FDI forward spillover effects in emerging markets: A comparative meta-analysis of China and Eastern Europe

Using two unique datasets of 530 forward estimates from 19 studies on China and 942 forward estimates from 28 studies on Eastern European transition economies, this study quantitatively analyzes foreign direct investment forward spillover effects, accounting for various biases and firm attributes in existing empirical results using a meta-regression analysis. We find that aggregation bias, misspecification bias, endogeneity bias (including simultaneity bias and omitted-variable bias), and publication bias, as well as firm attributes, contribute to the heterogeneity in forward spillover estimates; and that the preferred forward spillover effects are positive but nonsignificant. Interestingly, the preferred forward spillover effect is likely to be much larger in Eastern European transition economies than in China.     

Exchange rate, inflation and unemployment in East European economies: the case of Poland and Hungary*

The aim of the paper is to model the impact of exchange rate on both inflation and unemployment variables in economies which are characterized by important structural changes, i.e. a transition phase moving from centralized economies towards market economies. This phenomenon, which is common to the East European countries, stressed different effects both for what concerns the behaviour of economic agents and for what concerns fiscal and monetary measures adopted by governments and aiming to keep under control the inflation–unemployment trade off. Time series relationships between these variables are investigated within an econometric model. Economic theory and the available data on the hypothetically relevant variables, along with the consideration of the main facts occurred in the period under study, characterize our information set. It is found that single equation analysis yields inefficient inference relative to the whole system analysis, and important structural changes are detected which reflect possible breaks in the structure of the economic system along with a change in economic policy.     

Developing accounting and audit in a transition economy: the Romanian experience

The new Romanian accounting and auditing laws took effect in 1999. This paper investigates and evaluates the phase of development which started in 1996, comparing the outcome of that development with the experience of some other transition economies. Recognizing that the move to the market economy was a primary driver of change, the paper considers the economic and social context of Romania and the potential conflicts arising where the growing importance of the global market, political and international developments influence the shaping of strategy in matters of accounting. A strategy shaped in this way must also cater for the specific needs of the many small companies in transition economies. Key to the reform process in Romania has been the recognition that a controlled phasing-in of change, accompanied by training, is necessary to give the reform process a chance to succeed; however, this leads to tensions arising between professional associations, which wish to become self-regulatory, and governments, who need to retain a measure of control to ensure that all elements of the reform are in harmony. The paper concludes that the accounting developments from 1996 avoided some of the pitfalls experienced earlier in other transition economies and also shortened some of the development process by making changes in parallel rather than in sequence.     

新兴经济体发展对国际社会的影响力研究

当今世界经济呈现多极化趋势,新兴经济体成为世界经济增长的主要动力,对世界政治经济格局产生深刻影响。本文阐述新兴经济体在政治、经济、社会等各方面发展状况,分析新兴经济体的发展对国际社会的影响力。新兴经济体的发展促进了世界经济、国际贸易的稳步发展和产业结构调整,为消除世界范围的贫困和维护世界和平做出了积极的贡献,为发展中国家加快发展和加强“区域化”多边合作提供了可借鉴模式,同时对全球治理结构转型和国际秩序重塑产生一定影响。     

Modelling the inflation process in transition economies: Empirical comparison of Poland, Hungary and Czech Republic

This paper starts from the observation that inflation in transition economies appears to be persistently high and volatile and attempts to provide some empirical characterisation of the inflation process in three such transition economies: Poland, Hungary and Czech Republic. We first consider the role of monetary growth as a major causal factor for inflation in these economies, and argue that the evidence provides rather weak support for the causal relationship. We then propose a transition economy cost-plus model and estimate this using the equilibrium-correction modelling (ECM) strategy augmented by introduction of a number of transitory factors and changes in the internal structure of the real economy which we believe may have had a significant impact on inflation in these economies. We show that this approach enables us to account for long-run inflation in these economies from the early 1980s to the present despite the turbulence of the latter part of the sample period. Our results support wage and exchange rate based inflation policies.     

Capital and trade flows in Europe and the impact of enlargement

The Eastern enlargement of the European Union (EU) is likely to give a further boost to trade and capital flows, yet empirical evidence on its possible effects is scarce. This paper uses four different datasets to estimate the determinants of international asset holdings and trade flows. We find in most regressions that EU membership has a significant effect. Based on additional forecasts of the expected flows to 10 transition economies, we conclude that for the EU candidates actual levels are still far below expected values in most cases. Consequently, we anticipate raising capital and trade flows with the approach of EU accession, in particular for the seven EU candidates besides the Czech Republic, Hungary, and Poland.     

