1,720,967 research outputs found
Financial integration and financial development : does financial integration matter?
Get PDFThe aim of this paper is to investigate the effects of financial development and financial integration on economic growth in 89 developed and countries in transition, from the period of 1996 to 2007. We have focused in modeling threshold effects regarding financial markets depth as measure of economic absorption capacity of the countries. The results show that both financial development and integration have positive effect on economic growth in countries in transition, which is not case for developed countries. However, the effects are highly non-linear. First, the effect of development domestic financial markets on growth is higher in less developed countries. The effect may vanish as financial development reaches the level of the developed economies. Secondly, financial integration may not have a positive effect on growth, as its effects depend on the development of domestic financial markets, macroeconomic stability, and quality of institutions.peer-reviewe
Exchange Rate Pass-Through in Transition Economies: The Case of the Republic of Macedonia
Get PDFThis paper investigates the relative costs and benefits associated with introducing a different exchange rate regime in the Republic of Macedonia. In this finding, all econometrics results, using different methodologies (SVAR and VECM), show that introducing a different strategy of the exchange rate targeting in order to promote rapid economic growth could easy disturb macroeconomic stability (after having achieved it at a substantial cost) without any significant economic benefits. In the long term, the coefficient of exchange rate reveals that a one percent change in the exchange rate will generate an increase in the prices level of 0.52 percent, indicating that 52 percent of changes in the exchange rate feed into the prices level. The investigation suggests that introducing a different strategy of the exchange rate regime is likely to incur more costs than benefits.http://deepblue.lib.umich.edu/bitstream/2027.42/133029/1/wp1014.pd
Optimal strategy of monetary and fiscal policy in function of maintaining macroeconomics stability in the Republic of Macedonia
No full textODNOS IZMEĐU EMISIJE CO2 I BDP-a PO GLAVI STANOVNIKA, POTROŠNJE ENERGIJE I INDUSTRIJSKE PROIZVODNJE U SLUČAJU ZEMALJA ZAPADNOG BALKANA
No full textPurpose: This research investigates the relationship among CO2 emission, GDP per capita, energy consumption and industrial production for the Western Balkan countries during the period 2011 – 2022. Design/methodology/approach: The model consists of CO2 emission as a dependent variable, and GDP per capita, energy consumption and industrial production as independent variables. The analysis includes Ordinary Least Square (OLS), Fixed Effects (FE), Random Effects (RE), and Hausman–Taylor IV model. Findings: Results reveal a negative relationship between CO2 emissions and GDP per capita, and a positive relationship with energy consumption, while industrial production is not significant at all. Practical implications: Knowing the relationship between CO2 emissions and GDP per capita, energy consumption, and industrial production could help in projecting the policies that help protect the environment.Svrha: Ovo se istraživanje bavi odnosom između emisije CO2 i BDP-a po glavi stanovnika, potrošnje energije i industrijske proizvodnje za zemlje Zapadnog Balkana u razdoblju 2011. – 2022. Izrada/metodologija/pristup: Model se sastoji od emisije CO2 kao zavisne varijable te BDP-a po glavi stanovnika, potrošnje energije i industrijske proizvodnje kao nezavisnih varijabli. Analiza uključuje obični najmanji kvadrat (OLS), fiksne učinke (FE), slučajne učinke (RE) i Hausman–Taylor IV model. Nalazi: Rezultati pokazuju negativan odnos između emisija CO2 i BDP-a po glavi stanovnika te pozitivan odnos s potrošnjom energije, dok industrijska proizvodnja uopće nije značajna. Praktične implikacije: Poznavanje odnosa između emisija CO2 i BDP-a po glavi stanovnika, potrošnje energije i industrijske proizvodnje moglo bi pomoći u planiranju politika koje pomažu zaštiti okoliša
Does the Remittance Generate Economic Growth in the South East European Countries?
