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Opublikowane | Published
Central planning casts long shadows: new evidence on misallocation and growth | Post-Soviet Affairs Przeczytaj streszczenie | Read abstract
We analyze the link between resource misallocation and subsequent long-run economic growth. We use two unique and novel sources of data for Poland and measure misallocation inherited from the period of central planning, i.e. period where input prices did not determine the use of inputs at firm, industry and country level. We assess sectoral, regional and cohort dimension of the inputs misallocation. We then show that undercapitalization was more prevalent that overcapitalization, and that it was due mostly to the firm and sector level variation in factor inputs. Given this insight, subsequent reallocation of the resources required shifting of inputs not only between firms, but also between sectors: a process which is relatively more prone to frictions due to specialization and information. When analyzing the link to the rate of growth once market mechanisms were reinstated, we find that regions with more misaligned firms (especially in terms of undercapitalization) experienced lower subsequent economic growth. This result proves highly robust, even three decades since the market mechanisms were reinstated.
This paper utilizes our novel dataset on survival of all state manufacturing plants from 1988, details here. The full replication package is available here.
In this paper, we received wonderful research assistance from Peter Szewczyk.
Structural change and misallocation. Firm-level evidence from Poland | Economics of Transition Przeczytaj streszczenie | Read abstract
Early transition literature linked large number of firm failures with the inability to overcome the pre-transition misallocation of resources, i.e. the inadequate capital-labor ratio. We look at the link between misallocation and firm survival using a rich firm-level dataset of over 1600 manufacturing plants established in a centrally planned economy after 1945. Our duration models include the standard Olley-Pakes misallocation measures as well as firm-level counterfactual level of capital that takes into account the present day market allocation and productivity. We show that i) misallocation was rather a firm-level than sector-level phenomenon and more importantly ii) it did not have a sizeable effect on the actual firm survival. Moreover, privatization tends to be negatively related to firm survival. This may imply both inappropriate self-selection into privatization programs and possibly inadequate implementation of the privatization.
This paper utilizes our novel dataset on survival of all state manufacturing plants from 1988, details here.
A new instrument for measuring the local causal effect of privatization on firm performance | Gospodarka Narodowa Przeczytaj streszczenie | Read abstract
Despite an apparent consensus in the literature that privatization leads universally to an increase in firm performance, the problem of endogeneity bias is profound and has been emphasized in a number of meta-analyses. We propose a new instrument to address the endogeneity bias and apply it Polish medium and large firms over 1995-2008. We find that improvement in firm performance is not universal, in particular, we find no improvement among manufacturing firms privatized to domestic investors.
Upstreamness of employment and global financial crisis in Poland: the role of position in the global value chains | Economics of European Crises and Emerging Markets Przeczytaj streszczenie | Read abstract
The emergence of global value chains leads to fragmentation of the production processes and reallocation of those processes across countries. With increasing number of production stages, the manufacturing process is located increasingly further away from the consumer. Literature suggests that fragmentation of production increases the international transmission of shocks. The global financial crisis is believed to lead to consolidation and shortening of global value chains and amplification of demand shocks along the global value chains, the so-called bullwhip effect. In this paper we study the effects of global financial crisis on employment, focusing specifically on the role of the distance from final demand (upstreamness) in this adjustment. We find that upstreamness matters for both labor demand and adjustment in employment during the periods of crisis, but this relationship is heterogeneous across countries. While the reaction to the crisis is indeed amplified further away from final demand, contrary to our expectations it is mostly channeled through lower job creation rates rather than faster job destruction. Moreover, the adverse effects of the crisis are lower in foreign firms, this difference does not depend on the distance from final demand.
Trade and growth in the New Member States. The role of global value chains | Emerging Markets Finance and Trade Przeczytaj streszczenie | Read abstract
We analyze the determinants of value added and productivity growth of New Member States in the period between 1995 and 2009. We show that in the analyzed countries exports contributed to roughly 30 to over 40% of the overall growth of GDP while the contribution of the domestic component varied from negative to over 60%. We show that in the most important export manufacturing industries of the NMS, the growth in exported value added was substantial, while the growth of the domestic component of GDP was mostly due to the growth in services. We associate growth of sectoral productivity with the foreign direct investment and exporting but, more importantly, with the position of a sector/country in the global value chains. We show that sectors that have imported intermediate goods have experienced higher productivity growth. Moreover, productivity growth was found in sectors further away from the final demand and in sectors exporting intermediate goods.
- This paper uses the WIOD data together with the accompanying Social and Economic Accounts.
- You can compute the GVC measures used in the paper (WWZ, 2013) using the Decompr R package.
- The codes computing the GDP growth decompositions presented in the paper can be downloaded below, if you use it or any part of it in your research, please, cite our paper. This code assumes that you have the WWZ (2013) decomposition ready.
Up or down the value chain? A comparative analysis of the GVC position of the economies of the new EU Member States | Central European Economic Journal Przeczytaj streszczenie | Read abstract
The pattern of trade of the Central and Eastern European countries has been changing since the beginning of the economic transition in the early 1990s. By the end of the century this process was additionally strengthened by their integration with the European Union and overlapped with the development of global value chains (GVC) spanning across Europe with which the new member states (NMS) have become increasingly integrated.
In this paper, we shed light on these changes by analysing the position of the NMS within the global value chains. We employ the upstreamness measure proposed by Antràs et al. (2012) and use the World Input–Output Database. Although we observe a global increasing trend in the upstreamness of all countries, we find that the NMS have in many cases gone against this trend while converging in their production structure within their group and with the EU-15. This convergence is mostly observed in Czech Republic, Hungary, Poland and Slovakia where the level of upstreamness in the most important exporting sectors was close to that of Germany by the end of the analyzed period 1995–2011.
