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An Empirical Analysis of the Determinants of Economic Growth in the Western Balkans

An Empirical Analysis of the Determinants of Economic Growth in the Western Balkans AbstractThe objective of this paper is to assess the main determinants and the policies that affect economic growth in the Western Balkan over the period 1994 to 2015. It employs techniques such as pooled OLS, fixed and random effects model, and Hausman-Taylor model with instrumental variables (IV). The study shows evidence of conditional convergence, indicating the need for an upward move in the steady state level. The results show that foreign direct investments, gross savings and domestic credit to the private sector have a positive effect on per capita growth. On the other hand, initial level of per capita growth, corruption, unemployment, and general government final consumption, have a negative relationship with per capita growth. The study also shows a puzzling result, that schooling is not a significant factor for growth in Western Balkans. The study also highlights the relevance of attracting more foreign direct investments and reduction in corruption. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Scientific Annals of Economics and Business de Gruyter

An Empirical Analysis of the Determinants of Economic Growth in the Western Balkans

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Publisher
de Gruyter
Copyright
© 2017
eISSN
2501-3165
DOI
10.1515/saeb-2017-0016
Publisher site
See Article on Publisher Site

Abstract

AbstractThe objective of this paper is to assess the main determinants and the policies that affect economic growth in the Western Balkan over the period 1994 to 2015. It employs techniques such as pooled OLS, fixed and random effects model, and Hausman-Taylor model with instrumental variables (IV). The study shows evidence of conditional convergence, indicating the need for an upward move in the steady state level. The results show that foreign direct investments, gross savings and domestic credit to the private sector have a positive effect on per capita growth. On the other hand, initial level of per capita growth, corruption, unemployment, and general government final consumption, have a negative relationship with per capita growth. The study also shows a puzzling result, that schooling is not a significant factor for growth in Western Balkans. The study also highlights the relevance of attracting more foreign direct investments and reduction in corruption.

Journal

Scientific Annals of Economics and Businessde Gruyter

Published: Jun 27, 2017

References