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This paper examines the importance of trade openness for attracting Foreign Direct Investment (FDI) inflows, using a sample of 36 developing economies for the period 1990-2008. It provides a direct test of causality between FDI inflows, trade openness and other key variables in developing regions of the world: Latin America, Asia, Africa, CIS (Commonwealth of Independent States) and Eastern Europe. Trade openness is measured by using eight different indicators. The main empirical findings of the panel regression analysis reveal that in the long run, trade openness contributes positively to the inflow of FDI in developing economies.

This paper examines two aspects related to private equity investments in Europe. First, we will present the evolution of private equity investments across European countries during the last crisis. Second, the paper will analyse and identify the main determinants of the European private equity market, using an empirical panel analysis. The empirical model includes many of the determinants already tested in previous studies (GDP growth, Market Capitalization, Research and Development Expenditures, Interest rates, etc.) and also new variables such as productivity and corruption index which we consider important factors in explaining the evolution of private equity investments in Europe. The present research paper follows the equilibrium model of private equity investments (Gompers and Lerner 1998, Jeng and Wells 2000, Romain and de La Potteria 2004, Félix 2007). We will use aggregated data from European private equity market during 2000-2013, as well as macroeconomic data, in order to estimate a panel data model with fixed and random effects. This paper will also run the Hausman specification test in order to compare the consistency of fixed effects models and random effects models. Our results confirm existent hypotheses regarding the importance of some determinants on the evolution of private equity investments in Europe. However, in the context of the last crisis new factors emerged as important for the private equity market in Europe such as productivity or corruption. [ABSTRACT FROM AUTHOR]

This article presents an overview of this issue in relation to the periodical's twentieth anniversary. The author discusses the organization of a anniversary panel in London, England to mark the occasion, and to review articles from the history of the periodical focusing on economic-policy development during these 20 years. The article also provides an introduction to other articles presented in this issue, including one concerning the evolution of exchange-rate management, the effects of government debts on interest rates, and higher education reform in Europe.

An introduction is presented in which the editor discusses various reports within the issue on topics including the business environment in the Western Balkan countries, the role of small and medium enterprises (SMEs) in the European economic development and the innovation activities in Macedonia.

This paper considers future European growth prospects in the light of a new productivity paradox, namely, the co-existence of a productivity slowdown and exciting new technologies. Several potential explanations are reviewed. It is argued that while some are unpersuasive it is too soon to be sure which carry the most weight. This has the implication that while the slowdown is real, it is not necessarily permanent. A key, hotly disputed issue is the future economic impact of technological progress on which forecasts differ dramatically. Supply-side reform could have a strong positive effect, but this is not likely to happen. [ABSTRACT FROM AUTHOR]

Why do officials in some countries favor entrenched contractors while others assign public contracts more impartially? According to the research, such variation responds to differences in political institutions, economic development and historical preconditions. This paper instead emphasizes the interplay between politics and bureaucracy. It suggests that corruption risks are minimized when the two groups involved in decision-making on public contracts--politicians and bureaucrats-- have known different interests. This is institutionalized when politicians are accountable to the electorate, while bureaucrats are accountable to their peers, and not to politicians. We test this hypothesis with a novel experience-based measure of career incentives in the public sector-- utilizing a survey with over 85,000 individuals in 212 European regions--and a new objective corruption- risk measure including over 1.4 million procurement contracts. Both show a remarkable subnational variation across Europe. The study finds corruption risks significantly lower where bureaucrats' careers do not depend on political connections. [ABSTRACT FROM AUTHOR]

The aim of the paper is to establish the future intervention priorities in building a new programme that would target the economic development in the research area. The used methodology included an adapted A'WOT analysis - an initial SWOT analysis and a prioritization of the items through an expert questionnaire. In the present paper we analyze the experts' opinions and the areas where intervention is needed for the optimum strategies for the 2014-2020 financial frame. These should rely on the strengths in the Guidelines for Applicants, the rules for projects implementation and the institutional system, it should consider changes on the weak points concerning the programme objectives, the Guidelines for Applicants and the beneficiaries consultations, it should make use of opportunities coming from the crossborder status, European Union frame and economic opportunities and overcome the differences coming from crossborder status, membership of two different supranational structures and the economic gaps. [ABSTRACT FROM AUTHOR]

