Ralitza Dimova

Remittances and Chain Migration: Longitudinal Evidence from Bosnia and Herzegovina

Abstract Most of the literature on remittances focuses on their implications for the welfare of family members in the country of origin and disregards their role as facilitator of chain migration. We address this issue with the use of longitudinal data from Bosnia and Herzegovina, one of the primary exporters of migrants and recipients of remittances in the world. We find that remittances have a significant positive impact on the migration prospects of their recipients. Better-endowed people are most likely to migrate, which highlights a potential negative implication of migration and remittances.

Migration, Transfers and Child Labor

We examine agricultural child labor in the context of emigration, transfers and the ability to hire outside labor. We start by developing a theoretical background and show how hiring labor from outside the household and transfers to the household might induce a reduction in childrens working hours. Analysis using Living Standards Measurement Survey (LSMS) data on the Kagera region in Tanzania lend support to the hypothesis that both emigration and remittances reduce child labor.

Does Institutional Quality Affect Firm Performance? Insights from a Semiparametric Approach

Using a novel modeling approach, and cross-country firm level data for the textiles industry, we examine the impact of institutional quality on firm performance. Our methodology allows us to estimate the marginal impact of institutional quality on productivity of each firm. Our results bring into question conventional wisdom about the desirable characteristics of market institutions, which is based on empirical evidence about the impact of institutional quality on the average firm. We demonstrate, for example, that once both the direct impact of a change in institutional quality on total factor productivity and the indirect impact through changes in efficiency of use of factor inputs are taken into account, an increase in labor market rigidity may have a positive impact on firm output, at least for some firms. We also demonstrate that there are significant intra-country variations in the marginal impact of institutional quality, such that the characteristics of “winners” and “losers” will have to be taken into account before policy is introduced to change institutional quality in any direction.

The impact of labour reallocation and competitive pressure on TFP growth: firm-level evidence from crisis and transition ridden Bulgaria

This article uses the experiment of a macro‐financial crisis and radical liberalization in Bulgaria to explore the impact of labour reallocation and competitive pressure on Total Factor Productivity (TFP) growth in the manufacturing sector. Our results indicate that labour reallocated from less efficient to more efficient firms in virtually all industries but the influence of other within industry characteristics on TFP growth was significantly higher than the impact of between industry characteristics. Furthermore, while increased competitive pressure had a positive impact on TFP growth among relative laggards in the respective industries, this impact was more than overwhelmed by the inability of industrial leaders to leapfrog their competitors. This result is inconsistent with evidence from developed industrialized economies, but similar to that of less developed countries marked by credit crunch and institutional failure. It has potentially important policy implications.

The Impact of Structural Reforms on Employment Growth and Labour Productivity: Evidence from Bulgaria and Romania

Using firm-level data from Bulgaria and Romania, this paper addresses a lacuna in the transition literature, namely, the link of firm-level employment turnover with firm-level growth in labour productivity. The results suggest that while net job creation at the firm level was affected by privatization in Bulgaria, privatization in Romania did not have any effect on firm-level employment growth. Further, Olley-Pakes (1996) decomposition indicates that in Bulgaria, over time, resources moved from less productive firms to more productive firms in almost all industries, but that in Romania such a phenomenon was observed in less than half of the industries. At the same time, the Grilliches-Regev (1995) decomposition indicates that in both these countries mobility of labour across firms, i.e., the process of job creation and job destruction at the firm level, contributed more to productivity changes than did other firm-level characteristics and industry-level factors affecting productivity. Finally, we find that the rate of employment changes in Bulgarian firms has a significant impact on the countrys firm-level productivity changes. Regressions using Romania data, however, do not provide any support for this observation.

Does Human Capital Endowment of Foreign Direct Investment Recipient Countries Really Matter? Evidence from Cross‐Country Firm Level Data

The stylized literature on foreign direct investment (FDI) suggests that developing countries should invest in the human capital of their labor force in order to attract FDI. However, if educational quality in developing country is uncertain such that formal education is a noisy signal of human capital, it might be rational for multinational enterprises to focus more on job-specific training than on formal education of the labor force. Using cross-country data from the textiles and garments industry, we demonstrate that training indeed has a greater impact on firm efficiency in developing countries than formal education of the workforce.

Monopolistic Wages or Efficient Contracts?: What Determined the Wage-Employment Bargain in Post-Privatization Bulgaria?

Using a representative sample of medium and large firms, this paper explores the process of employment and wage bill determination in the Bulgarian manufacturing sector. The results suggest that, during 1997-2001, the labour market behaviour of these firms was consistent with weakly efficient contracting and employment elasticity with respect to both sales and wages similar to that of the fastest-reforming Central and Eastern Europe economies. Although a case study using data on sell-off deals by the Privatization Agency suggests that the largest firms selected for cash privatization may have exhibited higher preference for wage enhancement than employment protection, the results do not bring into question the efficient performance of the post-crisis labour market in Bulgaria. Importantly, the study rejects the hypothesis that either persistent government stakes or mass privatization may have led to efficiency deterioration. Copyright (c) The European Bank for Reconstruction and Development, 2006.

Off-Farm Labor Supply and Correlated Shocks: New Theoretical Insights and Evidence from Malawi

We offer new conceptual insights into the understanding of occupational choice in uncertain rural environments, with a focus on its ex ante (before a shock) and ex post (after a shock) consequences for farmers belonging to different portions of the asset distribution. We model theoretically the choice between relatively safe subsistence farming, higher return but higher risk cash crop activities, and off-farm labor—conditional on preexisting asset allocation—and look at the general equilibrium labor market implications of correlated shocks. Our results, backed by evidence from Malawi, challenge some stylized perceptions in the literature on consumption smoothing via off-farm labor supply.

The Impact of Food and Economic Crises on Diet and Nutrition

Abstract The conventional view is that inelastic demand makes consumption of staple foods resilient to major price and income shocks. We explore the dietary and nutritional implications of a major shock in Bulgaria in the mid-1990s with data from before, during and after the shock. While demand for foodstuffs may remain relatively unchanging in environments characterised by stable food prices and incomes, economic crises and significant price spikes appeared to induce dramatic changes in price and income demand elasticities. We therefore suggest the use of caution in basing policy prescriptions on randomly available pre-crisis simulations.

How family firms differ. Structure, strategy, governance and performance

Family firms account for a large proportion of firms in most countries. In industrialised countries of North America and Western Europe, they generally account for a large share of small and medium sized enterprises. In emerging market economies such as India, they also account for the majority of the large firms. Their importance for factors such as employment creation notwithstanding, relative to the widely held Anglo-Saxon firms, which are ubiquitous in the economics, finance and management literatures, family firms have historically received much less attention from scholars of these disciplines. However, in part owing to increased focus on emerging markets, there is a growing literature on family firms. In How Family Firms Differ, the authors explore important aspects of family firms, drawing on the existing literature and their own research on these firms.