Havlic iwasaki (eds ) economics of european crises and emerging markets (2017)

Economics of European Crises and Emerging Markets Edited by Peter Havlik, Ichiro Iwasaki Economics of European Crises and Emerging Markets Peter Havlik  •  Ichiro Iwasaki Editors Economics of European Crises and Emerging Markets Editors Peter Havlik Vienna Institute for International Economic Studies Vienna, Austria Ichiro Iwasaki Institute of Economic Research Hitotsubashi University Tokyo, Japan ISBN 978-981-10-5232-3    ISBN 978-981-10-5233-0 (eBook) DOI 10.1007/978-981-10-5233-0 Library of Congress Control Number: 2017945347 © The Editor(s) (if applicable) and The Author(s) 2017 This work is subject to copyright All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations Cover illustration: © Per Bengston / Alamy Stock Photo Printed on acid-free paper This Palgrave imprint is published by Springer Nature The registered company is Springer Nature Singapore Pte Ltd The registered company address is: 152 Beach Road, #21-­01/04 Gateway East, Singapore 189721, Singapore The project underlying this book is hosted by the Institute of Economic Research, Hitotsubashi University, Tokyo, Japan, and the Vienna Institute for International Economic Studies (wiiw), Vienna, Austria, with principal sponsorship by the Suntory Foundation, Osaka, Japan v Acknowledgments This volume contains the main research outcomes from the international project entitled “Economics of European Crises and Emerging Markets” launched in autumn 2014 The authors are grateful to the Institute of Economic Research of Hitotsubashi University and the Vienna Institute for International Economic Studies (wiiw)—the project’s host organizations— for their considerable support The authors also appreciate the Suntory Foundation’s principal sponsorship, which provided financing for workshops and conference presentations conducted within the project’s framework Additional financial support from the director of the Institute of Economic Research of Hitotsubashi University was useful for carrying out the editorial work and English proofreading of the book Other financial and organizational support that authors received individually are acknowledged in their chapters The editors thank all contributors to this volume for their great efforts and kind collaborations The editors are also thankful to Veronika Janyrova and Aki Yoshino for their administration of the project and to Tammy Bicket, Akira Ishida, and Mai Shibata for their assistance in preparing the manuscripts The authors also thank their colleagues and participants in the aforementioned workshops and conferences for their valuable comments and suggestions on the research work published in this book Those from Vasily Astrov, Mahdi Ghodsi, Doris Hanzl-Weiss, Gabor Hunya, Sandor Richter, and Hermine Vidovic are particularly acknowledged and greatly appreciated Their involvement in the peer-review process was very vii viii   Acknowledgments effective in improving the research quality and accuracy of the text contained in this book Last but not least, the authors would all like to express thanks to Jacob Dreyer and Jazmine Robles of the editorial staff at Palgrave Macmillan for their kind support and careful coordination, along with production staff Sudha Soundarrajan, Vinoth Kuppan, and Rachel Crawford Contents 1 Introduction: European Crises and Emerging Markets 1 Peter Havlik and Ichiro Iwasaki Part I  International Comparison  19 2 Macroeconomic Impacts of the Crisis on European Emerging Markets 21 Peter Havlik 3 The Financial Effects of the Crisis in European Emerging Markets 39 Mario Holzner 4 Effects of the Global Economic Crisis on FDI Inflow in Eastern European Economies: A Panel Data Analysis 63 Taku Suzuki Part II  The Czech Republic93 5 Employment in the Czech Republic: Trends During Economic Transition and the Global Recession 95 Daniel Münich and Klára Svitáková ix x   Contents 6 FDI and Ownership in Czech Firms: Pre- and Post-crisis Efficiency 121 Jan Hanousek and Evžen Kočenda Part III  Hungary147 7 Impacts of the Crisis on the FDI-Led Development Model in Hungary: Emergence of Economic Patriotism or Shift from the Competition State to Patronage? 