03. Journals

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These are journal articles published in World Bank journals as well as externally by World Bank authors.

Items in this collection

Now showing 1 - 10 of 16
  • Publication
    Liquidity Constraints and Firms' Linkages with Multinationals
    (World Bank, 2009-06-30) Javorcik, Beata S.; Spatareanu, Mariana
    Using a unique data set on the Czech Republic for 1994–2003, this article examines the relationship between a firm's liquidity constraints and its supply linkages with multinational corporations (MNCs). The empirical analysis indicates that Czech firms supplying multinationals are less credit constrained than are nonsuppliers. Closer inspection of the timing of the effect, however, suggests that the result is due to self-selection of less constrained firms into supplying multinationals rather than to the benefits derived from the supplying relationship. As the recent literature finds that productivity spillovers from foreign direct investment (FDI) are most likely to take place through contacts between MNCs and their local suppliers, this finding suggests that well-developed financial markets may be needed to take full advantage of the benefits associated with FDI inflows.
  • Publication
    Systemic Risk, Dollarization, and Interest Rates in Emerging Markets
    (World Bank, 2009-02-28) Bacha, Edmar L.; Holland, Márcio; Gonçalves, Fernando M.
    This study investigates the impact of systemic risks and financial dollarization on real interest rates in emerging economies. Higher systemic risks induce both higher real interest rates and increased dollarization. Using appropriate instruments for the dollarization ratio, the study overcomes the simultaneous equation problem and correctly estimates a negative coefficient for the dollarization ratio in the interest rate equation. It confirms the theoretical prediction that a strategy of "dedollarizing" the economy will raise the equilibrium domestic real interest rate if the strategy fails to address fundamental macroeconomic risks. Even so, it also finds that this effect is small, after controlling for the risks of dilution and default. The results bring to light the systemic-risk reasons for high interest rates in emerging economies—and contribute to evaluating the difficulties of dedollarization policies.
  • Publication
    Globalization and the Gender Wage Gap
    (World Bank, 2009-02-28) Oostendorp, Remco H.
    There are several theoretical reasons why globalization will have a narrowing as well as a widening effect on the gender wage gap, but little is known about the actual impact, except for some country studies. This study contributes to the literature in three respects. First, it is a large cross-country study of the impact of globalization on the gender wage gap. Second, it employs the rarely used ILO October Inquiry database, which is the most far-ranging survey of wages around the world. Third, it focuses on the within-occupation gender wage gap, an alternative to the commonly used raw and residual wage gaps as a measure of the gender wage gap. This study finds that the occupational gender wage gap tends to decrease with increasing economic development, at least in richer countries, and to decrease with trade and foreign direct investment (FDI) in richer countries, but finds little evidence that trade and FDI also reduce the occupational gender wage gap in poorer countries.
  • Publication
    Structure and Performance of the Service Sector in Transition Economies
    (2009) Fernandes, Ana M.
    This paper examines the performance of the service sector in the Eastern European transition economies during the 1997-2004 period. The performance of the service sector as a whole and of its sub-sectors is very heterogeneous within the region. Service sub-sectors that are information and communications technology producers or users and those using skilled labour more intensively exhibit the highest labour productivity growth. Our estimates show a positive and significant effect of liberalization on service labour productivity growth that is stronger for sub-sectors that are more distant from the technological frontier. Service liberalization is also shown to have a positive effect on labour productivity levels and growth of downstream manufacturing industries.
  • Publication
    Can Survey Evidence Shed Light on Spillovers from Foreign Direct Investment?
    (World Bank, 2008-09-01) Javorcik, Beata S.
    Although some economists remain skeptical of the existence of positive externalities associated with foreign direct investment (FDI), many countries spend large sums attracting foreign investors in the hope of benefiting from knowledge spillovers. Data collected through enterprise surveys conducted in the Czech Republic and Latvia suggest that the entry of multinationals affects domestic enterprises in the same industry or in upstream or downstream sectors through multiple channels. Some of these channels represent true knowledge spillovers while others have positive or negative effects on domestic producers in other ways. The relative magnitudes of these channels depend on host country conditions and the type of FDI inflows, which explains the seemingly inconsistent findings of the literature. The focus of the debate should shift from attempting to generalize about whether or not FDI leads to productivity spillovers to determining under what conditions it can do so.
  • Publication
    Governance Indicators
    (World Bank, 2008-03-01) Kaufmann, Daniel; Kraay, Aart
    Progress in measuring governance is assessed using a simple framework that distinguishes between indicators that measure formal rules and indicators that measure the practical application or outcomes of these rules. The analysis calls attention to the strengths and weaknesses of both types of indicators as well as the complementarities between them. It distinguishes between the views of experts and the results of surveys and assesses the merits of aggregate as opposed to individual governance indicators. Some simple principles are identified to guide the use and refinement of existing governance indicators and the development of future indicators. These include transparently disclosing and accounting for the margins of error in all indicators, drawing from a diversity of indicators and exploiting complementarities among them, submitting all indicators to rigorous public and academic scrutiny, and being realistic in expectations of future indicators.