The antecedents of SME innovativeness in an emerging transition economy

Understanding forces that contribute to the success of small and medium enterprises (SMEs) is very important, as these enterprises are vital for both developed and developing economies. Since innovativeness is among the most important means through which such businesses contribute to economic growth, numerous research studies were conducted to determine which factors positively impact SME's innovative efforts. This is an even more important issue for developing economies, where SMEs are often faced with inadequate infrastructure. Since there is a lack of studies on SME innovation in developing economies, often policy in such countries is based on findings from developed countries.In this paper, we explore factors that drive innovation activities in SMEs in a small emerging transition economy (Croatia), and compare it with findings from developed economies. In addition to factors used in most previous studies, we consider market scope, firm's market orientation and presence of strategic, managerial and marketing changes. We find that most factors that were found to be important in developed economies are important in developing economies as well. In addition to that, market scope was discovered to be a very important factor in both product and process innovation. Implementing corporate changes has positive impact on radical product innovation while implementing new organizational structures has positive effect on incremental innovation. When investigating determinants of product innovation, we distinguish new products of low novelty from new products of high novelty, and show that they need to be supported by different policies. To gain additional insight in innovation efforts, we examine obstacles to innovation. We find that firms that report facing obstacles are not less likely to innovate less, which suggests that innovators are able to work around obstacles without damaging effects to innovation. This study is based on a postal survey of 448 SMEs in Croatia, which was performed in 2004.     

On the role of institutional factors in shaping working capital management policies: Empirical evidence from European listed firms

The study examines the impact of institutional factors on working capital management for a sample of 5431 European listed firms over the period 2010–2018. Employing a weighted least squares (WLS) methodology, we provide empirical evidence on the role of institutional quality in shaping the working capital policies of European listed firms. The results indicate that firms located in countries with a stronger institutional framework maintain lower levels of working capital on average. The results are robust to different subsamples of firms. The study complements the extant literature by analyzing the effects of institutional quality on working capital management, across a large number of different institutional systems specific to developed and transition economies alike. The results are useful for practitioners and policy makers in understanding the relationship between institutional quality and short-term firm-level decisions.     

Redefining the field of European human resource management: A battle between national mindsets and forces of business transition?

This article examines the conflict between cultural heritage and the current forces of global competition in Europe. The nature of management in European organizations is in a state of transition, influenced by competing forces of economic, social, and political integration or disintegration. A review of European research is used to question the idealistic picture of the Single European Market as a unifying force that will simplify international human resource management in multinationals. Taking a comparative rather than international human resource management perspective, the paper identifies the factors that have created national patterns of HRM within Europe. A dynamic and comparative ‘force field framework’ of HRM is developed in order to understand the managerial frames of reference that are currently guiding the field. © 1997 John Wiley & Sons, Inc.     

Topics in macro-modelling of East European countries in the period of transition

Central and European former Centrally Planned Economies (CPEs) entered a period of transition towards market economies. The evolution is marked by a transition from shortage- to demand-determined economies, associated with the abandonment of price control and the introduction of tight wage control. Stabilization programmes (in Poland from 1990), implementing tough deflationary fiscal and monetary policies, brought about the suppression of hyperinflation. The high adjustment costs — deep recession, high rates of unemployment — are characteristics of the early '90s. The deregulation of the public sector and the building of the private one commenced, and will be a long-lasting process.To meet the changes in economic regimes and mechanisms, the existing models had to be adequately respecified and new models constructed. The large W-5 macromodel for Poland, which covers the final and intermediate demands, had to be extended to introduce the market adjustment mechanisms and, more broadly, the financial flows. To meet the needs of short-term financial policies, new quarterly models had to be built, as, for instance, the WK macromodel for the Polish economy. The paper discusses the major problems of the models' specification under the data constraints.     

Trade,competitiveness and investment: an empirical assessment

ABSTRACT

The Eurozone crisis has exposed several weaknesses of the European Monetary Union economies. This paper aims to assess the impact on external competitiveness of an expansionary capital stock policy that could contribute to reduce the trade balance asymmetries within the EU and help European exporters to recover their competitive role in international markets. A policy action to increase capital stock accumulation through investment in selected European countries could generate a double dividend: increasing both price and nonprice competitiveness, so stimulating their competitive position as exporters, and consolidating the growth path of EU economy. The analysis employs a bilateral trade model built at INFORUM with several distinguishing characteristics: a comprehensive bilateral data set, econometric estimation of key parameters, and emphasis on sectoral details. Our findings show that a capital stock increase is effective in narrowing trade imbalances within EU. Heterogeneous effects are estimated for commodities in China and the US.     

The Seller's Perspective on Determinants of Acquisition Likelihood: Insights from China's Beer Industry

This study investigates acquisition antecedents during China's transition from a planned to a market‐based economic system. Because of contextual realities such as a lack of freely tradable targets for buyers, the seller's willingness to sell is critical for acquisition occurrence in transition economies. We therefore take the seller's perspective and examine factors underlying firms' willingness to sell. We posit that selling is a decision based on the evaluation of a firm's prospects determined by its embeddedness within the planned system, organizational changes it undertook during the transition, and its ability to adjust its strategy according to the evolving strengths of the planning and marketing institutions. Data from the Chinese beer industry from 1995 to 2004 show that acquisition likelihood is high for firms founded as SOEs, low for firms having attracted more private investment or undertaken multiple changes, and has a U‐shaped relationship with firms' relative investment in marketing resources.     