Get PDFThis paper aims to examine the causal relationships between remittances and economic growth in 10 Southeast European developing countries, including Greece as a developed country. The research uses various econometric techniques, such as OLS, fixed-effects model, random-effects model, and Hausman-Taylor IV estimators. The regression results have shown up that there is a positive link between remittances and economic growth in 10 Southeastern European countries. Findings support the hypothesis that the remittance inflows generate economic growth in 10 Southeast European countries. Despite this, a positive relationship is also revealed between foreign direct investment, final consumption expenditure, gross capital formation, exports, and economic growth. The only exchange rate does not have a causal link on economic growth, meaning that the exchange rate does not affect economic growth. Since the remittances have a positive effect on the economic growth, and they represent a large source of external financing in Southeast European countries, the government should implement the right policies to reflect on encouraging and channelizing the remittance inflows for investment purposes, which in turn lead to a reduction of migration and unemployment. The study is original and makes effort to promote the role and significance of remittance inflows in the Southeast European developing countries, including Greece. The findings of the study might be valuable for Governments of these countries and other policymakers to channels remittances for investment purposes
Determinants of foreign direct investment in western Balkans
No full textPurpose: This study aims to establish the correlation between diverse economic and institutional factors and inward foreign direct investments (FDI) in Western Balkans countries. The analysis examines into the impact of market size, inflation rate, bank nonperforming loans, control of corruption, and rule of law on the relationship with inwards FDI. Design/methodology/approach: Ordinary least squares, fixed effects, random effects and Hausman Taylor IV models were applied to a balanced panel dataset comprising six western Balkans countries over the period 2008-2022. Our results provide evidence that past levels of FDI have a significant and positive impact on current FDI levels, even after accounting for endogeneity using instrumental variables. Findings: Our results provide evidence that past levels of FDI have a significant and positive impact on current FDI levels, even after accounting for endogeneity using instrumental variables. The coefficient for GDP per capita is negative, suggesting inverse correlation between GDP per capita and FDI. This relationship shows some marginal significance, indicating the possibility for further, more detailed studies to provide clearer insights in the future. Our findings suggest that inflation exhibits a positive and statistically significant relationship at the 0.01 level, implying that increased inflation rates correspond to higher levels of FDI. Over the course of our study period, the average inflation rate held at 3%. The results concerning the rule of law reveal a positive association with FDI. However, the coefficient for this variable is marginally significant (0.111), implying that stronger rule of law institutions may potentially attract higher levels of FDI. The results relating to control of corruption and bank nonperforming loans show no statistical significance. Research limitations/implications: While this study offers valuable insights into the factors influencing inward FDI in the Western Balkans, there are several limitations worth acknowledging. First, the analysis relies on a balanced panel dataset, which may not account for country-specific shocks or extreme events that could have affected FDI inflows during the study period. Another limitation is the reliance on certain macroeconomic and institutional indicators (GDP per capita, inflation, rule of law, corruption, and nonperforming loans), which may not encompass all the relevant factors influencing FDI. Future research could incorporate additional variables such as political stability, tax policies, or trade openness to provide a more comprehensive understanding of FDI drivers. Originality/value: This study offers a unique contribution to the literature on foreign direct investment (FDI) by specifically examining the relationship between FDI and a diverse set of economic and institutional factors within the context of the Western Balkans. While much of the existing research on FDI tends to focus on more developed economies or regions, this paper highlights the challenges and opportunities faced by transitional economies in Southeast Europe
DOES FEMALE EDUCATION GENERATE ECONOMIC GROWTH? AN EMPIRICAL ANALYSIS OF WESTERN BALKAN COUNTRIES
Get PDFThis paper investigates the relationship between female education and economic growth in Western Balkan countries during the period 2000-2019. The motive behind choosing Western Balkan countries was because there is insufficient research that has been made in this field of study; hence, this research assists to expand the issue of this topic. By using GDP as dependent variable, the paper addresses the question whether female education generates or not economic growth. The techniques applied for this study are OLS, fixed and random effects, and Hausman-Taylor model IVs. The findings show a positive relationship between GDP per capita, female labor participation, school enrollment primary, and literacy rate. On the other hand, there exists a negative relationship with fertility rate, while the school enrollment tertiary is statistically insignificant. This paper brings evidence that female education generates more economic growth in Western Balkan countries. Therefore, the Government of the Western Balkans should take into consideration to invest more on education of the woman in those countries. These in turn will lead to higher economic growth.
JEL Classification: I24, J16, J21, O1, O57
Determinants of Financing Obstacles of SMEs in Western Balkans
Get PDFThe main aim of this paper is to investigate the determinants of the financing obstacles and the effect of financial obstacles on the Small and Medium Enterprises (SME) growth in the Western Balkan region. The study employs OLS and probit models and using data from the Business Environment and Enterprise Survey (BEEPS V), conducted by EBRD and World Bank in the period 2012 – 2016. The econometric models used to achieve the main aim of this paper include the OLS and probit regression. From the results of the OLS, the study concludes that revealing the financial obstacles is an important determinant of SMEs' growth in the Western Balkan countries. Further, among the firm-specific determinants of the financial constraints of SMEs, the study concludes that large firms face fewer financing obstacles than small firms, while older firms are more financially constrained than new enterprises. In addition, in the context of the ownership, findings reveal that SMEs with high foreign ownership of the firms, report fewer financial constraints. Given the presented results, it is important to emphasize the vital role of SMEs as the main employer in the Western Balkans region, emphasizing the need for policymakers to address possible reforms in achieving better regulation, institutional development, and governance efficiency, accounting standards, business, and better credit environment
THRESHOLD EFFECTS OF VALUE-ADDED TAX ON THE ECONOMIC GROWTH IN THE REPUBLIC OF KOSOVO
No full textThe paper examined the relationship between VAT and economic growth in the Republic of Kosovo between 2000 and 2022. A technique of threshold Vector Autoregressive (TVAR) was employed, the findings of the study using TVAR analysis unveiled a statistically significant positive relationship between VAT and economic growth. TVAR model indicates that the VAT threshold is 16 percent and any level above 16 percent impedes or negatively affects economic growth in the Republic of Kosovo and any level below 16 percent impedes positively affecting economic growth. Our results suggest that the Kosovar economy should pay attention to its fiscal policy. It is therefore recommended to foster collaboration among government agencies, tax authorities, businesses, and international organizations to develop and implement effective VAT policie
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