Copyright of Industry / Industrija is the property of Economics Institute and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

In this paper we analyse the impact of financial liberalization and reforms on the banking performance in 17 countries from CEE for the period 2004–2008 using a two-stage empirical model that involves estimating bank performance in the first stage and assessing its determinants in the second one. From our analysis it results that banks from CEE countries with higher level of liberalization and openness are able to increase cost efficiency and eventually to offer cheaper services to clients. Banks from non-member EU countries are less cost efficient but experienced much higher total productivity growth level, and large sized banks are much more cost efficient than medium and small banks, while small sized banks show the highest growth in terms of productivity. [ABSTRACT FROM AUTHOR]

In this paper we take a critical look at current European regional policies. First, we document the motivation for such policies, that is, the large income disparities across the regions of the EU15. Large disparities are certainly present. Second, we illustrate the various instruments adopted and discuss their underpinnings in established economic theories. Next, we look at available data, searching for three kinds of evidence: (1) if disparities are either growing or decreasing, we conclude they are neither; (2) which are the major factors explaining such disparities and, in particular, if they are the factors predicted by the economic models adopted by the Commission to justify current policies, we conclude this is most certainly not the case; (3) if there are clear signs that EU policies, as opposed to other social and economic factors, are actually reducing such disparities, we cannot find any clear sign of such desired impact. Our conclusion is that regional and structural policies serve mostly a redistributional purpose, motivated by the nature .of the political equilibria upon which the European Union is built. They have little relationship with fostering economic growth. This casts a serious doubt on their social value and, furthermore, strongly questions extending such policies to future members of the European Union. A successful EU enlargement, in our view, calls for an immediate and drastic revision of regional economic policies. [ABSTRACT FROM AUTHOR]

The insurance industry plays an important role for European economic stability and the threats and opportunities it faces should be carefully determined. In this paper we highlight the main challenges by using a Political, Economic, Social and Technological (PEST) analysis. This work applies conventional actuarial thought on this area by focusing strictly on the European sector. [ABSTRACT FROM AUTHOR]

Global competition has evolved from the competition between companies to the competition between regions. In this context, clusters play an important role as competences' concentration poles. The cluster initiatives represent concentrated efforts to increase the wealth and competitiveness in a certain region including companies, local administration, research and training institutions. This paper proposes the analysis of the European clusters' role in ensuring the regional development. Resulted conclusions emphasize both the positive results of clusters' existence, as well as the fields where improvements can be made in order to increase the clusters' impact on the economic development. [ABSTRACT FROM AUTHOR]

Standard economic growth models generally consider different factors of production such as land, capital, labour, technology and human capital. These are common in theoretical models and empirical applications but more evidence is still needed for their long-term regional evolution. Therefore, this paper traces the evolution of specific aspects of these factors in the European regions and cities by means of different proxies. The data have been collected and calculated from a wide range of diverse historical and spatial data bases. A particular feature is the definition of the European regions according to the NUTS classification by the European Union. Thus, the paper gives a rough outline of some of the most important long-term regional tendencies that should be taken into account in research directed to past and recent time periods. [ABSTRACT FROM AUTHOR]

Copyright of Business: Theory & Practice is the property of Vilnius Gediminas Technical University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper attempts to show that convergence or divergence in the European Union (EU) will be influenced by developments in the periphery of Europe to a considerable extent, although the core situation cannot be ignored. In essence, therefore, it is the relationship between core and periphery that will determine the future of the EU. The main thesis of this study is that the EU economic position is such that divergence is more likely to occur than convergence. The focus of the analysis is what has come to be known as ‘Peripheral Fordism’, which enables us lo suggest that periphery prospects for economic development are predicated upon substantial expansion of their industrial sectors based on indigenous forces. It is therefore the existing institutional structure within the EU that poses obstacles to convergence. [ABSTRACT FROM AUTHOR]