149 Miklós Szanyi 8 Impact of Global Companies’ Real Options Implementation on Their Hungarian Subsidiaries 171 Andrea Szalavetz Part IV  Poland195 9 Potential Macroeconomic Effects of the Trade Collapse Due to Economic and Political Crises: The Case of Poland 197 Jan Hagemejer 10 Upstreamness of Employment and Global Financial Crisis in Poland: The Role of Position in Global Value Chains 217 Jan Hagemejer and Joanna Tyrowicz Part V  The Russian Federation 237 11 Political Response to the Crisis: The Case of Russia 239 Natalia Akindinova, Andrey Chernyavskiy, Nikolay Kondrashov, and Andrei Yakovlev  Contents     xi 12 The Impact of Crisis on Firm Creation and Regeneration in Russia: Regional Panel Data Analysis 263 Ichiro Iwasaki and Mathilde Maurel 13 Conclusions: The Crisis Left Deep Scars on European Emerging Markets 297 Peter Havlik and Ichiro Iwasaki Index 301 292   I IWASAKI AND M MAUREL Our assumptions are validated First, the decline of oil prices and the appreciation in the exchange rate during the crisis period strongly inhibited the creation and regeneration of Russian firms Second, violent fluctuations in crude oil prices and the exchange rate increased the uncertainty in business startups and operations and, accordingly, greatly depressed Russian entrepreneurs who were considering launching new businesses; many companies were forced to liquidate On top of these findings, we obtained supporting evidence that economic growth strongly encourages firm creation and regeneration, and that integration with the world economy is significantly related to firm regeneration We also found that intensive interfirm competition blocks newcomers to the market Population density also plays a key role in firm turnover Public security has a weak but positive effect on firm creation In regions with harsh climate conditions, firm regeneration becomes weak, which may reflect high initial sunk costs The above empirical results are reproducible under a series of robustness checks First, we treated the endogeneity of the crisis variables and dependent variables by using the system GMM estimator Second, we examined the influence of regional heterogeneity Third, we performed supplemental regressions using various estimators in addition to the fixed-­ effects and system GMM models Finally, we imposed many kinds of sample restrictions to ensure that our results were not due to the presence of outliers Our findings have two policy implications, namely that the oil curse is a blessing in Russia Appreciation of the exchange rate impedes the development of other sectors, which could employ entrepreneurs and workers The Russian economy, based essentially on oil- and gas-related activities, is insufficiently diversified to cope with the negative impact of falling prices of Russian natural resources The second important external factor is related to the vulnerability of the economy to world crises Although the degree of the integration of the Russian economy into the global economy is relatively low, recent economic and political crises and the increase in oil price volatility have depressed the creation and regeneration of Russian businesses To conclude, the recent global crises hardly discouraged firm entries and turnovers in Russia, as it was common to all countries The problem is that