Influence of institutional factors and wage-setting mechanism in a dual labour market with currency union: Northern Cyprus

In this paper, I consider two heterogeneous economies that engage in a currency union. The small economy adopts the currency of the large and is highly dependent on its wealthier partner for trade. The effects of a currency union, deficit financing and institutional restraints on inflation are analyzed in a dual economy with different wage-setting mechanisms. In the model, Northern Cyprus is the small economy and Turkey, being the only country that acknowledges it as an independent state is its larger partner. Features of the labour markets determine the wages. We make a conjecture that wage determination in Northern Cyprus (NC) is conducted with reference to centralized-bargaining and that decentralized bargaining sets the wages in Turkey (TR). Hence, the differences in wage-setting procedures cause a dual labour market. In order to incorporate monetary dependence into the analysis, we let the Turkish central bank to decide on the economic policy measures, in this case the inflation rate and unemployment. The institutional restraints such as economic sanctions increase the inflexibility in the NC and cause shocks to affect the economy more. In order to compensate for the losses that might be endured by the government in NC, TR finances the budget deficit of NC. Therefore, TR government needs to consider the burden of this financing issue

Influence of institutional factors and wage-setting mechanism in a dual labour market with currency union: Northern Cyprus

In this paper, I consider two heterogeneous economies that engage in a currency union. The small economy adopts the currency of the large and is highly dependent on its wealthier partner for trade. The effects of a currency union, deficit financing and institutional restraints on inflation are analyzed in a dual economy with different wage-setting mechanisms. In the model, Northern Cyprus is the small economy and Turkey, being the only country that acknowledges it as an independent state is its larger partner. Features of the labour markets determine the wages. We make a conjecture that wage determination in Northern Cyprus (NC) is conducted with reference to centralized-bargaining and that decentralized bargaining sets the wages in Turkey (TR). Hence, the differences in wage-setting procedures cause a dual labour market. In order to incorporate monetary dependence into the analysis, we let the Turkish central bank to decide on the economic policy measures, in this case the inflation rate and unemployment. The institutional restraints such as economic sanctions increase the inflexibility in the NC and cause shocks to affect the economy more. In order to compensate for the losses that might be endured by the government in NC, TR finances the budget deficit of NC. Therefore, TR government needs to consider the burden of this financing issue

What causes the regional disparity of FDI in Russia? a spatial analysis

We analyse the determinants of the regional disparity of FDI inflows to Russia. The spatial distribution of FDI is attributed to regional and/or trans-regional factors. Region specific characteristics such as wage, education level, transportation as well as gross regional product, which accounts for market size, in host and alternative regions are considered to analyze the spatial interaction between regions employing spatial econometrics. We find that shocks to FDI levels in proximate regions have no effect on FDI inflows to hosts. However, FDI in a region depends on spatial market size and endowment of natural resources in alternative host regions

Spoilt for Choice: Explaining the location choice of Turkish Transnationals

The investments of Turkish entrepreneurs to other countries increased in the 1990s. This paper explores Turkish FDI abroad focusing on the factors influencing the FDI decision and location choice, using micro data collected from investor firms. A micro level data set for the Turkish FDI abroad is constructed using the information gathered through questionnaires conducted at some selected firms, which have engaged in FDI abroad. The data is explored using statistical and econometric techniques by grouping the countries based on their geographical location. Among the factors that determine the location choice of investors access to consumers and suppliers, market penetration; the presence of Turkish firms and Turkish population, and similarity to Turkey; trade opportunities and preferential trade agreements; together with labour costs and availability of skilled workers affect the location choice of Turkish transnationals. Key words: outward foreign direct investment, location choice, Turke

Spoilt for Choice: Explaining the location choice of Turkish Transnationals

The investments of Turkish entrepreneurs to other countries increased in the 1990s. This paper explores Turkish FDI abroad focusing on the factors influencing the FDI decision and location choice, using micro data collected from investor firms. A micro level data set for the Turkish FDI abroad is constructed using the information gathered through questionnaires conducted at some selected firms, which have engaged in FDI abroad. The data is explored using statistical and econometric techniques by grouping the countries based on their geographical location. Among the factors that determine the location choice of investors access to consumers and suppliers, market penetration; the presence of Turkish firms and Turkish population, and similarity to Turkey; trade opportunities and preferential trade agreements; together with labour costs and availability of skilled workers affect the location choice of Turkish transnationals. Key words: outward foreign direct investment, location choice, Turke