Sustainable development has become one of the burning issues on a global, local and individual levels as a result of climate changes, pollution, rapid development and changes in the global information, economic, industrial and business sectors and value systems. In this sense, education for sustainable development, as part of lifelong learning, has become one of the most important strategic and educational policy issues in Serbia. The aim of this paper is to highlight the potential of geography as a school subject, with special reference to the role of the subject matter of geoheritage and geodiversity in education for sustainable development. The aim of pointing the benefits of integrated and out-of-classroom approaches in teaching geography, which favour an active, experiential and exploratory approach to learning about geodiversity and geoheritage, is that students can acquire competencies in sustainable development. As outcomes of geography classes, competencies also represent a basis for raising awareness and increasing accountability and responsibility in individuals for preserving geoheritage and geodiversity as part of the Serbian national treasure. [ABSTRACT FROM AUTHOR]

This paper analyzes the relationship between economic performance and institutional development in several Central and Eastern European Countries. Our meta-argument is that the structural transformations at the levels of the quantitative variables and mechanisms are only a part of the transition processes. In order to view the big picture, the qualitative aspects related to public policies and institutions should also be considered. We test the linkages between the quality of public policies and institutions for seven Central and Eastern European countries (Bulgaria, Poland, Czech Republic, Hungary, Slovenia, Slovakia and Romania) for a time span between 2001 and 2011. These countries are displaying a certain degree of heterogeneity in terms of economic performances and the design and implementation of public policies. We use for our analysis the World Bank indicators from World Wide Governance Indicators. In order to deal with the potential reverse causality issues, we employ Generalized Method of Moments Framework (GMM) by using the lagged variables as instruments. The impact of governance indicators is statistically significant even if we use several control variables: exchange rate, unemployment, current account deficit, taxes burden and price stability. The corresponding Sargan and Arellano-Bond test for zero autocorrelation in first-differenced errors tests shows that the results display a corresponding robustness. The main policy implications for our findings may be synthesized by the thesis, according to which a proper design of public policies, a high degree of their effectiveness and accountability, a stable social and political environment together with the rule of law and efficient anticorruption mechanisms are critical determinants of economic growth even in emerging markets. The impact of the government "size , economic structure and markets" mechanisms , monetary policy and price stability , ownership structure and legal rights , international exchange, freedom of exchange in capital and financial markets on economic growth is far from being negligible. Hence, the Central and Eastern European countries joining the EU should implement policies strength their institutions and to improve the quality of public decisions. [ABSTRACT FROM AUTHOR]

Creative industries clearly proved their potential for economic growth in the period before the crisis in Europe as well as across the world. However, the crisis has significantly changed the way of doing business and many sectors have been affected - some businesses managed to survive while others have been forced to close down. The present paper aims to examine whether creative industries have undergone a downturn as a result of the economic crisis or they managed to preserve their revitalising effect on countries, regions and cities. [ABSTRACT FROM AUTHOR]

Shopping centers play an important role in improving the quality of life in town and city centers around the world. Often seen as drivers of local economies, shopping centers are necessary to maintain economic growth and a sense of community, offering employment, and providing a better quality of life. In last decades in all capital cities and large cities in Central and Southeastern Europe numerous shopping centers were open and therefore the situation at retail market and traditional supply chains changed rapidly. The aim of this paper is to provide key data related to shopping center industry in Central and Southeastern European countries and to analyze the structure of retail offers, opportunities for investors, retailers and consumers at given markets. Comparative analysis of secondary data will give an insight into the current state of shopping center development and discuss the problems related to future retail development in Southeastern Europe. [ABSTRACT FROM AUTHOR]

Portugal faced a decade of feeble economic growth after joining the European Economic and Monetary Union. Systematic research of the specific effects of this regime change on growth is still lacking. The counterfactual analysis that we undertake in this paper seeks to fill such a gap. Our findings suggest that the adoption of the Euro did have adverse effects on Portuguese economy. To the contrary, in 2009, the Euro seems to have sheltered the Portuguese economy from the worse effects of the international financial crisis. [ABSTRACT FROM AUTHOR]