- This paper uses the WIOD data
- The STATA code used to compute the U measure can be downloaded below. If you use it or any part of it in your research, please, cite our paper. This code assumes that you have all the WIOD data in one Stata file.
Analyzing the efficiency of the pension reform: the role for the welfare effects of fiscal closures | Macroeconomic Dynamics Przeczytaj streszczenie | Read abstract
Pension system reforms involve fiscal consequences. In practice, a variety of fiscal closures may be implemented, while not all of them involve the same extent of distortions. This paper develops an overlapping generations model to analyze the case of a shift from pay-as-you-go defined benefit system to a partly funded defined contribution system. We calibrate the system to mimic the economy of Poland, which actually implemented such reform in 1999. We analyze the efficiency of the reform with two main closure types: public debt and taxes. Regardless of the fiscal closure scenario this particular reform seems to be efficient in terms of welfare and enhances economic performance. Comparing the welfare of various closures we find that while labor taxation yields relatively higher welfare gain, public debt closure involves least need for the redistribution if capital pillar is to be implemented.
This paper was awarded Joseph A. Schumpeter Prize from Deutsche Bundesbank.
Unprivatizing the pension system: The case of Poland | Applied Economics | Applied Economics Przeczytaj streszczenie | Read abstract
In many countries, the fiscal tension associated with the global financial crisis brings about the discussion about unprivatizing the social security system. This article employs an Overlapping Generations model to assess ex ante the effects of such changes to the pension reform in Poland from 1999 as implemented in 2011 and in 2013. We simulate the behaviour of the economy without the implemented/proposed changes and compare it to a status quo defined by the reform from 1999. We find that the changes implemented in 2011 and in 2013 are detrimental to welfare. The effects on capital and output are small and depend on the selected fiscal closure. Implied effective replacement rates are lower. These findings are robust to time inconsistency. The shortsightedness of the governments imposes welfare costs.
Decreasing fertility vs increasing longevity: raising the retirement age in the context of ageing processes | Economic Modelling Przeczytaj streszczenie | Read abstract
Given the decreasing fertility and increasing longevity, in many countries the policy debate emphasizes the role of either raising the minimum eligible retirement age (MERA) or raising fertility to avoid adverse changes in the population structure. In this paper we evaluate the welfare and macroeconomic effects of increasing the retirement age for various demographic scenarios under three major pension systems (defined benefit, notionally defined contribution and funded defined contribution). We compare populations with decreasing fertility, increasing longevity and one subject to both of these changes, and show that the welfare effects of raising MERA stem mainly from longevity. We show that – for increasing longevity – raising the retirement age is universally welfare enhancing for all living and future cohorts, regardless of the pension system and fertility. Finally, we show scope for further welfare gains if productivity is relatively high at old ages.
Small assumptions (can) have a large bearing: evaluating pension system reforms with OLG models | Economic Modelling Przeczytaj streszczenie | Read abstract
The objective of this paper is to inquire the consequences of some simplifying assumptions typically made in the overlapping generations (OLG) models of pension systems and pension system reforms. This literature is largely driven by policy motivations. Consequently, the majority of the papers is extremely detailed in the dimension under scrutiny. On the other hand, complexity of general equilibrium OLG modeling necessitates some simplifications in the model. We run a series of experiments in which the same reform in the same economy is modeled with six different sets of assumptions concerning the shape of the utility function, time inconsistency, bequests? redistribution, labor supply decisions and internalizing the linkage between social security contributions and benefits in these decisions as well as public spending. We find that these assumptions significantly affect both the size and the sign of the macroeconomic and welfare measures of policy effects with the order of magnitude comparable to the reform itself.
W toku | Work in progress
Are rushed privatizations substandard? Analyzing firm-level privatization under fiscal pressure Przeczytaj streszczenie | Read abstract
In this paper we provide the first analysis of whether rushed privatizations, usually carried out under fiscal duress, increase or decrease firms’ efficiency, scale of operation (size) and employment. Using a large panel of firm-level data from Poland over 1995-2015, we show that rushed privatization has negative efficiency, scale and employment effects relative to non-rush privatization. The negative effect of rushed privatization on the scale of operations and employment is even stronger than its negative effect on efficiency. Our results suggest that when policy makers resort to rushed privatization, they ought to weigh these negative effects against other expected effects (e.g. on fiscal revenue).
Productivity spillovers in the GVC. The case of Poland and the New EU Member States Przeczytaj streszczenie | Read abstract
The New Member States have been experiencing firm internationalization not only through inward foreign direct investment but also through exporting, importation of foreign technology in investment goods and increased use of imported intermediates. We argue that there are important productivity spillovers within the global value chains, ie. FDI alone does not tell the whole story of the reallocation processes going on in the economies of the NMS. We augment the standard TFP spillover empirical model with modern measures of GVC participation. We show that increased foreign content of exports brings additional productivity gains on top of the ones attributed to exporting. Moreover, we show that in selected cases, participation in the GVC leads to a smaller productivity gap between foreign and domestic firms. In Poland the productivity gains for domestic firms are located in production of intermediate goods with high foreign value content as well as in goods located close to the final demand. In many other NMS the benefits are concentrated close to the final demand.
- This paper uses WIOD data and Amadeus database.
- You can compute the GVC measures used in the paper using the Decompr R package.
- The codes used to compute the Levinsohn-Petrin TFP from firm-level data, the FDI spillover measures from WIOD and Amadeus can be found here and some trade aggregates can be downloaded below. If you use it or any part of it in your research, please, cite our paper.
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