Browsing by Subject "O57"

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  • Pääkkönen, Jenni (2009)
    BOFIT Discussion Papers 15/2009
    Published in Journal of Chinese Economic and Business Studies, Volume 10, Issue 1, February 2012, Pages 1-13
    This paper discusses growth differentials of Chinese provinces geared to agricultural activities and those focusing on industrial production over three decades of economic reform. Following trade theory and endogenous growth theory, we suggest that the fundamental differences between regions arise from their resource allocations at the start of reforms. Thus, capital-abundant regions have tended to specialize in industrial production, while the labor-abundant regions have concentrated on labor-intensive pro- duction (agriculture). Many of China.s agricultural provinces suffer from oversupplies of labor, which has led large numbers of people to migrate within the country to work in non-farming sectors of economy. We show that provinces with high shares of industrial production (the industrial club) have converged, and that agricultural provinces shifting to industrial production have been catching up to initially industrialized provinces. Provinces that have stayed with an agricultural strategy (the agricultural club) show no evidence of convergence and appear to have been left behind in terms of economic development. JEL Classi.cation: O17, O40, O57. Keywords: Growth, Agriculture, Convergence.
  • Bonin, John; Hasan, Iftekhar; Wachtel, Paul (2014)
    BOFIT Discussion Papers 8/2014
    Modern banking institutions were virtually non-existent in the planned economies of cen-tral Europe and the former Soviet Union. In the early transition period, banking sectors be-gan to develop during several years of macroeconomic decline and turbulence accompa-nied by repeated bank crises. However, governments in many transition countries learned from these tumultuous experiences and eventually dealt successfully with the accumulated bad loans and lack of strong bank regulation. In addition, rapid progress in bank privatiza-tion and consolidation took place in the late 1990s and early 2000s, usually with the par-ticipation of foreign banks. By the mid 2000s the banking sectors in many transition coun-tries were dominated by foreign owners and were able to provide a wide range of services. Credit growth resumed, sometimes too rapidly, particularly in the form of lending to households. The global financial crisis put transition banking to test. Countries that had expanded credit rapidly were vulnerable to the macroeconomic shock and there was con-siderable concern that foreign owners would reduce their funding to transition country sub-sidiaries. However, the banking sectors turned out to be resilient, a strong indication of the rapid progress in institutional development and regulatory capabilities in the transition countries. Keywords: transition banking, bank privatization, foreign banks, bank regulation, credit growth JEL codes: G21, P27, O57
  • Shen, Jian-Guang (2002)
    BOFIT Discussion Papers 13/2002
    This paper proposes a "before-and-after" approach to empirical examination of the relationship between democracy and growth. Rather than the commonly used cross-country regression method, this paper compares the economic performances of forty countries before and after they became democracies or semi-democracies sometime within the last forty years.The empirical evidence indicates that an improvement in growth performance typically follows the transformation to democracy.Moreover, growth under democracy appears to be more stable than under authoritarian regimes. Interestingly, wealthy countries often experience declines in growth after a democratic transformation, while very poor nations typically experience accelerations in growth.Growth change appears to be negatively related to the initial savings ratio and positively related to the export ratio to GDP.Partial correlation between growth change and primary school or secondary school enrollments and the ratio of government expenditure to GDP is not identified. Keywords: Democracy, economic growth, O40, O57 JEL classification: O40, O57
  • Pääkkönen, Jenni (2009)
    BOFIT Discussion Papers 1/2009
    Published in Economic Systems, Volume 34, Issue 4, December 2010: 469–479
    This paper reviews the political economy view of economic growth in post-communist economies making the transition to free markets, focusing on the role of economic policy and institutions. We test the hypothesis that better institutions, measured in terms of economic freedom, contribute to growth. The empirical results from the cross-section of transition economies confirm this hypothesis. The paper concludes that non-linearities are present in the growth model and that differences arise depending on how economic well-being is defined. JEL Classification: O17, O40, O57. Key Words: growth, institutions, human capital
  • Kurronen, Sanna (2012)
    BOFIT Discussion Papers 6/2012
    Published in Emerging Markets Review, Volume 23, June 2015: 208–229.
    This paper examines financial sector characteristics in resource-dependent economies. Using a unique dataset covering 133 countries, we present empirical evidence that the banking sector tends to be smaller in resource-dependent economies, even when controlling for several other factors which have been shown to have a significant effect on financial sector development in previous studies. Moreover, the threshold level at which the increasing resource-dependence begins to be harmful for domestic banking sector is very low. We also find evidence that the use of market-based and foreign financing is more common in resource-dependent economies. Further, we argue that a relatively small financial sector used to cater the needs of the resource sector might be unfavorable for emerging businesses, thereby hampering economic diversification and reinforcing the resource curse. resource dependence, resource curse, financial sector, banks, panel data, G20, O16, O57, Q32
  • Ivanenko, Vlad (2005)
    BOFIT Discussion Papers 16/2005
    The paper looks into convergence of Russian institutions with those of other democratic, free-market-oriented states, and considers definitions of "normalcy" that incorporate the concepts of free market, democracy, and government efficiency.The author provides an estimate of Russia s institutional convergence to the standards of the G7 and the Big Five group of large, middle-income countries that includes Brazil, China, and India.In some areas Russia outperforms "Big Five" countries, in others it trails behind.Finally, public mistrust, corruption, and inefficient governance in Russia are discussed in light of the Putin administration s current reform policies. JEL: O57, P30, P52 Keywords: Free market, democracy, institutions, Russia
  • Merlevede, Bruno; Schoors, Koen (2005)
    BOFIT Discussion Papers 11/2005
    Published in Journal of Economic Policy Reform, 2007, Vol.10, No.1, pp. 29-50
    We analyse how the choice of reform speed and economic growth affect one another.We estimate a system of three equations where economic growth, economic reform and FDI are jointly determined. New reforms affect economic growth negatively, whereas the level of past reform leads to higher growth and attracts FDI.This means that the immediate adjustment cost of new reforms is counterbalanced by a future increase in FDI inflows and higher future growth through a higher level of past reform.Reform reversals contribute to lower growth.We use the model to simulate the impact of big bang reform and gradualist reform on economic growth.This is only meaningful in the presence of reform reversals, which requires aggregate uncertainty about the appropriate reform path.Using the coefficients from the empirical model, we find that even relatively small ex ante reversal probabilities suffice to tilt the balance in favour of gradualism. The case for gradualism gains strength if policymakers are short-sighted, but weakens if voters are myopic. JEL Classification: O57, P21, P26, and P27 Keywords: policy reform, gradualism, big bang, FDI, economic growth