Europe's growth slowed in the 1990s, reinforcing the overall impression of a need to catch up with the US regarding standards of living. In reaction, EU leaders adopted the famous Lisbon Agenda in 2000. The Agenda is now under review, the aim being to determine why progress on its pro-growth goals has been unsatisfactory and what can be done about it. The first crucial step in this process is to understand the true sources of the European growth slowdown. Sources-of-growth calculations have always been imprecise, but evidence from the US suggests that‘quality upgrading’– especially in capital goods– has substantially worsened the precision problem since the 1990s. Unfortunately, quality adjusted sources-of-growth calculations, however, have not performed satisfactorily for Europe, so Europe's leaders are working with potentially misleading accounts of Europe's growth slowdown. Redressing this omission is the goal of this paper.Failure to account properly for capital quality improvements leads to two mistakes. First, overall GDP is underestimated. Our calculations, for example, show that euro area GDP growth was underestimated on average by 0.7 percentage points annually in the late 1990s. However, similar quality-adjustment figures raise US growth figures in the same period by even more, so quality-adjusting suggests that the US–EU growth gap was even more pronounced than previously believed. Secondly, the sources-of-growth calculations used to prioritize Europe's pro-growth policies are skewed. Our calculations show that the contribution of the slowdown in disembodied technical progress to the overall slowdown is more pronounced after quality adjustment.Our findings point to the need for adoption of microeconomic measures aimed at enhancing overall efficiency and boosting innovation activity. Such measures would aim at a better business environment, e.g. by easing regulatory and administrative burden and liberalizing energy and telecommunications markets.— Plutarchos Sakellaris and Focco Vijselaar [ABSTRACT FROM AUTHOR]

European nations are undergoing rapid and fundamental changes in response to social, political and economic events that are occurring both within and outside the region. These changes are far-reaching in scope and, ultimately, are expected to result in a redefinition of "Europe" and what it means to be "European." Using the author's extensively pre-tested Index of Social Progress (ISP), the research reported in this paper: 1) identifies the major changes in social development that have taken place in 36 European nations since 1970; 2) contrasts Europe's recent social development trends with those of other major world regions (including Asia, Africa, Latin and North America, and Oceania); 3) using aggregate scores on the Weighted Index of Social Progress (WISP), identifies Europe's "social leaders" (SLs), "middle performing countries" (MPCs), identifies Europe's "social leaders" (SLs), "middle performing countries" (MPCs), and "socially least developing countries" (SLDCs); 4) identifies the major development challenges confronting Europe at the outset of a new decade; and 5) provides baseline data against which future developments in the region may be assessed. [ABSTRACT FROM AUTHOR]

The hesitation of many conventional-wisdom economists to rely more aggressively on fiscal policy measures in order to keep their public finances more or less balanced may have contributed to the persisting current slowdown. We discuss the potential of active fiscal policies in stimulating growth focusing on the European experience. Recent contributions in this journal emphasized the role of expansionary fiscal policies not only during recessionary conditions but rather as a standard feature of the macroeconomic policy stance, arguing that budget deficits lead to higher business profits and, therefore, economic growth. We provide evidence pointing to a positive relationship between fiscal deficits and capital profitability. We conclude that the dogmatic aversion for budget deficits may be perilous. [ABSTRACT FROM AUTHOR]

I discuss possible problems engendered by loss of national monetary policies, and study them from three empirical perspectives. First, are business cycles sufficiently synchronized across EMU member countries? The evidence suggests that economic activity in those countries has become increasingly correlated in the 1990s, and that policy co-ordination has played a role in generating that outcome. Second, are there asymmetries in the mechanisms through which policy affects economic activity? The paper documents that policy transmission was indeed heterogeneous in the member countries, and that structural and financial factors were sensibly related to cross-country differences in the response of output to a monetary policy shock. Third, how is policy implemented in an environment of diverse business cycle fundamentals and transmission mechanisms? Estimation of monetary policy reaction functions finds that the European Central Bank is closer to an aggregate of the central banks in Germany, France, and Italy than to the Bundesbank alone. [ABSTRACT FROM AUTHOR]