the dominating presence of the oil sector in the Russian economy and the high value of the Russian ruble due to the Dutch disease deter companies seeking to perform in other manufacturing sectors   THE IMPACT OF CRISIS ON FIRM CREATION AND REGENERATION     293 Acknowledgments  This chapter is an updated and substantially revised version of Iwasaki et al (2016) We gratefully acknowledge financial support from the Japan Securities Scholarship Foundation, the Nomura Foundation, and the Joint Usage and Research Centre of the Institute of Economic Research, Hitotsubashi University, in addition to the Suntory Foundation—the main sponsor of the project We also wish to thank Vasily Astrov, Jan Hanousek, Mario Holzner, and Andrei A. Yakovlev for their valuable comments and suggestions, and Tammy Bicket for her editorial assistance Needless to say, all remaining errors are solely our responsibility Notes The estimation results are as follows: Firm creation rate =  4.321***−0.0040 × Trend            (0.946)          (0.004) Firm regeneration rate = 1.403**−0.0155** × Trend               (0.607)     (0.007) N = 80, R2= 0.275  N = 80, R2= 0.635 Figures in parentheses beneath regression coefficients are standard errors *** and ** denote statistical significance at the 1% and 5% levels, respectively Estimates of the lagged dependent variables are omitted for brevity If the firm regeneration rate took a negative value, we used a natural logarithm of its absolute value multiplied by minus one to fit the regression estimation Empirical results, however, are not greatly different, even if a non-log-transformed variable is utilized See Iwasaki and Suganuma (2015a, b) for recent developments in international trade and FDI in Russia As reported in Table 12.3, the Arellano-Bond test for AR(2) rejects the null hypothesis of no autocorrelation in Models [1] to [4] The Sargan test also rejects the null hypothesis that overidentifying restrictions are valid in all cases The estimation results of the dynamic model, therefore, have some room for improvement in model specification References Abiad, A., Detragiache, E., & Tressel, T (2008) A new database of financial reforms  (Working Paper No 08/266) Washington, DC: International Monetary Fund Aghion, P., & Saint-Paul, G (1993) Uncovering some causal relationships between productivity growth 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New York/London: McGraw-Hill Sprenger, C (2014) Privatization and survival: Evidence from a Russian firm survey Economic Annals, 59, 43–60 CHAPTER 13 Conclusions: The Crisis Left Deep Scars on European Emerging Markets Peter Havlik and Ichiro Iwasaki Nearly a decade after the outbreak of the global financial crisis, Europe and the European emerging markets are still struggling with the consequences In the meantime, extensive academic literature has been devoted to exploring the origins of the crisis; its impacts on individual countries and regions; and macroeconomic, sectoral, social, and political consequences The present European disarray over migration and Brexit, the East-West conflict over Ukraine, and the Transatlantic rift that has opened with the Trump presidency are among the broader consequences indirectly (and sometimes even directly) related to the global financial crisis of 2008–2009 The present volume explores selected impacts of this crisis on emerging markets in Central, Eastern, and Southeastern Europe (CESEE) It deals with both cross-country impact analyses on the region as a whole and selected country-specific issues, focusing on the Czech Republic, Hungary, Poland, and Russia P Havlik (*) Vienna Institute for International Economic Studies, Vienna, Austria I Iwasaki Institute of Economic Research, Hitotsubashi University, Tokyo, Japan © The Author(s) 2017 P Havlik, I Iwasaki (eds.), Economics of European Crises and Emerging Markets, DOI 10.1007/978-981-10-5233-0_13 297 298   P HAVLIK AND I IWASAKI Chapter describes economic growth and convergence patterns in the CESEE region over the past two decades, focusing on the real economy It underlines the diverging growth experiences of individual countries, including different impacts and responses to the crisis While the ­economic convergence and catching-up had been generally impressive before the crisis, especially in the Baltic States and in Poland—the latter being the only country that avoided negative growth in 2009—in other countries, particularly Hungary, the catching-up process has stalled The crisis not only interrupted the catching-up process but pushed it back several years Diverse growth performance has been accompanied by uneven structural changes Emerging markets in Central Europe that have been closely integrated in the German-CEE manufacturing value-chain perform better and have been more resilient to the crisis These experiences, as well as disappointments with the pre-crisis growth model, suggest a need for economic policy adjustments The latest economic developments and forecasts indicate a resumption of economic convergence, albeit at a slower pace than during the pre-crisis period, despite elevated geopolitical uncertainties Chapter investigates financial impacts of the crisis on the CESEE region, effects of deleveraging, and current account developments It underlines the important distinction between FDI flows in export-oriented manufacturing (prevalent in Central Europe) and domestically oriented import-­ intensive flows in banking, trade, and real estate activities that may lead to unsustainable imbalances Chapter empirically investigates effects of FDI inflows on different groups of emerging economies using panel data: both EU members and other East European economies Chapter analyses long-term labour market developments in the Czech Republic and discovers that less-educated men were hit hardest by the crisis, as jobs requiring only medium or low skills were cut Chapter illustrates how ownership form and firm size affected reactions to the crisis in the Czech Republic Within a broader sample of countries, the labour market performance during the crisis and various firm characteristics are also investigated in Chap 10 From a different angle, impacts of the crisis on the firm creation rate in Russia are analysed in Chap 12 The authors confirm that oil prices and related exchange rate fluctuations strongly affected firms in that country As mentioned above, the crisis undermined trust in the traditional economic model Subsequent economic policy changes have, so far, been most pronounced in Hungary and Poland: either in a covert protectionism (Chap 7) or by a shift to an increased local commitment to subsidiaries by global companies (Chap 8) The impact of the Ukraine-Russian conflict on   CONCLUSIONS: THE CRISIS LEFT DEEP SCARS ON EUROPEAN EMERGING     299 Polish trade is econometrically simulated using the CGE model in Chap Last, but not least, Chap 11 discusses not only economic impacts of the crisis on Russia, but also explores (failed) attempts to change the Russian economic development model and the key associated political constraints The whole volume, thus, provides various insights and evidence-based analysis of multiple effects of the crisis on Eastern European emerging markets in the areas of economic and financial developments, labour markets, and firm creation and destruction, as well as on far-reaching economic policy changes and even affected global political developments The selected country case studies underline the editors’ argument for differentiated