14thEuropeanAssociationforComparativeEconomicStudiesConference

ComparativeEconomicDevelopmentintheLongRun

BookofAbstracts

hostedby

Regensbu

rg8–10Septem

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14thEuropeanAssociationforComparativeEconomicStudiesConferenceRegensburg,8–10September2016President:SaulEstrin(LondonSchoolofEconomics)Vice-President:MagdolnaSass(CERS,HungarianAcademyofScience)LocalOrganizer:JürgenJerger(IOSRegensburgandUniversityofRegensburg)

Contents

ContributionstoPaperSessions......................................4

ContributionstoOrganizedPanels................................66TheCallforPapersforthe14thEACESConferenceinvitedproposalsforpaperandpanelsreflectingcurrentandongoingresearchonanythemeofcomparativeeconomics.ContributionsthathavebeensubmittedassinglepapersarecoveredinthePaperSessions(PS1toPS25),whereasthepanelsarepresentedinOrganizedPanels(OP1toOP11).Thisbookof abstract is structuredaccordingly, butdoesnotuse thetitlesofthesinglesessions.Rather,abstractsarelistedinalphabeticalorderofthelastnameofthepresentingauthor.Fullpapersareavailableonlineviatheconferencewebsite.Ifthisisnotthecase,interestedparticipantsarekindlyaskedtodirectlycontacttheauthor.

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ContributionstoPaperSessionsAcharya,Sanjaya (OxfordPolicyManagement,TribhuvanUniversity):Efficiencyandlong-termgrowthpotentialofvalueaddedtaxsystemindevelopingworld:thecaseofNepalAbstract:ValueAddedTax(VAT)hasbecomeanintegralpartofdomes-tictaxreformsinmanydevelopingcountries.Inaneffortofmodernis-ingoveralltaxsystem,itisreplacingnotonlysalestaxbutalsoseveraltiny indirect taxes except excise duties. Taking the case of a typicalSouthAsiandevelopingeconomyofNepal,VATassociatesanumberofrefundstodifferentprivatesectoractivitiesforpromotinginvestmentinhighgrowthandexportpotentialsectors.Totalrefund,morespecifi-callytheexportrefund,hasasignificantpositiveimpactonthelevelofGDP.Inefficiencyground,thesizeandgrowthperformanceofnon-ag-riculturalGDPhaveastrongpositiveinfluencetoVATC-efficiencyratio-definedastheratioofeffectiveVATratiotonominalVATratio.How-ever,compositionofVATrevenuedoesnothaveencouragingtrendduetogrowingsharefromtrade-relatedactivitiescomparedtoproductionactivities.Consequently, ithasbecomemore import-based. Likewise,VATgap-thedifferencebetweenpotentialandactualVATrevenues--hasbeenfoundbearingastrongassociationwithC-efficiencyratio.ThehigheristheVATgap,theloweristheC-efficiencyratio.IfC-efficiencyratioisimprovedalongwithhighercomplianceonbehalfofbothtax-payersandtaxauthority,thecapabilityofthegovernmentisstrength-enedintermsofthelong-termdomesticrevenuegeneration.Keywords:VAT;C-efficiencyratio;VATgap;Growth;TaxcomplianceJEL:H20,H21,H25Email:sanjaya.acharya@gmail.comAkinfemisoye,Tolulope(UniversityofLeeds),VirginiePérotin:Theef-fectsofemployees'empowermentonjobsatisfactionAbstract:Thepaper investigates theeffectsofemployees'empower-mentondifferentformsofjobsatisfactioninBritishworkplaceswhilecontrollingforthepresenceofjobdemandssuchasworkintensity.Us-

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ingthe2011WorkplaceEmploymentRelationsSurvey(WERS)andcon-ducting logit estimations, we explore the demand-control model, awidelyusedmodel inorganizationalpsychology.Themodelproposesthat imbalancesbetweenthedemandsplacedonemployeesandthecontroltheyhaveintheirjobnegativelyaffectemployeewell-beingandhealth.Weexaminetheindividualeffectsofjobdemandsandjobcon-trolonnineformsofjobsatisfaction,aswellastheeffectsofthetypesofjobsidentifiedbythemodelbasedonthedegreeofimbalancebe-tweendemands and control.Wealso testwhether these effects aremoderatedoramplifiedbythepresenceofequalitypoliciesinthefirm.Re-evaluatingindividualformsofemployeeempowermentpracticesinthecontextofthedemand-controlmodel,theresultssuggestthatem-ployeesaremorelikelytobesatisfiedinlowstrainjobs(jobswithlowdemandsandhighcontrol)thaninhighstrainjobs(jobswithhighde-mandsandlowcontrol).Employeesinpassivejobs(jobswithlowde-mandandlowcontrol)ontheotherhandarelesslikelytobesatisfiedwithachievementandinfluencethanemployeesinlowstrainjobs.Im-portantly,wealso find thatequalityplansmoderate thenegativeef-fectsofjobdemandsandstrengthentheeffectsofjobcontrol.Keywords:obSatisfaction,PayPerformance, Incentives,LabourMan-agement,WorkerEmpowerment,WorkArrangements,TasksandAu-thority,EqualityJEL:D63,J28,M54Email:tolulopeakinfemisoye@gmail.comAnikin,Vasiliy(NationalResearchUniversityHigherSchoolofEconom-icsMoscow,UniversityofEssex):SkillstraininginIndia:Marketorpriv-ilege?Abstract:Thecurrentpapertargetstheissuesofsocio-economicdevel-opmentofcontemporaryIndiabyexploringthefactorsofformalvoca-tionaltraining.Drawingonthe2012NSS68thRounddata,wehavedoc-umentedthatinIndiatraininghasacontroversialnatureincludingbothmarketandnon-marketcharacteristics.Themarketnatureoftrainingisreflectedinthesignificanceofeco-nomicfactors,suchasinequalitybe-tweenoccupations, the size of the organization, permanent employ-ment, and human capital characteristics like tertiary education and

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skills.However,themarketnatureoftheformaltraininginIndiaisap-parentlycontradictory,asintra-occupationaldiversitymeasuredbythewage differentials within occupations does not encourage trainingamongIndianworkers.Moreover,weexpectedtorevealtheimpactofemploymentrelationshipsontheprobabilityoftrainingmeasuredre-gardingthewrittenjobcontract,butitseffectturnedouttobeinsignif-icant.Thestatisticallysignificant impactofsocio-demographic factorssuchasage,gender,householdsize,maritalstatusandreligionontheprobability of training reveals its non-market nature. Modernizationtheorygivesagoodexplanationofthiscontroversialphe-nomenonsug-gestingthepivotalroleofascribedstatusesinsocietieswithpre-indus-trialpatterns,whichisthecaseforIndiaduetothehighshareoftheruralpopulation.Fromthemethodologicalpoint,wehavearrivedattheresultsbyapplying thecross-classifiedmodelsestimatedwithMCMCmethods.Bythis,wehavedetectedthesignificantstructuralvariationintheprobabilityoftrainingatthreecross-classifiedlevelssuchasoc-cupationalstructure,regions,andhouseholds.Keywords: Skills training, occupations, cross-classified modelling,MCMCJEL:J21,J24,J82Email:vanikin@hse.ruBartlett,William(LondonSchoolofEconomics):EducationsystemsandeconomicdevelopmentintransitioncountriesoftheWesternBalkansAbstract:Educationiscommonlyconsideredtobeanimportantgener-atorof thehuman capital that is needed topromote long-termeco-nomic development. This is especially so in transition countries. Thereason is that transition by its nature involves large-scale structuralchangeandtheintroductionofnewtechnologies.Inordertooperatethenewindustriesandnewtechnologies,theskillsofthelabourforcemustadaptandchangeintandem.However,inmanytransitioncoun-tries,theeducationsystemsthatproducetherequiredhumancapitalandskillshavenotbeenreformedinlinewiththestructuralchangesintheeconomy.Thishasledtotohighlevelsofstructuralunemploymentandreducedthepotentialrateofeconomicgrowth.Thispaperexploresthesephenomenaincomparativeperspective,takingthesixcountriesoftheWesternBalkansasacomparativecasestudy.Itisbasedonnew

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dataonskillmismatchandskillgapsderivedfromlargescalesurveysofstudents,graduatesandemployersdesignedtoidentifytherelationshipbetween education systems and the labour market changes takingplaceinthesecountries.Thefindingsoftheresearchshowthedifficul-ties facingsecondaryschoolstudents intheir transitiontothe labourmarket aswell as the presence of significant skill gaps and skillmis-matchesrelatedtouniversitygraduates.Thepaperanalysestheimpli-cationsoftheseimbalancesforlong-runeconomicgrowthandidenti-fiessomeofthepoliticaleconomybarrierstoeffectivereformoftheeducationsystemsintheregion.Keywords:Educationsystems,skillmismatch,WesternBalkansJEL:I25,J24,P52Email:w.j.bartlett@lse.ac.ukBoltho, Andrea (Magdalen College, University of Oxford): Export-ledgrowthorgrowth-ledexports?WesternEuropeintheGoldenAgeAbstract: It is generally accepted thatWestern Europe's exceptionaleconomicexperienceintheGoldenAge(1950-73)wasprimarilyduetoacatch-upprocessascountriescombinedtheirsurpluslabourwithim-portedAmericantechnologyto(partially)closethegapinpercapitain-comeswiththeUnitedStates.Theevidencesupportingthishypothesisisoverwhelming.Itdoesnot,however,explainallofthepost-warexpe-rience.SeveralEuropeancountriesperformedbetter (orworse) thanmighthavebeenexpectedonthebasisofcatch-upalone.Toexplainsuchdiscrepancies,someauthorshavestressedtheimportanceofex-portsrisingataboveaverageratesand,viamultiplierandacceleratoreffects,generatingavirtuouscircleofreinforcinggrowth.Thepaperin-vestigatesthisissue.Iteschewsformal"Grangercausality"testswhich,more usually than not, hide rather than reveal information about acountry's experience and relies instead on three less formal ap-proaches:i)Anexaminationofexportpriceandquantitychangestotryanddetectwhethershockscamefromthedemandorthesupplyside;ii)Alookatexchangeratedevelopmentstoseewhetherpersistentun-dervaluation, for instance,waspresent, therebybenefitingparticularcountries;iii)Aninvestigationofthecommodityandgeographiccom-positionofexportstoassesswhethersomecountriesbenefitedfroma

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favourable pattern of specialization. The conclusions reached are:[workisinprogressandnofirmconclusionshavebeenreachedasyet].Keywords:Exports,Growth,WesternEuropeJEL:N14,O47Email:andrea.boltho@magd.ox.ac.ukBrezinski, Horst (University of Economics Poznan, TU BegakademieFreiberg),RyszardBarczyk:AcomparativeanalysisofmacroeconomicstabilizationpolicyinPolandandinGermanyintheyears1990-2015Abstract:Thepolicyofmacroeconomicstabilizationplaysasignificantroleincapitalisteconomicsystems.Suchactivitieshavealsobeencon-ducted in thePolishandGermaneconomies.Thus,westartoutwiththehypothesisthatafterthestartofthetransitionprocess inPolandtheyaregraduallybecomingmoreandmoreconvergent.Consequently,theaimofthisarticleistocomparetheobjectives,instrumentsandef-fects of macroeconomic stabilization policies in the Polish economywheretransformationprocessesoccurredandintheGermaneconomyintheperiodofreunification.Onthisbasisanattemptismadetoex-aminethemostimportantdeterminantsandtofindoutthedegreeofconvergenceordivergencebetweenthosepolicies.Thearticleconsistsofthreeparts.Thefirstonecontainsacomparativeanalysisofstabilizationpolicies.Thisanalysisincludestheaims,instru-mentsappliedandthemechanismoftheiroperationineachofthean-alyzedcountries.Thesecondpartdiscusses internalandexternalfac-tors influencing theeffectsof stabilizationmeasures implemented inPolandandinGermany.Itconcernsnotonlypolitical-institutionalfac-torsdeterminingthefunctioningofthoseeconomiesandconditionsre-sultingfromtheachievedlevelandcharacteroftheireconomicgrowth,but also external determinants connected with the participation ofthosecountriesintheprocessesofEuropeanintegration.Thelastpartpresentsthemostimportantrealandnominaleffects(dynamicsofeco-nomicgrowth,situationonthelabourmarket,inflation)whichshowtowhatextentthestabilizationaimswereachievedinbothcountries.Thefinalpartcontainsconclusionsconcerningtheextentofconvergenceordivergencebetween the stabilizationpolicies implemented in PolandandinGermany.

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ThetimerangeoftheempiricalanalysesforthePolishandfortheGer-maneconomycoverstheyears1990-2015,whichresultsfromthefactthatthesystemictransformationinPolandstartedin1990andthere-unificationprocessesinGermanycommencedon3rdOctober1990.Keywords:Business Cycles,Macroeconomic Policy, Comparative Eco-nomicsJEL:E3,E6,P5Email:horst@brezinski.deChapman, Sheila Anne (Lumsa University), Valentina Meliciani: Re-gionaldisparitiesandstructuralchangeinCentralandEastEuropeAbstract:Thepaperanalysesthedeterminantsofregionalincomedis-paritiesandoftheirevolutioninCentralandEasternEuropeanCoun-tries(CEECs)between1991and2011.Withreferencetotheliterature,itidentifiesregionalgroupsonthebasisofgeo-sectoralcriteriadefinedmainlybygeographiclocationandchangesinspecializationpatterns.Inparticular,dataonthesectoralcompositionofeconomicactivityandonforeigndirect investmentareusedtodistinguishregions in industrialdeclineandrestructuringregions.Thepaperfindsthatregionalpercap-itaGDPdisparitieswithinCEECshavesignificantlyincreasedover1991-2011andthatsuchdisparitiesarestronglylinkedtogeo-sectoralfac-tors.Peripheralregions(oftenspecializedinagriculture)andoldindus-trialregionslagbehind,whileurbanregionsandsomerestructuringre-gionsforgeahead,alsothankstoforeigndirectinvestment.Keywords:regionaldisparities,CentralandEasternEuropeanCountries,geographyJEL:R10,R11,R12Email:chapman@lumsa.itChu, Thanh Tuan (Bournemouth University), Jens Hölscher, DermotMcCarthy: The impact of government expenditure on economicgrowth:anempiricalanalysisAbstract: This paper examines the relationship between governmentexpenditureandeconomicgrowth.Thispaperempiricallytestsamodel

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combining a set of variables from a number of existing endogenousgrowthmodels.Weseparategovernmentexpenditureintotwogroups,productiveandnon-productiveandexaminetheirimpactoneconomicgrowth. This paper contributes to existing knowledgebydrawing to-gethervariablesfromvariousexistingmodelsandcomparingtheresultsfordevelopedwithdevelopingeconomies,anaspectthathasreceivedlittleattentionsinexistingresearch.TheanalysisusesOLSFixedEffectsandGMMtechniquetoestablishtherelationshipbetweengovernmentexpenditureandeconomicgrowth.Our resultshave implicationsonhowgovernmentsought toallocatetheirexpendituresondifferenttypesofpublicgoods,andthenexpendi-turesharesaredirectlylinkedtoproductivitiesofthesegoods.Contrarytothoseexistingstudiesusingdevelopedcountries'data;thefindingofthispaper shows thatnon-productivegovernmentexpenditurehasapositive relationshiponeconomicgrowth.Meanwhile, theother sur-prisingresultfindsoutthatproductiveexpenditurehaveanegativeim-pactongrowthforthosedevelopedeconomies.However,inrelationtodevelopingcountries,productiveexpenditureisfoundtohaveaposi-tiveimpactoneconomicgrowth,whilenon-productiveexpenditureisnegative.Thislatterresultisconsistentwithdevelopedcountryexperi-encebutiscontrarytorecentresearchfindings.Failuretotakeaccountof thegovernmentbudgetconstraintvariables introducesabias intotheregressioncoefficientwhichhasbeenignoredinmostpreviousre-search,andwehaveshownthatthisbiascanbesubstantial.Keywords:Growth,GovernmentExpenditureandGMMtechniqueJEL:E62,H50,O40Email:TChu@bournemouth.ac.ukCohen, Solomon (Erasmus School of Economics Rotterdam, ErasmusUniversityRotterdam):GlobaldominanceofcountriesandregionsAbstract:Studiesanddiscussionsofgloballeadership,orglobaldomi-nance,focusontherelativesizeoftheGDPofindividualcountries.Theapproachsuffersfromtwobiases:theonecriterionGDPbias,andtheisolatedindividualcountrybias.Thepaperaimsatproposingandap-plying solutions to these two bias problems. First, we present basicpremisesformeasuringglobaldominanceviaadominanceindexthatavoidstheGDPbiasbycombiningpopulationsizewithGDPsize.This

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dominanceindexisquantifiedtogivethelistofleadingcountries.Se-cond,theworldcannotbeseenasaloosecollectionofindividualcoun-tries.Anyindividualcountryisalliedtoothercountriesinaregionalfor-mation,andisassuchamemberofaregionalinterestgroupthathascommoninterests.Theremedytotheisolatedindividualcountrybiasistodecomposeitintointerregionalandintraregionaldominance,whichisshowntoaddanalyticalinsights.The paper makes further use of the dominance index in projectingglobaldominanceforthenearfutureinthelightoftheexpecteddis-placementof incumbent leadersbynewcomer leaders, anduses theforegoneanalysisindiscussingdesignsofglobalgovernance.Keywords:GDPsize,populationsize,interregionaldominance,intrare-gionaldominance,worldgovernance,G-20.JEL:F02,F55,J11Email:cohen@ese.eur.nlDemidova,Olga (National ResearchUniversity Higher School of Eco-nomics Moscow), Tatiana Danilenko, Marcello Signorelli: Unemploy-mentClubsinRussianRegions:spatial-econometricanalysisAbstract:Thesocio-economicdevelopmentplanfortheRussianFeder-ationuntil2020statesthattheprioritiesofthestateregionalpolicywillbe(i)balancedsocio-economicregionaldevelopmentand(ii)thereduc-tionofinterregionaldisparities.Intheresearchreportedbythispaperweadopteda"clubsapproach"toexaminethedegreeofthehomoge-neityofRussian regionsaccording to the levelof regionalunemploy-ment.TheexplorationofMoranscatterplotsrevealedasignificanthet-erogeneityofRussian regionsand suggested thedistinctionbetweentwoclubs:High-High(regionswithhighunemploymentsurroundedbyregionswithhighunemployment)andLow-Low(regionswithlowun-employmentsurroundedbyregionswithlowunemployment);somere-gionsarenotincludedinthesetwoclubs.Wetestedthefollowingmainresearchhypotheses:(i)spatialeffectsfortheHigh-HighandLow-Lowclubsregionsdiffersignificantly;(ii)thedeterminantsofunemploymentfortheHigh-HighandLow-Lowclubssignificantlydifferfromthoseforthe other regions. The hypotheseswere tested using a specially de-signedclassofspatial-econometricmodelsandestimatedbyregional

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datafrom2004to2012usingdifferenceGMMandsystemGMM.Par-tialempiricalconfirmationwasfoundforbothhypotheses.Ourresultscanfavorabetterdesignofnationalandregionalpoliciesforimprovinglabormarket performance and reducing regional unemployment dis-paritiesinRussia.Keywords:regionalunemployment,regionalclubs,spatialeffects,Rus-siaJEL:J64,R23,R19Email:demidova@hse.ruDjalilov, Khurshid (Bournemouth University), Jens Hölscher: Marketpower,regulationandstabilityinthebankingsectoroftransitioncoun-triesAbstract: This studyexplores thechannels throughwhich the regula-tions impactonstability inthebankingsectorof thetransitioncoun-tries.Wearguethatthechannelsthroughwhichthedifferentregula-tionsaffecting stabilityvarybetweenEU-memberandnon-EU transi-tioncountries.Ourstudyconsiders370banksfrom20transitioncoun-triesfortheperiod2001-2013,where11areEU-member(Bulgaria,Cro-atia,CzechRepublic,Estonia,Hungary,Latvia,Lithuania,Poland,Roma-nia,SlovakiaandSlovenia)and9arenon-EU(Albania,Armenia,Azer-baijan, Belarus, Bosnia, Kazakhstan,Macedonia, Serbia, andUkraine)states.Ourresultsshowthathighereconomicgrowthandlesscompet-itiveconditionswouldleadtoamorestablebankingsectorinearly(EU-member)transitioncountries.Moreover,thestabilisationeffectofdif-ferentregulationssuchascapitalrequirement,restrictionsandsuper-visors(mainlyCentralBanksandothergovernmentbodies)ishighertothebankswithhighermarketpower.Fornon-EUtransitioncountrieswefindthathigherinflationratessignificantlyimpactonhigherlevelsofrisktaking.However,capitalrequirementshaveastabilisationeffectandthusitshigher level leadstomorestablebankingsectors inbothgroupsofcountries.Overall,ourresultsareconsistentwiththetheorythattheoutcomeoftheregulations-reformsvariesacrosscountriesac-cordingtotheirinstitutionaldevelopmentandthereforetheimpactofbankingregulationisdifferentbetweenEU-member(early)andnon-EUmember(late)transitioncountries.Keywords:Banks,regulation,transitioneconomies

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JEL:P20,G21,E58Email:kdjalilov@bournemouth.ac.ukErshova,Nina(NationalResearchUniversityHigherSchoolofEconom-icsMoscow): Investmentclimate inRussiaandchallenges for foreignbusiness:ThecaseofJapanesecompaniesAbstract:TheimprovementoftheinvestmentclimateinRussiaencour-aginganinflowofforeigndirectinvestmentintothecountry’seconomyisbeingdeclaredatthehighestlevelsoftheRussiangovernmentasanimportantobjectiveforthefurthereconomicdevelopmentofthecoun-try. One of the most important instruments for that improvementshouldbetheconsiderationoftheforeigninvestor’sopinionsandideasandreactiontothemosturgentandcriticalissueswhichserveasob-staclestotheirinvestmentactivitiesinRussia.ThispaperconsidersthecaseofJapaneseinvestorsinRussia.ItisbasedontheresultsofasurveyofJapanesecompaniesdoingbusinessinRus-sia(membersoftheJapanBusinessClubMoscow)andcontentanalysisofasetofinterviewswiththerepresentativesofJapanesebusinessandacademiccommunityandnon-governmentalorganizationsrepresenta-tives.WeidentifywhichfactorsattractJapanesecapitaltoRussiaandwhichhinderinvestmentactivities.StudyingJapaneseinvestmentinRussiare-vealstheparticularchallengesandobstaclesthatmakeJapanesecom-paniesreluctanttoengageinbusinessactivitiesinRussia.Theresearchreveals and systemizes the factors restricting thedevelopmentof in-vestmentcooperationandtheirroots,andidentifiespossiblewaysofovercomingthesechallenges.Theanalysisshowsthattheconstrainingfactorscanbedividedinto3groupsbytheorigin:external–associatedwiththeproblemsofthein-vestmentclimate inRussia, internal–revealingfromthespecificfea-turesoftheJapaneseproductionandmanagementsystemandotherfactors–non-economicfactors,whichmainlyconcernbusinesscultureandinformationalissues.Keywords:Russia,Businessclimate,JapaneseinvestmentJEL:F23,M11,M12

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Email:nershova@hse.ruEstrin,Saul (LondonSchoolofEconomics),StephanieDecker,TomaszMickiewicz:ThedeeprootsofentrepreneurialaspirationsinAfricaAbstract:Weconsiderhowthehistoricaloriginsofinstitutionalframe-worksaffectentrepreneurshipinAfrica,evaluatingtheextenttowhichhistorically-embeddedinstitutionalframeworksandotherenvironmen-tal conditions affect the likelihood of entrepreneurial start-ups,.Wealsoinvestigatewhetherentrepreneursinthesecountriesareprimarilymotivatedbythepressuresofsubsistence,orwhetherthebroadereco-nomiccontextfavoursmoreambitiousentrepreneurialventureswhichaimforbusinessgrowth.Toexploreourideas,wedevelopanewda-tasetwhichcombinesGEMdataaboutAfricaneconomiesin2013withinstitutionalandeconomicdata.Wepresentourresultsforninecoun-triesandthenfocusonapairofresource-driveneconomies,NigeriaandAngola,forwhichweconductedanin-depthanalysisofentrepreneurialattitudesandhistoricalcontext.Weconcludebyhighlightingnotonlythehistoricaloriginsofpresent-dayinstitutionalenvironmentsforen-trepreneurship inAfrica,butalsoemphasizing themoreevolutionaryelementsofthehistoricalcontextthatdetermineentrepreneurialaspi-rations.Keywords:Africanentrepreneurship,institutions,entrepreneurialatti-tudes,historicalcontextJEL:Email:S.Estrin@lse.ac.ukFedyunina,Anna (NationalResearchUniversityHigherSchoolofEco-nomicsMoscow), Sergey Kadochnikov: Determinants of fast-growingfirmsandhigh-skilledinterregionalmigrationinRussiaAbstract: This paper presents an empirical evidence on the determi-nantsoffast-growingfirmsintheRussianeconomy.Ourmainhypoth-esissuggeststhatstudentsgraduatedfromTop-100Russianuniversitiesand higher education institutions are strong and robust driver of

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knowledgediffusionacrossRussianregionsandthatthepatternofem-ploymentofgraduatesfromTop-100Russianuniversitiesexplainsthepatternofthedistributionoffast-growingfirmsacrossRussianregions.Inordertoexplorethelinkbetweenfast-growingfirmsandhigh-skilledmigrationinRussianregionswecompileauniquedatasetthatincludesdataoninterregionalmigrationflowsandwagesofstudentsgraduatedfromTop-100Russianuniversities.Sinceourdependentvariableisthenumberoffast-growingfirmsunderweakandstrongcriteria,wehavecountdatamodelandemploythefollowingestimationprocedure.First,werunaPoissonregressionwithrobuststandarderrorsandnegativebinomial regression.Second,wechecktherobustnessof resultswithzero-inflatednegativebinomialmodels.Controllingforasetofregionalsocio-economiccharacteristicsandfixedeffects,we find that higher number of graduateswith technical andnon-technicaldegreeinaregionpredictshighernumberoffast-growingfirmsinthatregion.Thisfactcouldbeanevidenceofhigherentrepre-neurialandinnovationpotentialofregionswhichhostTop-100RussianuniversitiesandwhichattractgraduatesfromTop-100Russianuniver-sities andhigher education institutions.Moreover,we find that fast-growingfirmstendtoexistinregions,whichprovidehigherwagepre-miumforstudentsgraduatedfromTop-100Russianuniversitiesrelativetotheaverageregionalwage.Keywords:fast-growingfirms,high-skilledmigration,RussianregionsJEL:L26,R1Email:afedyunina@hse.ruFiedorczuk,Monika(UniversityofBialystok):Capitalmarketasafactorofcorporatesectordevelopment inRussia.ThecomparisonwithCEEeconomiesAbstract:Themaingoalofthepaperistoanalyzetheevolution,maincharacteristicsandtheroleofthecapitalmarketinRussiainthecorpo-ratesector,especiallyfromthepointofviewofcorporategovernance.Inmanydevelopedeconomiesplayakeyroleinthedevelopmentandfinancinginvestmentsofpubliccompanies.Furthermore,capitalmar-ketsarethemaincorporategovernancemechanism.Itisaresultofalongtimeoftheirdevelopmentandtheevolutionoflawregulations.

