Economics of Transition and Institutional Change最新文献

We study the effect of favouritism via hometown ties of high-ranking administrators in universities on China's university admissions. By constructing a gravity specification model and collecting the data on inter-provincial admissions of nearly 1300 Chinese undergraduate universities between 2008 and 2015 and hometown information of the university's top administrators, such as the President or Party Secretary, we show that regional favouritism is prevalent in college enrolment. It is estimated that hometown ties of either the President or Secretary of the Party committee in a university increase the enrolments by almost 11% through admitting students with low entrance examinations scores from their hometowns. Interestingly, the hometown tie effects disappeared after President Xi's launched the anti-corruption campaign in 2013 and we proved the hometown favouritism in university admissions is a form of corruption through a series of ways.

Microfinance institutions (MFIs) are hybrid organisations that strive to balance business and social goals. This paper examines the determinants of the internal audit (IA) function in MFIs, with particular emphasis on the business goals, specifically efficiency, productivity, regulation and the gross portfolio yield. We also investigate whether the establishment of an IA function is associated with MFI's focus on their social objectives relating to outreach, and women director appointments. Multivariate regression results from 1025 MFIs across 63 countries show that MFIs' focus on their social objectives is related to their propensity to establish an IA function. Thus, outreach and women director appointments are positively related to the establishment of an IA function. Similarly, in terms of the performance emphasis, the gross portfolio yield (inefficiency) increases (decreases) the likelihood of establishing an IA, but productivity and regulation have no effect. The findings suggest that MFIs' dual focus on social and business objectives impacts the establishment of internal audits. The results are robust to various measurements and estimations.

Total housing real returns in large agglomerations in Kazakhstan are approximately 1% per year lower than in the rest of the country. Our results are also supportive of emerging literature, that housing real rent returns, adjusted for population, are generally lower in large agglomerations compared to the rest of the country. We indicate that within-country heterogeneity of housing returns mainly result from the spatial concentration of economic activity in urban centers. Our findings also suggest that residential real estate in a developing economy produces higher returns compared to financial capital over the long-run. At the same time, the volatility of holding housing investment is substantially higher than its “safe” alternative (i.e. deposit rate paid for savings deposits). As such, “Yield Curves for Main Street” concept refers to the general positive spread between total housing returns and financial capital returns in a developing economy.

This study examines the impact of an imbalanced judiciary on the generation and rectification of wrongful convictions in China. Specifically, we investigate the influence of the Political and Legal Affairs Commissions (PLACs), which are tasked by the Communist Party with controlling judicial authorities. By analyzing 335 cases of wrongful convictions between 1990 and 2010, we have identified a significant relationship between the appointment of PLAC secretaries as chiefs of police and an increase in wrongful convictions. This arrangement disrupts the checks within the judicial system, leading to the prosecution of an additional 251 individuals each year in a given province. Our research reveals that in 81% of the cases examined, the correction of a wrongful conviction occurred after the secretary of the provincial PLAC, who held oversight over the court responsible for the conviction, had left office. Furthermore, even after the responsible PLAC secretaries had been replaced, if the successors were previously their subordinates, the likelihood of reversing wrongful convictions remained low. Our findings provide persuasive evidence in favour of judicial independence.

To analyze whether the occurrence of elections affects access to credit for firms, we perform an investigation using firm-level data covering 44 developed and developing countries. The results show that elections impair access to credit. Specifically, firms have lower access to credit in election years and pre-election years as elections exacerbate political uncertainty. While higher borrower discouragement is a tangible negative effect of elections, their occurrence per se does not seem to affect loan acceptance by banks. We also document that the negative relationship between elections and credit access is shaped by country and election characteristics as well as firm characteristics.

In China, between 1995 and 2018, the proportion of workers employed in unskilled job categories grew, while the share holding middle-skilled jobs declined. The resulting income polarization magnified a major redistribution of wages within job categories, which is not only the main component of total income inequality but is also the driving factor contributing to changes in total income inequality over the 1995–2018 period. Our counterfactual simulation results support our conjecture that the large employment shift from middle-skilled to unskilled jobs reflects the adoption of labor-saving technologies and the response to increased demand for services. We believe that our study sheds light on similar transformations in other developing economies.

This paper traces the institutional root of China's rural industrialization to a historical policy, which paired factories in urban areas with people's communes in the countryside during the Send-Down Movement in the 1970s. The policy, initially intended to improve the lives of sent-down youth (SDY), is believed to have provided some initial impetus for industrial development in rural areas before the marketization reform that began in the late 1970s. Based on a manually collected county-level panel dataset of Zhejiang Province, we find that following the implementation of the pairing policy in 1974, counties that received a higher concentration of SDY, relative to their rural population, achieved faster growth in per capita industrial output of commune enterprises. Our results are consistent with various historical accounts. In addition, our tentative evidence shows that the pairing policy had a prolonged effect on rural economic development, lasting into the 1980s. Overall, our findings reveal the importance of some pre-reform institutions in shaping China's unique paths towards industrialization.

This paper assesses the impact of constitutional changes on foreign direct investment (FDI) in 49 African countries during the period 1980–2020. The paper uses a dummy variable related to the year of the constitutional change and the number of changes during the study period to capture the frequency of constitutional changes. The results reveal that an increase in the frequency of constitutional changes negatively affects FDI. The negative relationship between constitutional change and FDI is consistent across different measures of constitutional change and FDI and is robust to alternative empirical approaches. These results suggest that frequent constitutional changes may create uncertainty and instability in the investment climate, which may discourage foreign investors from investing in these African countries. The study provides evidence for policymakers that a stable constitutional framework may attract FDI in African countries.

Rural-to-urban migrants account for more than one-third of the total population in China. However, because of China's hukou system, urban migrants can have limited access to different public services in urban areas. Consequently, this can affect their consumption and savings behaviour. However, little is known about how the hukou system changes migrants' allocation of savings across different savings instruments. In this study, we utilize the 2013 round of the Urban and Rural Residents Income Distribution and Living Conditions Survey of China to see if migrants' hukou status affects allocation between short-term and long-term assets. Propensity score matching is used to match migrants with migrants who have obtained urban hukou. When comparing the urban migrants having rural hukou with hukou holders who converted their hukou from rural to urban, we find that the migrants hold significantly higher proportions of savings in cash and other short-term assets. Those who have obtained urban hukou, appear to hold a greater share of their portfolio in long-term, higher returning assets. The differences in portfolio allocations appear to be larger for migrants with lower household income. We argue that these results are consistent with savings behaviour driven by a precautionary motive.

This paper builds a bilateral FDI-output model to study intermediary roles played by the relative differences in human capital and technology in triggering the gross-output-enhancing effect of inward foreign direct investment (FDI). Our model develops several testable hypotheses to assess how these intermediary factors—the differences between leader and follower countries' capabilities—determine the technology transfer and shorten the gross output gap between the frontier and follower countries. In our empirical work, we employ country-level panel data that contain 67 countries from 1977 to 2013 and find that the differences in human capital and technology, which take into account the gap in capacity between the leader and follower countries, are the determinants that trigger the gross-output-enhancing effect of FDI. Our results are robust to the non-linear effects, cyclical fluctuations, endogeneity of FDI per se, and the variation of the host countries' institutions and inflation.