impacts of the crisis, going far beyond purely economic factors These conclusions are sobering enough, yet the implication is that impacts of the crisis are continuing and may even manifest themselves in new or broader forms in the future, not just in the emerging markets covered by this volume Further efforts are required to explore these new aspects of the crisis Index A Agency for Strategic Initiatives (ASI), 246 AIG See American International Group (AIG) Amadeus database, 130, 220, 221, 223, 224, 227, 231, 233 AMECO database, 53 American International Group (AIG), anti-corruption Law, 246 anti-crisis policy, 253 Arab Spring, 15, 247, 256 Arellano–Bond GMM estimation, 64 Arellano-Bond test, 293n4 Armington aggregation, 202 ASI See Agency for Strategic Initiatives (ASI) Asian financial crisis, 43, 44, 72 B backshoring, 190n1 Bajnai government, 164 BAL See Baltic states (BAL) Baltic states (BAL), 9, 25, 27, 35, 37n5, 43, 50, 52, 58, 59, 200, 298 Bank for International Settlements (BIS), 47, 54 barriers to trade, 95, 156, 205, 211 BIS See Bank for International Settlements (BIS) Blundell-Bond’s dynamic panel GMM estimation, 84 BNP Paribas, Bologna process, 118n11 Brazil, Russia, India, China, and South Africa (BRICS), 1, Breusch–Pagan test, 84, 278 Brexit, 22, 23, 36, 36n2 bullwhip effect, 14, 218–20, 232, 233 business capture, 12, 153, 167 business-polity network, 153 C CDE See constant difference of elasticities (CDE) CEO See chief executive officer (CEO) © The Author(s) 2017 P Havlik, I Iwasaki (eds.), Economics of European Crises and Emerging Markets, DOI 10.1007/978-981-10-5233-0 301 302   INDEX CES See constant elasticity of substitution (CES) CGE See computable general equilibrium (CGE) CGE-based analyses, 13 Chiang Mai Initiative, 89 chief executive officer (CEO), 177 CIS See Commonwealth of Independent States (CIS) Cobb-Douglas production function, 127 common lender effect, 72, 73 Commonwealth of Independent States (CIS), 9, 41, 43, 44, 46–51, 53, 54, 59–61, 69, 127 competition state, 12, 149–68 comprador elites, 151 computable general equilibrium (CGE), 198, 202, 204, 299 concentrated ownership, 124, 131, 132, 139 constant difference of elasticities (CDE), 202 constant elasticity of substitution (CES), 202, 204 contagion, 72 covert protectionism, 157, 298 creative destruction, 266 Crimea euphoria, 253 crony capitalism, 166 cross-case analysis, 179 Czech Labour Force Survey (LFS), 96, 98, 100, 102–4, 109, 110, 112–15 D DCFTA See Deep and Comprehensive Free Trade Area (DCFTA) decoupling theory, 5–6 Deep and Comprehensive Free Trade Area (DCFTA), 22–3 deleveraging, 9, 40, 41, 50, 51, 59–61, 298 deoffshorization, 258 Department of Industrial Policy and Promotion (DIPP), 64 dependence on the oil sector, 263, 264, 271, 273 dependent market economy, 154 DIPP See Department of Industrial Policy and Promotion (DIPP) divestments, 12, 173–5, 178–80, 188 Doing Business, 246, 248, 249 double recession, 122 double-dip recession, 22–3 Dow Jones index, 74–5 Dutch disease, 264, 265, 292 dynamic panel model, 10, 84 E EACES See European Association for Comparative Economic (EACES) EAEU See Eurasian Economic Union (EAEU) East Asian developmental state, 157 EBRD See European Bank for Reconstruction and Development (EBRD) EC See European Commission (EC) ECB See European Central Bank (ECB) ECFIN See Economic and Financial Affairs of the European Commission (ECFIN) Economic and Financial Affairs of the European Commission (ECFIN), 37n6 economic and political elites, 151, 240, 242, 256, 257 economic convergence, 8, 9, 21, 24, 27, 36, 298 economic crisis, 5, 10–12, 64, 89, 96–8, 101, 105, 106, 111, 116, 124, 241, 254, 257, 258, 265 economic nationalism, 155–6 economic patriotism, 12, 149  INDEX     economic transition, 