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InCentralandEasternEuropecountriescapitalmarketsdevelopmentwaspossiblebecauseofthetransformationprocess.Stillthosemarketsdon't play important role in corporate governance. In Russia, capitalmarketindicatesparticularfeatures,interalia:highconcentration,sig-nificantroleofthestatebothasaparticipantandasasupervisorandhighdependencyofrawmaterials'pricechanges.Asaresult,thecapitalmarketcannotbeconsideredasacrucialfactorinfluencingcorporatesectordevelopment.As itwillbeshown,capitalmarket inRussia isaspecificonecomparedtotheCEEregion.Keywords:Russia,capitalmarket,corporategovernanceJEL:G32,G34Email:monika.fiedorczuk@uwb.edu.plFilipovic,Milorad(UniversityofBelgrade),MiroljubNikolic:EconomicdevelopmentofSerbia-NeedforstructuralchangesAbstract:Structuralchangesarealong-termprocess,stimulatedmainlyby global developments in technology and innovation. They are im-portantbecausetheyshapetheopportunitiesforfutureeconomicde-velopment.Innovationintechnologyandskillsallowforthesameprod-uctstobeproducedathigherlevelsofproductivity,thedevelopmentofnewproductsandservices,withsimultaneouschangeinthestruc-tureofdemand.Keyfeaturesofstructuralchangesaredropintheshareofprimaryproductionandgrowth,andthenstabilizationoftheshareoftheproduction,mainlyhigh-techsector.Serbiahasachievedhighav-eragegrowthrateofGDP,butwithoutsignificantchangesintheeco-nomic structure, the expected reindustrialization, and the growth inproductionoftradablegoods.Serbiandevelopmentpathinthelast15years(afterpoliticalchangesanddemocratization)showssignsofseri-ous deficiencies immediately after the start of Global crisis in 2008.Even7yearslater,duetogrowthbasedonlowtechnologicalcapacities,the reduction in employment and the inadequately employedwork-force,lossofintellectualresourcesandtechnologicalsetbacks,Serbiaisstill going through turbulent episodes of slow growth rates, in someyearscombinedwithnegativeresultsinproductionandGDPinothers.ItisentirelyclearthatSerbianeedsstructuralchangesofitseconomy,tobecomemodernmarket-orientedcountry.

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Inthispaper,wewillanalyzedevelopmentresultsofcertainnumberofcountriesoftheSEEregion,throughTFPdisaggregationoftheirgrowthrates.DecomposingGDPpcshowsthathighproductivitywithouthighemployment does not mean higher, especially not sustainable eco-nomicgrowth.Wewanttoprovethatallsuccessfulcountriesrelyonfosteringofhigh-techsectorsandhighervalue-addedproductdevelop-ment.Insteadofcheapworkforceandnaturalresourceutilization,theirmain comparative advantage becomes competitive business climate,predictable institution functioning, and increased investment inknowledgeandinnovation.TheresultsofourresearchwillbeconcentratedfirstonSEEregion,butalsoonothersuccessfulcountriesthathavebeenpassingthroughthetransition process in the last 25 years. Positive experience of thosecountriesisstillnotusedinbackwardcountriesofSEEregionthatareintheprocessofEUaccessionlikeSerbia.Keywords:structuralchanges,economicgrowth,technologicaldevelop-mentJEL:L16,O47,O14Email:miloradf@ekof.bg.ac.rsFrensch, Richard (IOS Regensburg, University of Regensburg), JarkoFidrmuc:RiversandtradeAbstract:Whileriversbothimpedeandfacilitatetrade,thedualroleofrivershassofar,tothebestofourknowledge,notbeenexplicitlycon-sidered.WeexpandtheexistingbilateralgeographicalCEPII-databasebyaddingdetailed informationonbilateral riverbordersand indirectriverlinkagesfor1,560Eurasiancountrypairs(40countries).Withinagravityframework,weassesstheimpactofinternationalriversonEu-ropean trade, using disaggregate trade data derived from UN-Comtrade,bothontradeflowsandalongthemarginsoftrade.Whilesubstantialriverbordersaresignificantlydetrimentaltotrade,interna-tionalrivershaveasmallbutpositivenetimpactonEuropeantrade.Keywords:Gravity,EconomicGeographyJEL:F14Email:frensch@ios-regensburg.de

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Fujimori, Azusa (Osaka Seikei University): Technological diffusionthroughtheforeigndirect investmentinmanufacturingindustry:Em-piricalevidencefromafirm-levelanalysisinIndiaAbstract:Thispaperexaminetechnologicaldiffusionfromforeigndirectinvestment(FDI) investorstodomesticmanufacturingsector in India.Weemploy firm-levelpaneldata from2000to2007coveringallme-diumandlarge-sizemanufacturingindustriesinIndiaobtainedfromAn-nual Survey of Industries published by Central StatisticOrganisation.ThisstudyattempttocaptureFDIspillovereffectempiricallyfromtwodifferentchannel;horizontalspillovereffect(technologicaldiffusioninthesameindustry)andbackwardspillovereffect(technologicaldiffu-sionfromdownstreamindustries).Inaddition,periodoftechnologicaldiffusionisdistinguishedtermofspillovereffecttheshort-termandthelong-term.First,weestimatetotalfactorproductivity(TFP)ofeachmanufacturingfirmthroughtheestimationoftheCobb-Douglastypeproductionfunc-tion,thenestimatetheimpactincreasingtheratioofFDItodomesticcapitalstockineachindustrytoTFPgrowth.Fromtheresultsofempiricalanalyses,wedonot findanysignificantevidencesofthehorizontalspillovereffectneitherintheshort-termnorinthelongterm.However,wefindthatTFPgrowthrateisfallenbytheincreaseofFDIindownstreamindustriesintheshort-term,butraisedinlong-term.Inotherwords,increaseofFDIcontributestotechnologi-cal development and productivity growth in Indian local suppliersthroughinter-industriesrelationsinthelong-term.Keywords:ForeignDirectInvestment,TechnologyTransfer,IndiaJEL:C82,F21,O53Email:fujimori-a@osaka-seikei.ac.jpGatskova,Kseniia(IOSRegensburg),BarbaraDietz,ArtjomsIvlevs:Doesmigrationaffecteducationofgirls inTajikistan?Evidence frompaneldataAbstract:Acrossthedevelopingworld,girls'andwomen'saccesstoed-ucationcontinuestobehamperedbyanumberoffactors,rangingfrom

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householdincomeconstraintstorestrictivesocialnorms.Recentlitera-ture suggests that migration of family members and migrant remit-tances might be another factor affecting children's educational out-comes.Evidence based on panel data is still in short supply, the channelsthroughwhichmigrationandremittancesaffecteducationarenotwellunderstoodand,crucially,relativelylittleisknownaboutthegenderef-fectsofmigrationonschoolingoutcomes.Ourresearchattemptstofillthese gaps. Focusing on Tajikistan, the poorest post-Soviet CentralAsian state, it asks the following questions: Domigration and remit-tancesaffecteducationaloutcomesofgirls?Ifyes,throughwhatchan-nels?Doesemigrationoffamilymembersaffectsocialnormsandatti-tudesofwomenstayingbehindand,ifyes,doesthisfeedintoeduca-tional outcomes of girls and youngwomen? To answer our researchquestions,weusehouseholdpaneldatafromTajikistanthatwerecol-lectedintheyears2007,2009and2011.TheextentofmigrationthatTajikistanwitnessedinthelast20yearsmakesthecountryparticularlyappropriateforanexaminationofthelinkbetweenmigrationandtheschoolingofgirls.Takingadvantageofourstudyweidentifythecon-cretechannelsthroughwhichmigrationmightaffecttheeducationandempowermentofwomeninthiscountryandwhatpolicyoptionsareavailabletoreducepotentialbarriersgirlsandwomenmightstillface.Keywords:Migration,education,TajikistanJEL:F22,O15Email:gatskova@ios-regensburg.deHajek, Jan (CharlesUniversityPrague,CzechNationalBank):Realex-changeratemisalignmentintheEuroArea:Canbedeflationhelpful?Abstract:Isthereanypointofviewenablingtoregarddeflationashelp-ful?Theprevailingviewacrosstheeconomiccommunityisthatgoodsandservicespricedeflationsarealwaysperniciousandeconomichis-toryisabletoprovideabundantevidencetosupportsuchclaim.Thispaperdoesnothavetheambitiontosuggestotherwise,insteadthepa-per tries topresentanunorthodoxperspectiveenablingspecificeco-nomicunitiestoboostitscompetitivenessviafallingprices.Underthisscheme,deflationcouldbeviewedaseconomicpurgatory improving

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futureeconomicprospectsatthecostofsevererecessioninthebegin-ning.Inthispaper,weusethebehavioralequilibirumexchangerateap-proachtoexaminetheextentofrealexchangeratemisalignmentintheeuroareaovertheperiod1980-2014.Inapanelcointegrationsetting,wefindsignificantlinksbetweenrealexchangerates,relativeproduc-tivity,tradebalanceandtermsoftrade.Unlikeotherpapersrelatedtothetopic,wegofurtherinthedirectionoflinkingtheestimatedmisa-lignmenttoinflationarydifferentials.Ourresultsindicatethatanega-tive inflationarydifferentialbetween individual countryand theeuroareaitselfdecreasestheextentofovervaluationofthecountry'srealexchangerate.Wealsoshowtheextentofovervaluationinperipheralcountriesoftheeuroareahasbeenincreasingsincemid-2000s.Attheendofobservedperiodthistrendpartiallystoppedduetoemergenceoffallingpricesintheseeconomies.Wediscussimplicationsofsuchre-versalandconcludedeflationinperipheralcountriesmightbehelpfulwhenrestoringitscompetitiveness.Keywords:realexchangerates,misalignment,euroareaJEL:C21,F31,F45Email:hajek.ja@gmail.comHinks,Tim(UniversityoftheWestofEngland):Communistpartymem-bership,networksandcorruptionintransitionalcountriesAbstract:WeanalysetheimpactCommunistPartyMembershiphasonself-reported bribery in 29 European and Central Asian transitionalcountries. We find that a connection with the Communist Party in-creasesthelikelihoodofpayingbribes.FurtheranalysisindicatesthatitistheoffspringofformerCommunistPartymembersratherthanpartymembersthemselveswhoaremorelikelytopaybribestoday.Possibleexplanations include the importance of family ties in accessing net-worksinwhichbriberyislikelytobeprevalent.Keywords:Communist,corruption,intergenerationalJEL:D73,O57Email:timothy.hinks@uwe.ac.uk

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Hölscher, Jens (Bournemouth University), Peter Howard-Jones, D.Radicic:TheimpactofEuropeanUnionmembershipandloanfinancingontheperformanceoffirmsintheBalkanstatesAbstract: This paper evaluates the respective performance of Balkanfirmsbothwithinandoutside theEuropeanUnion (EU).The involve-mentoftheWashingtonbasedinstitutions,theInternationalMonetaryFundandtheWorldBanktogetherwiththeEUStabilisationandAsso-ciationProcess(SAP)fortheWesternBalkansprovidesanopportunitytoevaluatetheefficaciousnessoftheWashingtonConsensusprocessasinternalisedbytheEU.InadditiontotheperceiveddesirabilityofEUmembershipforallBalkancountries,theEuropeanCentralBank(ECB)ataworkshopheldonthesubjectofEUaccessionexpressedtheviewthatfinancialdevelopmentwasimportantforeconomicdevelopmentandthat integrationinrelationtobanks"washeldtoacceleratecon-centration,raisingcompetitionandpressureforefficiency,raisingtheextensionofservicesandstrengtheningthecompetitionfordeposits"(ECB 2002). The European Bank of Reconstruction andDevelopment(EBRD)hasmajoredon theneed to "rebalance finance" in transitioncountriesinits2015/16TransitionReportexpressingconcernaboutthelackofcreditavailabilityparticularlyamongstSME's(EBRD2015).Inthelightofthis,itisimportanttoanalysetheefficaciousnessofEUmem-bershipalongsidethedevelopmentofthefinancialsystemsandtoiden-tifyanydifferencesintheperformanceandaccesstofinancebetweenfirmsinEUmembercountriesandthoseinnon-EUcountries.Weuse twodistinctmodelling techniques toestimate individual andjoint treatment effects of the EUmembership and a loan receipt onthreeoutcomevariables-outputperworker(productivity),profitabilityandpropensitytoexport.Firstly,theestimationofmultivaluedtreat-menteffectsusingtheinverse-probabilityweightedregressionadjust-ment(IPWRA)modellingallowsananalysisoftheindividualandjoint(complementary,synergistic)effectsofthetwotreatmentvariables(EUmembershipandaloanreceipt)whichprovidesacomparisonofrela-tiveperformancemeasures.Secondly,themainlimitationofmatchingestimatorsisthattheycannotcontrolforunobservedfirmheterogene-ity.Therefore,totakeintoaccountapotentialhiddenbias,oursecondmodellingstrategyencompassestheuseofacopula-basedendogenousswitchingmodelwhichallowsforarangeof jointdistributionsofthe

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errortermsbesidethenormaldistributionassumedintheHeckmanse-lectionmodel.Thisenablesustoprovidegreatercredencetotheout-comeanalysiswiththeabilitytointerpretthefunctionsofthecontrolvariables.OurresultssuggestthatEUmembershipisthemaindriverofproductivitywiththeprovisionofloansanaddedbonus.Additionally,theprovisionofloansinnonEUcountrieswouldindicateapropensityforgainsinproductivity.Wealso find significant advantages to EUmembership for profit perworkerandidentifythatthereisastronginfluenceonexportwiththeadvantagesoffreeaccesstotheEuropeanUnionmarketsdiminishingthe impactof lackof competitiveness.Problemsof access to financeandtheavailabilityofcapitalandcredit isalsomoreacute innonEUmemberstateswithbothserviceandparticularlymanufacturingfirmshavingissuesinthisarea.Keywords:Productivity,profit,loans.JEL:D22,P23,P33Email:jholscher@bournemouth.ac.ukKalkschmied,Katja(UniversityofGraz):Rebundlinginstitutions:Inter-related institutional elements and economic outcomes at themicro-levelAbstract:Currentapproachestoevaluatehowinstitutionsaffecteco-nomicoutcomesandcausecross-countrydifferencesineconomicper-formanceanddevelopmentaimtoestimateindividualeffectsofdiffer-entinstitutionsandassesstheirrelativeimportanceforeconomicout-comes.Thispapersuggestsanalternativeapproach.Itakeonasystem-analyt-ical perspective and analyze how institutions of different types andkindsinteracttojointlyaffecteconomicoutcomesofcoordinationtasksagentsfaceatthemicro-level. Iutilizemathematicsonsupermodularfunctionsandsublatticesetsandadaptthe"TheoryofComplementari-ties".Thetheoreticalformulationspresentedaccountforamulti-cau-salityofcoordinationtasksandshowunderwhichconditionstheeffectsofsingleinstitutionalrulesandpracticesontheeconomicoutcomeofacoordinationtaskdependoneachother.Ishowhowinterrelatedinsti-tutionalelementsformaninstitutionalarrangementandexhibitajoint

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effectonagents'microeconomicoutcomeswhichdiffersfromthesumoftheirindividualeffects.Theexplanationliesintheexistenceof"Edge-worth"complementsamonginstitutionalelementswhichexhibitapos-itivesystemeffectonmicroeconomicoutcomes.Imakeuseofcompar-ativestaticstoshowthatapluralityofinstitutionalarrangementsmaymaximizetheeconomicoutcomeofthesamecoordinationtaskacrosseconomic entities. I exemplify how the objective-maximizing institu-tionalarrangementchangesinthecharacteristicofapersistentinstitu-tionalelementwhichbecomesanexogenousparameterthatindirectlyinfluenceseconomicoutcomeviainstitutionalinterrelations.Heteroge-neityamonginstitutionalframeworksacrosscountriesmaydeliveranexplanationforpersistentdifferencesinthelevelsandgrowthratesofeconomicoutcomesacrossentities.Keywords:interrelatedinstitutions,institutionalcomplements,systemeffectsJEL:D,O,PEmail:katja.kalkschmied@uni-graz.atKemme,David(UniversityofMemphis),BhavikParikh,TanjaSteigner:Taxhavens, taxevasionandtax informationexchangeagreements intheOECDAbstract:UsingdataonForeignPortfolioInvestment(FPI)andcountrycharacteristicsfor34OECDhostcountriesand160sourcecountries,wefindapositiverelationshipbetweenhighertaxburdenandOECDresi-dents’offshoretaxevasion.Contrarytoestablishedinvestorpreferencefor physical proximity, same language, legal system, and corruptioncontrolwhen investingabroad,we find that thesecharacteristicsarenotimportanttotaxevaders.WefindnoevidencethatOECDTaxInfor-mation ExchangeAgreements (TIEAS) reduce tax evasion, controllingforotherdeterminantsofFPI.Moreimportantly,wefindthattaxevad-ers’perceivedbenefitsoutweighanyperceivedcostsofdetectionbytaxauthorities.Keywords:TaxHaven,TaxEvasion,ForeignPortfolioInvestment,TaxIn-formationExchangeAgreements,OECDJEL:F38,G38,H26Email:dmkemme@memphis.edu

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Keren,Michael(HebrewUniversityofJerusalem):Isfightinginequalitycostly?NotwhenHomoSocialisisaddedtoHomoEconomicusAbstract:Theadvancedeconomieshavebeenplaguedbyrisinginequal-ityduringrecentdecades.Thistrendiswidelyacceptedassociallyandpolitically dangerous; the present US election campaign shows thatownersofextremewealthmayseemtobeablealmosttobuythepres-idency;othersuchexamplesabound.Yetitisalsobelievedthattinker-ingwithmarketdetermineddistribution,e.g.,bytheimpositionofhighmarginaltaxes,sapsincentivesandleadstothewithdrawalofproduc-tive effort. This paper claims that this assumption is unfounded, be-causehumantastes,asusuallyviewedineconomics,disregardourso-cialneeds.Wehavetotakeaccountofhomosocialis,manorwomanasasocialanimal in theutility functionandrecognizetheneed, for thegreatmajorityofus,forsocialstandingandrank.Andwhatcountsforsocial status isnot theabsolutevalueof the resources thatwecom-mand,orotherbadgesofsuccess,butwherewestandrelativelytooth-ers inourreferencegroup.Anychangethatdoesnotaffectourrankwithinoursocialenvironmentwillthereforenotimpingeoneffort.Regardingtastes, thepaperassumesthatbelowsubsistence incomesabsoluteresourcesareall-important,butonceincomesrise,theweightofsocialstandingandrelativeincomerises.Consequentlyatveryhighincomesproportionaltaxesshouldnotdistortincentives.Thereexistshistoricalevidencethatsuchtaxesneednotaffectincentives:confisca-torymarginaltaxesontheveryhighestincomescoincidedintheafter-mathofWW2withthefastestgrowthrates.ThisseemstoruncountertothefindingofthecelebratedOECDstudyoftheeffectoftaxationongrowth,thatfindsthathighmarginaltaxesharmgrowth.YetacloserreadingoftheOSCDpapershowsthatitde-finesmarginaltaxesastaxesonmeanincomes,notonextremelyhighones,andisthereforenotrelevanttothesubjectathand.Thispaper'sanalysisdisregardsinvestmentdecisionsbyfirms.Keywords:Socialutilityfunction;inequality;taxationandincentivesJEL:D11,D31,H21Email:michael.keren@mail.huji.ac.il

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Kocenda,Evzen(CharlesUniversityPrague),JozefBarunik,LukasVacha:AsymmetricvolatilityconnectednessonaforexmarketAbstract:Weshowhowthebadandgoodvolatilitypropagatethroughaforexmarket,i.e.webringevidenceoftheasymmetricvolatilitycon-nectednessonaforexmarket.Withhigh-frequency intra-daydataof themost actively traded currencies over2007 -2015wedocumentdominatingasymmetries in spillovers thatareduetobadratherthangoodvolatility.WealsoshowthatnegativespilloversarechieflytiedtodraggingsovereigndebtcrisisinEuropeandpositive spilloverscorrelatewith thesubprimecrisis,differentmone-tarypoliciesamongkeyworldcentralbanksalongwithdevelopmentsoncommoditiesmarkets.Itseemsthatcombinationofmonetaryandrealeconomyeventsisbehindthenetpositiveasymmetriesinvolatilityspilloverswhilescalfactorsarelinkedwithnetnegativespillovers.Keywords:forexmarket;asymmetriesinvolatilityspilloversJEL:C18,C58,E58Email:evzen.kocenda@fsv.cuni.czKocenda,Evzen(CharlesUniversityPrague),JanBruha:Financialstabil-ityinEurope:BankingandsovereignriskAbstract:Weanalyzethelinkbetweensovereignriskandthebankingsectorsystemicandperformance-relatedvariablesinnewEUcountriesthathave joined theUnion in2004and2010.ThesystemicvariablesincludetheshareoftotalbankassetsinnominalGDP,theshareoffor-eignintotalbankassets,theratioofbankcredittoGDP,andtheLernerIndex.Thebankingsectorperformanceisreflectedbytheratioofnon-performingtototalloans,thetotalcapitaltorisk-weightedassets,andtheZ-scoreinsolvencyindicator.Thelinksbetweenthebankingvaria-blesandsovereignriskareparticularlypronouncedduringtherecentfinancialcrisis.Forempiricalexamination,weuseapanelofsovereignriskdataandarangeoftheabovebankindicatorsforeachcountry.Ourtestsshowthatthelinkbetweenbanking-specificvariablesandsover-eigndefaultrisk isstronginnewEUmembersthathaveadoptedtheeuro(SloveniaandSlovakia)andweakerinthecountriespursuinginde-pendentmonetarypolicies(Poland,CzechRepublicandHungary).We

