Contents of issue 7-8/2012
Piotr Boguszewski, Maria Lissowska - Low Reliance on Credit Among Polish Firms: A Blessing in Disguise at a Time of Financial Crisis?, summary
Marek Lubiński - The Impact of Foreign Banks on the Stability of the Host Economy, summary
Andrzej Wojtyna - Central Banks After the Crisis: Is the Direct Inflation Targeting Strategy in Need of Institutional Changes?, summary
Andrzej Cieślik, Jan Michałek, Anna Michałek - The Determinants of the Export Activity of Polish Firms, summary
Anna Krajewska - Income Disparities in Poland And Why They Are Widening, summary
Anna Barwińska-Małajowicz - Polish Labor Migrations at the Start of the Century: The Role of Migration Networks, summary
Book Review: Nouriel Roubini, Stephen Mihm, Ekonomia kryzysu
(Crisis Economics: A Crash Course in the Future of Finance; Polish edition: Ekonomia kryzysu), Wolters Kluwer Polska, Warsaw 2011, 371 pp. - reviewed by Marek Lubiński
Book Review: Grzegorz Konat, Tadeusz Smuga (eds.), Wolne i Otwarte Oprogramowanie w polskich przedsiębiorstwach
(Free and Open-Source Software in Polish Businesses), Dom Wydawniczy ELIPSA, Warsaw 2011, 246 pp. - reviewed by Andrzej Muszyński
Book Review: Jędrzej Chumiński (ed.), Modernizacje czy pozorna modernizacja. Społeczno-ekonomiczny bilans PRL 1944-1989
(Modernization or Pretend Modernization? The Socioeconomic Track Record of the Communist Era in Poland, 1944-1989), GAJT Wydawnictwo 1991, Wrocław 2010, 488 pp. - reviewed by Andrzej PieczewskiCONFERENCES
3rd Polish Law & Economics Conference - Alina Niemiro, Magdalena Smyk
Piotr Boguszewski, Maria Lissowska - Low Reliance on Credit Among Polish Firms: A Blessing in Disguise at a Time of Financial Crisis?
The article explores the extraordinary resilience of the Polish economy to the implications of the global financial crisis despite Poland’s strong integration with other economies. The authors hypothesize that one of the key reasons for this resilience is a low reliance on credit among Polish firms and their low use of financial leverage.
To validate their hypothesis, the authors use both macroeconomic data (reflecting the role of credit in company balance sheets) and data from surveys carried out annually on a representative sample of companies by Poland’s Central Statistical Office (GUS) and the country’s central bank, the National Bank of Poland (NBP).
The research shows that many firms decide against using credit at all if possible. Interestingly, the authors say, not only companies with a poor financial standing and those whose loan applications have been turned down follow this policy. Generally, Polish companies have been doing relatively well financially in recent years, the authors note, so their limited use of leverage is the result of a conscious choice rather than necessity, especially in the case of companies in relatively good shape. This is in line with the “pecking order” theory under which companies tend to obtain financing from sources that are readily available and then steadily move on to sources that may be more difficult to utilize. This means that a company is likely to make use of its internal resources first. Such a model of financing results in the relative resistance of Polish firms to any periodic tightening in bank lending policies and, consequently, in their greater resilience to the financial crisis, Boguszewski and Lissowska say.Keywords
: post-transition economies, financial crisis, leverageJEL classification codes
: G01, G32, P34Article
Marek Lubiński - The Impact of Foreign Banks on the Stability of the Host Economy
The article attempts to answer the question whether, to what extent and by what mechanisms foreign banks can influence the macroeconomic and financial stability of the host economy. This problem has been widely analyzed in the literature, with researchers highlighting both the opportunities and risks related to the presence of foreign banks. Critics argue that foreign banks tend to discriminate against local firms, especially small and medium-sized ones. Foreign-owned banks are also criticized for draining funds from the local market, especially at a time of a downturn in the home economy, and for siphoning off foreign exchange reserves. These arguments are neither confirmed nor disproved by economic theory and empirical studies, Lubiński says. This testifies to the complexity of the issue and calls for caution in voicing opinionated views, the author adds.Keywords
: foreign banks, economic stability, pro-cyclicality of creditJEL classification codes
: E44, F23, F44Article
Andrzej Wojtyna - Central Banks After the Crisis: Is the Direct Inflation Targeting Strategy in Need of Institutional Changes?