10, 95–117 efficiency frontier, 126, 127, 130, 133, 136–9 EFSF See European Financial Stability Facility (EFSF) elites, 12, 15, 149–52, 154, 157, 240–8, 251, 253, 254, 256–9 elites ranges, 151–3 emerging markets, 1–16, 21, 39–61, 64, 66, 72, 75, 297–9 EMU See European Monetary Union (EMU) endogeneity, 6, 7, 16, 125, 126, 227, 264, 278, 292 EU accession, 25, 27, 43, 122 EU framework regulations, 157 EU market entry, 95 EU See European Union (EU) Eurasian Economic Union (EAEU), 22, 36 Euromaidan, 77 European Association for Comparative Economic (EACES), 259 European Bank for Reconstruction and Development (EBRD), 24, 33, 34 European Central Bank (ECB), 4, 5, 24, 74, 90 European Commission (EC), 23, 24, 36, 118 European Council, 197 European debt crisis, 265 European Financial Stability Facility (EFSF), European Monetary Union (EMU), 265 European sovereign debt crisis, European Union (EU), 4, 22, 39, 52, 63, 82, 83, 96, 121, 122, 155, 197, 198, 232, 233, 298 Eurostat, 23, 27, 31–3, 35, 47, 48, 54 Eurozone, 4, 22, 28, 36, 122, 141 303 expenditure cascades effect, 54, 58–61 export-oriented manufacturing FDI, 9, 51, 60 F FDI See foreign direct investment (FDI) FDI-led development model, 149, 159–62, 167 FDI-led modernization and restructuring, 29 Federal Reserve Bank (FRB), Federal Reserve System (FRS), financial crisis, 4–6, 21, 22, 65, 66, 72, 73, 84, 87, 88, 133, 155, 162, 228, 232, 242 financialization, 9, 39–48, 52–61 FIPB See Foreign Investment Promotion Board (FIPB) firm creation, 16, 263–93, 298, 299 firm destruction, 283, 299 firm regeneration, 15, 268–72, 283, 292 fixed-effects model, 84, 264, 286 foreign currency (FX), 40, 50, 60, 255 foreign direct investment (FDI), 9, 10, 27, 29, 30, 34, 39, 40, 44–6, 51, 59, 60, 63–90, 96, 121–42, 149, 152–4, 158–62, 165, 168, 173, 176, 275, 283, 291, 293n3, 298 Foreign Investment Promotion Board (FIPB), 64 foreign ownership (FO), 11, 123, 125, 132, 140, 142, 158, 160, 163, 221, 223, 224, 232, 233 Frankfurt DAX, 73–4 FRB See Federal Reserve Bank (FRB) free-cash-flow theory, 128 FRS See Federal Reserve System (FRS) F-test, 84 304   INDEX G G7 See group of seven GC See global company(GC) generalized method of moments (GMM), 64, 84, 283, 286, 292 geopolitical uncertainties, 8, 36, 298 GFC See global financial crisis (GFC) Gini index/coefficient, 53, 54, 58 global company(GC), 171–7, 179–81, 183, 187, 190n3, 190n5, 191n6 global credit crunch, 1–3, 5–8, 16 global financial, 133 global financial crisis (GFC), 9, 11, 14, 15, 40, 41, 43, 44, 46, 47, 49–51, 58–61, 63, 72, 82, 84, 121–4, 129, 130, 137, 140–2, 171, 189, 217, 239, 263, 268, 271 global financial shock, 15, 64, 84, 265, 271–3 global recession, 3, 95, 96 Global Trade Analysis Project (GTAP), 13, 204 global value chain (GVC), 14, 34, 161, 173, 199, 206, 217, 175–6, 178 globalization, 89, 217, 227, 228 GMM See generalized method of moments (GMM) GNI See gross national income(GNI) Great Depression, 64, 154 Greek crisis, 36, 72, 74, 87 Greek government debt crisis, 64, 65, 69, 74, 82, 87 greenfield investments, 158 gross national income (GNI), 53 gross regional products (GRP), 274–5, 278, 283, 283, 291, 291, 291, 291, 291 group of seven (G7), GRP See gross regional products (GRP) GTAP See Global Trade Analysis Project (GTAP) GVC See global value chain (GVC) H Hausman test, 84, 278 herding effect, 72–3 Herfindahl-Hirschman index (HHI), 129, 137 HHI See Herfindahl-Hirschman index (HHI) I IER See Institute of Economic Research of Hitotsubashi University (IER) IMF See International Monetary Fund (IMF) Im-Pesaran-Shin test, 84 income distribution, 9, 41, 60 income inequality, 9, 34, 40, 54, 60, 61 information technology (IT), 186, 275, Institute of Economic Research of Hitotsubashi University (IER), 168, 259 institution