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Do Transition Countries Converge towards the European Union?

Do Transition Countries Converge towards the European Union? AbstractThe aim of this paper is to analyze if the Western Balkan and Eastern Partnership countries converge towards the twenty-eight members of the European Union. The relationships between the selected macroeconomic variables and per capita GDP growth rate are econometrically tested to support this research. The analyzed period is 2004–2017, with two sub-periods: 2004–2008 and 2009–2013. The subdivision is made to test whether the recent financial crisis affected the absolute and conditional convergence process in the analyzed group of countries. The empirical findings support the economic convergence hypothesis. The results show that the recent financial crisis negatively affected the absolute and conditional convergence process, when economic variables are included in the analysis. The negative effects of the crisis on conditional convergence with economic and socio-political variables are not identified. The poorer countries in the analyzed group should do more to attract investment and open their economies, as gross fixed capital formation and economic openness have a positive impact on per capita growth, and keep low inflation or stabilize it, while general government debt and unemployment should be decreased in the examined sample of countries. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Baltic Journal of European Studies de Gruyter

Do Transition Countries Converge towards the European Union?

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Publisher
de Gruyter
Copyright
© 2019 Dzenita Siljak et al., published by Sciendo
ISSN
2228-0596
eISSN
2228-0596
DOI
10.1515/bjes-2019-0007
Publisher site
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Abstract

AbstractThe aim of this paper is to analyze if the Western Balkan and Eastern Partnership countries converge towards the twenty-eight members of the European Union. The relationships between the selected macroeconomic variables and per capita GDP growth rate are econometrically tested to support this research. The analyzed period is 2004–2017, with two sub-periods: 2004–2008 and 2009–2013. The subdivision is made to test whether the recent financial crisis affected the absolute and conditional convergence process in the analyzed group of countries. The empirical findings support the economic convergence hypothesis. The results show that the recent financial crisis negatively affected the absolute and conditional convergence process, when economic variables are included in the analysis. The negative effects of the crisis on conditional convergence with economic and socio-political variables are not identified. The poorer countries in the analyzed group should do more to attract investment and open their economies, as gross fixed capital formation and economic openness have a positive impact on per capita growth, and keep low inflation or stabilize it, while general government debt and unemployment should be decreased in the examined sample of countries.

Journal

Baltic Journal of European Studies – de Gruyter

Published: Jun 1, 2019

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