The article looks at whether and to what extent criticism is justified with regard to monetary policy in Poland in the context of the ongoing debate on the causes, course and implications of the global financial and economic crisis. Another aim is to determine to what extent the proposed adjustments in monetary policy concern the institutional aspect of the direct inflation targeting strategy. The author discusses proposals to increase the inflation target and replace the direct inflation targeting strategy with the so-called price-level targeting strategy or the nominal GDP targeting strategy. The general conclusion from the article is that, until broader dilemmas are resolved concerning the optimal role of supervisory, regulatory and macro-prudential functions in the institutional structure of the economy, any attempts at replacing the direct inflation targeting strategy with alternative strategies would be uncalled-for, the author says, regardless of the purported advantages of these alternative strategies highlighted by their advocates.Keywords
: central banks, monetary policy, direct inflation targeting strategy, price-level targeting, nominal GDP targeting, financial crisisJEL classification codes
: E52, E58Article
Andrzej Cieślik, Jan Michałek, Anna Michałek - The Determinants of the Export Activity of Polish Firms
The main purpose of the article is to empirically validate a hypothesis derived from the so-called Melitz (2003) model that there is a positive relationship between the productivity of companies and their export propensity, using firm-level data for Poland. In addition, the study attempts to endogenize the productivity of firms by referring to their spending on research and development (R & R), use of human capital and new technology. The empirical results obtained by the authors confirmed the predictions of the Melitz (2003) model regarding the presence of a positive relationship between the productivity of companies and the probability of exports in the case of Polish companies. In addition, the attempt to endogenize the productivity of companies showed that the probability of exports can be influenced by the level of expenditure on R&D and the use of the internet, while the proportion of skilled workers in employment did not prove to be statistically significant. On the other hand, the size of the firm was an important determinant of export activity. The larger the firm the greater is the probability of it exporting its products and services, the authors say. The study also showed that the internationalization of firms, measured with the use of foreign technology licenses and foreign ownership, is positively correlated with the probability of exporting. The authors’ results are thus consistent with those obtained previously in other large European Union countries.Keywords
: export activity, Melitz model, internationalization, heterogeneity, PolandJEL classification codes
: F14, D22Article
Anna Krajewska - Income Disparities in Poland And Why They Are Widening
The article examines the scope of income disparities in Poland during the country’s transition from central planning to a market economy, in comparison with other European Union economies. The author also discusses the multiple determinants of the level of income inequalities and the economic effects of this diversification. To achieve this goal, the author uses statistics from Poland’s Central Statistical Office (GUS) and the EU statistics office, Eurostat. Krajewska also uses the results of Polish empirical studies on income diversification.
Wherever data is available, problems related to Poland are analyzed in comparison with statistical data for other EU economies.
The market reforms in Poland have led to an increase in income disparities measured with the Gini coefficient, the poverty rate, and the at-risk-of-poverty rate, the author notes.
As the country’s socioeconomic system changed, remuneration, employment and tax policies contributed to the growth of income inequalities. Other factors contributing to the increase in income inequalities included a weakening in the redistributive functions of public spending and corporate social services. Further reasons for the deepening of inequalities can be looked for in the way in which state-owned enterprises have been privatized and in the expansion of the shadow economy and corruption.
The article ends with a conclusion that Poland’s membership of the European Union and the current crisis should encourage decision makers to adjust economic and social policies and take prompt action to reduce income inequalities in the country.Keywords
: income disparities, social implications, transition, inequalityJEL classification codes
: H24, H55, D31, D63Article
Anna Barwińska-Małajowicz - Polish Labor Migrations at the Start of the Century: The Role of Migration Networks
The article focuses on migration networks and labor migrations by Polish workers seeking employment abroad. The article refers to key theories describing migration processes and analyzing network resources and functions. The authors also evaluate the meaning of trust as a positive factor for migration networks as well as the role of “bridging” and “bonding” social capital and formal and informal networks and their influence on migration processes. The theoretical part of the article is based on the related literature. Migration capital and migration networks are discussed on the basis of existing empirical research and the author’s own research carried out among Polish and German students and college graduates in the partner cities of Rzeszów and Bielefeld in 2010.
Two conclusions deserve particular attention, the author says. First, it is difficult to thoroughly explain the significance and level of social capital and changes in the function of migration networks. After Poland joined the EU, the significance of migration networks, both formal and informal, increased. Second, the analysis confirms that substantial changes are taking place in migration processes. Due to their complexity and interdisciplinary nature, these changes require further examination, Barwińska-Małajowicz concludes.Keywords
: labor migration, social migration capital, bonding social capital, bridging social capital, migration networksJEL classification codes
: F22, J61Article