Institutional matrices and institutional changes

This article represents a paper for the 5th International Symposium on Evolutionary Economics “Economic Transformation and Evolutionary Theory of J. Schumpeter” (Pushchino, Moscow region, Russia, 25-27 September, 2003). There is shown, that the comparison of two well-known works of Josef Schumpeter (“The Theory of Economic Development” and “Capitalism, Socialism, and Democracy”) displays a discrepancy between the two visions of development of market economic systems – evolutionary and transformational, i.e. non-evolutionary transition into a qualitatively different state. No theoretical schema that would reconcile logically these two visions was left to us by Schumpeter. Is it possible to deal with this discrepancy in a correct way? What in economy changes evolutionarily and what is transformed? What structures persist and where is the room for institutional changes? An attempt to find the answer within the framework of the theory of institutional matrices is presented.institutional matrices theory Schumpeter institutional changes

Productivity Growth and Ownership Change in China: 1998-2007

This paper studies the industry productivity dynamics in China’s manufacturing sector from 1998 to 2007, and in particular, explores to what extent the privatization of state-owned enter- prises (SOEs) contributes to the aggregate productivity growth. Our results show that, though non-SOEs on average are more productive than SOEs, the average productivity growth among SOEs is greater than their counterparts. Industry concentration, taxation, and credit market all account for this difference in growth between SOEs and non-SOEs. We find that industry productivity growth is mainly attributed to the growth of non-SOEs, entry of non-SOE firms, and the exit of SOEs. However, non-SOE firms that are transformed directly from SOEs make a small and negative contribution to industry productivity growth

Working Paper 05-07 - Growth and Productivity in Belgium

The objective of this report is to provide an overview of the main drivers of economic growth and productivity evolution in Belgium between 1970 and 2004, based on a consistent data set. The growth accounting methodology is applied to explain value added and labour productivity growth for total economy, manufacturing and market services. This decomposition exercise diverges from what has been applied in Belgium up to now, as it uses capital services flows rather than capital stock to measure the contribution of capital factor to production growth. Contributions of the main industries to value added, employment and productivitygrowth are also estimated.Growth accounting, Growth contribution, Productivity, MFP, ICT

Macroeconomic volatility after trade and capital account liberalization

What are the equilibrium effects of trade and capital liberalization on consumption smoothing? This question is addressed by studying the response to productivity shocks in a baseline two country, two goods, incomplete market model, where foreign borrowing is secured by collateral. The paper shows that international financial integration, modeled by relaxing a borrowing constraint a la Kiyotaki in the domestic country, worsens consumption smoothing; international trade integration, modeled by a reduction of non linear iceberg transportation costs, improves it. As a measure of consumption smoothing, the analysis uses the ratio between the simulated standard deviation of consumption growth and the simulated standard deviation of output growth. These results are qualitatively consistent with the empirical evidence provided by Kose, Prasad and Terrones (2003).Emerging Markets,Economic Theory&Research,Free Trade,Debt Markets,Trade Policy

Financial liberalisation: from segmented to integrated economies

Cataloged from PDF version of article.Capital market liberalisation transforms segmented stock markets into integrated ones. Further impact should be expected on the dynamics of the rest of the domestic economy. This study presents evidence to that effect. A significant change after liberalisation is the emergence of world returns as an influential factor on other economic fundamentals. The information content of world returns influences emerging market returns prior to capital market liberalisation and this relation continues after capital market liberalisation. What is new after liberalisation is the influence of world returns on the dynamics of the domestic economy as a whole and its relation to stock returns. © 2003 Elsevier Inc. All rights reserved

Income transfers in transition : constraints and progress.