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identifyarangeofmacroprudentialandregulatorypoliciesaimedatim-provingbankperformanceand,ultimately,atmitigatingsovereignde-faultrisk.Keywords:sovereigndefaultrisk;bankingsector;globalfinancialcrisisJEL:F15,G21,P20Email:evzen.kocenda@fsv.cuni.czKörner,Jenny(UniversityofRegensburg):MonetarytransmissionintheCzechRepublicafterthetransformationAbstract: Thispaperanalyzes the transmissionmechanismsofa con-tractionarymonetarypolicyshockontherealeconomy.Thesufficientlylongregimeuniformtimeperiodsince thepolitical transformation intheCzechRepublicprovidesevidenceforeffectiveinflationtargetingbythe Czech National Bank. I apply a recursive vector autoregression(VAR), a structuralVAR,and structural vectorerror correctionmodel(SVECM).IntheSVARtherestrictionsimplyalaggedeffectofthemon-etarypolicy shockonoutputandprices in the short run,andmoneyneutralityinthelong-run.IntheSVECMamoneydemandandaninter-estraterelationshipidentifythecointegratingvectors.Theimpulsere-sponsesofallmodelsstateareductionofoutputandconsumerpricesafter monetary tightening. The exchange rate overshoots its steadystatelevelintheVARandSVECMmodels,indicatingalargedegreeofexchangeratevolatilityaftertheshock.Theresultsrevealaninterestpass-throughfromCzechmonetarypolicytoinflation.Keywords:JEL:Email:jenny.koerner@ur.deKoyama,Yoji(NiigataUniversity):Transformationandeconomicdevel-opmentintheWesternBalkans:FocusonSerbiaAbstract:Thispapergives,firstly,anoverviewoftheWesternBalkans.Then it considers challenges facing Serbia. Already at the endof the1980duringtheperiodoftheformerYugoslaviaSerbiastartedthetran-sitiontoamarketeconomy.Inthe1990s,however,Serbiaexperienced

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the disintegration of the Yugoslav Federation and ethnic conflicts aswellasUNsanctions,andtheKosovowar.OnlyafterthefallofMilose-vicregimeinautumn2000Serbiawasabletoreturntotheinternationalcommunity.ThecountryrestartedthetransitionandtheEuropeanin-tegrationwithalagof10years.However,itseconomywasexhaustedatthattime.FDIinflowmostlywenttothefinancialsector,servicesandrealestate,andonlyasmalleramountwenttothemanufacturingin-dustry.Inthesamewayasinotherpost-socialistcountriesWestEuro-peanbanksadvancedtothiscountrytoo.Untilthe2008globalfinancialcrisisSerbiaexperiencedtheeconomicdevelopmentledbyconsump-tion,leavingitseconomyveryvulnerabletoexternalshocks.Contrarytoshort-termcapital,FDI,stayinginahostcountryforalongertime,contributestothecountry'seconomicdevelopmentandthereforeitisveryuseful.However,multinationalenterprisesarefickle.AsthecaseoftheSmederevosteelfactory,inwhichtheUSSteelacquireditin2003andwithdrewin2012,shows,FDIisneverimmobile.ThispaperarguesthatSerbiaaswellasothercountriesintheWesternBalkansneedsanindustrialpolicywithactiveparticipationbythegovernment.Keywords:WesternBalkans,Serbia,EconomicDevelopmentJEL:P26,P31Email:ZAC00343@nifty.comKristalova,Maria(UniversityofBremen),JuttaGünther:ImpactofEUandRussiansanctionsonsectorsintheGermaneconomyandEU-27Abstract:FollowedbytheescalationoftheUkraineconflictin2014,theEuropeanUnion and Russia applied bilateral sanctions towards eachother.ThistradeconflictaffectsnotonlytheRussianeconomy,butalsohassignificantrepercussionsformanyeconomiesintheEuropeanUn-ion.Thispaperisfocusedontheimpactofsanctionsontheirsender,theEU-27andGermanyinparticular.Theconsequencesofthedeterio-rationoftraderelationsingeneralwillbequantifiedintermsofoverallproduction,valueadded,andemploymenteffects.Therefore,theanal-ysismakesuseofaninput-outputapproachand,comparedtoalreadyexistingstudies,providesathoroughsectoralanalysis.Thecalculationsaccommodatedirectaswellas indirecteffectsthroughoutthesupplychainonasectorallevel.Preliminarycalculationsshowthattheindirecteffectsofsanctionstendtobemorepronouncedthanthedirectimpact.

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ThepreliminaryresultsforGermany,attainedbyuseofthenationalIn-put-Output table for the year 2011, exhibit a realized loss inGDPof0.46%andthereof0.13%duetosanctions in2015.Especiallyexport-oriented German sectors with strong backward linkages within Ger-many,suchasmotorvehiclesandmachineryareaffected.Forthetimebeing,theeconomicconsequencesforGermanyaremanageable.ThisisincontrasttothehypothesizeddamageinflictedonothereconomiesintheEuropeanUnionsuchasBalticandEasternEuropeaneconomies.Keywords:sanctions,tradepolicy,EU-27JEL:F17,F15,E65Email:maria.kristalova@uni-bremen.deKumo, Kazuhiro (Hitotsubashi University, Institute of Economic Re-search):Factorsdetermininginter-regionalmigrationpatternsinRussiarevisited:Analysisonorigin-to-destinationmatrix,1990-2013Abstract:ThispaperexaminesregionaleconomicconditionsandtheireffectsoninterregionalpopulationredistributionpatternsinRussia.Af-terreviewingstrikingchangesinpopulationflowsbeforeandafterthecollapseoftheformerSovietUnion,anapplicationofthegravitymodelonpopulationmigrationinRussiaispresentedusinganewlyobtainedinterregional in- and out-migration flow matrix from 1990 to 2013,whichwere supplied by Rosstat (formerly Goskomstat). The analysisconductedcomparisonoffactorsaffectingmigrationpatternsbetweenthoseintheSovieteraandinmodernRussia,focusingongeographicalfactors, namely, the attractiveness of resource-mining regions. Theanalysisclearlyshowedmajorchangesintheeffectofgovernmentalin-vestmentindeterminingmigrationflowbeforeandafterthecollapseoftheSovietUnion.Keywords:Migration,Russia,ODMatrixJEL:O15,P25,P39Email:kumo@ier.hit-u.ac.jpLazarov,Darko(GoceDelcevUniversity),TrajkoSlaveski:Empiricalesti-mation of macroeconomic and institutional determinants of capitalmarketsdevelopmentintheCEEcountries

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Abstract:Theresultsoftheempiricalresearchworksrelatedtofinancialdevelopmentandeconomicgrowthindicatepositiveandstatisticalsig-nificantcorrelationbetweenstockmarketdevelopmentandeconomicgrowthintransitioneconomieswhichsupportsthehypothesisthatcap-italmarketdevelopmentmightboosteconomicgrowth.Ontheotherside,theextentandthespeedofcapitalmarketdevelopmentinthesecountriesarequitedifferent.Theevidenceshowsthatsomecountrieshaveexperiencedalargeboom,whileothercountriesstillhaveunder-developedcapitalmarkets.Themainaimofthispaperistoinvestigatewhether thecross-countrydifferences inmacroeconomicand institu-tionaldeterminantsexplaindifferencesinthelevelofcapitalmarketsdevelopmentamongtheCEEcountriesduringthetransitionandpost-transitionperiod.Morespecifically,thepaperexaminestheimpactofmacroeconomic, financial and institutional determinants on capitalmarketsdevelopmentintheCEEcountriesbyusingdynamicpanelre-gressionanalysis(GMM)fortheperiod1997to2013.ThestockmarketdevelopmentcapitalizationrelativetoGDPisusedasaproxyvariableforcapitalmarketsdevelopment.Preliminaryresultsoftheestimationsshowthatmacroeconomicfactorssuchaseconomicperformance,banksector, investmentandmacroeconomicstabilityare importantdeter-minesofstockmarketdevelopment.Also,theresultsshowthatinstitu-tional factors which strengthen the investors' rights and their confi-dencearestronglyrelatedtothecapitalmarketsdevelopment.Keywords:Capitalmarketsdevelopment,macroeconomic,financialandinstitutionaldeterminants,CEEcountries.JEL:G20,G28,O55Email:darko.lazarov@ugd.edu.mkLissowska,Maria(WarsawSchoolofEconomics):Financialdecisionsofhouseholdsinpost-transitioncountries-whatdoesit impact:incomeorculture?Abstract:Thispaperattemptstocomparethetrendsofborrowingandsavinginpost-transitioncountriesinthelargerperspectiveoffinancialdecisionstakenbyahouseholdoverthelifetime.Itusestheclassicalpermanentincomeandlifecyclehypotheses,butadmitsirrationalityofdecisionstakenbyhouseholds.Usingdifferenttypesofdata(macroand

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microeconomic)itconcludesthatregularlifecycleoffinancialdecisions(savingwhenyoung,thentakingmortgagecredit,afterwardsrepayingit,finallysavingforretirement)isrelevantforricherhouseholdsfromdevelopedcountriesonly.Thedecisionsofhouseholds inpost-transi-tioncountriessignificantlydepartfromthiscycle.Inparticular,savinginpost-transitioncountriesisrareandonlyforapartofhouseholdsismotivatedbygatheringresourcesforretirement.Mortgageborrowingpatterndepartsfromthisforeseenbylifecyclehypothesis,whilenon-mortgageborrowingismorefrequentandwasrisingmorequicklythaninmoredevelopedEuropeancountries.Thistypeofbehaviourissimilartotheoneofpoorerhouseholdsfromdevelopedcountries.However,also lower financial awareness and lack of precautionary culture ofoldergenerationandoflesseducatedpeople,inparticularfrommoreremoteareas impactson this.Scarcityof some financialproducts (asprivatepensions)andanexceptionalopportunityofbecomingownerofresidencethroughprivatisationareadditionalfactorsofparticularitiesoffinancialdecisionsinpost-transitioncountries.Keywords:consumerfinance;post-transitioncountriesJEL:G02,P36,P51Email:lisso@sgh.waw.plLitvinova,Maria (UniversityofTrento),MariaLuigiaSegnana: Importcompetitionandfirmreorganization.ThecaseoftransitioncountriesAbstract:Recentmanagerialliteraturehasfoundnewevidenceonthelinkbetweeninternationaltradeliberalizationandthechangesofinter-nalfirmorganizationindevelopedcountries.Inparticular,importcom-petitionisshowntostimulatefirmstobecomeflatter(Wulf,Guadalupe,2006). Opposite to a widespread assumption that flattening implieshigherdecentralization,flatteningmay,inpractice,increasethecontrolofhighermanagers(Wulf,2011).Acoherenttheoryexplainingsuchev-idencehasstilltoevolve.However,itisoftenarguedthatflatteningal-lows firms to make intra-firm coordination and information sharingmoreefficient.Theaimofthisstudy istocomplementexisting literaturefocusedondevelopedcountries,bystudyingtheprocessofflatteninganditslinkwithtradeliberalizationintransitioncountries.Analysisofsuchalink

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wouldallowsheddingmorelightonfirms'adjustmentstotradeliberal-ization.Moreover,itwouldunderlinethedriversofadditionalpossiblegainsfromtradeduetoorganizationalchangeinthesecountries.TheanalysisisbasedontheEBRD-WorldBankManagement,OrganizationandInnovation(MOI)surveyonmorethan1000firmsin10transitioncountries,supplementedbytheinformationontradeliberalization.Theresultsshowthatfirmsbecomeflatterasaresponsetotheincreaseinimportpenetration,thus,confirmingexistingevidenceontheposi-tivelinkbetweentradeliberalizationandfirmflattening.However,thepaperunderlinesotherfactorsinfluencingflattening,ownershipstruc-tureinparticular.Suchresultsbringusclosertotheunderstandingofintra-firm adjustments prompted by increasing foreign competition,andhighlighttheopportunitiesforintra-firmefficiencygrowth.Keywords:flattening,tradeliberalization,transitioncountriesJEL:L2,F14,P2Email:maria.litvinova@unitn.itMa,Xinxin (HitotsubashiUniversity, Instituteof EconomicResaerch):IndustrialsegregationandwagegapsbetweenmigrantsAbstract:Thispaperexplores industrialsegregationandits impactonwagegapsbetweenrural-urbanmigrantsandlocalurbanresidentsinChina.UsingCHIP2002andCHIP2007,decompositionanalysis is con-ductedbasedonBrownetal.(1980)models.Severalmajorconclusionsemerge.First,therearedifferentials inoccupationdistributionbymi-grantsandlocalurbanresidentsgroups,andthereexistindustrialwagegaps in bothmigrants and local urban residents groups in 2002 and2013.Second,althoughboththeinter-industrialdifferentialsandintra-industrialdifferentialsaffectthewagegapsbetweenmigrantsandthelocalurbanresidents,theeffectofintra-industrialdifferentialsaffectisgreaterin2002(80.6%)and2013(145.7%).Third,consideringtheeffectofintra-industrialdifferentials,althoughtheeffectofendowmentdif-ferentials(humancapital)isgreaterthanunexplaineddifferentials(dis-crimination)inboth2002and2013,theeffectofunexplaineddifferen-tials in intra-industrial differentials rise greatly from 19.4%(2002) to68.0%(2013).Theresultsshownthatholdingotherfactorsconstant,theproblemofdiscriminationonmigrantsinthesameindustryisbecoming

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moreseriousrecently. Inaddition,theeffectofendowmentdifferen-tials in intra-industrial differentials rise from 61.2% (2002) to 77.7%(2013).Theseresultsindicatethatforreducingwagegapsbetweenmi-grantsandlocalurbanresidents,employmentequalitylawandanequalpayforequalworkpolicyaremostimportant.Inthesametime,policiesforreducingthegapsofhumancapitalsuchaseducationandtenureyearsbetweenmigrantsand localurbanresidentalsoshouldbeper-formedinthelong-term.Keywords:industrialsegregation,wagedifferentials,migrants,localur-banresidents,urbanChinaJEL:J16,J24,J42Email:maxx@ier.hit-u.ac.jpMádr,Michal(MendelUniversityBrno),LudekKouba:Thetypeofpo-liticalregimeandeconomicgrowth:EvidencefromEuropeanpost-so-cialisteconomiesAbstract:ThemainaimofthepaperistoexplorewhetherthepoliticalsystemaffectseconomicgrowthinEuropeanpost-socialisteconomies.As indicatorsof thepolitical regimeweuse threeproxies,Regime (adummy based on the Nations in Transit reports), Polity2 (a dummybasedonthePolityIVProject)andavariableofpoliticalrightsandcivilliberties (adummyprocessed fromFreedom inWorld). The researchusespaneldataregressionanalysis,namely,afixedeffectsmethodwitharobustoptionandaGMMdynamicpaneldataestimator.Withinfixedeffects,wedistinguishshort-run(economicperformance)andlong-run(afive-yearaverage)economicgrowth.Thereferenceperiodisfocusedontheperiod2000-2014duetothedataavailability.Accordingtotheresultsofthethreemodels,theproxiesofthepoliticalregimearenotstatisticallysignificantandhaveanambiguous impact,which is inac-cordancewiththeviewprevailingwithinempiricalliterature.Regardingtheeconomicproxies,economicgrowthisaffectedbytheinitiallevelofeconomic development ("the effect of convergence"), the growth ofrealGDPpercapitainthepreviousyear(theinitialcondition)andthegrowth of gross investments and export to GDP (the input factors).Abovementionedconclusionsareillustratedbycomparisonoftheindi-vidualpoliticalregimes.Thehybridandauthoritativeregimesachievedinaverageabout40%ofeconomiclevelofthepost-socialistdemocratic

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states in 2000. Nowadays hybrid regimes have the similar level,whereasauthoritativeregimesaccomplishabout73%.Keywords:Politicalregime,economicgrowth,post-socialisteconomiesJEL:O43,O47,P26Email:xmadr@mendelu.czMarek,Philipp(UniversityofBremen,HalleInstituteforEconomicRe-search),BrunoMerlevede:Regionalpolicyandfirmperformance-Evi-denceforEasternEuropeAbstract:TheEuropeanUnionallocatesa largeshareof itsbudgettoStructuralFundsPrograminordertoreduceregionaldisparitiesandtofostertheeconomic,socialandterritorialcohesionacrossitsmembercountries.Givenitsimportance,manystudieshaveaimedtoevaluatetheeffectivenessoftheEU'sregionalpolicy.Thesestudies,whichwerepredominantlyfocusedonthegrowthofregionsintheEU,haveshownthatimpactEUStructuralFundsdependsontheregionalabsorptiveca-pacity, the objective of the funds and on the intensity of StructuralFunds.Sofar,thereislittleevidenceonthedirectandindirecteffectsofEUStructuralFundsontheperformanceoffirms.Thispaperprovidestotheliteraturethroughthecombinationoffirm-levelinformationwithdetailedinformationontheregionaldistributionofEUStructural inCentralEasternEuropeannewmemberstates.ByapplyingaHeckman-GMMestimation,weareabletoassesstheimpactoftheEU'sregionalpolicyonthesurvivalprobabilityof firmsandonfirmperformanceindicatorssuchasproductivity,valueaddedandem-ployment.AhighshareofEUStructuralFundsleadstoanincreaseinemploymentandtoalowerproductivityoffirmslocatedinthecorre-spondingregion.Furthermore,ourfindingsconfirmthatitisessentialtotakeapreciselookattheexpenditurecategories.Fundsallocatedinthecategoryofproductiveenvironmentleadtoahigherprobabilityofsmallandlowproductivefirmstostayinthemarketand,hence,pro-moteapersistencyofexistingeconomicstructures.Keywords:RegionalPolicy,FirmPerformance,FirmSurvivalJEL:C34,H23,O52

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Email:philipp.marek@uni-bremen.deMarelli,Enrico (UniversityofBrescia),MarcelloSignorelli:Output, in-vestmentand(un)employmentgapsintheEurozone:newpoliciesareurgentlyneededAbstract:Eurozonehasbeenhitbya"doublecrisis"(the2008-09finan-cialcrisisandGreatRecessionplusthe2010-12sovereigndebtcrisis),withhugerealeffectsinseveralcountries,andiscurrentlycharacter-izedbyastagnationscenariowithprevailingdeflationandpersistentlyhighunemployment.Wearguethatsomecausesofthisevolutionaretobefoundintheuncertain,delayedorinadequatepoliciesdecidedbytheEUinstitutionsorimplementedintheindividualcountries.Moreo-ver, structural reformsare important to reinforcegrowthonly in thelongrunandnowthere isaclearproblemofdeficientaggregatede-mandintheEurozoneasawholeanditisparticularlyevidentinsomememberstates.Thepaperprovidesnewempiricalevidencenotonlyonthe"severity"ofthecrisisbutalsoonthefallofindividualcomponentsofaggregateexpenditure: in particular, a true collapse occurred for investments,bothprivateandpublic.Italsofocuses-inacomparativeperspective-onthesignificant"gaps",regardingoutput,(un)employmentandothermacrovariables,with respect to both pre-crisis performance and keypolicygoals.Theshort-runpolicyimplicationisthattheEurozoneneedsan"aggre-gatedemandshock",e.g.amassiveinvestmentplan,muchbiggerthantheunsatisfactory"Junckerplan".Regardingprivateinvestment,weno-ticethatECB'sunconventionalmeasureshavebeenimportantto"save"theeuroandtocreateliquidity,butthecreditconditionsarestilldisap-pointinginseveralcountries.Amoredefinitesolutionwouldbetoin-troduce"project-Eurobonds"orothermechanisms,includingappropri-atereformsintheEU/Eurozonegovernante.Keywords:Eurozone,outputgap,investmentJEL:P44,P51,F45Email:enrico.marelli@unibs.it

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Masso,Jaan(UniversityofTartu),PriitVahter:Knowledgetransferfrommultinationals through labourmobility: Learning from export experi-enceAbstract:Labourmobilityisconsideredtobeoneofthekeychannelsofmultinationalfirms'(MNE)effectsonproductivityofdomesticfirmsinthehosteconomy.Thispaperinvestigatesoneofthechannelsthroughwhichthesespilloversoflabourmobilityonfirmperformancecanop-erate.Wefocusontherelationshipwithexportentryandexportmar-ketexpansion,aslotofknowledgetransferredthroughFDIislikelytoberelatedtotrade.Weuseemployer-employeeleveldatafromEsto-nia.Thefindingsconfirmthathiringespeciallymanagersortopspecial-ists--proxiedbyhigh-wageemployees--withexperience fromMNEs isassociatedwithhigherfirmperformance.Also,hiringMNE-experienceemployeesisassociatedwithawagepremiumbothforthehiredandincumbentemployeesatthedomesticfirm.However,weshowthattheestimatedrelationshipappearstobereflectinginparticularthemobil-ityofexport-experiencedemployees.Ourevidencesuggeststhatanim-portantchannelof theeffects is the increase inpropensityofexportentrybydomesticfirms.Theresultsimplythattheeffectsofexternalexperiencemaybestrongerespeciallyinthe1ststageofinternational-isationofafirm.Wedonotfindevidenceaboutadditionaleffectsonlater introductionofnewexportproductsorfirm's laterexpansion intermsofnumberofmarkets.Keywords:multinationalenterprise,spillovers,exportentry,labourmo-bilityJEL:F10,F23,J60Email:jaan.masso@ut.eeMavisakalyan, Astghik (Curtin University), Le Zhang: Looks matter:BeautyandemploymentintheFormerSovietUnionAbstract: The rigidSovietpolicyof fullemploymentensuredemploy-ment forallable-bodiedpopulation.Byremovingthispolicy, thecol-lapseofthesystemhasmadediscriminationlesscostly.Hasitalsobe-comemoreprevalent?Thispaperstudiesthelabourmarketdiscrimina-tiononthebasisofphysicalattractivenessusingdatafromthethreepost-Soviet countries of Caucasus: Armenia, Azerbaijan and Georgia.

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Weestimatealargepositiveeffectofphysicalattractivenessonmales'probabilityofemployment.Usingapartialidentificationapproach,weshow that this relationship is likely to be causal. However, differentfromevidenceindevelopedcountries(e.g.,Canada,US,Luxembourg)anddevelopingcountries(e.g.,China,Brazil),nostatisticallysignificanteffectofbeautyonfemales'employmentisfound.Keywords:Beauty;Employment;FormerSovietUnionJEL:J21,J24,P24Email:astghik.mavisakalyan@curtin.edu.auMelcarne,Alessandro (UniversitádelPiemonteOrientale, ),GiovanniB.Ramello:Justicedelayed,growthdenied:Evidencefromacompara-tiveperspectiveAbstract: Institutions play a fundamental role in economic develop-ment.However,eventhemostwell-designedregulatoryenvironmentmightturnouttobe(atbest)ineffectiveifnotproperlyenforced.Ac-cordingly,arapidandwell-functioninglawenforcementsystemisgen-erally a toppriority inpoliticians' agendaaround theworld. This be-comesevenmorerelevantsincethesymptomsofcourts'poorperfor-mancesareacommontraitofbothrichanddevelopingcountries.Theneedofaneffectivejusticesectorisnotonlyrelatedtothenecessityofkeepingcivillitigationundercontrol(andthushelppreservesocialco-hesion),but isequallyessential foreconomicgrowth.Previous litera-turehasunveiledthelinkbetweeneconomicactivityandcourts'delayinsolvingcases:thetimeneededtodisposeaprivatelawsuitincreasesuncertainty among economic actors, thus hindering transactions onmarkets.Thepresentworkstriestocontributetotheextantdebateonthistopic,byconsideringthefurthernexusbetweenjudicialdelayandeconomicsgrowth.Byexploitingacross-sectiondatasetof175coun-triesfromallovertheworld,ourworkreachestwoconclusions:(a)ju-dicialdelay turnsout tobea relevantand significantdeterminantofgrowth,aseveryextrayearneededtodispose(onaverage)privateliti-gationlowersgrowthratebyover1%;(b)differentlyfromasubstantialstreamofliteraturesupportingtheideathatcommonlawsystemsarebetterequippedtofostereconomicdevelopment,wefindnosignificantdifferencewhenmovingfromtheregulatoryenvironmenttoitsactualenforcingmechanisms.