This article reconsiders the relative growth performance of centrally planned economies in the broader context of postwar growth in Europe. It reports a new dataset of revised estimates for investment rates in eastern European countries between 1950 and 1989. Complemented with data on other growth determinants, this evidence is used to re-evaluate the socialist growth record in a conditional convergence framework with a panel of 24 European countries. After controlling for relative backwardness, investment rates, and improvements in human capital, the findings show that centrally planned economies underperformed due to their relative inefficiency only after the postwar golden age. In the 1950s and 1960s, eastern Europe was falling behind mainly due to relatively low levels of investment and weak reconstruction dynamics. Both are explained, in part, by the lack of labour-supply flexibility that, in turn, resulted from the comparatively much larger negative impact of the war on population growth in eastern Europe. [ABSTRACT FROM AUTHOR]

Wine cooperatives were relatively scarce in Europe before the Second World War, but by the 1980s accounted for more than half of all wines made in France, Italy, and Spain, the three major producer countries. Unlike Danish dairy cooperatives, whose success before the First World War was linked to their ability to improve product quality and compete in high-value niche markets, wine cooperatives are often associated with the production of large volumes of low-quality products. This article argues that the initial slow diffusion of wine cooperatives was caused by the difficulties of improving quality due to environmental conditions in European vineyards ('terroir') and measurement problems, rather than institutional shortcomings. Cooperatives only became widespread when the state found them a useful instrument to regulate markets, especially after 1950. The problems associated with poor wine quality were never resolved, and cooperatives have become increasingly uncompetitive in the market place, especially following the major decline in per capita consumption and shift towards premium wines from the 1980s. [ABSTRACT FROM AUTHOR]

Recent advances in the urban science make broad use of the notion of scaling. We focus here on the important scaling relationship between the gross metropolitan product (GMP) of a city and its population (pop). It has been demonstrated that GMP ∝ Y Ypopβ with β always greater than 1 and close to 1.2. This fundamental finding highlights a universal rule that holds across countries and cultures and might explain the very nature of cities. However, in an increasingly connected world, the hypothesis that the economy of a city solely depends on its population might be questionable. Using data for 248 cities in the European Union between 2005 and 2010, we found a double GMP/pop scaling regime. For West EU cities, β = 1 over the whole the period, while for post-communist cities β > 1 and increases from ∼1.2 to ∼1.4. The evolution of the scaling exponent describes the convergence of post-communist European cities to open and liberal economies. We propose a simple model of economic convergence in which, under stable political conditions, a linear GMP/pop scaling is expected for all cities. The results suggest that the GMP/pop super-linear scaling represents a phase of economic growth rather than a steady, universal urban feature. The results also suggest that relationships between cities are embedded in their political and economic context and cannot be neglected in explanations of cities, urbanization and urban economics. [ABSTRACT FROM AUTHOR]

We present new evidence about the long-run relationship between state capacity - the fiscal and administrative power of states - and economic performance. Our database is novel and spans 11 European countries and four centuries from the Old Regime to World War I. We argue that national governments undertook two political transformations over this period: fiscal centralisation and limited government. We find a significant direct relationship between fiscal centralisation and economic growth. Furthermore, we find that an increase in the state's capacity to extract greater tax revenues was one mechanism through which both political transformations improved economic performance. Our analysis shows systematic evidence that state capacity is an important determinant of long-run economic growth. [ABSTRACT FROM AUTHOR]

Small and medium enterprises (SMEs) play a vital role in economic development, they offer the most economical use of capital in relation to job creation and provide the strongest channel for development and innovation. Innovation is recognized as an essential component of the economic growth process, broadly defined as development, deployment and economic utilization of new products, processes and services. SMEs are crucial for helping economies to restructure quickly in response to changing economic, social and market conditions, under the impact of international financial crisis. However, SMEs can fulfill this potential if they obtain the finance necessary to start and develop their businesses. Access to finance is a key determinant for business start-up, development and growth for SMEs, including the innovative ones, and they have different needs and face different challenges. The limited market power, lack of management skills, absence of adequate accounting records and insufficient assets, transaction costs and lack of collateral, all tend to increase the risk profile of SMEs. Moreover, uncertainty and informational asymmetries that characterize SMEs are amplified for innovative SMEs making it more difficult for them to access finance through traditional means. The current economic environment has brought SME needs into particular focus given the significantly tightened credit supply conditions arising from the reduced ability and willingness of banks to provide financing. In order to improve the access to finance for SMEs, the efforts should be focused at the European and national levels on solving the problems regarding working capital, improving entrepreneurship and financial environment in the long term, attracting new financial resources, facilitating dialogue and consultation between governments, SMEs and financial institutions. [ABSTRACT FROM AUTHOR]