IS THE TRANSITION TO THE MARKET TOO IMPORTANT TO BE LEFT TO THE MARKET?

Most models of Central and Eastern European transition fail to appreciate the de facto organising principles that governed life in the Soviet-type system. Concentration has instead been focused on the de jure pronouncements of what constituted these systems. It is this misidentification, we contend, that has caused the major problems for economists devising strategies for reform. Proper appreciation of the de facto realities underlying Soviet-type economies sheds light on the crucial role that market forces must be allowed to play in the process of transition.     

Testing for predictability in equity returns for European transition markets

This paper presents empirical evidence of short and long-run predictability in stock returns for European transition economies. We employ variance ratios with a bootstrap methodology to test for short-run predictability, which is present in most countries. We also estimate Hurst exponents to test for long-range dependence, and find evidence of such. Furthermore, we find evidence of strong time-varying long-range dependence in these economies stock returns, which is in line with evidence of multifractality of equity returns.     

International Leadership in Productivity at the Aggregate and Industry Level

Since many policies affect specific parts of economies differently, it is useful to decompose GDP per capita differences across countries into differences across smaller and smaller parts of economies. In this paper, we summarize recent contributions in this area and fit them together into a decomposition procedure for GDP per capita differences. The overall finding is that the U.S. is the productivity leader for the most of the economy. Moreover, international productivity differences at the aggregate level of the economies are in most cases translated into differences in the productivity of industries, at least compared to the productivity leader U.S. The variability of productivity differences at the industry level is, however, substantially higher than any differences at the aggregate or sector level. For the manufacturing sector alone the U.S. and Japan share the leadership on the industry level. In contrast, France, U.K., and Germany exhibit almost no leadership in productivity at the industry level. Hence, nation-specific factors appear to be dominant in the comparison of European countries with the U.S. Finally, mix differences do not play a very large role for big countries. For Germany, however, the mix effect can help to reconcile relative high productivity for the market economy and lower productivity at disaggregated levels.     

International trade and hedging in economies in transition

This paper develops a general equilibrium framework to analyze risk management policies in economies in transition. By cross-hedging against real exchange rate risk exposures, these economies can increase their gains from international trade. We suggest that countries with emerging forward markets can gradually introduce the risk sharing markets, as limiting resources may prevent them from introducing complete hedging markets in the first place. Thus the growing demand for risk management instruments can be gradually met and it would be welfare enhancing. Economies in transition benefit when hedging devices are offered by financial markets, irrespective of whether the hedging instruments are de facto perfect or not.     

Pitfalls in estimating equilibrium exchange rates for transition economies

The literature on equilibrium exchange rates for the central and eastern European countries has mushroomed in recent years. In this paper, we discuss the econometric pitfalls involved in such estimations and endow the reader with the methodological ingredients to avoid such biases. We review the commonly used approaches and identify problems related to the most straightforward econometric procedures as they often do not take the transition process properly into account. As an alternative, we propose a two-stage “out-of-sample” strategy that consists of estimating the relationship between the exchange rates and fundamentals and the extrapolation of these relationships to transition economies.     

Exploring the Impact of Agricultural Price and Trade Policy Reform under Transition in Albania

Agricultural policy decision making in economies undergoing transition to market is in need of empirical tools for assessing the impact of alternative policy options. The econometric means available for such exercise, however, are limited for lack of data and structural breaks in economic behaviour. Synthetic, partial equilibrium, multi-market models offer a potential alternative. Such models have been used extensively, even in advanced economies, to offer valuable insights on the impact of alternative policy options. This paper shows the use of such a partial equilibrium, multi-market, synthetic-type model as a tool for agricultural policy analysis in a country in transition. The model is applied for Albania, a predominantly agricultural country that, after a period of centralism and autarky, aims to re-join the international economic system. The model, albeit its many limitations, offers some useful insights on the impact of alternative options available for agricultural price and trade policy. This revised version was published online in July 2006 with corrections to the Cover Date.     

Convergence in Transition Countries – Focus on Investment: Central and Eastern Europe, 1970–1996

Our data on investment in Central and Eastern European economies reveal that, though investment rates were typically high in the 1970s, the marginal efficiency of investment was low. Investment shares begun to decline in the 1980s, before the collapse of the communist system, but there was some recovery in most countries after transition. We use the Kalman filter framework to test for convergence in investment rates. We find some evidence of convergence in Central European countries – former Czechoslovakia, Poland and the countries of the former Yugoslavia. For the remainder of the socialist bloc, however, we were unable to isolate convergence in investment shares. This revised version was published online in July 2006 with corrections to the Cover Date.