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Keywords:EconomicGrowth,Institutions,JudicialDelayJEL:O43,K41,H4Email:alessandro.melcarne@unito.itMontag, Josef (Mendel University Brno), Peter Huber, Hana M.Smrcková,andPetrSunega:Theimpactofhousingprivatisationonin-dividualunemploymentrisksintransitioneconomiesAbstract:Homeownershipisbelievedtocausehigherunemployment.Thisisbecausehomeownersfacehighermobilitycostsandmayhavelowerwillingnesstomove---limitingtheirjobsearchtolocallabormar-kets.Empiricaltestsofthispredictionhaveyieldedmixedresults.How-ever,sincehomeownershipinthesestudiesisnotrandomlyassigned,theirinterpretationisunclear.Thispaperdocumentsthatprivatizationofpublicdwellingscreatedaquasi-experimentalassignmentofhome-ownershiptoindividualhouseholds.Thisallowsustostudythecausaleffectsofhomeownership.Homeownershiplowersmobility,howeverourestimatesoftheeffectofhomeownershiponunemploymentareintheneighborhoodofzero.Keywords:Homeownership,unemployment,housingprivatization.JEL:J61,J64Email:josef.montag@gmail.comMyant,Martin(EuropeanTradeUnionInstitute):Varietiesofcapitalismandbarrierstogrowthineast-centralEuropeAbstract:Thevarietiesofcapitalismframeworkhassufferedfromem-phasis on static classification and postulated permanence of institu-tionalfeatures.Tobemoreappropriatetocountriesofeast-centralEu-rope, it is reinterpretedtoemphasisedevelopmentandchange.Eco-nomicgrowthpotential is influencedbypolitical choices that set theinstitutionalframeworkandarethemselvestheresultofpastthinking.Economic development in turn has strengthened the social base foreconomic thinking that leads toeconomieswith low tax levels, smallstates,highlevelsofemploymentprecarity,limitedlabour-forcepartic-ipationandlowqualificationlevels.Howeconomic,socialandpolitical

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developmentshaveinfluencedeachothersince1989,howtheselimitcountries'growthpotentialandtheforcesforfurtherdevelopmentandchangeareexploredfortheV4countries.Thispointstoadirectionfordevelopingthevarietiesofcapitalismapproachingeneral.Keywords:varietiesofcapitalism,politicaleconomyJEL:P26,P27,P16Email:mmyant@etui.orgNikitina,Alisa(NationalResearchUniversityHigherSchoolofEconom-ics Moscow), Fuad Aleskerov, Natalia Meshcheryakova, SergeyShvydun: Long-range key borrower index for evaluation of power ofcountriesasborrowersAbstract:Thepaperproposesanewmethodforassessingtheagents'influence in the network structures, long-range key borrower index,whichtakesintoconsiderationtheintensityof interactions.Adistinc-tivefeatureofthisapproachisthatitconsidersnotonlydirectinterac-tionsofthefirstlevelandindirectinteractionsofthesecondlevel,butalsolong-rangeindirectinteractions.Thisapproachhelpsustoidentifysystemicallyimportantelementswhichcannotbedetectedbyclassicalcentralitymeasuresandotherindexes.Theproposedmethodwasusedtoanalyzethebankingforeignclaimsfortheendof1Q2015onthebasisoftheBankofInternationalSettle-mentsconsolidatedbankingstatistics(CBS).Asaresultitallowstode-tect countrieswith themost interconnected financial systems takingintoconsiderationtheintensitiesofcountries'bankingsystemsinterac-tions.Underthisapproachtwotypesofkeyborrowersweredetected:a).ma-jorplayerswithhighratingsandpositivecredithistory;b).intermediaryplayers,whichhaveagreatscaleoffinancialactivitiesduetofavorableinvestmentconditionsandpositivebusinessclimate.Finally, the level of countries' interconnectedness was estimatedthroughabroadrangeofcentralitymeasures:weighteddegreecentral-ity,closenesscentrality,betweennesscentrality,PageRankandEigen-vectorcentrality.Theseresultsarecomparedwithproposedlong-rangekeyborrowerindex.Keywords:keyborrower index, systemic importance, interconnected-ness

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JEL:C7,G2Email:knurova.a.a@gmail.comNugumanova,Lyazzat(IOSRegensburg,UniversityofGiessen):EnergypolicyinKazakhstanAbstract:Theprimaryfocusofthisstudyisanalysisofeconomy-wideeffectsoftheremovalofexistingenergysubsidiesinKazakhstan.Totalimplicit consumer subsidies for energy products in Kazakhstanamountedto6billionUSDin2013.ConsumersubsidiesinKazakhstan,expressedthroughlowdomesticenergypriceswhicharebelowthefullcostofrecovery,predominateinquantitativeterms.Energypolicyre-form isanalyzedusingcomputablegeneralequilibriumapproachandglobaldatabase.Comparativestaticmultiregion,multisectoralcomput-ablegeneralequilibriummodel,GTAPisemployedinthisstudy.GTAPmodelprovidesdetailedlinkagesbetweendifferentsectorsoftheecon-omy.Generalequilibriummodelsareparticularlyusefulinpolicyanaly-sis,thoughtheyaremeantnotforforecasting,butarerathermeanttoprovidegeneraldirectionsof changedue to thepolicy change.GTAPdatabaseversion9,thelatestversionofGTAPdatabaseismodifiedtoanalyzeenergyconsumersubsidiesinKazakhstan.Theresultsdemon-stratethatenergysubsidiesreformwouldhavepositiveeffectontheoverallwelfare,decreaseofenergydemand,andincreaseinexportsofenergyproductsandstructuralchangeoftheeconomyinthecountry.Keywords:CGE;EnergyPolicy;KazakhstanJEL:C68,Q43Email:nugumanova@ios-regensburg.deOrosz,Agnes(InstituteofWorldEconomicsoftheCentreforEconomicandRegionalStudiesoftheHungarianAcademyofSciences,FacultyofInternationalandEuropeanStudies,NationalUniversityofPublicSer-vice,Hungary):TheevolutionoftheEastCentralEuropeanwelfarestateregime

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Abstract:TheoverallaimoftheresearchistoprovideacomprehensiveanalysisofsocialpolicydevelopmentsofEastCentralEuropeancoun-triesinordertoassesswhetherthereisdistinctEastCentralEuropean(ECE)welfarestateregime.TheclassificationandthedistinctivenessofwelfarestatesinEastCentralEuropeareofgreatinterestincontempo-rarywelfarestateliterature.ThepaperaimstosummarizethedistinctfeaturesoftheECEmodelbasedontheevolutionofwelfarestategen-erosity ratiosandotherwelfarestate indicatorsbeforeandafter theoutbreakofthefinancialandeconomiccrisisandlinkittotheevolutionof income inequalities. In the researchprojectEastCentralEuropeanwelfarestatesconstituteadistinctwelfarestateregime,leadingustothemainresearchquestions:Whatarethedistinctfeaturesofthewel-farestatemodelinEastCentralEurope?HavethecountriesoftheECEmodelbecomemoresimilarovertimeandinwhichsocialpolicycate-gories?OntheonehandresearchonsocialpolicyinEastCentralEuropeisrel-evant due to the theoretical disagreement about the characteristics,commonalitiesanddifferencesofthepost-communist/CEEorECEwel-faremodel.Ontheotherhandthisregion istypically leftoutsidetheanalysisofsocialpolicychangeswithintheEuropeanUnion.Theresearchfollowstheclassicalstagesofanyresearchdesigninsocialsciences:examinationofprevioustheoreticalframeworks,formulationofhypothesis,operationalisationofconcepts,collectionofdata,analy-sisoftheempiricalmaterialandexplanationoffindings.Keywords:welfarestategenerosity,EastCentralEurope,welfarestateregimeJEL:I38,P52Email:orosz.agnes@krtk.mta.huOstapenko,Nataliia(UniversityofTartu):EffectofInformalinstitutionsandsocialconditionsontheperceptionsofgovernmentactions:Com-parativeanalysisAbstract: It iswell-knownthatpeoples'perceptionsofexternalworldinfluencetheireverydaybehaviour.Thepurposeof thisstudy, there-fore,istodefinetheextentandwayofsocialconditions'andinformalinstitutions'influenceontheperceptionsofgovernmentactions.TodosotheEuropeanSocialSurveydatasetwasusedandtheanalysishas

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beenconductedattheindividuallevel.Astheproxiesofinformalinsti-tutions the Kaasa's et al. cultural proxies were used. The additionalproxyhasbeendefinedbytheextractingtheerrortermfromthere-gressionfortheperceptionofgaysandlesbiansfreedomdependsontheperceptionoftheimportanceoftreatingpeopleequallyandhavingequal opportunities. The appropriateness of these proxies has beencheckedbythecorrelationatthenationallevel(14countries)withIn-glehart'sandHofstede'snationalculturemeasuresand theseproxieswerefoundtobehighlycorrelatedwithsomeofthemeasures.Becausetheseeffectscouldvaryacrosscountriesduetothesimultaneousim-pact of the formal institutions, the comparative study of the effectsfromregressions,fromregressionswithcountrydummiesandinterac-tiontermsandfromseparateregressionsforeachcountryhavebeenimplemented.TherobustnessoftheresultshasbeencheckedbyusingadditionalTabellini'snationalcultureproxies.Themainfindingsarethatinformalinstitutionsandsocialconditionsatthelevelofindividualareempiricallyconnectedwith theperson'ssatisfactionwith thegovern-mentandcouldimpactasdirectlyaswellasthroughtheformalinstitu-tions,butthiseffectvariesacrosscountries.Keywords:institutions,socialconditions,governmentJEL:Z100,P480,D030Email:natayal107@mail.ruPaes,Kadri(UniversityofTartu,FacultyofEconomicsandBusinessAd-ministration),AnneliKaasa,UrmasVarblane:Regionalculturalcontextasadeterminantofentrepreneurialbehaviour:thecaseofGermanyAbstract:Thecurrentarticledescribestheregionalculturalcontextasoneofthepossibledeterminantsofentrepreneurialbehaviour,relyingontheexampleofGermany.Themainobjectiveistotakethefirststepstowardsunderstandingwhetherregionalculturalbackgroundhasanin-fluence on a person's entrepreneurial behaviour. Therefore, severalquestions are raised. Firstly, whether cultural contextmatters in re-gardstoentrepreneurship.Secondly,ifyes,whatkindofculturaldimen-sionsmatter.Thirdly,istheinfluencedifferentforearlystageentrepre-neurshipandforownersofestablishedbusinesses.

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Combining Global Entrepreneurship Monitor (GEM) individual leveldataaboutentrepreneurshipwithregionallevelcharacteristicsandcul-turaldimensionsenablesustocarryoutmultilevelregressionanalysistospecifyinfluenceofculturaldeterminantsfordifferentstagesofen-trepreneurship.TheaforementionedculturaldimensionsarebasedonHofstede'sapproachandreflectregion's(NUTS1level)powerdistance,uncertaintyavoidance,individualism-collectivism,andmasculinity-fem-ininity.The example ofGermany is interesting because of historically devel-opedculturalheterogeneityandexistingdifferencesinentrepreneurialactivitybetweeneasternandwesternstates,thoughformalinstitutionsaresimilarand infrastructurehasbecomemorealike throughout thepast25years.Preliminary results indicate that regional cultural context is an im-portant determinant of entrepreneurial behaviour and the impact ofculturealsodiffersamongdifferentphasesofentrepreneurship. Lowlevelofuncertaintyavoidanceinaregioncouldhavepositiveimpactonearlystageentrepreneurship,butformorepeopletobecomeandop-erateasanowner-managerofanestablishedbusinesses,alowerlevelofpowerdistanceinaregioncouldbenecessary.Keywords:Entrepreneurship,culturaldimensions,GermanyJEL:M13,M21Email:kadri.paes@ut.eePham,Tho(UniversityofSheffield):Multimarketcompetitionandprof-itability:EvidencefromUkrainianbankingAbstract:ThispaperexaminestheimpactsofmultimarketcompetitiononbankfinancialperformanceintheUkrainianbankingindustryfrom2009Q1to2015Q3.Repeatedcompetitionisindicatedbymultimarketcontacts.Wefindthatbanksaremoreprofitablewithhigher levelofmultiplemarketcontacts.Moreover,theeffectifstrongerwhenmulti-marketcompetitorscoincideinmorecompetitivemarkets.Thefindingsimplytheanti-competitiveeffectofmultimarketcontacts:whenbankscompetewiththerivalsinmultiplemarkets,theyhaveincentivestoco-operateinsteadofcompetingaggressively.Theresultssupportthemu-tualforbearancehypothesisinbankingindustry.Keywords:Banking;Multimarketcompetition;Profitability

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JEL:G21,L11,L25Email:t.a.t.pham@sheffield.ac.ukPilc,Michal (Poznan University of Economics and Business), MonikaNaskrecka:Arethereanydifferencesinhowdemocraticandautocraticcountries adapt theemploymentprotection legislation in reaction tothemacroeconomicshock?Abstract:LaboureconomistsagreethatEmploymentProtectionLegis-lation(EPL)affectsthewaythelabourmarketfunctions.InthiscontextitisquitesurprisingthatonlyarelativelysmallnumberofstudieswasaimedatansweringthequestionofwhatdeterminesEPLandhow.WecontributetotheliteraturebyfocusingourinterestontheEPLchangesafter themacroeconomicshockandbyaugmenting theanalysiswithautocraticregimes,wherethegovernmentcanchangeEPLwithouttheriskoflosingtheelections,evenwhenmostlabourmarketparticipantsdonotsupportsuchachange.Wealsoassumethattheadherencetothelabourlawissignificantlylowerinautocraticcountriesthanindem-ocratic states, whichmeans that the autocratic governmentmay in-creasethestringencyofformalemploymentprotectionwithoutlimitingthelabourmarketflexibilityinpractice.Inresult,ourtheoreticalmodelpredictsthatafterthepositive(negative)macroeconomicshockadem-ocratic governmentwill rather increase (decrease) the protection ofemployees,whiletheautocraticgovernmentwillreduce(extend)it.TheempiricalanalysiswasconductedforOECDandpost-socialistcoun-tries for years1991-2013.Wehaveused three indicatorsofemploy-mentprotection,twomeasuresofpoliticalsystemandtwoindicesofadherence to the labour rights.Theanalysishasbeenpredominantlybasedonaseminalwithin-betweenmodeladvocatedbyBellandJones(2015).Theobtainedresultshave revealed that thesignsof theesti-matedparametersareconsistentwiththetheoreticalmodel,however,theanalysedrelationship isnotstatisticallysignificant inallspecifica-tions.Keywords:employmentprotectionlegislation,politicalfreedom,transi-tioncountriesJEL:D72,J83,P20Email:michal.pilc@ue.poznan.pl

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Pompei,Fabrizio(UniversityofPerugia),CristianPerugini:Over-educa-tionandwageinequalityacrossEuropeanUnioncountriesAbstract:Over-educationisanimportantmechanismforlabourmarketadjustmentswhenthereisanexcessofsupplyofhigh-educatedwork-erswithrespecttoanabundantdemandinlowerleveloccupations.Es-peciallyduringcrisistimes,bettereducatedworkerslesreluctantlyac-ceptlowerqualifiedjobsasalternativetounemployment(Doladoetal.2009). Independentlyon theirproductivity, veryoften theseworkerssufferapaycutforthiseducationmismatchandwageinequalitycouldincreaseifwecomparetheirearningswiththoseofwell-matchedwork-ersatthesameeducationlevel.Ontheotherhand,the lastOECDoutlook(2015)arguesthatthenetsupplyofhighversusmedium-skilledworkerscanaccountforonethirdofthedifferencesacrossEUcountriesintermsofwageinequality,es-pecially ifwe lookattheD9/D5ratio.Thismeansthatthescarcityofhigh-skilledworkersinthelaboursupply,comparedtothedemand,stillcausesimportantwagepremiaandhighinequality.Thispaperwantstoexploretheseaspectsbytakingintoaccountlabourpolarizationtheories(AcemogluandAutor,2011)andbyinvestigatingtherelationshipbetweeneducationmismatchandwageinequality,inroutinary and non-routinary occupations. The idea is that inequalitycould toa largeextentdependon the changes that crisis caused forroutinary jobs and forworkerswith intermediate levelsof educationwhohadtoadapttolow-skillednon-routinaryjobsandbecameover-qualified.OurempiricalanalysisisbasedonindividualleveldatacomingfromEU-SILCdatabaseandincludesmostofEUcountries.Firstofall,westudythedistributionofover-qualifiedworkersacrosscountries,sectorsanddifferenteducationlevels(tertiaryandsecondarylevelofeducationalattainment).Changesinthisdistributionduringandafterthecrisiswillbetakenintoaccountbyconsideringyearsfrom2007on.Secondly,westudytheeffectofover-educationonwageswithin thedifferent education levels and by distinguishing between rountinaryandnon-routinaryjobs.Theoutcomesprovideinterestingevidenceonwhichwebasesomepolicyimplications.Keywords:wageinequality,over-education,EU-Silc,mismatch

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JEL:I24,J31,C21Email:fpompei@unipg.itPopova,Olga(IOSRegensburg,CERGE-EI,UralFederalUniversity),Vla-dimirOtrachshenko,JoseTavares:Psychologicalcostsofcurrencytran-sition:EvidencefromtheEuroAdoptionAbstract:WeanalyzeindividuallevelsofsatisfactionwiththeeconomyinSlovakia,afterthatcountryadoptedtheEuro,followingaspiritedde-bate.Wegaugethepsychologicalcostoftransitiontothenewcurrencybycomparingindividuallifesatisfaction,notonlybeforeandafterEurointroduction,butbycomparisonwithindividualswithsimilarcharacter-isticsintheneighboringCzechRepublic,whichdidnotadopttheEuro.Both countries were economically and politically integrated for dec-ades,andsharesimilarmacroeconomicindicatorsjustbeforethecur-rencychangeinSlovakia.Wefindevidenceofsubstantialpsychologicalcostsofcurrencytransition,whichareespeciallyimportantfortheold,theunemployed,thosewithloweducationandinhouseholdswithchil-dren.Webelievetheseresultssuggesttheimportanceofinformationandenlighteneddebatebeforeasweepingchangeineconomiccontextsuchastheadoptionofanewcurrency.Keywords:Eurointroduction;currencychangeover;subjectivewell-be-ingJEL:E52,I31,P26Email:popova@ios-regensburg.deProchniak,Mariusz(WarsawSchoolofEconomics):Theimpactofprod-uctmarketcompetitiononeconomicgrowthintheEUcountries:Doesthemodelofcapitalismmatter?Abstract:Thepapercombinestheanalysisofthemodelsofcapitalismwiththeempiricsofeconomicgrowth.WefollowtheapproachadoptedbyAmable(2003)whoanalyzedthemodelsofcapitalism indifferentcountriesonthebasisoffivedomains,amongothers,productmarketcompetition.Welinkproductmarketcompetitioninthecountriesbe-longing to fourmodelsofcapitalism (Anglo-Saxon, socialdemocratic,

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Europeancontinental, andMediterranean)witheconomicgrowth. Inmoredetail,thestudyexaminestheimpactofproductmarketcompe-tition on economic growth of the EU countries. Second, the analysisaimstodistinguishwhethertheimpactisthesameordifferentamongvariousmodelsofcapitalismprevailinginWesternEuropeandonthisbasistoassessthebehavioroftheCentralandEasternEuropeancoun-tries.Tomeasureproductmarketcompetition,weusebothinputandoutputvariables(likeproductmarketregulationfromtheOECDdata-baseandthenumberoffirmsindifferentsectorsfromEurostat).Weestimate growth regressions where GDP growth rate is regressedagainstanumberofvariables, includingproductmarketcompetition,butalsoinitialGDPpercapitalevelaswellassomeothertypicaleco-nomicgrowthdeterminants.Toobtainrobustresults,weapplypaneldatawithoverlappingobservationsaswellasnonlinearities.Themod-elsareestimatedonthebasisofBlundellandBond'sGMMsystemes-timator.Itturnsoutthatproductmarketcompetitionisimportanteco-nomic growth determinant and that there are some differences be-tweenthecountrieswithdifferentmodelofcapitalism.Keywords: models of capitalism, product market competition, eco-nomicgrowthJEL:O47,P10,P51Email:mproch@sgh.waw.plRadu,Dragos(IOSRegensburg),BogdanVoicu:Emigrationandpoliticaldevelopment:EvidencefromEasternEuropeAbstract:Westudy the impactof largeemigration flowsonelectoraloutcomesinthesendingcountry.Ouranalysisexploitstheregionalvar-iation inmigrationpatternsandpoliticalpreferencesusingRomaniancensusdataandresultsfromthetworoundsofthe2014presidentialelections.Apoliticalshockduetochangesinelectoralrulesforexternalvotingtriggeredlargeprotestsbetweenthetworoundsandallowsustoidentifytheimpactofemigrationonthepoliticalbehaviourofthoseleftbehind.Wedevelopanovelsetofinstrumentsdrawingonhistoricalmigrationdatatodealwithpotentialconfoundersaffectingbothmigra-tion and political choices. These allow us to estimate themigration,turnout and vote-share equations simultaneously (3SLS). Our results

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suggest thatmigrationhasa significanteffecton thepoliticalprefer-encesofnon-migrantsintheregionsoforigin.Alongthedimensionswestudy,emigrationactsinthesamewayastheanincreaseintheaveragelevelofeducationoraurbanizationprocess-intermsofpoliticalpar-ticipation, electoral preferences and how these are affected by localeconomic conditions.But thiseffectdoesnotoffset thedirecteffect(exit)ofselectiveemigrationontheelectoralmassinthesendingcom-munity.Keywords:emigration,self-selection,politicalpreferencesJEL:F22,O15,D72Email:radu@ios-regensburg.deRamello,GiovanniB. (UniversitádelPiemonteOrientale, IELCollegioCarloAlberto),KojiDomon,AlessandroMelcarne:DigitalPiracyinAsianCountriesAbstract: The impactof severaldisruptive innovationshasweakenedtheoriginalroleofcopyright,thusstimulatingawidescholarly litera-ture.Ahandfulofpapershavealreadytriedtogaininsightsonconsum-er's behavior inwestern countries,while the issue is still largely ne-glectedinmanycountriesintherestoftheworld.Thispapertakesad-vantageofasurveydatagatheredthroughfieldresearchinfourAsiancountries,that istosayChina,Japan,KoreaandVietnam, inordertoprovideapictureofconsumer'sbehavior.Theaddedvalueofthisworkistohighlighthowthedifferentnationaljuncture,theidiosyncraticlocalcultureandthespecificsocio-economicsituationdeterminetheneces-sityofabehavioralinvestigationinorderfortrulyunderstandingwhatmakescopyrightvaluableandwhatmakesitweakvis-ˆ-visthecontin-gentsituation.Interestingresultsemergefromtheempiricalanalysisconductedonthedatagathered,suggestingthatdifferencesintheinstitutionalsettingsseemtoplayafundamentalrolebothona"macro"levelandona"be-havioral"one.Inparticular,weareabletoconcludethat"onesizefitsall"copyrightpolicydoesnotworkequallyevenwithinthesamegeo-graphical area, since historically related countries can differ signifi-cantly. Socialnormsandpsychologicaleffects seemmore relevant indeterminingpiracyacrossallcountries,alsointhemostvirtuous,while

