Is Locking Domestic Funds into the Local Market Beneficial? Evidence from the Polish Pension Reforms

This paper is concerned with the effect of enforced home bias on the development of emerging stock markets. It provides a detailed study of the impact on the Warsaw Stock Exchange of the Polish pension fund reforms and the associated restrictions on international investment. The time path of market development for the Warsaw Stock Exchange is compared with a benchmark sample consisting of the other seven post-communist countries that joined the EU in May 2004. It is shown that benefits arising from the pension funds’ increased investment in the home market are short-lived. In the long run, the relative performance of the Polish market returned to pre-1999 levels or worse, suggesting that enforced home bias on emerging markets may be detrimental, rather than beneficial, to the long-run development of the market.pension reforms, home bias, stock market development, transition countries

Home bias and stock market development. The Polish experience

Pension reform has become a major policy issue for both developed and developing countries in recent years. In developing countries the impact of these reforms on the development of their financial markets is critical. However, the initial expectations that pension reforms in developing countries would bring broad benefits and result in faster market development have not materialised. A particular problem has been that governments have imposed restrictions on the freedom of pension funds’ investment decisions. In particular, they have a tendency to enforce home bias in investment behaviour. This paper provides a non-technical introduction to home bias and its role in stock market development, and uses the Polish experience as a case study. It discusses the main arguments for portfolio diversification, the primary side effects that emerge from locking funds into underdeveloped equity markets, and highlights the problems the Polish pension funds face as a result of the “enforced” home bias policy of the Polish authorities. The findings support the view that enforced home bias has a negative impact on the local stock market development, on the performance of pension reform.pension reforms, home bias, stock market development, emerging markets

Deindustrialisation. Lessons from the StructuralOutcomes of Post-Communist Transition

Theoretical and empirical studies show that deindustrialisation, broadly observed in developed countries, is an inherent part of the economic development pattern. However, post-communist countries, while being only middle-income economies, have also experienced deindustrialisation. Building on the model developed by Rowthorn and Wells (1987) we explain this phenomenon and show that there is a strong negative relationship between the magnitude of deindustrialisation and the efficiency and consistency of market reforms. We also demonstrate that reforms of the agricultural sector play a significant role in placing a transition country on a development path that guarantees convergence to EU employment structures.http://deepblue.lib.umich.edu/bitstream/2027.42/39847/3/wp463.pd

Profitability Measures and Competition Law

The paper outlines various measures of profitability and considers what role they can play in competition law. We argue that profitability measures can provide a good answer to the wrong question and a much less good answer to the question we really want to answer. Using appropriate definitions of asset value it is possible to identify whether a firm earns more than the absolute minimum needed to cover cost and compensate for risk, i.e., whether profitability measures such as the internal rate of return and the accounting rate of return are above the cost of capital. However, both the empirical evidence we present and theory indicates that this does not really help in most cases. Knowing that a firm is earning say, half a percent more than the cost of capital is not really much help in almost all competition law cases. But we show that once the rate of return deviates from the cost of capital it becomes hard to measure. Using simple examples we show that shifts in cash flows that preserve the net present value of a project can have dramatic effects on profitability measures. Hence, it is hard to assess the quantity of the “excessive” return. Furthermore, this problem is likely to be far more prevalent today than in the past given the growth in outsourcing (since outsourcing has exactly this type of effect on cash flows). Despite such problems, we argue that the measurement of profit has a role to play in competition law but that the analysis is far more of an art form and far less of a simple statistical procedure.profitability measures, excess return, competition

Niepoliczone i niepoliczalne (?) ofiary broni chemicznej, maj 1915 r.