Visiting the main employment office in Warsaw in late 1989, I asked how many people they were currently paying benefits to. The answer (in a city of 1.6 million people) was five. A year later, unemployment in Poland was more than a million, and by December 1993 was three million. There is no need to belabour the resulting strains on a social safety net designed for a very different régime. This paper discusses how the safety nets in the reforming countries, though in many ways well-adapted to the old system, were poorly suited to the needs of a market economy, and what progress has been made in adjusting them. The problems faced by the system of income transfers need to be seen against the backdrop of broader constraints facing policy makers at the start of the reforms. The emphasis on these constraints is not intended to sound gloomy; rather the opposite – it shows how much progress has been made in very difficult circumstances. A former French Prime Minister invited fellow citizens to imagine that France had over a very few years to go through the Political Revolution of 1789, the Industrial Revolution of the nineteenth century and the decolonisation of the 1960’s. That, he pointed out, was precisely what the world community is asking Russia to achieve.

Productivity Growth and Ownership Change in China: 1998-2007

This paper studies the industry productivity dynamics in China’s manufacturing sector from 1998 to 2007, and in particular, explores to what extent the privatization of state-owned enter- prises (SOEs) contributes to the aggregate productivity growth. Our results show that, though non-SOEs on average are more productive than SOEs, the average productivity growth among SOEs is greater than their counterparts. Industry concentration, taxation, and credit market all account for this difference in growth between SOEs and non-SOEs. We find that industry productivity growth is mainly attributed to the growth of non-SOEs, entry of non-SOE firms, and the exit of SOEs. However, non-SOE firms that are transformed directly from SOEs make a small and negative contribution to industry productivity growth.Productivity Growth, Industry Dynamics, Ownership Change, Reallocation

The Crisis of Missouri’s Polity: How Privileged Interest Groups Influenced the Development of Missouri’s 2014 Tax Reform Law

Increasing wealth inequality has created a public discourse concerning its societal impact and the government’s role in its regulation. Should the government regulate and redistribute wealth through taxes and government programs, or should the market regulate it? To this end, one concern that has not been discussed is to what extent wealthy individuals have manipulated our government institutions to ensure their preference of market regulation of wealth distribution. Scholarly research has been conducted at the national level to determine the networks who are altering our political institutions to enable wealthy, minority interests’ access to our legislative process. Due to our federalist style of democracy, similar alterations are occurring at the state-level with little academic focus. This dissertation seeks to answer how strong are Missouri’s legislative institutions and to what extent have wealthy individuals gained points of access into Missouri’s legislative process to promote a market-based management of wealth distribution through its passage of the 2014 Tax Reform Act, SB 509. This dissertation uses a multi-method research design, while borrowing theories and models utilized at the national level, to illustrate to what degree interest groups representing the wealthy were engaged with SB 509’s development and enactment into law. This study finds that Missouri’s legislative institution has weakened over the last 40 years, and there is a regional and Republican party-bias favoring Missouri’s weakened legislative institution. This study also finds circumstantial evidence that wealthy individuals and interest groups who support a more market-based redistribution of wealth gained access to Missouri’s legislative process through campaign donations and lobbying to attempt to influence SB 509’s development. This research illustrates a link between weak political institutions and the ability of groups representing wealthy and conservative interests to gain access to these institutions to attempt to influence tax legislation that ensures a market-based management of wealth distribution

Foreign subsidiaries as channel of international technology diffusion. Some direct firm level evidence from Belgium

The use of FDI as a channel of international spillovers is by now fairly established in the empirical literature on innovation and growth. It is often argued that subsidiaries of foreign MNEs are a mechanism through which technological know-how flows across borders. For foreign subsidiaries to be channels of international spillovers, these subsidiaries need to source know-how internationally and at the same time transfer their know-how to the local economy. Using direct firm level evidence from Belgian CIS-survey data on the occurrence of technology transfers, we find that foreign subsidiaries are indeed more likely to acquire technology internationally. But once controlled for the superior access to the international technology market that foreign subsidiaries enjoy, we find that these firms are not more likely to transfer technology to the local economy. This suggests that foreign subsidiaries are not necessarily interesting sources for local transfers. What seems to be important for local technology transfers is having an international network that provides access to international technologyManagement; Technology transfer