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thegendereffecthighlightedintheWesterncountriesdoesnotemergeinAsiancountries.Keywords:P2Pfile-sharing,Unauthorizedcopying,CopyrightJEL:K42,L62Email:giovanni.ramello@uniupo.itRebechi, Alessio (University of Perugia), Cristiano Perugini, MehmetSedatUgur:MultidimensionalpovertyinEUcandidatecountriesAbstract:InthispaperweprovideempiricalevidenceonpovertyinsixcountriesofSouth-EasternEurope,usingamultidimensionalindexthatisabletoaccountforthemulti-facetednatureofindividuals.Ouranal-ysisusesasbenchmarksthegroupofEU-28membercountries.Meth-odologically,we build ourmultidimensional poverty index relying onthe largelyusedapproachproposedbyAlkire-Foster, considering thebasic capabilities of individuals on three main dimensions (income,healthandeducation).Totheseaims,weusedatafromEU-SILCfortheyear2012forCroatia,Serbia,Greece,RomaniaandBulgariaandincludeinourdatabaseTurkey,throughtheTR-SILCdata.OuranalysisprovidesinterestingresultsonthepositioningofthesixcountrieswithrespecttotheEUpictureandillustrateshowthemaindimensionsandcompo-nentsofpovertydifferbetweencountries;thedecompositionbygen-der,ageand regionof residenceprovides further interesting insightsandrelevantinformationforpolicyimplications.Keywords:Multidimensionalpoverty,South-EasternEurope,SILCdataJEL:I32,P46,O52Email:alex.rebechi@gmail.comRõigas,Kärt(UniversityofTartu),AloLilles,UrmasVarblane:Compara-tiveviewontheEUregionsbytheirpotentialofuniversity-industryco-operationAbstract: Higher education institutions play an important role in re-gionalspaceandcontributetoregionaleconomicdevelopmentbycre-atingafavourableenvironmentsupportingknowledgeandtechnologytransfer.TheaimofourpaperistoevaluatethecapabilitiesofEuropean

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regionstosupportuniversity-industrycooperation.Wecombinediffer-entdatasetsandevaluatethepotentialofEuropeanregionstocreatefavourableenvironment foruniversity-industrycooperationbasedontwelve indicatorsof regional innovationsystemcovering theregionalresearch and development- and higher education system, economicstructure,unemploymentandinnovativebehaviouroffirms.Usingex-ploratory factoranalysis four independentdimensionsdescribing thepropensityofregionstosupportuniversity-industrycooperationwerefound-supportingroleofpublicsectortoinnovate,supportingroleofprivatesector to innovate, innovationperformanceof firmsandsup-portingroleoftheuniversitiestoinnovate.IngeneralSweden,Denmark,IrelandandGermanyareofferingthebestenvironment foruniversity-industry cooperation,whereas several re-gionsfromSpain,Italy,andPortugalandfromPolandandRomaniahavethe weakest environment. Sweden, the Netherlands, Denmark, theUnitedKingdomandGermanyhavethestrongestenvironmentcreatedbythepublicsector.ThesupportingroleofprivatesectorisstrongestinseveralregionsfromtheUnitedKingdom,France,GermanyandSwe-den.Ireland,GermanyandItalyclearlydifferfromtheothercountriesinEuropebyhavingregionswiththehighestscoresintheinnovationperformance. The supporting role of the universities to innovate isstrongestinFrance,GermanyandtheUnitedKingdomandweakestinItaly,PortugalandSpain.Keywords:University-industrycooperation,innovation,regionalspaceJEL:O33,O52,R11Email:kart.roigas@gmail.comSass, Magdolna (MTA KRTK, Corvinus University), Zoltán Gál, BálintJuhász:Theimpactofforeigndirectinvestmentsonthehosteconomy:theanalysisofselectedservicesindustriesofVisegradcountriesAbstract:Foreigndirect investmentsaresubstantial inservices in theVisegradcountries.InthearticleweanalysetheimpactofFDIinthreeselectedservicesbranchesonthehosteconomyintwoareas:exportandemployment.FDIinthethreeselectedservicesbranchesdifferintermsoftheirverticalorhorizontalnature: inbusinessservicesFDIispredominantlyvertical, infinancialservicespredominantlyhorizontal,

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whileinICT-relatedservicesbothtypescanbefound.Wecarryoutre-gressionanalysisonthegroupofVisegradcountries (CzechRepublic,Hungary,PolandandSlovakia)andonindividualVisegradcountriesfortheperiod2001-2013inordertoassesstheimpactofvertical,horizon-talandconfluentFDIonemploymentandexportsofthehosteconomy.Furthermore,wecuttheanalysedperiodintotwoinordertotracetheimpactofthecrisisontheanalysedareas.Accordingtoourresults,theimpactonthehosteconomydiffersinthethreesectors:positiveandsignificantimpactonexportscanbefoundinverticalbusinessservicesandinconfluentICT-relatedservicesandpositiveandsignificantimpactonemploymentwasfoundinbusinessservicesandinfinancialservices.Thepositiveimpacteitherdiminishedordisappearedduringthecrisisyears.Comparingthefourcountriestheextentandsignificanceoftheimpactdiffers,whichunderlinestheirdifferentspecialisationintheareaofservices.Keywords:verticalandhorizontalservicesFDI,impactonthehostecon-omy,VisegradcountriesJEL:F21,L8Email:sass.magdolna@krtk.mta.huSato,Takahiro(KobeUniversity),AtushiKato:Violentconflictsandeco-nomicperformanceofthemanufacturingsectorinIndiaAbstract:Weinvestigatetheeffectsofviolentconflictsontheeconomicperformance of manufacturing sector of Indian regional states. Thenumberofviolentconflicts,thenumberofdeathsandthenumberofparticipantsinviolentconflictsallhavenegativeimpactsongrossvalueaddedandcapital laborratioofmanufacturingsector.Amongviolentconflicts,ethnicandreligiousconflicts,aswellasthosenestedinalargeconflicthavesignificantlynegativeimpacts.Keywords:violentconflict,India,manufacturingsectorJEL:D74,K42,O43Email:takahirodevelop@gmail.com

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Schönfelder,Nina(FernUniversitätinHagen):Theimpactofeuroareamembershiponstructuralreformsinproductmarketandbusinessreg-ulationAbstract:Thispaperinvestigateswhetherthemembershipintheeuroareaenhancesorhampersstructuralreformsintheregulationofprod-uctmarketsandbusinessenvironment.Itupdatestheempiricalresultsof the early literature and extends it by applying new indicators forstructuralreforms.Byestimatingadynamicpaneldatamodelwithsys-temGMM,IfindthateuroareacountriessignificantlyderegulatemorethanotherOECDcountriesinproductmarkets.However,Idonotfindanyevidenceforreformsinthebusinessregulationthatwouldeasedo-ingbusiness.Keywords:productmarketregulation,euroarea,structuralreformsJEL:F33,F36,L50Email:nina.schoenfelder@fernuni-hagen.deSchweickert,Rainer(KielInstitutefortheWorldEconomy,IfW):Clus-tersofeconomicsystemsindevelopingcountries-Amacroclusterap-proachAbstract:Whilesomepapersoneconomicsystemsfocusedontransi-tioncountries,Asiancountries,andLatinAmericancountriesaswellasondevelopingcountriesonly(Pryor2005),thereis,toourknowledge,noquantitativeempiricalapproachlookingatthefullsampleofdevel-opedanddevelopingcountries.Wetrytoprovideacomprehensivepicturebyapplyingamacroclusterapproachtoabroadsampleofdevelopedanddevelopingcountries,byaccountingforproductionandwelfareaspects(following,e.g.,Amable2003 and Schršder 2013), and by considering performance variables(following,e.g.,Kitschelt2006andHall/Gingerich2009).Lookingatan8-clustersolutionbasedonstandardizedvariables,i.e.theworldasitis,thedevelopingworldrangesfromaLiberalemergingclus-ter (distinguishedbyastillhigher levelofregulation)ontheoneendandalowincomeclustercharacterizedbyagenerallyverylowlevelofgovernmentactivityontheotherend.However,onceincomeadjustedresidualvariablesareintroduced,i.e.theworldasitmightbe,emergingand developing countries to a larger degreemix up with developed

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countries and groups of emerging and developing countries revealsomeoverallmaximumvalues:-Inequality:CentralLatinAmericancountriesplusHongKongandSin-gapore.-GovernmentSize:aclusterdominatedbyAfricancountries.-Regulation:asmallgroupofresourcerich(includingLatinAmerican)developingcountrieswithsmallgovernments.- Innovation:aclusterofemergingmarketeconomiesalsocharacter-izedbyinequality.Keywords:EconomicSystems,ClusterAnalysis,DevelopingCountriesJEL:P51Email:rainer.schweickert@ifw-kiel.deSemerikova,Elena(NationalResearchUniversityHigherSchoolofEco-nomicsMoscow),OlgaDemidova:Predicting regionalunemploymentlevelinRussiaandGermanyusingspatialpaneldataapproachAbstract:Labormarketsalwaysstayamongthecentral issuesofgov-ernmentpolicy.Alotofstudiesconsiderthequestionofforecastingun-employment,butmostofthemfocusonthepredictionofthenationalunemploymentlevel.However,forecastsattheregionallevelarealsonecessary since they can help policymakers to develop better innereconomicpolicy, forexample,toallocateresourcesandexpendituresbetweenregionsmoreefficiently.InthispaperwepredictthelevelofunemploymentinRussiaandGermanyforeachregionsimultaneouslybyemployingspatialpaneldatamodels.Weemploydatafrom2005to2010 inordertoestimatethemodeland leave2011-2012yearsforprediction.Themainobjectiveofthepaperistoanalyzetowhatextentthe introduction of spatial dependence into a panel data unemploy-mentmodelaffectsthepredictiveaccuracyofregionalunemployment.Therefore,wecomparevariouspaneldatapredictors(dynamicspatialfixed effects, spatial fixed and random effects, non-spatial fixed andrandomeffects,pooledOLS)andnaivepredictors,computedasanav-erageofpreviouslevelsofunemployment.Comparing different forecasts by the root mean squared error andothermeasuresofforecastingerror,wefindthatspatial fixedeffectsmodel(inRussiancase)andspatialdynamicfixedeffectsmodel(inGer-mancase)givethebestforecasts.Thus,introductionofspatialeffects

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intotheregionalunemploymentmodelincreasesthepredictionaccu-racysignificantly.Thisresultconfirmstheimportanceofaccountingforspatialcorrelationandusingspatialpaneldatamodelsforthepurposesofregionalunemploymentforecasting.Keywords:regionalunemployment,spatialpaneldatamodels,predic-tionJEL:R23,C23,J64Email:lena.sem7@mail.ruShiraishi, Maho (University of Kitakyushu): Financial intermediationandfirm'ssurvivalinChinaAbstract:Thispaperempiricallyinvestigateshowfinancialintermedia-tionpathscontributetothedurationoffirmsinChina.Forthepurpose,weconductasurvivalanalysiswherefirm'sexitdummytakesvalueofoneifthefirmexitfrommarketandvalueofzerootherwise.Ourmainfindingsare the followings.First,private firms facehigherriskofexitfrommarketthanstate-ownedfirmswhentheyfinanciallydependondebtsuchasbankloansandtradecreditreceived.Second,thereexistsU-shapedrelationshipbetweenfirm'sageandriskofexitfrom;theriskishighforthefirmswiththeageoflessthansevenyearsold,islowestforthefirmswiththeagebetweeneightandfifteenyearsold,andbe-comeshighagainforthefirmswiththeageofmoresixteenyearold.Third,during theperiodafter2008,higherprofitabilityandaccess toexternal finance such as short-term bank loans and suppliers' tradecreditincreasethedurationoffirms.Theseobservationssuggestthatcloserrelationsarebuiltbetweenfirmsandbetweenfirmandbanksasfirm'sagebecomesoldandthatChinahavepreparedbetter-function-ingfinancialsystemafter2008thanbefore.Keywords:Firm'sfailure,financialsystem,ChinaJEL:O53,D22,O16Email:mshira@kitakyu-u.ac.jpSignorelli, Marcello (University of Perugia), Chiara Mussida, DarioSciulli:Schooldropoutandworkingopportunitiesindevelopingcoun-tries:Acomparativeanalysis

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Abstract:Thisstudycontributestotheknowledgeregardingtheconse-quencesofschooldropoutintendevelopingeconomies,distinguishedinthree“macroregions”,focusingontheworkingperspectivesofyoungindividualsaged15to29.Inparticular,weadoptasimultaneoustwoequationsmodelforschooldropoutandworkingoutcomesallowingforcorrelationbetweenerrortermsandthereforeaccountingforendoge-neityofschooldropout.Ourstudyshowstheexistenceofanegativecorrelationbetweenerrorstermsofworkanddropoutequations;thissuggeststhatconfoundingfactorsdrive,simultaneously,bothdropoutandworkingdecisions,butinareverseway.So,amajorfindingofthisstudyisthattheunderlyingmechanismsdrivingthepositiveimpactofschooldropoutonworkingperspectivesdiffersacrossoutcomes (un-paidwork,self-employmentandemployment);however,eventhoughconfoundingfactorsmayaffecttheprobabilityofbeinginunpaidworkorself-employment,theirroleisnotcrucialtodetermineapositiveef-fect,asdemonstratedbythespecificationnotaccountingforendoge-neity;thepositiveimpactofschooldropoutis,instead,moreexplainedbytheirrelevanceofhavinghigheducationalattainmentstoaccesstounpaidworkandself-employment.Ourresultshaveanumberofpolicyimplications.Keywords:schooldropout,workingperspectives,endogeneity,devel-opingcountriesJEL:J21,I25,J24Email:marcello.signorelli@unipg.itSönmez,Sinan(AtilimUniversity,AnkaraUniversity,FacultyofPoliticalSciences):AlternativeeconomicdevelopmentexperiencesandWash-ingtonConsensusinthebigemergingeconomiesAbstract:Thepurposeofthispaper is toportraythe influenceoftheWashingtonConsensusondevelopmentexperiencesandeconomicpol-icies in China, India and Brazil (BIC), part of the BRICS. The referredeconomies,inthepastandatpresent,havedifferentstrategies,modeof industrializationanddevelopmentmodels.Theengagementtone-oliberalpolicyprinciplesdidnotradicallyreducetheroleofthestateintheeconomy.Infact,theBeijingConsensusisthetermforthestate-ledcapitalistdevelopmentalismunderasocialistregimeinChina;Mumbai

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ConsensuscorrespondstothedevelopmentexperienceofIndiawhichischaracterisedbythecombinationoftheneoliberalreformswithgov-ernment involvement; Brazilian neo-developmentalism combines theneoliberalpolicyprincipleswiththestateintervention.Itseemstobedifficultevenimpossibletoputalltheexperiencesinameltingpotandtofabricateauniquemodelorparadigmfortheemergenteconomiesandthedevelopingcountries.Nevertheless,themarketdrivenreformsandtheeconomicroleplayedbythestateinthebigemergentsofferanopportunitytofindacommondenominatorforthedevelopmentmod-elsorparadigms.ThecorrelationwithordeviationfromtheWashing-tonConsensuswouldpermittomakeafinalremarkonthebasicprinci-plesoftheeconomicpolicyanddevelopmentprocessand/ormodelsintheBIC.Keywords:WashingtonConsensus;BeijingConsensus;MumbaiConsen-susJEL:F63,L60,O57Email:sinan.sonmez@atilim.edu.trSuganuma,Keiko(NihonUniversity):ThestrategyofJapanesecompa-niesonRussiabusiness:FocusingonhumanresourcemanagementAbstract:TheobjectiveofthispaperistoexamineinternationalHumanResourceManagement(HRM)practicesintermsofplacementofJapa-nesepeoplebelongingtothemanagementclass,andthetrainingoflo-calstaff,particularlyfromthecontextofJapanese-affiliatedcompaniesandthelabormarketinRussia.TheinvestigationdiscussesinthispaperisbasedontheresultsoftheinterviewsurveysIconductedonJapanesepeopleof themanagement class in30 Japanese-affiliated companies(includingalocalsubsidiaryandrepresentativeoffice)operatinginRus-siabetweenMayandDecember2015.AlthoughtheresponsescannotbeconsideredrepresentativeofallJap-anese-affiliatedcompaniesoperatinginRussia,however,theresultsareconsideredthattheappointmentoflocalstafftothemanagementclasshascurrentlysomedifficultiesinRussiawithrespecttotheexistingsit-uationoftheJapanese-affiliatedcompaniesandlabormarketinRussia.Inotherwords, it isconsideredthatthedifficultiesarecausedbythenecessitiestomediatetherelationshipbetweenparentcompanyand

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subsidiary,historicalbackground inRussiaand so forth. Therefore, itcouldbestatedthatselectingpersonneltothemanagementclassandhumanresourcedevelopmentarebothveryimportant.Keywords: Russia, Japanese-affiliated companies, Human ResourceManagementJEL:F21,F23,M50Email:suganuma.keiko@nihon-u.ac.jpSzijártó,Norbert(InstituteofWorldEconomicsoftheCentreforEco-nomicandRegionalStudiesoftheHungarianAcademyofSciences,Cor-vinusUniversityofBudapestandNationalUniversityofPublicService):ThreeperipheryregionsoftheEuropeanUnionandtheoptimumcur-rencyareatheoryAbstract:ThispaperfocusesonthreeregionsoftheEuropeanUnion:the Iberian countries (Portugal and Spain), the Visegrad countries(CzechRepublic,Hungary,PolandandSlovakia)andtheBalticcountries(Estonia,LatviaandLithuania).AcommonfeatureisthattheseregionsaresituatedontheperipheryoftheEuropeanUnion(EU),however,theIberiancountries,BalticcountriesandSlovakiahavealreadyintroducedtheeuro,andthethreeremainingVisegradcountriesarereluctanttojointhemonetaryunion.Thepaper'sfundamentalaimistoinvestigatewhetherthesenineEUmemberstatesformandoptimumcurrencyarea(OCA)withthecoreeurozone.Wesurveytheoreticalissuesfromtheclassical contributions to theOCA theory to themodernendogenousandexogenousview.TheOCAtheorydoesnothaveasingleoperationalframeworkbutwecanapplyindicesrelatedtoOCApropertiesinorderto compare and evaluate the nine countries stance contrast to corecountries.Moreover,withstaticanddynamicmethodologywecanan-swer the question whether the use of single currency have broughtthosecountriesclosertothecoreeurozoneintermsofOCAproperties.EarlyresultssuggestthatVisegradcountriesareclosertocorecountriesthanperipherymembersoftheeurozone,ifwetakeintoconsiderationtradeintegration,economicstructuresandopenness.Keywords:optimumcurrencyareatheory,EconomicandMonetaryUn-ion,core-peripherydichotomyJEL:F15,F33,F45

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Email:norbertszijarto@gmail.comTalavera, Olexandr (The University of Sheffield), Nourhan Eid, Jose-phineMaltby:Incomeroundingandloanperformanceinpeer-to-peermarketAbstract:ThispaperusesauniquedatasetfromLendingClub,thelarg-est online lender in the U.S to analyze the consequences of incomeroundingintermsofloansperformance.Wefindthatroundingtendtohavenegativeeffectonloansoutcome.Borrowerswithroundingten-dencyaremorelikelytodefaultandlesslikelytoprepaycomparedtoborrowerswithmoreaccurate incomereporting.Furthermore, inves-torsarenotcompensatedfortheextrariskassociatedwithrounding.Borrowerswhomisreportincomebymeansofroundinghavelowerin-terest rate, larger loans and longermaturity. These results are con-sistentacrossvariousspecificationsandsub-samples.Keywords:Peer-to-Peerlending,Rounding,MisreportingJEL:D03,D12,G20Email:oleksandr.talavera@gmail.comUvalic,Milica(UniversityofPerugia),JanSvejnar:AretheWesternBal-kanscatchingupafteralostdecade?Abstract:The1990shavebeenadecadeofhighpoliticalandeconomicinstabilityintheWesternBalkanregion,thathasdelayedmoreradicaltransition-related reforms and integrationwith the European Union.Notsurprisingly, the1990s inthisregionhaveoftenbeenreferred inthetransitionliteratureas"thelostdecade".Afterthehighlyunfavora-blepoliticalandeconomicconditionsintheWesternBalkansthrough-out the1990s, the2000sbroughtmanypositivedevelopments.Untilthe strong impact of the global economic crisis, theWestern Balkancountriesregisteredhighgrowthrates,declininginflation,rapidexpan-sionofforeigntradeandincreasingForeignDirectInvestment(FDI).Anumber of important economic reforms related to the transition tomarketeconomyhavealsobeenimplementedsuccessfully.Thesere-formsweresustainedbytheEUStabilizationandAssociationProcess

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(SAP),whichhasgreatlycontributedtofasteconomicintegrationoftheWesternBalkanswiththeEUeconomythrough increasingtrade,FDI,bankingandfinancialintegration.However,thesepositivetrendshavebeeninterruptedbytheglobaleconomiccrisiswhichseverelyhittheWesternBalkancountries from late2008onwards.Theongoingeco-nomiccrisishasbroughtreversalsineconomicrecoveryofmostWest-ernBalkancountries.Withinsuchabackground,inthispaperweexam-inethenatureoftheproblemofeconomicgrowthandcatchingupoftheWesternBalkancountrieswiththemoredevelopedpartsofEurope.Wewillfirstrecallwhytheregionhasbeengrowingslowlyoverthelast25years;next,welookintothespeedofconvergenceoftheWesternBalkancountriesrelativetotheEU,basedonsomestandardindicators,followingSabirianova,SvejnarandTerrell(2011)andSvejnarandSeme-rak(2014);andprovideadiscussionoftheoptionsforresuminglong-termsustainableeconomicgrowthandconvergencetotheEU.Keywords: Transition, Western Balkans, Development, Convergence,GrowthJEL:P2,F6,O1Email:milica.uvalic@unipg.itvanderVelde,Lucas(UniversityofWarsaw,GRAPE):Phasingoutofthelabormarket:routinejobsandretirementpatternsAbstract:Theliteratureonthetaskcontentofoccupationsprovidesagoodbasistoanalyzethedemandandsupplyoftasksandchangesinwageinequality.Yet,littleisknownabouttherelationbetweenthetaskcontentofoccupationandotherrelevanteconomicbehaviour,inpar-ticular retirement decisions. Autor and Dorn (2009) show that olderworkers tend toperformmore routine cognitive tasks,namely thosewhoserelativedemandisindecline.SimilarconclusionsarisefromtheanalysisofCentralandEasternEuropeanlabourmarketsconductedbyLewandowskietal(2016).Inthispaper,wetakethisanalysisonestepforwardandanalyzehowthetaskcontentrelatestotheretirementde-cision.Wetesttwohypotheses.Thefirsthypothesisstatesthatworkersinmoreroutineintensivejobsaremorelikelytoretiresooner.Thishy-pothesisisconnectedtheshortageindemandforthosetasksandthedifficultiesinlearningnewskills.Second,workersthatmovedrecentlytoamoreroutineintensivejobaremorelikelytoretirethanthosewho

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performedthatjobforalongerperiod.Thishypothesiscorrespondstothe idea that jobswithmore routine tasks area ``waiting'' stone to-wardsretirement.Keywords:taskcontent,retirement,paneldataJEL:J23,J24,J26Email:lucasvandervelde@gmail.comVenturini,Francesco(UniversityofPerugia):ASchumpeterianperspec-tiveonPiketty'slawsofcapitalismAbstract:WederiveaSchumpeterianversionofPiketty'ssecondlawofcapitalismwhichrelatesthedynamicsofthewealth-to-incomeratiotothoseofendogenousinnovation,startingfromtheseminalcontributionby Grossman and Helpman (1991b). Our model predicts that thewealth-to-incomeratioisnegativelyaffectedbytherateofeconomicgrowthandpositivelybythesharesofnationalincomespentonR&Dactivitiesandcapitalinvestment.Weassessempiricallythetheoreticalpredictionsofthemodelthroughalong-run(historical)investigationcoveringtheperiod1870-2013for18OECDcountries.Specifically,weestimateastochasticversionoftheequation for thewealth-to-income ratio, applying a novel regressiontechnique, namely the Cross-Sectionally AugmentedDistributed Lags(CS-DL)estimator(Chudiketal.,2016).Thisapproachisbasedonady-namicrepresentationwhichprovidesconsistentestimatesforthelong-runparametersandisrobustalonganumberofimportantdimensions(namely,misspecification of dynamics, error serial correlation, cross-sectionaldependence,etc.).Ourevidenceindicatesthatthewealth-to-incomeratioisraisedbyR&D-basedinnovationactivities(namelyR&DinvestmentoverGDP) thatdonot translate intohigher ratesof eco-nomicgrowth.IncreasesintherateofGDPgrowthreducewealthine-quality.Keywords:Wealthinequality;Economicgrowth;InnovationJEL:E21,E22,O47Email:francesco.venturini@unipg.it