building, 150 intermediate goods, 204, 209, 219, 226, 228 international competitiveness, 168, 218, 265 International Monetary Fund (IMF), 4, 28, 33, 39, 43, 74, 274 international trade, 10, 96, 97, 141, 155, 204, 205, 217, 221, 275, 283 Iraq War, 66 IT See information technology (IT) Izborsk Club, 247, 260  INDEX     J job creation (JC), 14, 165, 220, 227, 228, 231–3 job destruction (JD), 14, 227–8, 231–3 K Keynesian effect, 54, 58–61 knowledge-intensive development tasks, 186 L labour demand, 14, 98, 101, 117, 219, 227, 229, 230, 232, 233 labour force survey (LFS), 30, 98, 99 labour supply, 97, 98, 108, 116 LAO See limited access order (LAO) Lehman Brothers, 3, 65, 74, 82, 218 Lehman shock, 3–4 Levin-Lin-Chu test, 84 LFS See labour force survey(LFS) liberalization, 43, 63, 89, 95, 155, 156, 211, 242, 264 limited access order (LAO), 15, 240–3, 254, 256, 257, 259, 259n2 Lind and Mehlum test, 54 loan-for-shares auctions, 260 loss of mandates, 182, 190n4 luxury profits of foreign firms, 162 M macroeconomic impacts of the crisis, 21–37 mass-scale liberalization process, 156 maximum likelihood one-stage procedure, 126 May Decrees, 248, 258 305 MBS See mortgage-backed securities (MBS) MENA See Middle East and North Africa (MENA) Middle East and North Africa (MENA), 23 migration crisis, 22, 34, 36 military and political conflict, 82 Minsky-type asset price inflation and volatility, 46 mortgage-backed securities (MBS), 2, 3, multinational firms, 133, 149, 161–3, 165 N NACE See statistical classification of economic activities in the EU(NACE) NASDAQ, National Entrepreneurial Initiative (NEI), 246 natural resource curse, 263, 267, 291 ND See New Democratic Partly (ND) networks, 140, 150–3, 157–9, 165–7, 172, 175, 178, 247 New Democratic (ND), new elite groups, 15, 240, 256, 257 new growth model, 8, 21, 34 new right-wing, 155 NFC See non-financial corporation(NFC) NGO See non-governmental organizations (NGOs) non-financial corporation (NFC), 47, 48, 60 non-governmental organizations (NGOs), 247, 260 non-performing loans (NPLs), 40, 49, 50, 60 NPLs See non-performing loans (NPLs) 306   INDEX O OAO See open access order (OAO) OECD See Organization for Economic Co-operation and Development (OECD) oligarchs, 15, 153, 242, 257, 260n4 OLS See ordinary least squares (OLS) once-in-a-century crisis, open access order (OAO), 256, 259n1 ordinary least squares (OLS), 228 Organization for Economic Co-operation and Development (OECD), 24, 39, 53, 73, 107, 108, 143n2, 215n3 organizational experimentation, 12, 13, 173, 180, 188 ownership concentration, 125, 129, 131, 133 ownership structure, 121, 123–6, 126–9, 132, 139 P panel data, 10, 16, 63, 64, 82, 130, 263, 298 Panhellenic Socialist Movement (PASOK), PASOK See Panhellenic Socialist Movement (PASOK) paternalism, 150 patronage, 12, 149, 167 patronage state, 150, 157, 158, 167 pay-as-you-go state pension system, 165 payroll tax, 244 pooled OLS, 84 population, 5, 10, 11, 26, 27, 53, 66, 69, 76, 82, 83, 90n8, 98, 99, 101, 106–8, 116–18, 214, 243, 244, 250, 251, 253, 255, 258, 275, 286, 291, 292 PPP See purchasing power parity (PPP) pre-crisis growth model, 298 privatization, 95, 121, 150, 158, 164, 241, 242 protectionism, 156 purchase of loyalty, 241 purchasing power parity (PPP), 26, 53 R R&D See research and development (R&D) random-effects model, 84 real options (RO) theory, 12, 13, 171–4, 179, 181–90 regional heterogeneity, 264, 286, 291, 292 Regulatory Impact Assessment (RIA), 246 relocation, 174, 175, 178, 179, 183, 186, 190n1 renationalization, 164 rent, 211, 214, 240–3, 248, 251, 256, 258, 259, 266 research and development (R&D), 165, 171, 173, 177, 186, 187, 190, 266 Reserve Fund, 244 RIA See Regulatory Impact Assessment (RIA) RO See real options (RO) theory ROSSTAT See