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Abstract

This study focuses on the level of interdependence across the Central and Eastern European (CEE) foreign exchange markets (Hungary, Poland, the Czech Republic, Romania and Croatia) from September 2008 to September 2017, using the return spillover measure proposed by Diebold and Yilmaz (2009; 2012). We mainly find a bidirectional volatility spillover among these assets and the cross-market linkages in the CEE region have become stronger over time. Furthermore, the Czech exchange market has a significant influence on the rest of the foreign exchange markets. The total spillover remained very high over the periods 2010–2012 and 2015–2017, despite the noteworthy fluctuations in other periods. These results would also be useful for portfolio managers, policy makers and speculative traders to develop exploitable strategies, by providing knowledge of the transmission mechanisms of the volatility of foreign exchange markets. The results may support the distribution of assets in a financial portfolio, especially after financial integration.

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Abstract

The paper investigates how the increased use of temporary contracts in Poland affected employment elasticity with respect to output. The analysis is based on Okun's law, and covers the period of 1996–2016, with particular focus on the years of 2001–2016 when temporary jobs became prevalent. We look at the relationships between output growth and the growths of aggregate, permanent and temporary employment separately. Our study finds that the responsiveness of aggregate employment to output is positive and changes through time. Interestingly, after 2007, when the use of temporary contracts stabilised at a high level, the employment intensity of growth started decreasing. We relate this to the opposite trends in output responsiveness of temporary and permanent jobs. Elasticity of temporary job was growing, while elasticity of permanent job was decreasing. Our study also shows that initially employers adapt to output changes replacing permanent job with temporary job, next temporary contracts become the main adjustment device.

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Abstract

The relationship between social expenditure, on the one hand, and poverty or income inequality indicators, on the other, focuses a great interest in the literature on welfare systems. In this paper, we evaluate the efficiency of the social transfer policies of the EU-28 states between 2011 and 2015 using deterministic and stochastic frontier models. Using the fuzzy clustering methods, we identify the patterns in the size of welfare systems, which we measure from the value and efficiency of social expenditure. In this way, we identify four clusters. The first cluster comprises many EU-15 countries (normally the Continental and the Nordic welfare states); the second comprises nations that were integrated into the EU in the last 15 years (mostly the former Communist countries); the third cluster comprises the culturally and geographically heterogeneous countries, such as Hungary, Ireland, Croatia and Luxemburg (whose main characteristic is the high efficiency of their social expenditure); and finally, the fourth group basically comprises the southern European countries, whose social transfer policy effectiveness is rather weak.

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Abstract

This paper investigates how social capital contributes to the pro-social behaviour of individuals in a post-conflict environment. I simultaneously investigate the pro-social behaviours in the periods of crisis (floods) and normality and observe whether (structural and relational) social capital has important influences in these two different times. The main novelty of this approach is that I model individuals' pro-social behaviours jointly for both the periods in focus and treat them as systematic outcomes of observed and unobserved (endogenous) influences. I find that more pro-social activities in the normal times are positively associated with such activities in the crisis period. Additionally, the results reveal the importance of (structural) social capital on pro-social behaviour – namely, group membership, size and ethnic structure of individual networks matter. Of particular interest for this post-conflict society and related literature is that greater ethnic diversity of individual networks is supportive for pro-social engagement of citizens. Finally, among the observed economic influences, I find that the respondents working in the informal economy report more pro-social activities while formal employment works more as financial intermediary for these engagements.