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Vernikov, Andrei (Institute of Economics - Russian Academy of Sci-ences,NationalResearchUniversityHigherSchoolofEconomics),Mi-khailMamonov:Long-termbanklending:WhodoesabetterjobinRus-sia?Abstract:Ourkeyobjectiveistochecktheeffectofbankownershiponproductivelendingtotherealeconomy.Inabank-basedfinancialsys-tem likeRussia's, itdoesmatter foreconomicgrowthwhetherbanksissueloansfor longertermandproductivepurposes.Wetestthehy-pothesis that state-controlled banks have higher propensity to lendlong-termtotherealeconomythandomesticprivatebanksandforeignbanks,duetogovernmentinterferenceinlendingdecisions.Fortheem-piricaltestingtheauthorsemployanexhaustivedatasetofbank-levelstatisticsfor2005Q1-2013Q4.Wefind,predictably,thatpublicbankshadonaveragea9%highershareoflong-termloansthanprivatebanks.Largepublicbanksmakeadisproportionallyhighcontributiontolong-termlendinginRussia,thusconfirmingthe'helpinghand'theoryofgov-ernmentbanking.Thecontributionofdomesticprivatebankstolong-termlendinghasbeenlargelyinadequate.Wealsofind,counter-intui-tively, that long-term lending is insensitive tobusiness cycle stage inRussia. Longer-term lending to non-financial firms benefited frombanks'lowerpriceoffunds,greatermarketpower,biggersize,highercapitalbuffer,lessriskylendingstrategy,andadiversifiedfundingstruc-ture.Policyimplications:(a)aneventualprivatizationofthecorestatebankswouldchoketheinflowofinvestmentresourcestonon-financialcompanies;(b)astatedivestmentfromnon-corecommercialbanksandconcentrationofpublicfundsatcorebanksmightmakesense.Ourre-searchaimstocontributetotheunderstandingoffinance-growthnexusandthepoliticaleconomyofbanklending.Keywords:finance-growthnexus;banks;RussiaJEL:G21,G28,P23Email:verand77777@gmail.comVujacic,Ivan(UniversityofBelgrade),JelicaPetrovic-Vujacic,SvetozarTanaskovic,MarkoMiljkovic:Yugoslavia-Whereitwas,whereitwentAbstract: ThebreakupofYugoslaviamade thesuccessor states late-comerstotransitionwithdifferentstartingpointsdependingwhenthe

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conflictineachformerrepublicended.Nevertheless,enoughtimehaspassedtoassessthedevelopmentpotentialofthesestates.Yugoslaviainthe1950'sand1960'shadhighgrowthandexhibitedrapiddevelop-ment.Italsosomewhatmitigatedthedifferencesinlevelsofdevelop-mentamongtherepublics.Itdid,however,encounterdifficultiesasso-ciatedwithitsdevelopmentmodelintheearly1980's.TheauthorswillmakeashortassessmentofeconomicdevelopmentintheformerYu-goslavia.Afterthat,theanalysiswillconcentrateonthedevelopmentssincethebreakupintermsofdifferencesamongtheformerrepublics.ThesewillbeevaluatedintermsofGDPgrowthandotherdevelopmentindicators.TheanalysiswillalsolookattheconvergenceofthesestatestotheEUaverageastheyareallonthepathtoEUaccession.Theau-thorswill focusontheperioduptothecrisisof2008andtheperiodfollowingit.Itwillalsolookattheperformanceofthesestatescompar-ativelywith states that did not belong to the former Yugoslavia, butcouldprovideforalegitimatecomparison(ex.SerbiaandBulgaria,etc.).Theanalysiswillalsofocusonhowthecountrieshavemanagedtocopewith the economic downturn since 2008 i.e. assessing vulnerability.Macroeconomic performance indicatorswill be analyzed. Finally, theconstraints to future economic and social developmentwill be high-lighted.Keywords:Yugoslavia,EconomicDevelopment,TransitionJEL:O10,O57P29Email:ivujacic@ekof.bg.ac.rsWebster,Allan(BournemouthUniversity):AnempiricalanalysisofthegenderpaygapintheUnitedStatesAbstract:ThisstudyexaminesthegenderwagegapbetweenmaleandfemaleworkersintheUS.Despiteanextensiveliteratureonthesubjectit remainsdifficult toaccuratelyassesswhetherwomenarepaid lessthanmenforthesamework.Thisdifficulty,longrecognizedintheliter-ature, arises from differences inmale and female employment. Thisstudy,likeseveralothers,findsgendersegregationbyindustryandbyoccupation to be of particular importance in this respect. This studyuses amatching estimator to provide a stronger andmore accuratecomparisonbetweenmaleandfemaleworkers.Despitethisdoubtsre-mainaboutevenamatchingestimatorwhenappliedtothefullsample,

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mainlyfromthehighdegreeofgendersegregationatwork.Tosecureevenbetterprecisionwerepeatthematchinganalysisforthreeindus-tries,eachcarefullyselectedforemployingsimilarnumbersofmenandwomen.Ourresultssuggestthatthefindingofastatisticallysignificantgenderpaygapisconsistentthroughout.Thatis,nomatterhowfaronetriestocontrolforawiderangeofinfluences(suchasindustry,occupa-tion,region,educationetc.)thefindingthatwomenaresimplypaidlessthanmenforcomparableemploymentispersistent.Keywords:genderpaygapJEL:J16,J31Email:awebster@bournemouth.ac.ukWebster,Allan (BournemouthUniversity): InwardFDIand innovationintransitionalcountriesAbstract:Thisstudyempiricallyexaminestherelationshipbetweenin-novationandforeignownershipforalargesampleoffirmsin29transi-tional countries, taken from the 2013 BEEPS survey. The analysis isbasedontwodifferentaspectsofFDItheory–technologytransferandstrategicasset seeking (with respect toR&D). It finds that firmswhoinnovatewithrespecttonewproducts,newprocessesandnewman-agement techniques have, on balance,more foreign ownership thanthosewhodonot. Theevidence supportsa view that strategicassetseeking is associatedwith inward FDI. It also supports the view thattechnologytransferisalsoanimportantfeatureoftherelationshipbe-tweeninnovationandFDIintransitionalcountries.Ofthetwoeffectsthetechnologytransfereffectisofmoreconsequencethanthestrate-gicassetseekingeffect.Keywords:FDI,innovation,transition,firm,technologytransfer,strate-gicassetseekingJEL:F23,O30,P20Email:awebster@bournemouth.ac.ukYakovlev,Andrei (NationalResearchUniversityHigherSchoolofEco-nomicsMoscow),AndreyTkachenko,AlexandraKuznetsova:Repeated

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contracts inpublicprocurementandopportunitiestoidentifycorruptandhonestbehaviorofeconomicagentsAbstract:Inthispaperweshowhowanalysisofrepeatedcontractsinpublicprocurementofsimplehomogeneousgoodcanhelptodifferen-tiatebetweenopportunisticandhonestbehaviorofeconomicagents.We assume that honest agents will benefit from repeated procure-ments due to lower uncertainty and decrease in transaction costs.Therefore prices of repeated procurements between honest agentsshouldbelowercomparingtoone-timedeals.Onthecontraryoppor-tunisticagentswillseekforpersonalgainfromrepeatedcontracts(intheformofkick-backspaidbysupplierstocorruptedprocurementof-ficers)andthisstrategywillleadtohigherpricesofrelevantdeals.Ad-ditionally,weassumedthatstateownershipofsupplierscanintensifytheseeffectsprovidingonemorechannelforinteractionsbetweenhon-estagentsinthefirstcaseandopportunisticagentsinthesecondcase.Forempiricaltestingofthesehypothesesweuselargedatasetonpro-curementofgranulatedsugar inRussia in2011-2013.Taking intoac-countthepeculiaritiesofnationalprocurementregulationweanalyzemainprocurementprocedures-includinge-auctions,requestsforquo-tations and single-sourcing. Normalized contract price is used as de-pendentvariableanddummiesforrepeatedcontractsandSOEstatusofsuppliersasmainexplanatoryvariables.Theanalysisshowsthatpriceswerelowerinrepeatedprocurementsofsugarthroughmoretransparentandcompetitivee-auctionsandhigherinrepeatedprocurementsthroughlesscompetitiverequestsforquota-tions.Atthesametime,ourhypothesesregardingtheeffectsofstate-ownedcompanies'participationinpublicprocurementsareconfirmedonlypartially.RepeatedcontractswithSOEsafterlesscompetitiveandnon-transparentprocurementprocedures(requestsforquotationsandsingle-sourcing)leadtosignificantpriceincreases.Whereasnosignifi-cant differences are observed in the prices of contractswith privatesuppliersandSOEsconcludedthroughe-auctions.Keywords: public procurement, corruption, state-owned enterprises,transparencyJEL:H57,L14Email:ayakovlev@hse.ru

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Yakovlev,Andrei (NationalResearchUniversityHigherSchoolofEco-nomicsMoscow),IrinaLevina,GregoryKisunko,IsraelMarques:Uncer-taintyasafactorininvestmentdecisions:ThecaseofRussia’sregionsAbstract: Thispaperargues thatwhile thebulkof literature tends tofocusonregulatoryuncertaintystemmingfromformalpractices,uncer-tainty that comes fromunpredictable informal practices surroundingregulationisanunderexploredadditionalformofregulatory.Thepaperusesresultsofempiricalanalysisofseveraluniquefirm-leveldatasetstoarguethatfirmsinRussianinstitutionalenvironmentsadapttoinfor-mal practices of business-government interactions, so long as thesepracticesarepredictable.Thepaperdrawsadistinctionbetweendiffer-encesinlevelsofwell-orderedandpredictablecorruption,whichmaybeseenasapartofthecostofdoingbusiness,anddifferencesinregion-specificvariationofexperienceswithdecentralizedandunconstrainedcorruption.Itarguesthatasignificantobstacletoinvestmentdecisionsatregionallevelisnotsomuchformalorinformalrulesperse,butlackofpredictabilityoftheirapplication.Italsoexaminesin-countryincon-sistencyinpropertyrightsenforcementasanothersourceofregulatoryuncertainty tied to informalpractice. Itargues thatbyselectivelyen-forcingpropertyrightandnotonlyallowingsometomakeuseofextra-legal strategies to strip others of property, but also participating intheseactivities,thestatecreatesuncertaintyabouthowandwhenfun-damentalprotectionswillbeenforcedandthereforedepressesinvest-ment.Keywords: Investmentatfirmlevel,regulatoryburden,regulatoryun-certainty,imperfectinstitutionsJEL:D81,K42,O17Email:ayakovlev@hse.ruYano,Go (KyotoUniversity),MahoShiraishi:Finance, institutionsandinnovationactivitiesinChinaAbstract:Wemodelpublicprocurementasagamebetweenabureau-crat,aprocurerandasupplier.Thetimingofthegamehasthefollowingform:1.Thehierarchicalrelationshipbetweenthebureaucratandthe

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procurerisestablished(amonitoringcostisundertakenbythebureau-crat),2.Theprocurer introducesanauctionthatallowshimtoselectthesupplier,and3.Thesupplierimplementsthecontract.Weidentifythreeequilibriumsolutionstothestaticversionofthismodel.Thefirstequilibrium occurs,when the bureaucrat formally regulates the pro-curer`s activity, but there is nomonitoring and enforcementmecha-nism.Under this non-monitoring regulatory regime, theprocurer se-lects the supplierbyhimself.Weassume that theconclusionof con-tracts between the procurer and the supplier is amatching process,whoselevelofefficiencyisdefinedbytheabilityoftheprocurertocon-cludeacontractwithasupplierofhisowntype.However,absenceofmonitoring(withnosanctionsforcorruption)causestheincreaseofop-portunisminprocurers’behavior.Keywords:finance;institutions;innovationactivitiesinChinaJEL:O16,O31,P34Email:rswtj922@yahoo.co.jpZhang,Mao(UniversityofSheffield),OleksandrTalavera,ShuxingYin:Managingdiversity:boardagediversity,directors'personalvalues,andbankperformanceAbstract:Thisnegativeshiftinprocurer`sincentivesleadstounderpro-ductionofpublicgoods.Thenthebureaucratstartsfacingpoliticalpres-sure and thereforemonitors the procurer`s compliance. He imposesmonitoring on the observable elements of the procurement process(tenderingorplacementoforders).Asresultboththeprocurerandthesupplierfacepartialmonitoringandrigidprocurementrules.Inthenewpartialmonitoringregime,acorrupt-typeprocurerislimitedinthese-lectionofhissupplier.Thesameholdsalsoforanhonest-typeprocurerwith respect to rejection of bids offered by opportunistic suppliers.Whenthereisbroadcorruptionatthepointofintroductionofpartialmonitoringregime,honestsuppliersinitiallycangetbroaderaccesstopublicprocurement.However,contractexecution (asamorecompli-catedstageofprocurementprocess)isnotobservablebythebureau-cratunderpartialmonitoringregime,andthereforethepositiveeffectofregulationislimited.Acorruptprocurercanaskabribefromanhon-estsupplier (usingpaymentsdelaysandprovidingadditional require-mentstosupplier).Atthesametime,anhonestprocurerislimitedin

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hisabilitytoputpressureonopportunisticsupplier.Asaresult,anin-creaseintheprovisionofpublicgoodsistemporary(short-run),anditdeclines again in long-run. This iswhy thebureaucrat facingpoliticalpressuremaywanttomovetomorecomprehensiveextendedmonitor-ingandmoreflexibleregulation.Keywords:boardofdirectors,agediversity,bankperformanceJEL:G21,G30,J10Email:mzhang32@sheffield.ac.uk

ContributionstoOrganizedPanelsAkindinova, Natalia (Development Center, National ResearchUniversity-HigherSchoolofEconomics,Moscow):Politicalconstraintsforeconomicdevelopment:thecaseofRussiaAbstract:Comparing tootherCEE transitioneconomiesduringglobalfinancialcrisisRussiaexperiencedextremelyhighdeclineofGDP(about8% in 2009) but could keep and even increased leaving standards.However contrary to East-European countries already in 2013Russiafacedneweconomicslowdownandcameintonewrecessionin2014-2015afteraccelerationofgeopoliticaltensionswithWestinframeworkofUkrainiancrisis.Inthispaperwewillshowthereasonsforeconomicslowdownin2013includingkeyfeaturesofRussianmodelofeconomicdevelopmentin2000s,itscrashduring2008-2009globalfinancialcrisisand failed attempts to change the model in 2009-2011. Politicalresponse to the crisis 2008-2009 included huge increase in socialspendingasthetooltokeepsocialandpoliticalstability.Asaresulthalfof reserves were spent in 2009. Those decisions caused the radicaldeclineinthevolumeofrentavailableforredistributionandtightenedbudgetconstraintsforrulingelite.Howevertherulingelitestilltriedtokeepsocialobligationsalongwiththeotherhugespendingprograms,suchasanewlargedefenseprogram,startedin2011.Inouropinionpolitical survival incentives clearly started to dominate economicefficiencyargumentsinpolicymakingalreadysince2012-asresponseto 'Arabspring'andmassprotests inMoscowinDecember2011.For

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example,Mr.Putin'spre-electionprogramkickedthenewincreaseinsocialobligations,whichcausedabudgetdeficitatregionallevel.Thisturninprioritiesofcountryleadershipaswellaslackof'visionoffuture'provides extremely negative influence on incentives and behavior ofeconomic agents (including decline of investment and capital flight).Taking into account these political constraints we will discuss keydrivers,mainrisksandoverallprospectsofeconomicdevelopmentinRussiainnextfuture.Keywords:economiccrisis,modelofeconomicdevelopment,politicalconstraintsforeconomicreforms,RussiaJEL:E61,P26,P35Email:nakindinova@hse.ruAmbroziak, Adam (Warsaw School of Economics):Modern industrialpolicyandservitizationprocesswithintheInternalMarketoftheEUAbstract: The Internal Market of the European Union was primarilyestablished and based on free movement of goods. After theelimination of physical, technical and fiscal barriers, the Commissionobservedmanynationaladministrativeobstaclesinfreemovementofservices, which should be eliminated on the basis of the servicedirective of 2006. Recently, following the period of fascination withservices,wehavebeenhearingmoreandmoreoftenabouttheneedofreindustrializationintheEuropeanUnion.Asaresultofeconomiccrisis,instead of introducing modern solutions that would facilitate thefunctioning of the EU internal market we witnessed reinforcedprotectionistandinterventionisttendencies.ThenewCommission seems tobedoingawaywith thisapproachbystressing theneed to takeacomprehensiveapproach to the internalmarket of goods and services and to link them into an integratedproductmarketwithbusiness-friendlyrightsandobligations.Thereforewe will base our research on the analysis of production within theframeworkoftheEUindustrialpolicyandtradeingoodsandservicesintheEUinternalmarket.Theaimofthepaperistoverifyifweexperiencethe servitization of economic activities in the EU at the cost of themanufacturingandtradeingoods.Keywords:EUindustrialpolicy,EUInternalMarket,servitizationJEL:L50,L60,L88

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Email:adam.ambroziak@wp.plAndreff,Wladimir(UniversityofParis1PanthéonSorbonne):Outwardforeigndirectinvestmentfromnewwaveemergingeconomies:AshiftofnewlyemergingmultinationalcompaniesAbstract:Someeconomistscontendthat,beyondtheBRICs,anumberof new candidates are muddling through the crisis to reach theemerging country group", including as home countries for outwardforeigndirectinvestment(OFDI).Thepaperattemptstoidentifyarelevantandhomogeneoussampleofsuchnewwaveemergingeconomies (NWEEs) in a first part, then topresent a tentative study of their OFDI during the past recent years(secondpart).AfirstwaytosamplingNWEEsconsistsinselectingthefirst100homecountriesaccordingtotheirOFDIstockin2014andthenscalingdownthe sample on economic criteria (skipping out developed marketeconomies, transition economies, etc.). Another way is to compareNWEEs,relyingoneighteconomiccriteria,toothercountrygroupings,namelytheBRICs.Bothwaysconvergetowardsa14countrysample:Malaysia, Mexico, Chile, Thailand, Colombia, Turkey, Argentina,Philippines,Indonesia,Nigeria,Vietnam,Egypt,Iran,andPakistanwhenranked byOFDI stock. Some statistical testing shows that theNWEEgroup ismore homogeneous than other country groups, namely theBRICS,despite some similaritieswith the latter as regards theirOFDIdevelopment.ApreliminarystudyfocusesonidentifyingwhenOFDIstartedupfromeachof the14NWEEs,whicharecurrently theirmajormultinationalcompanies as well as the geographical and industrial distribution oftheirOFDI,andcomparesNWEEs'OFDItoBRICs'OFDI.Keywords: outward foreign direct investment, multinational(transnational)corporations,emergingeconomiesJEL:F23,O57,F21Email:andreff@club-internet.fr

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Belloc, Filippo (University “G. d’Annunzio” Pescara): EmployeerepresentationlegislationandinnovationAbstract:Weanalysehowsectoralinnovationoutcomesareaectedbynational legislationsofworkerparticipationtocorporategovernance.Wedevelopamodelofemployeerepresentationlaws (ERL) and innovation in the presence of incomplete labourcontractsandpredictheterogeneousERLeectsacrossdierentsystemsofdismissal regulation.Wethenperformapanel regressionanalysis,exploitingpaneldataforfivecountriesoverthe1977-2005periodand21 two-digit manufacturing sectors. We find that ERL effects onaggregate innovation output are positive, statistically significant andhigher in magnitude where national labour laws impose significantfiring costs to the firmwith respect to institutional settings inwhichfiring costs are low or absent. These results are robust to possibletechnologyselectiondynamics,endogeneityandinstitutionalchangesinthelegalsystemofpatentprotection.WealsoestimateERLeffectsoninnovationconditionalonfiringcostsatanindustrylevelandshowthat the impactof ERL is relatively larger in those sectorswhere thehuman capital contribution to production is higher.Our results haverelevant implications for the optimal design of employeerepresentationlegislations.Keywords: employee representation law, hold-up, innovation, paneldataJEL:K31,O31,P51Email:f.belloc@unich.itBruno, Randolph Luca (UCL, SSEES, IZA, Fondazione Rodolfo DeBenedetti), Douarin, J. Korosteleva, S. Radosevic: Determinants ofproductivitygapintheEU:AmultilevelperspectiveAbstract: In the last fourdecadesTotal FactorProductivity (TFP)andlabour productivity growth have reportedly slowed down globallygeneratingmuchcauseforconcerns.Indeed,datafromtheConferenceBoard(2015)showthatglobalTFPgrowthhasrecentlyfallentoaroundzero,afteraveragingat1percentbetween1999and2006andat0.5percent between 2007and 2012. This trend is strongly felt in theEuropeanUnion (EU),where theharmful effectsof slowgrowthand

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productivity slowdown on economic and social cohesion have beenextensivelydiscussedsince2008,andwheretheslowdownitselfmayhave started as early as the mid-1990s - see for example van Ark,O'Mahony, and Timmer (2008) on the increasing productivity-lagbetweentheEUandtheUS.SlowproductivitygrowthintheEUhasbeenaccompaniedbyanotherphenomenon.Inthisregionanadditionalconcernhasbeenthatfrom2004, and even more strongly from 2008, increasing divergence inlabourproductivityhasbeenobserved(FilippettiandPeyrache,2013).TheEUwhichwasoncedescribedbytheWorldBankasa'convergencemachine'(Gill&Raiser2012)ceasedtoconverge.WhiletheEurozonecrisis led tomassive job losses inmanufacturing in theEUperiphery,especially in the South, even well before 2008 traditional labourintensiveindustriesinSpainandItalylanguished(Timmeretal.2010).TodaysomeNewMemberstates,especiallyVisegrad-5,havejoinedtheGerman-Austrianmanufacturing core,while the Southof the EUhasbecome a very stagnant region that is de-industrializing at anaccelerated pace. Overall, pre- and post-2008, one can see a strongdifferentiation amongst high and medium-income EU economies(Landesmannetal,2015).Againstthisbackdrop,thispaperattemptstoshedsomelightintotheprocessoftechnologicalcatch-up,orlackthereof,withintheEUregion,more specificallyweaim to identify thedeterminantsof catchingupaccountingforfirm,sectorandcountrylevelcharacteristics.SimilartoMcMorrowetal(2010)thepaperadoptsa"Schumpeterian"approachto growth (e.g., Acemoglu et al, 2006; Aghion and Howitt, 2006) toanalyseproductivitydeterminants.Accordingly,productivityispositedtodependontherateofinnovationand/orimitationi.e.ontherateatwhich frontier technologies are being developed and applied ineconomiesthatare"technologyleaders"andontherateatwhichthesetechnologies are diffused through the economy and to catching-upeconomies.So,acountry'sorfirm'sprogressdiffersaccordingtohowfar it is from the frontier. In theory, countries or firms behind thefrontier should grow faster and catch up to the global technologicalfrontierbecausetheybenefitfromknowledgespilloversfromthoseonthe frontier. Firms or countries behind the frontier can imitatetechnologicalactivities,whereasthoseatthefrontiermustcontinuallyinnovate to stay in that position.Moreover, policies and institutionsthat favour imitationarenot thesameas thosethat favour leading -

