as a result of privatisation, increases employment and wages of individuals and thus has a positive effect on per capita income, per capita expenditure and poverty reduction. In particular, the effect on per capita expenditure tends to be higher for households with male, younger and better educated heads than those with female, older and less well educated heads. We do not find any effect from state-owned firms on household welfare and poverty reduction.
TL;DR: In this article, the authors examined the effects of fiscal devaluation on the trade balance of a country with a small open economy and found that the dynamics of trade balance cause changes in VAT and social security contributions.
Abstract: This article examines the effects of fiscal devaluation on the trade balance of a country with a small open economy. It is assumed that typically such countries are price takers, which means low price elasticity of exports and imports. If this assumption is true, then it is impossible to make an impact on the trade balance through the price mechanism and, accordingly, fiscal devaluation will not have significant effects. To confirm or reject this hypothesis it is necessary to determine causal relationships between changes in the fiscal devaluation indicator and trade balance dynamics. Applying a series of causality tests to Ukrainian data, the authors argue that the dynamics of trade balance cause changes in VAT and social security contributions. The opposite causality was not detected. This is treated as evidence of fiscal devaluation's inefficiency in economies like Ukraine on one hand and of the price-taking characteristics of Ukraine on the other. The potential null effect of fiscal devaluation was co...
TL;DR: In this article, a broad analysis of the Czech way of bad loan consolidation using information from financial statements and reports of consolidation institutions, and a calculation of returns from individual and block sales of receivables.
Abstract: This article deals with the ‘old bad loans’ problem in the Czech Republic. The issue with classified loans provided by the socialist monobank State Bank of Czechoslovakia before 1989 had been solved through special consolidation institutions operated by the government in the 1990s and 2000s. The topic seems to be quite historical but infact the opposite is true – the state's involvement in the process of consolidation of bad loans created good conditions for rent seekers, whose efforts led to out-of-court remuneration, i.e. additional costs of consolidation for Czech public finances in 2013. The article consists of a broad analysis of the Czech way of bad loan consolidation using information from financial statements and reports of consolidation institutions, and a calculation of returns from individual and block sales of receivables. The calculations show individual sales had higher return ratios than block sales, while the average return to nominal value was under 20%. A comparison with the different Sl...