  • Publication
    Beyond Borders--Reconsidering Regional Trade in Central Asia
    (2008) Grafe, Clemens; Raiser, Martin; Sakatsume, Toshiaki
    This paper investigates the barriers to trade in Central Asia. While much of the existing literature on international integration of FSU countries has focused on the quantities traded, we use relative prices to shed some light on impediments to trade. We find that the impact of borders on price variations across different locations in Central Asia is much smaller than conventionally thought. While prices vary significantly across the region, variations within one country are just as large as variations across countries. We hypothesise (although we cannot prove) that this is due to obstacles to trade, and in particular rent seeking by enforcement agencies at the numerous internal check points. The paper also confirms that in relative terms, the borders with Uzbekistan are considerably more difficult to cross than those with Kazakhstan or the Kyrgyz Republic.
  • Publication
    Returns to Education in the Economic Transition: A Systematic Assessment Using Comparable Data
    (2008) Flabbi, Luca; Paternostro, Stefano; Tiongson, Erwin R.
    This paper studies a sample of economies in transition to verify the assertion that returns to schooling increase as an economy transitions to a market environment. This claim has been difficult to assess in the past as the empirical evidence so far has covered only a few countries over short time periods. A number of studies find that returns to education increased from the "pre-transition" period to the "early transition" period; it is not clear what has happened to the skills premium through the late 1990s, or the period thereafter. We implement a more systematic analysis using data comparable across countries and over time to estimate returns to schooling in eight transition economies (Bulgaria, Czech Republic, Hungary, Latvia, Poland, Russia, Slovak Republic, and Slovenia). The analysis covers the early transition period up to 2002; in the case of Hungary, we capture the transition process more fully, beginning in the late 1980s. Compared to the existing literature, we also implement more comprehensive robustness checks on the estimated returns, although at best we offer only an incomplete solution to the problem of endogeneity. We find that the evidence of a rising trend in returns to schooling over the transition period is weak. There are, however, significant differences in returns across countries. These differentials have remained roughly constant over the last 15 years. We speculate on the likely institutional and structural factors underpinning these results.
  • Publication
    Earnings, Schooling, and Economic Reform
    (World Bank, 2007-09-30) Campos, Nauro; Jolliffe, Dean
    Earnings, Schooling, and Economic Reform: Econometric Evidence From Hungary (1986 2004) Nauro Campos and Dean Jolliffe How does the relationship between earnings and schooling change with the introduction of comprehensive economic reform? This article sheds light on this question using a unique data set and procedure to reduce sample-selection bias. The principal assumptions are that sample-selection bias was minimal in 1986 and that the decision to participate in the wage market after 1986 is correlated with age, gender, and schooling demographics. Once corrected for sample selection on observables, the increase in returns is smaller, suggesting the existence of the positive correlation between education and the decision to participate in the wage sector that was discussed above. 16 Comparing the panels shows that sample-selection bias is positive and quite large throughout the period of analysis. An advantage of the Wage and Earnings Survey design is that the sample was selected in a single stage, and thus there is no need to correct estimates of the sampling variance for any design-induced dependence. Returns to Years of Schooling, 1986 2004: Spatial and Industry Fixed-effects Estimation of Equation (1) 1986 Panel A: Selection-corrected estimates Years of schooling Gender dummy variable (male 1) Potential experience Experience squared/100 Firm size dummy (300 employees 1) Number of observations R2 Panel B: Uncorrected estimates Years of schooling Gender dummy variable (male 1) Potential experience Experience squared/100 Firm size: 300 employees Number of observations R2 1989 1992 1995 1998 Although the Wage and Earnings Survey data include no direct measures of school quality, it is possible to provide limited supporting evidence. Studies that are based on multiple survey instruments for temporal analysis face the difficult question of whether the observed change results from changes in the examined population or changes in the survey instrument. The analysis showed that the 75 percent increase in returns to a year of schooling between 1986 and 2004 is evidence that the planned economy Campos and Jolliffe 525 undervalued education and that liberalization has allowed markets to correct this.
  • Publication
    Attaching Workers through In-Kind Payments : Theory and Evidence from Russia
    (Published by Oxford University Press on behalf of the World Bank, 2005-10-05) Friebel, Guido; Guriev, Sergei
    External shocks may cause a decline in the productivity of fixed capital in certain regions of an economy. Exogenous obstacles to migration make it hard for workers in those regions to reallocate to more prosperous regions. In addition, firms may devise 'attachment' strategies to keep workers from moving out of a local labor market. When workers are compensated in kind, they find it difficult to raise the cash needed for migration. This endogenous obstacle to migration has not yet been considered in the literature. The article shows that the feasibility of attachment depends on the inherited structure of local labor markets: attachment can exist in equilibrium only if the labor market is sufficiently concentrated. Attachment is beneficial for both employers and employees but hurts the unemployed and the self-employed. An analysis of matched household-firm data from the Russian Federation corroborates the theory.