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Kaicheng Gai and Yongsheng Zhou
As an essential part of mainstream Western development economics, the trickle-down theory originates from the behavioral choices and iterations of thought on conflicts of interest…
Abstract
Purpose
As an essential part of mainstream Western development economics, the trickle-down theory originates from the behavioral choices and iterations of thought on conflicts of interest in the evolution of remuneration structure in Western countries. The fundamental flaw of the logic of this theory is that it conceals the inherent implication of social systems and the essential characteristics of social structures.
Design/methodology/approach
This paper examines the relationships among economic growth, income distribution and poverty from the perspective of social relations of production – the nature of production relations determines the nature of distribution relations and further determines the essence of trickle-down development, and ownership is the core mechanism for realizing the trickle-down effect.
Findings
The stagnation or smoothness of the trickle-down effect in different economies is essentially subject to the logic of “development for whom”, which is determined by ownership relationship.
Originality/value
To be more specific, “development for capitalists” and “development for the people” indicate two distinctly different economic growth paths. The former starts with private ownership and follows a bottom-up negative trickle-down path that inevitably leads to polarization, while the latter starts with public ownership and follows a top-down positive trickle-down path that will lead to common prosperity in the end.
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Over the past four decades, China has strived to make the market mechanism play a decisive role in resource allocation under the conditions of adhering to the basic socialist…
Abstract
Purpose
Over the past four decades, China has strived to make the market mechanism play a decisive role in resource allocation under the conditions of adhering to the basic socialist economic system. The paper aims to discuss this issue.
Design/methodology/approach
On this matter, this paper proposes a three-phase transition hypothesis for the Chinese institutional change models, namely, a de facto path, which gives potential to a successful incremental transition of a centralized country from planned economy to a market economy, lies in the incremental transitions of the institutional change models from a supply-oriented model at initial reform to a middle-proliferation model and to a demand-induced model along with the gradual establishment of exclusive property rights, thereby completing the transition to a socialist-market-economic system.
Findings
The Chinese economic model’s unique connotation is the reason why the solution to this model often baffles both the traditional political-economic logic and western mainstream institutional change theory.
Originality/value
This hypothesis corroborates that China’s unswerving practice of economic reform has provided unprecedented opportunities and challenges for the development of economic theory. The Chinese model constitutes the source of innovation for the subject of Economics with Chinese Studies.
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Peter Karpestam and Peter Palm
The authors investigate how prices of condominiums are affected by the size of the tenant-owner associations that they belong to.
Abstract
Purpose
The authors investigate how prices of condominiums are affected by the size of the tenant-owner associations that they belong to.
Design/methodology/approach
The authors use data of sold apartments in the Swedish municipality Malmö 2013–2018 and estimate hedonic price regressions. The authors also perform semi-structured interviews with three senior professionals in real estate companies.
Findings
The authors find significantly negative relationships between the prices of condominiums and the size of tenant-owner associations. Also, regression results indicate that associations should be no smaller than 6–10 apartments. The interviews support that associations should not be too small or too big. The lower and upper limit was suggested by the respondents to 40–50 and 80–150 apartments, respectively. In these ranges, economies of scale can be achieved, and residents will not lose the sense of community and responsibility.
Research limitations/implications
The authors do not prove causality. Smaller associations may have relatively exclusive common amenities, about which we lack data. The same relationships may not exist in different market conditions.
Originality/value
The authors are not aware of previous studies with the same research question. The size of tenant-owner associations may affect the price through different channels. First, several of the banks in Sweden do not always grant mortgages for condominiums that belong to small associations. Second, larger associations may have better economies of scale and more efficient property management. Third, homeowners may prefer smaller tenant-owned associations, because they may feel less anonymous and provide more influence on common amenities.
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Juan Carlos Cuestas and Merike Kukk
This paper aims to investigate the mutual dependence between housing prices and housing credit in Estonia, a country that experienced rapid debt accumulation during the 2000s and…
Abstract
Purpose
This paper aims to investigate the mutual dependence between housing prices and housing credit in Estonia, a country that experienced rapid debt accumulation during the 2000s and big swings in house prices during that period.
Design/methodology/approach
The authors use Bayesian econometric methods on data spanning 2000–2015.
Findings
The estimations show the interdependence between house prices and housing credit. More importantly, negative housing credit innovations had a stronger effect on house prices than positive ones.
Originality/value
The asymmetry in the linkage between housing credit and house prices highlights important policy implications, in that if central banks increase capital buffers during good times, they can release credit conditions during hard times to alleviate the negative spillover into house prices and the real economy.
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This study investigates the correlation between financial inclusion and legal system quality.
Abstract
Purpose
This study investigates the correlation between financial inclusion and legal system quality.
Design/methodology/approach
Pearson correlation analysis was used to assess the correlation between financial inclusion and legal system quality.
Findings
The author finds evidence for a positive correlation between financial inclusion and legal system quality. The findings suggest that improvements in legal system quality go hand in hand with improvements in the level of financial inclusion. More specifically, higher supply of ATM per 100,000 adults is correlated with stronger insolvency resolution framework among G7, European and non-European countries. Also, the number of bank branch per 100,000 adults is positively correlated with strong rule of law and legal rights in non-European countries. Also, the number of ATMs per 100,000 adults is positively correlated with strength of insolvency resolution framework and negatively correlated with the time it takes to resolve insolvency before, during and after the global financial crisis.
Originality/value
No study has explicitly analyzed the correlation between financial inclusion and legal system quality. This present study contributes to the literature by filling this research gap.
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