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edge innovation (Aghion, Harmgart & Weisshaar, 2011). So, theSchumpeterian approach explicitly considers the role of institutionalsetupontechnologyaccumulationanddiffusion.Forexample,barrierstoentryaremuchmoreimportantinnewtechnologieswhere'creativedestruction' dominates when compared to established technologies.The examples of the Schumpeterian framework in exploring thedeterminantsofTFPatcountrylevelareGriffithetal.(2004),Nicoletti&Scarpetta(2003),andatasectorallevel-McMorrowetal(2010).The approach at a macro level is grounded in the 'technology gap'literaturewhich postulates that technology and technical knowledgeare difficult and costly to transfer (Fagerberg, 1994). TFP growth fordevelopingcountriesthatarerelativelyclosetothefrontierislikelytobe significantly boosted by technological diffusion from the frontiercountries (Savvides and Zachariadis, 2005). On the other hand, theabilityofacountrytocatchupisafunctionofitsabsorptivecapacityanditsinnovativecapability(Castellacci,2011).Akeynoveltyofourapproachisthatweexplorethedeterminantsofproductivityinamulti-levelframeworkbycombiningfirm,industryandcountry-levelfactors.Thisisanimportantdeparturefromtheliterature,wheredeterminantsofproductivityhavebeenexploredata countrylevelandtoamuchlesserextentatasectoralormicro-levelandwheremostpastpapersonlyestablishstatisticalassociationsandprovidenocausal direction. We aim instead to ground our analysis in theframework of the Schumpeterian growth theory. Accordingly weassumethatthetechnologygaporthedistancebetweentheTFPoftheleading sector country and country analysed indicate the extent towhichacountrycangrowbasedonimitationoradoptionofthemoreefficient technology. In addition, we control for several firm andcountrylevelinstitutionalfactors.Inauniqueexampleofamultilevelstudy of international TFP catch-up, Jung and Lee (2010) show thatinternationalcatchup(Koreavis-à-visJapan)ismorelikelytooccurinsectorswheretechnologiesaremoreexplicit(e.g.electronics)andmoreeasilyembodiedinimportedmachineryandequipmentthaninsectorswithmoretacitknowledgeregime(e.g.automotive).Theyalsofindthattheabsolutemajorityofproductivitygap isdue to the industry levelcatchupwhereasthefirmlevelcatchupisminimal.However,fromtheperspectiveofourpaperresearchonbothKoreaandtheEUhasshownthatfirm-levelvariablesareimportantinexplainingintra-nationalcatchupandthatfirmlevelanalysisneedstocomplementanindustry-level

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analysis.Itisherewhereweseethenoveltyofthepaper.Tothebestof our knowledge we are not aware of any work that attempts tointegrate all three levels of analysis or determinants into oneframework.Wedefine technology frontier as thebest EU sector in termsof TFPduring the2004-13period forwhichwehaveavailabledata.WeareinterestedinthedeterminantsofTFPcatchinguptocountryindustry(sector) levelandtotheEU industry leveltechnologyfrontier i.e. thebestEUsectorintermsofTFP.Ourdatasetislargelybasedonfirm-leveldata.Givenaverylargesizeofourdatasetweareabletoaggregatefirm level data and account for industry level data too. Our level ofdisaggregation is a 4-digit level which is quite detailed and whichguaranteesthatindustriesatthatlevelarequitehomogenousentitiesintermsoftechnologyfeatures.CalculatingTFPatsuchdisaggregatedlevelallowsustoalsoaddresssomecriticismofTFP(see,forexample,Felipe and McCombie, 2014). However, we also employ furtherrobustness checks of our results using labour productivity as analternativemeasure.By focusing on four manufacturing sectors at different level oftechnological sophistication - Food (NACE 10, representing a lowtechnology industry); BasicMetal (NACE25, representing amedium-lowtechnologyindustry);Chemicals(NACE20,representingamedium-high technology industry); and finally Computing (NACE 26,representing a high technology industry) - our empirical strategy iscomposed of three steps. Firstly, we follow Foster, Haltiwanger andSyverson (2008) and we estimate TFP as the residual from a 4-digitCobb-Douglas equation at the EU level on the 2004-2013 time span.Following Jung Lee (2010)we then compute an average EU industrylevel frontier for the same period by looking at the best performingcountryinaspecificsector.Thisallowsustogaugeadualtechnologycatching up measure: on the one hand we identify the catching upcomponentbetweenasinglefirmandtheaveragesectorinacountry;ontheotherhand,wemeasurehowfartheverysamefirmisfromtheEU industry level frontier. Finally, in the third step we chase thedeterminants of these two gaps via looking at firms, industry andcountry factors in amultilevel framework, theadvantageofwhich isallowing micro-, meso- and macro-levels to be modelledsimultaneously,addressingtheclusteringeffect(e.g.seeGVanOortet.Al,2012;GoedhuysandSrholec,2015).

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InitialfindingsindicatethatthebalkofthegapisfoundinthefirmTFPdistancefromtheEUtechnologymorethanfromthesectoraverageina country for a specific year and this is confirmed by a regressionanalysisonpurecountry,sectorsandyearsdummies:all threesetofdummies show a remarkable statistical significance but countriesdummies are way above the other two sets in terms of economicmagnitude.We intend to further explore these results by examiningvariancepartitioncoefficientsinthecontextofmultilevelmodelling.Ourpreliminaryconclusionsarethreefold:therearebothconvergenceanddivergenceeffectsinEuropedependingonthesectorwhenlookingatdetailedproductivityestimationsatfirmlevelwithinstrictlydefinedsectors;amultilevelanalysisisneededtoinvestigatethesepatternsfora comparison with a single-level more aggregated data, where ourpreliminaryexplorationspointtowardsanindicationofthemajorroleincountriesdifferences(i.e.middleincometrapargument)aswellasasubstantialsectoralheterogeneityevenat4-digitslevel;wepositthatthe role of technology level and embedded technology (e.g. R&Dcontent)iskeytounderstandthesepatterns.Keywords:Productivity,Multilevel,EuropeJEL:L25,O33,C67Email:randolph.bruno@ucl.ac.ukBurdin,Gabriel(LeedsUniversityBusinessSchool,IZAandUniversidaddelaRepublica(Uruguay)):Employeerepresentationandworkingtimeflexibility:identificationthroughasize-contingentEUDirectiveAbstract:n.a.Keywords:JEL:Email:g.burdin@lubs.leeds.ac.ukDanzer,Alexander(CatholicUniversityofEichstätt-Ingolstadt),RobertGrundke:Coerced labor in the cotton sector:Howglobal commodityprices(don't)transmittothepoor-EvidencefromTajikistan

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Abstract:Thispaperinvestigatestheeconomicfortunesofcoercedvs.free workers in a global supply chain. To identify the differentialtreatment of otherwise similar workers we resort to a uniqueexogenous labor demand shock that affects wages in voluntary andinvoluntary labor relations differently. We identify the wage pass-through by capitalizing on Tajikistan’s geographic variation in thesuitability for cottonproduction combinedwith a surge in theworldmarket price of cotton in 2010/11 in two types of firms: randomlyprivatizedsmallfarmsandnotyetprivatizedparastatalfarms,thelatterofwhichcommandpoliticalcapitaltocoerceworkers.Theexpansioninlandattributedtocottonproductionledtoincreasesinlabordemandandwages for cotton pickers; however, the price hike benefits onlyworkersonentrepreneurialprivatefarms,whereascoercedworkersofparastatal enterprisesmiss out. The results provide evidence for thepolitical economy of labor coercion and for the dependence of theeconomiclivesofmanypooronthecompetitivestructureoflocallabormarkets.Keywords:coercedlabor,exportprice,pricepass-through,cottonJEL:J47,J43,F16Email:alexander.danzer@ku.deDziembala,Malgorzata (University of Economics in Katowice): Someconsiderationsontheroleofthestateinpromotinginnovationinthepost-crisisperspective:theexampleofPolandAbstract: Nowadays in the Central and Eastern European (CEE)countriescertainmeasuresareimplementedtoliftinnovativeness.Thefinancialoutlaysonresearchandinnovationhavebeenincreasing.Therole of enterprises in innovation promotion is not disputable.Innovationenhancingstatesupporthasbecomeespecially importantafterthecrisis.Aiminglongtermgrowthandstability,thestateintheCEE countries should reformulate the innovation policy and specialattentionshouldbepaidtomarketcreationforinnovation,facilitatingcooperationwiththeprivatesectorandtoothermeasures.The paper discusses the role of state in creating the conditions fordevelopinginnovationsbyenterprises,basingonthereviewofexistingliterature.Theconceptoftheinnovativestateisdevelopedandbroadlydiscussed. One important question raised in this context is how to

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support the innovativeness of enterprises without distorting themarket?ThepaperanalysestheroleofthePolishstate inpromotinginnovationingeneralandalsoontheregionallevel.WearguethattheroleofstateinsupportinginnovationshouldbereformulatedinPoland.Thepaper considers theexperienceof other countries that couldbeusefulparticularlyfromtheEUandtheUS.Keywords:Innovationpolicy,PolandJEL:F00,O30,O31Email:malgorzata.dziembala@ue.katowice.plÉltetö, Andrea (Institute of World Economics, CERS, HungarianAcademy of Sciences), Katalin Antalóczy: Post-crisis foreign tradepolicieson theperipheryof theEuropeanUnion -comparisonof theIberian,BalticandCentralEuropeanregionAbstract:Theyearofthegreattradecollapse intheworldwas2009.The international crisis caused a shrinkage of domestic demand andgeneralcreditcrunch.Asaconsequence,thegrowth-enhancingroleofexportscameintofocusinmostcountires.Exportsgainedmomentumfrom2010butwithcertainchanges instructureanddirection.Tradewithinglobalvaluechainshasbecomemorepronouncedandnon-EUmarketsweretargetedbyseveralfirms.Incertaincountriesitbecameadeliberatestatepolicytoturntowardsnon-EUareas.On theonehand,ourpaperwilldescribegovernmentforeign trade strategies and institutional framework of the Iberian,BalticandCentralEuropeancountries,detectingpossible similarities.Ontheotherhandwewillanalysetheactualforeigntradedataintherecent years;what are themainexportproducts and services.Apartfromdesk research,ourmethodology consistsofdetailed tradedataanalysis from the Eurostat Comext database and service tradedatabase.Basedon thesewe can get apictureon the structure anddirection of exports of the peripheric economies and this can becomparedtotheaimsofthegivenstates.Ourpreliminaryhypothesis is that there isagapbetween the realityand the intentions of the states. The size of this gap varies and isinfluenced by certain factors like the different involvement ofmultinationalcompaniesintheforeigntradeorthedifferenteconomicstructureofthesecountries.

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Keywords:Export,TradepolicyJEL:F13,P52,F14Email:elteto.andrea@krtk.mta.huFalk,Martin(WIFO):Productivity,broadbandusageandtechnologicalinnovations:Firm-levelevidencefor9EuropeanCountriesAbstract: This paper investigates the link between productivity,broadbandusageandtechnologicalandorganisationalinnovations.Thedataisbasedonlinkedfirmleveldatabasedonthestructuralbusinessstatistics, community innovation survey and the ICT/-E-commercesurveyfortheperiod2001-2010.Using110,000firmlevelobservationswefindtheproductivityissignificantlyrelatedtobroadbandconnectedemployeesandtoalesserextentwithproductinnovations.Incontrast,process,marketingandorganisationalinnovationsarenotsignificantinthemajorityifcases.However,thestrengthoftherelationshipsvariesacrosscountriesandindustries.Keywords:Broadbandusage,technologicalinnovations,productivityJEL:C81,D22andO33Email:Martin.Falk@wifo.ac.atGál, Zoltán (HASResearchCentre forEconomicandRegional StudiesHungary): The limits to local embeddedness - Lending activity of thecooperativebankingsector-thecaseofCEEandHungaryAbstract: Traditional cooperative banks are considered aslocally/sociallyembedded,lendingtolocalclientsfromlocallycollecteddeposits.Tooffsettheirdisadvantageduetotheirinsufficientsize,theyexploit the information advantagederiving from their social ties andproximitytotheirclients.Thestudyexploresthe limitsof local-socialembeddedness by examining Hungarian cooperative banks.Cooperative banks, located in the periphery with insufficient socio-economic conditions to develop closer relationships with borrowersaccelerate capital flight from their regions. Commercial cooperativesenteringnewmarketsshowhigherlendingactivitybuthavemorenon-performingloansduetothelostinformationadvantage.Demutualised

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ex-cooperatives have better loan portfolios replacing embeddednesswith a new corporate governance form. The limits of cooperatives'corporategovernanceintensifywhenloosingsocialembeddedness.Keywords: Cooperative banking, local and social embeddedness,demutualisation,HungaryJEL:G21,P13,R12Email:galz@rkk.huGärtner,Stefan(InstitutArbeitundTechnik):Financialsystemsaspartof the German model: A comparison of company financing from aspatialperspectiveinSpainandGermanyAbstract: Despite recent initiatives to create a common Europeanmarketandtointegratediversenationalbankingsystems,theEuropeanfinancial system remains spatially complex and uneven, in particularwith respect to the degree of geographical concentration. One keycharacteristic of the German banking system is the major role thedecentralizedpublicandcooperativebanksplay.Whilethesebanksareorganized in savings or cooperative bank associations, each of theapproximately 1,500 banks is regionally independent. Decentralizedbanks (savings banks and cooperative banks) handed out 526 billioneuro in credit to the German economy (firms and self-employed) in2013andclaimedamarketshareof45.1%.Inthesameyearcentralizedbankshandedoutonlycreditsof415billioneuro,whichrepresentsamarketshareof35.6%.In a research project we are going to compare different Europeaneconomiesandtheirfinancialsystemsformaspatialpointofview.InthepresentationIwillcomparetheresultfromGermanyandSpaintoenableaprocessoflearningfromeachother.Keywords:JEL:Email:gaertner@iat.euGavrilenkov, Evgeny (Sberbank-CIB): The metamorphosis of themonetarypolicyandRussia'seconomicgrowth

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Abstract:Russia'seconomicgrowthslowedin2013toslightlyabove1%amidaveryfavorableeconomicenvironment,whichmeansthatapartfromexternalshockwhichcamein2014-2015somethingelseistobeblamed for a poor economic performance in recent years. Asinstitutionalenvironmenthasnotdeterioratedmuch(Russiahasevenmovedupaccordingtovariousrankings)itisthemacroeconomicpolicywhatneedstobeanalyzedthoroughlyinthisregard.ByattemptingtoimitatequantitativeeasingpracticesofthewesterncentralbankstheRussian Central bank since mid-2013 orchestrated policy of massive"expensiveeasing"(asthepolicyratesremainedfarabovezero)whichbecame a fertile soil for speculation against the ruble. Ruble'sovershootingtothedownsideinDecember2014wasaproductofsuchpolicy.Apeculiarmixofagenerousbutexpensiveeasingproducedanumberofotherdistortions,suchasexcessivevolatilityoftherublein2014-2015,highinflation,etc.Economicgrowthevaporatedinsuchanenvironment. The CBR reverted its policy and turned to quantitativetighteningin2015,howeverstillkeptpolicyratesatelevatedlevels.Asa result it lost control over the money markets as the Ministry ofFinance became themajor supplier of liquidity as amid high rates itpreferredtofinancethebudgetdeficitfromtheReservefund(partiallysoldtotheCBR).Thelattermeantanotherformofeasing.Notthefalloftheoilpricealonebutswingsinthemonetarypolicycanbeblamedfor Russia's poor economic performance. If policy is improved, theeconomycaneasilygrowinthelowoilpriceenvironment.Keywords:monetarypolicy,quantitativeeasing,economicgrowthJEL:E44,E52,E58Email:Evgeny_Gavrilenkov@sberbank-cib.ruGötz, Marta (Vistula University, Department of Business andInternationalRelations):CompetitivenessintheEUintheaftermathofthe2008crisisAbstract:Competitivenesshasbecomeabuzzwordforatleastthelastdecades. It is as much fashionable as misused or misunderstoodconcept.Worshipped by some as remedy for all economic troubles,criticisedharshlybyothersasmeaninglessandinappropriatecategory.Thecompetitivenessofnationsor regions isanamorphouscategory,though, it is used persistently by politicians, economists, media and

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seems inevitable in economic analysis or policy advice. Thepresentation investigates the renewed interest in competitivenesswhichcanbewitnessedintheEUoncetheacutephaseof2008crisisabated.Thisrevivalisexpressedinseveralinitiativessuchastheideatoset up national competitiveness boards - a part of Five PresidentsReport, the Euro Plus Pact or the European Central Bank researchnetworkCompNet.A brief review of recent literature and expert opinion is providedconcerningtheconceptofcompetitivenessasrelatedtotheseselectedEUinitiatives.Thepresentationidentifiestheirpromisesandpitfalls.Inparticular, it stresses the need of more nuanced approach tocompetitiveness,whichgoesbeyond thenarrowperspective centredonthesynchronisationofcostdevelopments.Inthecurrentform,withstrict focus on wage harmonisation, it seems to abuse the termcompetitiveness.The "competitiveness" attempts undertaken at the EU level to gobeyond the fiscal policy, macroprudential supervision and monetarytools - main instruments aiming at solving or alleviating the crisis -should be undoubtedly welcome. However, the emerging trend tocentreonthequantitativeaspect,i.e.thestraightforwardlymeasurableand comparable dimension of competitiveness such as the wagedevelopments must be treated with caution. Relatively easy tocoordinateasasynchronisationtoolamongtheEUmembersitmasks,however,deepersenseofcompetitiveness.Itgoeswithoutsaying,thattheevolutionofsalariesandproductivitymustbealignedandcertainlevel of convergence among the members of monetary union isnecessary.Nevertheless,reducingcompetitivenesstosuchissueseemsinadequate as it ignores the "high road and beyond GDP"competitivenesswhichistherealityformatureEuropeaneconomies.Hopefully, promoted attitude will not be considered in the way thenominal Maastricht criteria were once regarded - as some artificialthreshold which does not necessarily reflect the real economicconditions and cannot be the exact proof of the soundness of acountry's macroeconomic policies. Competitiveness should beunderstood as more than only certain resilience and adjustmentcapacity. Hence, there is a clear need for the EU to get thecompetitivenessconceptright.Keywords:competitiveness,EuropeanUnion,crisisJEL:E02,O10,O40

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Email:martagoetz@gmail.com;m.gotz@vistula.edu.plGregorič,Aleksandra(INTCopenhagenBusinessSchool),MarcSteffenRapp, Evis Sinani: When minority matters: Employee boardrepresentationandco-operativesolutionsduringcrisesAbstract:n.a.Keywords:JEL:Email:agr.int@cbs.dkJugheli,Tamar(UniversityofGroningen,ResearchprojectGovernanceinEmergingEconomies):Theevolutionofstate-ownedenterprises inGeorgia - The role of state as shareholder for promoting economicdevelopmentAbstract:State-ownedenterprises(SOEs)and joint-venturesbetweenprivatebusinessandstatehavebeenacentralcomponentofsuccessfulstate-led economic policy from East Asia to Latin America. Georgia,whichiswidelyassociatedwithitsfar-reachingliberaleconomicpolicyaftertheRoseRevolution,hasbeenundergoingashifttowardsstate-ledeconomicapproaches since2011.This comprisesalsoa changingattitudetowardsSOEs.Sofar,thestate-ownedenterprisesectorinGeorgiaisrelativelysmallanditscontributiontoGDPamountedto7percentandaccountedforabout10percentofformalemploymentin2012.Mostofthe1129SOEsthat had been established in the period between 1991- 2011 werehighly inefficient and poorly managed. A turning point marks theestablishmentofthePartnershipFund(PF),whichwascreatedin2011tomanagethefivebiggestandmostprofitableSOEsandto invest injoint-ventureswithprivateinvestors.Indoingso,thestateisenteringasshareholderpromisingsectorsoftheGeorgianeconomy.ThepaperisdedicatedtoanalyzePF'sinvestmentperformanceontwolevels,first,theinvestmentstrategyandeconomicperformanceofthejoint-ventures and, second, the governance performance of PF. Thesecond level comprises the analysis of the established corporate

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governance models of the joint ventures as well as the structuralcapacitiesanddecisionprocessofPFforinvestingandmanagingthesecompanies. The paper will theoretically draw upon and empiricallycontribute to the comparative literature on the role of SOEs forpromotingeconomicdevelopment.Keywords:Georgia,State-ownedEnterprises,economicpolicyJEL:O38,O25Email:jugheli@gee-research.netKocenda, Evzen (Charles University Prague,), Jan Hanousek: FDI andownershipinCzechfirms:Pre-andpost-crisisefficiencyAbstract:Weanalyzehowefficiencyof firms in theCzechRepublic isaffected by their size, age, competition, capital structure, ownershiptypes, and global financial crisis. We employ the stochastic frontierapproach,usealargeanddetaileddataset,andcovertimespan2001-2012. We show that larger firms cannot be associated with betterefficiency in general. Effect of their age has only negligible impact.Impactofthecapitalstructureisshowntobestronginlargeandmoreleveraged firms. Higher competition is not contributive to efficiencyneither on individual nor aggregate levels. While effects of firmcharacteristics are small, the effects of ownership are economicallysubstantial.Weshowthatmajorityownersaremostcontributivewithrespect to firm’s efficiency when compared to other categories weanalyze. Minority owners with legally grounded power are able toimpose significant efficiency improvement. The effect of the foreignownershipisstrongestwhenforeignownerscontrolfirmswithlessthanmajorityofvotingpower.Minorityownerssharingthecontroldonotseemtocontributetoefficiency.Theimpactofcrisisisnotbalancedbutcan be regarded as negative in general. The firms’ characteristicschange only a little. In contrast, worsening impact of the crisis isevidencedforcontrollingownershipcategories.MinorityownersKeywords:efficiency;ownershipstructure;firms;paneldata;stochasticfrontier;EuropeJEL:C33,D24,G32,L60,L80,M21Email:evzen.kocenda@fsv.cuni.cz

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Kuboniwa,Masaaki(HitotsubashiUniversity):EstimatingGDPoftheoilandgassectorintheSovietUnionandthepresentRussiaAbstract:WefindaSovietlegacyforthepresentRussiainitsresourcedependency aswell as its implicit accounting of resource rents fromforeigntrade.WeprovethattheSovietUnionandthepresentRussiaas well has derived the major part of resource rents from thedifferences between foreign trade prices and domestic prices ofresources.WemakefulluseoftheSovietinput-outputtables(IOT)atdomesticpricesfor1972and1976-1990,whichhasbeenavailableafterthebreakupoftheSovietUnion,andtheofficialdataonforeigntradetocapturetheSovietrents.WealsoemployRussiandataondomesticproducerpricesandforeigntradepricesoftheoilandgasfor1998-2015to synthesize the Russian rents.We also find a Soviet legacy in thenational accountswhere resource rentshavebeenaccountednot asvalue-addedoftheoilandgasbutimplicitlyasthatofthetradesector.In order to measure the Soviet and Russian resource dependencycorrectly, we present explicit estimates of resource rents generatedfrom the oil and gas. Then, through appropriately reallocatingestimated rents, we demonstrate the value-added at factor costs orbasicpricesandGDPatmarketpricesoftheSovietandRussianoilandgas sector. This paper is part of a joint research with ProfessorsShinichiroTabataandYasushiNakamuraonSovietLegacy.Keywords:Sovietlegacy,oilandgas,rentJEL:E01,P33,P51Email:kuboniwa@ier.hit-u.ac.jpLehmann,Hartmut (UniversityofBologna, IZA,DIWandWDI),SinemAyhan, KseniaGatskova: Cognitive and non-cognitive skills and labormarketperformanceinruralUkraineAbstract:n.a.Keywords:JEL:Email:hartmut.lehmann@unibo.it

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Lumiste, Rünno (Tallinn School of Economics and BusinessAdministration):AFrenchelectronicsMNEinEstoniaAbstract:n.a.Keywords:JEL:Email:runno.lumiste@tseba.ttu.eeMeunier,Bogdan(UniversityofParis1PanthéonSorbonne):Firmentryandexitduringacrisisperiod.EvidencefromRussianregionsAbstract:Inthispaper,weaimtoempiricallyanalyzethedeterminantsoffirmentryandexitinRussiausingaregional-levelpaneldatafortheyearsof2008-2014,withspecialemphasisoninstitutionalfailuresandthepolitico-economic impactofexternal crises.We found that thesetwo elements exhibit statistically significant and economicallymeaningful effects both on the creation and destruction of Russianfirms, while controlling for potentially explanatory factors. Ourempiricalresultsalsosuggestthattheprocessoffirmentryandexitismanifold across Russian regions due to their heterogeneity.Nevertheless, a surprisingly robust estimate of the world oil price,irrespectiveofthedifferenceintargetregions,suggestsapossiblehighexposureofeachRussianregiontoaglobalcrisis.Thiscomesfromtheimportanceofoil tradewith theworldand,accordingly, theongoingcrisis may bring a harmful influence to regeneration of RussianbusinessesKeywords: firm entry, firm exit, institutions, economic integration,crisis,RussiaJEL:D22,F15,G01,P31,P33Email:meunierbogdan@gmail.comMigheli,Matteo (UniversityofTurin): Landownership,access toandcostofinformalcredit:EvidencefromtheMekongDelta

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Abstract:Accesstocreditanditscostisamajorchallengeforfarmersin developing countries. Formal moneylenders often ration theseeconomicagents,astheylackassetstogiveascollateralfortheloans.Consequently,farmersresortto informalcredit.Severalstudiesshowthatlandservesascollateralforaccessingformalcredit,buttheyoftendo not find any significant effect of land size on access to informalcredit.HereIstudytheeffectsoflandownershiponboththedemandandthecostofinformalcreditintheMekongDelta.Theresultsshowthat as land ownership increases, both the demand and the cost ofinformalloansdecrease.Thisresultisrelevantindevelopingcountries,wherelandreformsarestillongoing,asitshowsthatlandredistributionmaycontributetothedevelopmentofformalcreditmarkets.Keywords:informalcredit;landownership;VietnamJEL:N25,O12,O17Email:matteo.migheli@unito.itMurzakulova, Zhanat (University of Groningen, Research projectGovernance in Emerging Economies): Kazakhstan's industrialization:structuralchangeorpath-dependenceAbstract:TodayKazakhstanispositionedatlowerlevelsofglobalvaluechainduetoresourcenatureofitsexports.Kazakhstan'snationalideato join TOP-30 richest economies by 2050 requires measures topromotemore stable economywith sustained long-term growth. ToachievethisnationalgoalKazakhstanhastomoveupglobalvaluechainand specialize inactivitieswithhighest value-added. Inorder togaincompetitivenessresourceabundantcountrieshavetomoveawayfromtheirgivencomparativeadvantage.AsEvans(1995)calledit,theyhaveto"constructcomparativeadvantage".According to resource curse theory market-led diversification isconstrainedinresourceintensivecountries.Recentresearchliteratureon economic diversification in resource-rich countries argues that,when properly managed, resource wealth provides grounds foreconomictransformation.Giventhatcommoditiessectorscandevelopindependentlyfromotherindustrialsectorsandoperateaseconomicenclaves, installing economic linkages between extraction and otherindustrial sectors appears to be a safe way to successfulindustrialization.