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Abstract

Though tax amnesties (TAs) are considered as a policy tool to increase revenue for governments, they have generated some puzzles. To solve the puzzles of TA we should not ignore the behavioural aspects of delinquent taxpayers. In this paper, we focus on a relatively neglected but important area of the TA literature. Considering that people who participate in tax amnesty policy (TAP) may not honestly report the whole amounts of evaded tax, thus they commit a secondary tax evasion. We indicate that even considering the risk of abstaining from TA and incurring possible uncertainty of tax evasion penalties, participating in a TA provides a higher level of utility for the delinquent taxpayers. Also, due to a secondary tax evasion usually accompanying with TA, we show that during the initial assessment period of a TAP the tax revenue drastically increases and when the assessment period is approaching the tax revenue stably declines and ultimately converges to a fixed value. Furthermore, we show that if delinquent taxpayers participate in the TAP and the penalties are larger than the expected tax revenue of the government, it increases the tax revenue without reducing the welfare of other taxpayers, so as to achieving Pareto improvement.

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Abstract

The high rate of increase of ruling politicians' wealth has been empirically proven many times. However, in the literature it is almost always assumed that politicians grew rich faster due to political rent-seeking or corruption. The aim of this article is to discuss the assumption whether corruption and rent-seeking is indeed the only possible cause, and to present empirical findings undermining the assumption. The results of the analysis of levels and rate of growth of Polish politicians' wealth clearly show that the other explanation is the selection of people exercising authority. Based on statistical analysis of 2024 asset declarations of 689 councillors from Polish voivodeship assemblies from two terms in the period of 2010–2018, the paper demonstrates that the different rates of changes of the value of assets of coalition and opposition councillors are at least partly the effect of the selection bias.

Open access

The paper applies a variant of the gravity model to test whether there is a positive link between the size of trade flows and the extent to which they follow the pattern of comparative advantage. Using UNCTAD's 2016 trade data for every country in the world, and 255 merchandise items, we show that countries trading more with each other tend to follow the patterns of comparative advantages more than countries with smaller mutual trade flows. While smaller trade flows can be easily influenced by business decisions of individual companies or one-off trade contracts going against trade pattern predictions, this is not the case with larger flows. We also find signs that holding trade volume constant, more distant countries trade less than geographically proximate countries, in line with predictions from comparative advantage. The results are valid for the whole database of all country pairs in world trade, but the goodness of fit increases with the number of items these country pairs trade in. The paper is the first insight into the topic and can be expanded to a higher level of disaggregation and more variables in future research.

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Chinese infrastructural projects like the “Belt & Road Initiative” or the “Chinese 16 + 1 Initiative” are trapped in geopolitical narratives. Geopolitical concepts dressed in scientific robes make the logic of warfare begin to prevail over the logic of cooperation. As a consequence, something that was to be an opportunity for less developed countries, becomes the axis of conflict between the great powers. In this paper, I identify the logic of warfare as an underlining characteristic of geopolitical reasoning and show why it is incompatible with economic approach. I also argue that geopolitical concepts are not scientific theories, but rather self-fulfilling prophecies. This theoretical background allows to detect the biggest obstacles related to many Chinese initiatives, and also indicates some necessary means to neutralize geopolitical narratives.

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This paper investigates whether multinational companies possess superior manufacturing knowledge relative to domestic companies operating in emerging market countries. Manufacturing knowledge is operationalized as knowledge in use through the implementation and performance impact of manufacturing practices. Using survey data of 216 manufacturing plants located in five emerging countries, we apply analysis of variance (ANOVA) and structural equation modelling (SEM) to identify the potential knowledge surplus of multinational subsidiaries over local companies. Results of our analysis show that, generally, multinational subsidiaries invest significantly more effort in implementing manufacturing practices. Nevertheless, their knowledge superiority concerning the effective use of these practices is only materialized in terms of practices related to human resource development and advanced manufacturing technologies.

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The operations of the cooperative organization are an actively debated issue. The efficiency and viability of this organizational form still pose many unanswered questions. The literature is not unequivocal in evaluating the merits and drawbacks of this organization. This article provides empirical evidence from research about cooperatives covering three countries (Canada, France and Hungary) and tests theoretical hypotheses in the framework of organizational economics and cooperative theory. The findings point towards the positive influence of the social environment and cooperative values on organizational choice. The results prove the continued relevance of this type of organization in the 21st century in agriculture in all three researched countries.

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