The subject of this discussion are the almost forgotten victims of chemical weapons on the Eastern Front of World War I. Source data related to military operations, in particular to the German gas attacks in the region of the Bzura and Rawka rivers, are the basis for presenting problems related to the estimation of the number of victims of poisonous chlorine gas in the period between May and July 1915. Using the example of selected data relating to the wave attack of May 31, 1915, I show the specificity and complexity of the source documents closely related to the problem under consideration, that is the issue of the countability of victims of chemical weapons. Indirectly, I show the need and legitimacy of systematizing and interpreting all available information on what resulted from the historical use of chemical weapons. This would be conducive to deepening our knowledge about the fallen soldiers and their resting places. It would be helpful to initiate work on a digital repository of knowledge on the use of chemical weapons in the past, taking into account the very diverse descriptions of events and victims of chemical weapons from the Eastern Front of the Great War. Such a digitized resource could contribute to the systematization of highly dispersed source data, their further interpretation and reinterpretation, and their social activation, for the benefit of deepening knowledge about history and historical awareness and preventing the threat of again turning to the use of such weapons of mass destruction.Przedmiotem omówienia są zapomniane ofiary broni chemicznej na froncie wschodnim I wojny światowej. Dane źródłowe powiązane z działaniami zbrojnymi, w szczególności z niemieckimi atakami gazowymi w rejonie Bzury i Rawki, stanowią tu podstawę estymacji liczby ofiar trującego chloru z okresu między majem a lipcem 1915 r. Na przykładzie zebranych danych odnoszących się do ataku falowego z dnia 31 maja 1915 r. ukazuję specyfikę i złożoność krytyki źródłowej w odniesieniu do liczby ofiar broni chemicznej. Pośrednio ukazuję przy tym potrzebę i zasadność systematyzacji oraz interpretacji wszelkich dostępnych informacji na temat tego, czym skutkowało stosowanie broni chemicznej (CW) w czasach minionych. Pomocne w tym byłoby zainicjowanie prac nad cyfrowym repozytorium wiedzy na temat użycia broni chemicznej w przeszłości z uwzględnieniem wydarzeń i ofiar z frontu wschodniego Wielkiej Wojny. Taki zdigitalizowany zasób mógłby się przyczynić do lokalizacji miejsc spoczynku ofiar broni masowego rażenia, do integracji danych źródłowych, a także ich wtórnych opracowań oraz do ich aktywizowania, na rzecz: pogłębiania wiedzy o dziejach i świadomości historycznej oraz zapobiegania zagrożeniu stosowania broni masowego rażenia

Deindustrialisation and Structural Change During the Post-Communist Transition

The aim of this paper is to model the evolution of employment structure in post-communist economies in the broader context of deindustrialisation. The paper builds on the model of structural change developed by Rowthorn and Wells (1987). We show that the starting point of high industry sector share in total employment and its direct fall when productivity of sectors changes in favour of services can be explained in terms of this framework. Moreover, the model can also describe the phenomenon of a further expansion of the agriculture, observed in countries classified as "less consistent" in the reforms implementation. Hence, we distinguish two development paths, the efficient one, called "horizontal", and the inefficient one called "vertical". We illustrate it with empirical data, using alternative measures of structural change and patterns of structural evolutions during transition. Finally, we discuss the link between the EBRD indicators of reforms and structural change. We show that the "quality" of reforms, not the initial GDP level determines a country's development path.http://deepblue.lib.umich.edu/bitstream/2027.42/39767/3/wp383.pd

Lichens in the rural landscape of the Warmia Plain

Lichens and lichenicolous fungi in the rural landscape of the Warmia Plain were studied. Lichen species were observed on old wooden fences, roadside trees, fruit trees, pylons, farm machinery, buildings and bridges. The analysed biota consists of 104 taxa with several noteworthy and rare lichens

De-industrialisation and the post-communist transition:Rowthorn and Wells' model revisited

In this paper we present a simple three-sector model explaining the structural change in employment, which is a modified version of Rowthorn-Wells (1987). We supplement the theoretical analysis with simple econometric tests, which illustrate how the modified Rowthorn-Wells model can be used to (i) motivate empirical estimates of the link between the level of development and structures of employment, (ii) illustrate structural distortions under the command economies, and the structural adjustment that happened during the post-Communist transition. We demonstrate that in the case of these economies, the transition process leads to an adjustment to the employment structures predicted by the model