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New Challenges for the Balkan Economies in the Context of the European Union

Author(s): Romeo-Victor Ionescu / Language(s): English Issue: 4/2017

The paper deals with the idea that EU has to reformate as a result of the latest challenges,including the Brexit. A possible effect and opportunity from this can be a stronger position for the EU Balkan Member States. The analysis in the paper takes into consideration all Balkan economies,including candidate countries in order to obtain a general approach for the region. This approach is new because it puts together member and candidate members from a region, in the context of re-evaluating the EU, and leads to the idea of finding a regional leader able to generate regional progress and to support the region’s interests in the European Institutions. The analysis covers five representative economic indicators (GDP growth rate, gross fixed capital formation, unemployment rate, inflation rate and general government gross debt) and is realized on three levels: a comparative analyses, a cluster analysis, and a cumulative analysis as well. Moreover, regression is used in order to point out the economic disparities across the region. The main conclusion of the analysis is that the great regional economic disparities can be decrease using common regional policies. Moreover, the analysis identifies a regional economic leader able to coordinate common initiatives at least on short and medium terms. The analysis and the conclusions in the paper are supported by the latest official statistic data, pertinent tables and diagrams.

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The Endogeneity of Business Cycle Synchronisation in SADC: A GMM Approach

Author(s): Ntokozo Patrick Nzimande,Harold Ngalawa / Language(s): English Issue: 4/2017

Studies often conclude that in SADC would be disastrous and not optimal for all member countries. This is because of the observed low, and even negative correlation amongst member countries. However, Frankel and Rose (1998) demonstrate that the degree of synchronisation is not irrevocably fixed and is endogenous to other factors. Hence, this study is set out to investigate factors influencing business cycle synchronisation in the SADC region. More precisely, we use a generalised method of moments (GMM) to investigate the influence of trade integration, financial integration, fiscal policy convergence, monetary policy similarity and oil prices (a proxy for global common shocks) on the degree of business cycle synchronisation. To conduct our analysis, we data covering the period of 1980-2014, we use bilateral data due to unavailability of regional aggragates. We find trade, fiscal policy convergence and monetary policy similarity to have a sanguine impact on the degree of synchronisation. Moreover, owing to their procyclical behavior, financial flows lead to diverging business cycles. In addition, we find oil prices to exert a negative impact on business cycle co movement in the SADC region. Our results have far-reaching policy implications for the proposed SADC monetary union- by stimulating trade, ensuring coherence in macroeconomic policies SADC could move closer to becoming an optimal currency area.

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Foreign Direct Investments and the Real Convergence. An Approach for Romania and Bulgaria

Author(s): Vasile Cocriş,Ovidiu Stoica,Maria-Ramona Sârbu / Language(s): English Issue: 4/2017

This paper outlines the need for an analysis of the extent to which foreign direct investments(FDIs) affects real convergence expressed using the following selected macroeconomic indicators:Gross domestic product (GDP) per capita, the unemployment rate (UR), labour productivity (LP) per person employed and the minimum wage (MW). The purpose of this paper is to analyze the impact of foreign direct investment (FDI) on real convergence in Romania’s and Bulgaria’s economy during 2004-2014. The main results for both Romania and Bulgaria show that FDI can be considered important sources of growth for real convergence that have contributed to economic growth, increased labour productivity and increased the minimum wage except for the unemployment rate. The results confirmed our expectations because logically, foreign firms bring their own technology, appropriate for the work of the employees, in order for their employees to produce as much as possible and pay salaries relatively higher compared to companies with local capital, but they demand instead higher productivity.

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Oil Price Shocks and Economic Performance in Africa’s Oil Exporting Countries

Author(s): Mathew Ekundayo Rotimi,Harold Ngalawa / Language(s): English Issue: 5/2017

This study applied recently developed Panel Structural Vector Autoregressives (P-SVAR)estimating technique to empirically assess the transmission processes of oil price shocks and how it impacts economic performance within the monetary framework of the Africa’s net oil exporting economies. The study considered, among other variables; inflation, money supply, bank rate, exchange rate, gross domestic product, unemployment and oil price shocks which is treated a sexogenous while other variables as endogenous variables. The period of the study covered 1980-2015. The analysis of the data revealed that there were significant responses to oil price shocks during this period. The result of the study showed that oil price shocks have large impact on the economic performance of Africa’s oil exporting countries and also that transmission of oil price ensues monetary medium. Hence, the study suggests that strong monetary control measure should be put in place whenever positive shocks in oil is experienced.

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Europe 2020 Strategy vs Global Environment Protection’s Challenge

Author(s): Romeo-Victor Ionescu,Luminita Maria Filip / Language(s): English Issue: 5/2017

The paper deals with the analysis of the latest events related to the environment protection and clean energy. This analysis is built on two levels. The first one is the analysis of the Europe 2020 Strategy regarding the environment and energy across the EU and points out the great disparities between the Member States. The second level is focus on the environment and energy consumption in Romania. It is followed by forecasting procedures related to the greenhouse gas emissions, there newable energy in gross final energy consumption, the primary energy consumption and the final energy consumption. The main conclusion of the paper is that EU has to face to great challenges in this domain and the Strategy’s goals achieving in 2020 is not sure. On the other hand, Romania has good performance for two from the four above specific indicators. The analysis is based on long term statistical data, pertinent diagrams and is supported by IBM-SPSS software.