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ThepaperwilldiscusshowKazakhstancanpromoteitsindustrializationbased on linkage creation theory (Hirschman, 1977). This analysis ishighly fruitful given increased state-activism in Kazakhstan afterfinancial crisis and move towards selective industrial policyaccompanied by National Champions initiative. Under condition ofunderdevelopedfinancialmarketindustrializationismainlyfundedbyNationalOilfund.GivencurrentlowoilpricesandlimitedresourcesofNational Oil Fund state have to apply its abilities in a best way tosucceed.Thecoordinativeroleofstatestructuresandstate'scapacityas well as the nature of private-public interaction in Kazakhstan'sindustrialpolicywillbethoroughlyexamined.Keywords:Kazakhstan,IndustrialpolicyJEL:025,038Email:murzakulova@gee-research.netNikolova,Milena(InstitutefortheStudyofLabor(IZA),TheBrookingsInstitution):TheBulgarianhappiness(in)efficiencyAbstract: Despite the burgeoning academic literature on thedeterminantsofhappinessattheindividual-andcountry-level,scholarshave largely ignored explorations of how individuals or countriestranslate given resources into well-being. Using panel data on 91countries from Gallup Analytics between 2009-2015 and borrowinginsights fromproduction theory,we investigatewhether countries inoursample,andBulgaria,inparticular,efficientlyreachhappinesslevelswithcurrentresources(i.e.,income,education,andhealth).Wefocuson Bulgaria as it is often lurks at the bottom of the internationalhappinessrankingsdespite itbeinganuppermiddle incomecountry.Our results imply that happiness efficiency gains are possibleworldwide, i.e., countries couldachievehigherwell-being levelswithcurrent resources. Furthermore, Bulgaria is among the least efficientcountriesexceptin2013,whenthecountry-wideprotestslikelymadeBulgariansmoreinformedabouttheirendowmentsandimprovedtheefficiencywithwhichtheyweretranslatingcapabilitiesintowell-being.Our second-stage analyses indicate unemployment and involuntarypart-time employment reduce efficiency while the rule of law andfreedom perceptions improve it. The results are robust to severalchecks.Within-country investigationsdemonstrate thataminorityof

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Bulgarians are efficient in translating their resources into happiness.Efficiency is lower among the unemployed, divorced/separated,widowed,theold,largehouseholdsandhouseholdswithchildren,whileliving in a city, freedom, generosity, and social support improveefficiency.Weprovidesomeofthefirstinsightsaboutwhetherhigherwell-beinglevelsarepossiblewithcurrentresourcesandopenpolicy-relevantquestionsabouttherelevantinstrumentimprovinghappinessefficiency.Keywords:Bulgaria;efficiencyanalysis;happinessJEL:I31,P52,R15Email:nikolova@iza.orgOrlic,Edvar(BournemouthUniversity),I.Hashib,M.Hisarciklilar:CrosssectoralFDIspilloversandtheirimpactonmanufacturingproductivityAbstract: Thispaperexplores the relationshipbetweenFDI spilloversand productivity in manufacturing firms in five European transitioncountries.Thenoveltyofourapproachliesinseparatingtheimpactofvertical linkages in services and manufacturing sectors. For thispurpose, we rely on firm level data obtained from the Amadeusdatabaseandannual inputoutputtables.Theresultsfromadynamicpanel model reveal that local manufacturing firms benefit frompresence of foreign firms in upstream services, especially thosepertaining to knowledge intensive services and downstreammanufacturing sector, while the effect of intra-industry spillovers isnegative. Consideration of firm characteristics shows that the firms'productivity is also positively influenced by human capital andintangibles.Inaddition,itwasfoundthatthemagnitudeofbackwardmanufacturing linkages and forward services linkages increases withtheintensityoftheuseofintangibleassets,withmuchheterogeneityacross countries. The results for intra-industry spillovers suggestattenuatingeffectsforhigherlevelsoffirms'absorptivecapacity.Keywords:FDI,services,verticallinkages,productivityspilloversJEL:C23,D24,F23Email:eorlic@bournemouth.ac.uk

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Pérotin, Virginie (Leeds University Business School): Are moredemocraticfirmsmoreproductive?Abstract:n.a.Keywords:JEL:Email:v.perotin@lubs.leeds.ac.ukPignatti,Norberto(LaSalleUniversit),AdamPelillo:StalledstructuraltransformationandmissinglabormarketsintheRepublicofGeorgiaAbstract:n.a.Keywords:JEL:Email:npignatti@gmail.comPopova, Olga (IOS Regensburg, CERGE-EI, Ural Federal University):Psychological costs of currency transition: Evidence from the EuroadoptionAbstract:We analyze individual levels of life satisfaction in Slovakia,after that countryadopted theEuro, followinga spiriteddebate.Wegauge the psychological cost of transition to the new currency bycomparing individual life satisfaction, not only before and after Eurointroduction, but by comparison with individuals with similarcharacteristicsintheneighboringCzechRepublic,whichdidnotadopttheEuro.Bothcountrieswereeconomicallyandpolitically integratedfor decades, and share similarmacroeconomic indicators just beforethe currency change in Slovakia. We find evidence of substantialpsychological costs of currency transition, which are especiallyimportantfortheold,theunemployed,thosewithloweducationandin households with children. We believe these results suggest theimportanceofinformationandenlighteneddebatebeforeasweepingchangeineconomiccontextsuchastheadoptionofanewcurrency.Keywords:Euro;Slovakia;subjectivewell-beingJEL:E52,F55,I31

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Email:popova@ios-regensburg.deRadu,Dragos(IOSRegensburg),EkaterinaSelezneva:Neverlookback(Inanger):Thelife-satisfactionofEastEuropeanmigrantsandreturneesAbstract:Littleisknownaboutthewayinwhichinternationalmobilityaffectsthesubjectivewell-beingofmigrantsandreturneesoverthelife-cycle. Our paper contributes to this research topic by analysing thevariation in life-satisfaction differentials between migrants, non-migrants and returnees across Central and East European countries.Suchcross-nationaldifferencesremainunaccountedfor intherecentliteratureonsubjectivewell-being.Weusecrossnationalsurveydata(specifically from the ESS and UNDP Social Exclusion Survey) whichallow us to identify migrants and returnees. We find a large cross-country variation in the differences between non-migrants,migrantsandreturneesintermsofsubjectivewell-being.Thisvariationcannotbeaccountedforintermsofdifferencesinindividualcharacteristicsdueto the self-selective nature of migration. We analyse therefore thedegree towhich such cross-national differences canbe attributed tosocio-political factors which varied greatly during post-communisttransition.Keywords:lifesatisfaction;returningmigrants;aspirationsJEL:I3,F22,D02Email:radu@ios-regensburg.deRichet,Xavier (University SorbonneNouvelle, Paris):Geographic andsectoralfactorsinChineseDirectInvestmentinEuropeAbstract:TheflowsandstocksofforeigndirectinvestmentfromChinahave increased sharply since the beginning of the millennium andacceleratedinthewakeofthefinancialcrisisof2007-2008.Afterbeingmainly directed to access resources, since the last ten yearsChineseinvestmentsaredirectedtowardsmajordevelopedmarketeconomies.Investing companies are looking for strategic assets but also newmarkets for Chineseproductswithhigh andmedium technology, forservices, finance, realestate.ThecaseofEuropeasadestination for

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Chinese FDI is interesting to study for several reasons:Chinese firmsseeking to enter into regional value chains are looking upstream ordownstreamforinputstheydon'thaveyetbutthatnecessaryeithertocatch up technologically on the domestic market or to enter newmarketsabroad.TheentryofChineseFDIismadeeasierinEuropethanin the US because of more liberal regulations toward Chineseinvestments. The decline in the share price of many Europeancompanies facilitates the acquisition or entry into the capital ofrenowned European firms. Despite their rapid growth, the level ofChineseFDIremainsmodestandtheEUauthoritiesandmemberStatesare adopting measure which should increase the volume ofinvestments.Wewill discuss the impact of Chinese FDI among hostcountries,thebuildingupofarealvaluechainsincludingChinesefirmsandhowtheycouldreallybenefitbothwaytothesefirmswhichintendtobecomeimportantplayersinEurope.Keywords:China,FDI,emergingeconomiesJEL:F23,L24,O52Email:xrichet@gmail.comRosati,FurioCamillo(UniversityofRomeTorVergata,UCW),GiuseppeDachille:PathwaysfromschooltoworkinruralareasofthedevelopingworldAbstract:n.a.Keywords:JEL:Email:f.rosati@economia.uniroma2.itSass, Magdolna (Centre for Economic and Regional Studies, HAS,Hungary):EmergingCEEMultinationalsintheelectronicsindustryAbstract:n.a.Keywords:JEL:Email:sass.magdolna@krtk.mta.hu

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Sass,Magdolna (CERS, Hungarian Academy of Sciences): Indigenoustechnological development through subcontracting linkages frommultinationals: evidence and policy implications based on theexperienceoftheHungarianpharmaceuticalindustryAbstract:IthasbeenlargelydemonstratedintheliteraturethatlinkagesbetweenforeignsubsidiariesofmultinationalsandindigenousfirmsisamajordeterminantoftheimpactofFDIinahostcountryandverticalbackwardlinkagesbetweenforeignsubsidiariesofmultinationalsandindigenous suppliers are probably the most important canal for thetransferoftechnologyandknowledge.Thebulkofthesectoralstudies(inautomotiveandelectronics) inCentralandEasternEuropedetectpoorrelationshipsbetweentheforeignandlocalfirms.Localsuppliershavebeen cornered inprice-driven subcontracting andare linkedbycasualrelationshipstoforeignsubsidiariesofmultinationals.The Central European pharmaceutical industry has only been poorlystudiedalthoughthisindustrybelongstothehigh-technologyindustrieswithimportantpotentialtechnologicaleffectonthelocalindustry.Thepresentpaperaimsatfillingthisgap.Because the pharmaceuticalindustry is specialized in high-technologyorientedactivities,long-termrelationshipswithtransferofknowledgebetweenproducersandsuppliersmaybemoreimportantthaninotherindustries. Structural evolutions of the pharmaceutical industry mayalso facilitate the creation of technological cooperation betweenmultinationals and CEE firms. Indeed, the pharmaceutical companieshave engaged in the last two decades in a process of increasingexternalizationofsomeR&Dactivities.We chose to focus our study on the CEE country with the highestpotentialoftechnologicalcooperationinthepharmaceuticalindustry:Hungary.Inordertoassessthenatureoftherelationshipslinkingtheforeign subsidiaries of multinationals to the Hungarian industry weworked, directly, by interviews with companies and indirectly, byworkingontheR&DinformationandpatentdataoftheHungarianfirmstoevaluatetheirtechnologicalresearchcapabilities.Wefoundthatpharmacompaniescanbasicallybecategorizedintofivegroups,withonlythefirstone(withonlytwofirms)carryingoutqualityR&D activities and offering and realizing substantial local linkages.Furthermore,ourinterviewsshowedthatthepharmaindustryitselfhas

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lower than average local contacts compared to the manufacturingaverage on one hand and the units specialized on R&D have a veryspecificcircleoflocalactorswithwhomtheycooperate.Asfaraspolicyimplicationsareconcerned,wepointout,first,industrydifferences in terms of (potential) local linkages and second, theimportanceof thenatureandcontentof local linkages (comparedtotheirsheerexistence)fromthepointofviewofthedepthandnatureoftheirlocallinkages.Keywords:multinationals,Hungary,pharmaceuticalindustryJEL:F23,F61,F68Email:sass.magdolna@krtk.mta.huSchumann, Thomas (Technische Unversität Bergakademie Freiberg):Fostering regional economic development by promoting cooperativebankingstructures-LessonslearnedinRussiaAbstract:CooperativeBanksconstitutedan importantdeterminant intheeconomicdevelopmentofWestEuropeancountriesinthe19thand20thcentury.Theycanbeclassifiedas»two-bottom-line«institutionspursuingcommercialaswellassocialinterestsoftheirmembers.Duetothisreasontheyactratherstakeholder-thanshareholder-oriented.Focusingon the regional levelopenedup roomto supporteconomicdevelopmentprocessesbya)providingappropriatefinancialservicestotheirmembers-customers and b) by looking at the overall picture ofregional investment patterns considering necessary additionalelementslikee.g.branchcompetitionandinfrastructure.Cooperativebankswhichmake efficiently use of their potential have to considertheirown institutionalandcommercialdevelopment inordertobeafull-fledgedand-relevant-partofthebankingsystem.Thisimpliestooffer carefully-designed financial products according to the level ofdevelopmentof theirmembers/customers,of the regionsandof thefinancialsysteminwhichtheyareembedded.FromthisperspectivethepaperanalysestheemergenceofruralcooperativebankingstructuresintheRussianFederationthatdevelopedafter1990byreferringandupdating Chick/Dow`s "stages-of-banking-model". The empirical dataonRussianregionssuggestthatcooperativebankinginstitutionsneedto achieve further elements of modern banking for becoming

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fundamental players in the regional development of transitioncountries.Keywords:Russia,creditcooperatives,regionaldevelopment.JEL:D02,D82,P25Email:thomas.schumann@tu-freiberg.deSchweiger,Helena(EBRD),W.Bartz,P.Mohnen:Theroleofinnovationand management practices in determining firm productivity indevelopingeconomiesAbstract: In this paper, we compare the impacts of managementpracticesandinnovationonproductivity,usingdatafromauniquefirm-levelsurveycovering30countriesinEasternEuropeandCentralAsiainthe period 2011-2014. We adapt the well-established three-stagemodelbylinkingproductivitytoinnovationactivitiesandmanagementpractices.Resultssuggestthatbothreturnstoinnovationandreturnsto management practices are important drivers of productivity indeveloping economies. However, productivity in lower-incomeeconomiesisaffectedtoalargerextentbymanagementpracticesthanby innovationwhile the opposite holds in higher-income economies.These results imply that firms operating in less favourable businessenvironments are able to compensate for the lack of innovativeactivitiesbyimprovingthequalityofmanagementpractices.Keywords:DevelopingCountries;ManagementPracticesJEL:D24,O14Email:SchweigH@ebrd.comSzanyi, Miklós (Budapest Business School, Institute of WorldEconomics,CERSHAS):TheFDI-leddevelopmentmodelrevisited?ThecaseofHungaryAbstract:exhibitalimiteddiscipliningeffecttoimproveefficiencyafterthecrisis.Keywords:FDIpolicy,cronycapitalism,patronagestateJEL:D72,H82,P16,P31Email:szanyi100@gmail.com

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Szelagowska,Anna (WarsawSchoolofEconomics),AgnieskaAlinska:CooperativebankingsectorinPolandduringtheglobalfinancialcrisisAbstract: The global financial crisis caused many changes in theEuropeanfinancialmarket.Thecooperativebankingsectoraswellasother commercial banks were obliged to implement new regulatorysolutions to strengthen the safety of their operations. Europeanregulationsandsafetyrequirementsforthecooperativebankingsectorshouldbefullysynchronizedwiththenationallegislation.Itshouldbeconsideredasabasistodeveloptheirpotential,marketadvantageandbuildastable,safeandeffectivenetworkingofcooperativebankinginthecountry.CooperativebankingsectorinPolandhasalong(morethan150yearsold)historyoffunctioningonthemarket,agoodunderstandingoftheneedsoflocalcustomersandstablemarketshare.Despitetheirmanyadvantages, the cooperative banks in Poland have transitionalproblems, either in the internal organization or obtaining positivefinancial results. Lack of coordination of the operation of thecooperative banking sector in Poland had led to a situation in 2015,whereoneofthelargestcooperativebank(SK-Bank)wentbankrupt.This article presents the analysis of the current cooperative bankingsector inPoland, taking intoaccount theexternal conditionsand theimpactofdomesticfactorsandappliedinstitutionalsolutionstypicaltothePolishsectorofcooperativebanks.Inaddition,onecanobserveasystematic decrease of profitability in this sector and the need formergers or implementation of remedial programs supervised by thePolish Financial Supervision Authority. In this context, looking for anansweronthequestionwhereistheproblem,seemstobeoneofthepriority in the cooperative banking sector. The new approach in thesector of cooperative banking in Poland should be the basis toimplementmoreradicalinstitutionalsolutions.Keywords: Cooperative banking, financial crisis, banking regulation,PolandJEL:G18,G21,P13Email:n.a.

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Szunomár, Ágnes (Centre for Economic and Regional Studies, HAS,Hungary), Agnieszka McCaleb: Emerging multinationals in emergingEurope: Huawei in Central and Eastern Europe. A case study onHuawei’soperationsinHungaryandPolandAbstract:n.a.Keywords:JEL:Email:szunomar.agnes@krtk.mta.huTabata,Shinichiro(HokkaidoUniversity):ObservationsonhighinflationinRussiain2014and2015Abstract: Inflation in Russia exceeded 10 percent in both 2014 and2015. This paper analyses its causes and clarifies differences andsimilarities of high inflation in these years in comparison with theinflationinpreviousperiodsfrom2000to2013.Influenceofeconomicsanctions and anti-sanctions, in addition to the impact of the rubledepreciation caused by the drop in oil prices is analyzed. Specialattentionispaidtostate-regulatedpricesinnaturalmonopolyspheres.Anotherfactors,suchasmoneysupplyandwageincreases,aretakenintoconsiderationaswell.Basedonthisanalysis,IwanttoclarifywhyRussiahasnotsucceededtoreduceinflationratebelow5percentsofar.Keywords:Russianeconomy,inflation,pricecontrolJEL:E31,P24,P27Email:shin@slav.hokudai.ac.jpUegaki,Akira(SeinanGakuinUniversity):SoviettradeintheperiodofWWIIAbstract:InthetalkIwillpresentanewdataseriesofexportandimportoftheUSSRin1941-45whichhasnotbeenavailableinofficialstatisticsoftheUSSR.InthenewdataIfoundthatoverwhelmingamountsoftheimportswere those from the USA through the framework of "Lend-LeaseActs".Theimportsincludenotonlymilitarygoodsbutalsonon-

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militarygoods,whichhadbecomea focusofdebatebetweenSovietgovernmentandAmericangovernmentaftertheendofthewar.Iwillanalyzehowlarge impactofthe importswasonthewareconomyoftheSovietUnionintheperiodofWWII.ThisstudyisapartofalargeresearchprojectofHitotsubashiUniversitycompilingdataofRussia'sandUSSR'seconomichistory.Keywords:Soviettradedate,WWII,Lend-LeaseActsJEL:F14,F34Email:uegaki@seinan-gu.ac.jpVoicu,Bogdan(RomanianAcademyofSciences,ResearchInstituteforQuality of Life), Marian Vasile: City scale. On post-migration lifesatisfactionAbstract:Thispaper isaboutmigrants’ lifesatisfaction.FollowingtheworkofGlickSchiller (2012);GlickSchiller,Caglar,andGuldbrandsen(2006)andGlickSchiller(2015),wearguethattherelationshipbetweencity scale and life satisfaction is moderated by the intensity ofrelationships with the stayers. Independently if international or nor,migration may change life satisfaction. Moving from small-scale tolarge-scale cities one is expected to increase life satisfaction due tomore opportunities for a better life. However, this is not thewholestory.Migrants’rootsstillhaveaneffectontheirqualityoflife.Intenserelationships with the stayers and big negative differences betweenoriginandhostcitiesscalediminishlifesatisfactionofmigrants.Theshadowof‘badlife’ isthere.Besidesthepsychological consequencesof failure like low self-esteem, therewill be adaptation problems given the lower opportunities forincreasingthestandardofliving.WeusedatagatheredfromRomanianmigrants in 2008, complementary to the 4th wave of the EuropeanValuesStudy.Multilevelmodelingallowstestingtheseassumptions.Keywords:JEL:Email:bogdan@iccv.ro

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Wancio, Agata (Collegium of World Economy, Warsaw School ofEconomics): Understanding the interplay between OFDI andinnovation:theevidencefromIndianelectronicandITmultinationalsAbstract:n.a.Keywords:JEL:Email:agata.wancio@gmail.comWehinger, Franziska (University of Groningen, Friedrich EbertFoundation):Governingnationalchampions.HistoricexperiencesfromEuropeandEastAsiaAbstract:ComparingEconomicDevelopment in the long run includescomparingindustrializingphasesofdifferentregionsindifferenttimeperiods.EmbeddedinthepanelonNationalChampions,thispapershallcomparepolicyinterventionsforNationalChampionsinWestEuropeancases inthe19th,20thand21stcenturywithpolicy interventionsforNationalChampionsinNortheastAsiainthe20thcentury-forinstanceKorea. This paper shall compare the relationship betweenentrepreneurs and public policies in the mentioned regions. It willthereby ask the question whether the so-called growth engines(NationalChampions)wereindirectlymanagedbythegovernmentorwhether company's decisions were left to the private sector afterhavingestablishedabusiness-friendlyenvironment.Wefounddifferentapproachesin19thcenturyEurope:WhileFrance,Germany and the US conducted strong interventions in privatecompany's decisions and made state servants influencing andsupervisingtheNationalChampions,theUK- incontrast-followedanon-interventionistapproachassumingthatthecomplexityofmodernindustrial companies exceed the capacities and knowledge of statemanagers or public servants (Dobbin 1994). Furthermore, the paperelaboratesthedifferentinstitutionsonwhichtheinterventioniststatesrelied their entrepreneurial state policies: while France made themilitary supervising themost important national enterprises, the USrelied on its very effective law system and the UK's most effectiveinstitution seemed to be the legislative. Interestingly, the UK andGermanyturnitsroleinthe20thcentury:UKincreases"microeconomic

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management"whileGermany'spost-war-governmentstepsbackfromvertical industrial policy (Owen 2012). Looking at the HCI economicdevelopmentplanofthe1980sKorea(Heavy-ChemicalIndustryDrive),wefindthatthegovernmentdidnottakeovermanager'sdecisionsintheBoardduringtheoperationofthecompany.However,itpreparedthe groundwork, the rules and themanagement in the constructionphaseofthecompanies(Auty1992).Keywords:IndustrialPolicy,Europe,EastAsiaJEL:O25,038Email:wehinger@gee-research.net

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