This article quantifies the activities of medieval and early modern parliaments. It traces the long-term evolution of this European institution, and offers a first pass at analysing its impact on long-term economic development. Starting in Spain in the twelfth century, parliaments gradually spread over the Latin west between 1200 and 1500. In the early modern period, parliaments declined in influence in southern and central Europe and further gained in importance in the Netherlands and Britain, resulting in an institutional 'Little Divergence' between 1500 and 1800. We discuss the background of this phenomenon in detail. Moreover, by analysing the effects of parliamentary activity on city growth we find that these differences in institutional development help to explain the economic divergence between north-western and southern and central Europe. [ABSTRACT FROM AUTHOR]

Development policies are commonly regarded as a phenomenon of the post-Second World War era. This essay looks at the historical antecedents of European development efforts and analyses the determining interests that motivated development policy in the twentieth century. The regional focus on south-east Asia allows for a differentiated appreciation of national approaches to European development policies. It shows that the legitimation of control and the securing of interests–security and economic interests, as well as notions of national prestige–are among the driving forces behind development policies. It also suggests that development policies were multifunctional from their inception.[The author wishes to thank Heide-Irene Schmidt and Helge Pharo, the contributors to a workshop on early European development aid (held in Bochum, March 2003), as well as Jost Dülffer, Ruth Jachertz and Philipp Janssen for invaluable comments.] On voit généralement les politiques de développement comme un phénomène de l''après-guerre, thèse contredite dans cet article qui porte sur les antécédents historiques de l''effort européen en analysant les intérêts qui ont motivé les politiques de développement au cours du XXe siècle. En adoptant une perspective régionale, visant le sud-est asiatique, l''auteur a pu distinguer entre les différentes attitudes nationales envers les politiques de développement. Celles-ci étaient inspirées en général par le souci de légitimer la domination européenne et de sauvegarder les intérêts nationaux–la sécurité, les avantages économiques–aussi bien que d''assurer le prestige national. L''auteur conclut que les politiques de développement ont été multifonctionnelles dès le début. Entwicklungspolitik bzw. Entwicklungshilfe wird allgemein als ein Phänomen der Zeit nach dem Zweiten Weltkrieg betrachtet. Dieser Aufsatz verweist auf historische Vorläufer und verdeutlicht die Interessen, die europäischer Entwicklungspolitik im 20. Jahrhundert zugrunde lagen. Die regionale Konzentration auf Südostasien ermöglicht die Herausarbeitung nationaler Unterschiede europäischer Entwicklungspolitik und zeigt, dass Legitimation von Herrschaft, Einflusssicherung, Sicherheits- und Wirtschaftsinteressen sowie nationale Prestigevorstellungen dominierende Motive für Entwicklungspolitik waren. Entwicklungspolitik war damit zugleich von Beginn an multifunktional. [ABSTRACT FROM AUTHOR]

This special issue is concerned with the development of the Single European Market (SEM) and its likely impact on industrial relations in the member-states of the European Community (EC). The articles that follow present new empirical material, analysis and speculation on the development of industrial relations arrangements at the level of both the EC and the member-states.
The articles fall into three groups. The first provides a general overview of EC developments and the establishment of the Single Market. The second group then focuses on the structure and governance of firms within the EC and on channels of representation of workers' interests at enterprise level. The third part of the issue deals with likely economic problems and possible economic outcomes of the SEM. [ABSTRACT FROM AUTHOR]

The article presents prospects for individual economies in Europe. The slight improvement in economic growth that happened in late 2014 seems to have earned momentum in the early months of 2015. Its growth projections have been changed for both 2015 and 2016, to 1.5 and 2.2 per cent respectively. Lower oil prices have contributed to more favorable demand conditions.