Russian Federal State Statistics Service (ROSSTAT) RTS See Russian Trade System (RTS, Moscow exchange) Russian Federal State Statistics Service (ROSSTAT), 252, 268–70, 272 Russian financial crisis, 43, 64 Russian Trade System (RTS, Moscow exchange), 249 Russia-Ukraine conflict, 273  INDEX     S sanctions, 8, 22, 64, 197, 198, 205, 211, 250, 255, 258 Sargan test, 293 saving rates, 40–1, 53–9, 61 savings propensity, 9, 41 SEE See Southeastern Europe (SEE) selective advantage, 12, 149, 153, 162–7 selective measures, 157, 166 semi-periphery, 39, 42 SFA See stochastic frontier analysis (SFA) shared services center (SSC), 178, 186 siloviki, 15, 241, 243, 247, 257 smile curve economics, 190n2 SOEs See state owned enterprises (SOEs) Southeastern Europe (SEE), 4, 9, 23, 43–8, 50–2, 54, 58–61 spillover effect, 123, 161 SSC See shared services center (SSC) Standard World Income Inequality Database (SWIID), 53 state capture, 154, 242 state clientism, 150 state favoritism, 167 state owned enterprises (SOEs), 152 state-led capitalism, 241–6, 257, 258 state-owned enterprises, 150–1 statistical classification of economic activities in the EU (NACE), 3, 46, 125, 127, 127, 127, 221, 221, 221, 221 stochastic frontier, 11, 142 stochastic frontier analysis (SFA), 125–6 stochastic production frontier model, 124 Stolypin Club, 255 strategic-relational state theory, 151 307 Strategy-2020, 246 structural change, 27, 30–3, 37n5, 199, 298 subprime mortgage crisis, subsidiary-focused perspective, 174 supply chain cluster, 34 SWIID See Standard World Income Inequality Database (SWIID) system GMM model, 283, 292 T technical efficiency, 124, 126, 129 Tobit model, 228, 230 trade collapse, 13, 14, 198, 199, 211, 214, 218, 219 Transatlantic rift, 297 transformational crisis, 239 Trump presidency, 36n2, 297 U Ukraine conflict, 64, 72 Ukrainian unrest, 75 UNCTAD See United Nations Conference on Trade and Development (UNCTAD) Union of Soviet Socialist Republics (USSR), 197, 200 United Nations Conference on Trade and Development (UNCTAD), 68, 71, 76 upgrading, 13, 173, 175, 177, 182, 183, 185, 187–9 upstreamness, 14, 217–34 U-shaped (quadratic) relationship, 54, 58, 61 U-shaped trends, 105 USSR See Union of Soviet Socialist Republics (USSR) 308   INDEX V V4 See Visegrad four countries (V4) valorization, 244 VAR See vector autoregressive (VAR) Varieties of Capitalism, 154 vector autoregressive (VAR) (model), 269, 273 Velvet Revolution, 99 vertical of power, 248 vertical specialization, 226 Vienna Institute for International Economic Studies (wiiw), 1, 21, 39 Visegrad four countries (V4), 151, 154, 160, 161 wiiw See Vienna Institute for International Economic Studies (wiiw) WIOD See World Input-Output Database (WIOD) women, 101, 102, 104–16 World Development Indicator (WDI), 47, 53, 77 World Input-Output Database (WIOD), 221, 225, 226, 228 world oil price, 16, 243, 264, 271, 273, 274, 278, 283, 286, 291 World Trade Organization (WTO), 156 worldwide stock plunge, 64, 72, 75, 82, 87, 88, 90n5 W wait-and-see attitude, 172, 174 WDI See World Development Indicator (WDI) welfare, 14, 205, 206, 211, 214 Western Balkan, 23, 29, 36, 41 X x-inefficiency, 128, 137, 138 Y Yukos, 260n4 .. .Economics of European Crises and Emerging Markets Peter Havlik  •  Ichiro Iwasaki Editors Economics of European Crises and Emerging Markets Editors Peter Havlik Vienna... Author(s) 2017 P Havlik, I Iwasaki (eds. ), Economics of European Crises and? ?Emerging Markets, DOI 10.1007/978-981-10-5233-0_1 2   P HAVLIK AND I IWASAKI the global credit crunch on emerging markets? ??based... P. G (Eds. ) (201 1) The impact of the global financial crisis on emerging financial markets Bingley: Emerald Brada, J.  C., & Wachtel, P (Eds. ) (201 6) Global banking crises and emerging markets