Features that influence the exit decision from the private pension system in Turkey

Public pension system costs constitute a significant part of government expenses. Private pension systems have been developed as an alternative and/or as a complement to the public systems. In Turkey, the Private Pension System was given a head start in 2003. Although the system aims to provide supplementary income to the public pensions at retirement, observations reveal that many participants prefer to exit the system before retirement. The purpose of this study is to identify the characteristics of participants, who are more likely to exit earlier than retirement using the total population of contract buyers since the start of the system until 2011. The data is obtained from the Pension Monitor Center, and covers the customer and contract characteristics of more than 75% of all lapse types in the period. Impact of demographic factors and contract features are examined using the logit model. We divide the sample into different groups of customers according to their monthly contributions to the system. The results of econometric analysis reveal evidence of a significant relationship between exit decision and features such as education level,occupation, total accumulated savings, geographical regions, pension sales channel and payment instruments. Staying long enough in the system increases participants’continuity. Our elaborations also provide some tips for pension companies to ensure longevity and retirement of customers

Features that influence the exit decision from the private pension system in Turkey

Public pension system costs constitute a significant part of government expenses. Private pension systems have been developed as an alternative and/or as a complement to the public systems. In Turkey, the Private Pension System was given a head start in 2003. Although the system aims to provide supplementary income to the public pensions at retirement, observations reveal that many participants prefer to exit the system before retirement. The purpose of this study is to identify the characteristics of participants, who are more likely to exit earlier than retirement using the total population of contract buyers since the start of the system until 2011. The data is obtained from the Pension Monitor Center, and covers the customer and contract characteristics of more than 75% of all lapse types in the period. Impact of demographic factors and contract features are examined using the logit model. We divide the sample into different groups of customers according to their monthly contributions to the system. The results of econometric analysis reveal evidence of a significant relationship between exit decision and features such as education level,occupation, total accumulated savings, geographical regions, pension sales channel and payment instruments. Staying long enough in the system increases participants’continuity. Our elaborations also provide some tips for pension companies to ensure longevity and retirement of customers

Assessment of the methodology for establishing the EU list of critical raw materials : background report

This report presents the results of work carried out by the Directorate General (DG) Joint Research Centre (JRC) of the European Commission (EC), in close cooperation with Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (GROW), in the context of the revision of the EC methodology that was used to identify the list of critical raw materials (CRMs) for the EU in 2011 and 2014 (EC 2011, 2014). As a background report, it complements the corresponding Guidelines Document, which contains the "ready-to-apply" methodology for updating the list of CRMs in 2017. This background report highlights the needs for updating the EC criticality methodology, the analysis and the proposals for improvement with related examples, discussion and justifications. However, a few initial remarks are necessary to clarify the context, the objectives of the revision and the approach. As the in-house scientific service of the EC, DG JRC was asked to provide scientific advice to DG GROW in order to assess the current methodology, identify aspects that have to be adapted to better address the needs and expectations of the list of CRMs and ultimately propose an improved and integrated methodology. This work was conducted closely in consultation with the adhoc working group on CRMs, who participated in regular discussions and provided informed expert feedback. The analysis and subsequent revision started from the assumption that the methodology used for the 2011 and 2014 CRMs lists proved to be reliable and robust and, therefore, the JRC mandate was focused on fine-tuning and/or targeted incremental methodological improvements. An in depth re-discussion of fundamentals of criticality assessment and/or major changes to the EC methodology were not within the scope of this work. High priority was given to ensure good comparability with the criticality exercises of 2011 and 2014. The existing methodology was therefore retained, except for specific aspects for which there were policy and/or stakeholder needs on the one hand, or strong scientific reasons for refinement of the methodology on the other. This was partially facilitated through intensive dialogue with DG GROW, the CRM adhoc working group, other key EU and extra-EU stakeholders