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The Relationship between Renewable and Nonrenewable Energy Consumption and Economic growth in G7 countries: Evidence from Bootstrap Panel Causality Test

Author(s): Uğur Korkut Pata,Harun Terzi / Language(s): English Issue: 5/2017

In this study, both renewable and nonrenewable energy consumption and economic growth relations were examined by the bootstrap panel Granger causality method covering the period 1996- 2014 for G7 countries. The findings show a unidirectional causality moving from renewable energy consumption to economic growth in Germany and Japan, and a bidirectional causality between these two variables in France, Italy and the United Kingdom. Regarding nonrenewable energy consumption, unidirectional causality moving from nonrenewable energy consumption to economic growth in Canada and the United States, and the causality in the opposite direction is valid in the United Kingdom and Germany. Also in Japan, there is a bidirectional causality relationship between these two variables. As a result, energy consumption is an important factor for G7 countries' economic growth.

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Cost Reduction Strategy and Firm Profitability during Recession Period: Nigerian Banking Industry Experience

Author(s): Patrick Amaechi Egbunike,Segun Idowu Adeniyi / Language(s): English Issue: 6/2017

Nigeria banks faced financial crisis due to financial meltdown and government treasury single account policy. This has forced banks to employed strategic cost management techniques like downsizing of employee and reduction of staff salary to survive and sustain their competitiveness in banking industry. This study examines the influence of downsizing of staff and reduction of staff salary on bank profitability. The specific objective is to ascertain the influence of downsizing of employee and reduction of staff salary on return on asset. Survey design was used for the study. Purposive sampling technique was used to select the sample frame from first generation of banks that are licensed with international authorization in Nigeria This study obtained secondary data from the Nigerian Stock Exchange Fact-book and Annual Report and Accounts of the sample population for the period 2006 to 2016. A linear regression analysis was used in estimating the parameter of the model. The study finds out that there is negative relationship between downsizing of employee, reduction of staff salary and profitability. It was discovered that the period after banks downsize their employee, bank performance was at its low ebb. We strongly recommend that banks can reduce their employee salary instead of laying them off. Then, salary increment can be done when the financial performance is improving.

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The Linkage between Emerging and Developed Markets: Implication for International Portfolio Diversification

Author(s): Oladapo Fapetu,Olufemi Adewale Aluko / Language(s): English Issue: 6/2017

This study is a holistic attempt to examine the linkage between emerging and developed markets between January 2012 and June 2016 using iShares MSCI Emerging Markets ETF and iShares MSCI World ETF to measure emerging and developed markets respectively. Employing the Johansen, Engle-Granger, and Philip-Ouliaris, cointegration testing approaches, this study reveals that there is no cointegration between emerging and developed markets, thus indicating that international portfolio diversification is feasible for investors holding financial assets in both markets. This finding implies that investors can reduce risk by constructing a portfolio consisting of assets in both emerging and developed markets.

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Harmonization of Corporate Income Tax (CIT) in the EU - Achievements and Challenges

Author(s): Fitore Morina,Bedri Peci / Language(s): English Issue: 6/2017

This paper provides a framework of the tax systems of CIT - Corporate Income Tax in theEU. This paper treats the concept of CIT according to the OECD, EU directives and Kosovo legislation. It aims to identify gaps in the current Kosovo legislaton and the tendency to increase the harmonization of the tax systems in EU, especially, in view of the direct taxes. The theory of international tax law counts some methods used in the case of the relocation of the source of income from countries with high tax rate in countries with the lower tax rate. However, determining the level of taxation in this area is the exclusive issue of Member States in harmony with the principle of subsidiarity. With the aim at securing sustainable economic development and growth in the EU, within the framework of their strategy some changes were proposed regarding the elimination of all legal and fiscal barriers that hinder the full integration of the national systems of member states into the common market. The CCCTB initiative is considered a major step towards aligning the EU tax systems. So, the purpose of this article is to demonstrate the level of harmonization of the tax systems in EU, using the comparativ, empirical, normativ and logical methods, to conclude the role of CIT in the tax systems.

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Relationship between China’s Economic Growth and South Africa’s Exports to China

Author(s): Bella Angomoko,Malefa Malefane / Language(s): English Issue: 1/2018

The rapid growth of China’s economy has increased China’s demand for imports required to meet the increased demand for raw materials in its industries. In 2006, China became the largest export destination for South Africa. This paper seeks to examine the relationship between China’s economic growth and South Africa’s exports to China. The paper aims to find out whether there is any significant relationship between China’s economic growth and South Africa’s exports to China. Using an import demand function for China, we employ an ARDL framework to analyze the research problem based on quarterly data covering the period 1992 to 2015. We find no evidence that there is a significant relationship between China’s economic growth and South Africa’s exports to China.However, the results do show that there is a positive long-run relationship between South Africa’s exports to China and the price of South Africa’s exports. The positive coefficient of South Africa’s export prices indicates lack of price sensitivity in terms of South Africa’s exports to China. Based on the results, we recommend that South Africa should find ways to enable its exports sector to benefit more from the high economic growth in China. Among other ways, this could be achieved through negotiating a free trade agreement (FTA) between South Africa and China.

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A Panel VECM Analysis of Competition, Access to Finance and Economic Growth in BRICS

Author(s): Farai Kwenda / Language(s): English Issue: 1/2018

This study examines the interplay between competition, access to finance and economic growth in Brazil, Russia, India, China and South Africa (BRICS). It adds to the ongoing debate on the interdependence that exists among competition, access to finance and economic growth by exploring their causal relationship using the panel Vector Error Correction Model. The results obtained suggest that there is a long run causality running from the access to finance (proxied by interest rate spread) and competition to economic growth. This is not surprising because it is generally expected that the interplay between competition and access to finance has some influence on the growth of any economy. The study did not find any evidence to support any long run causality running from economic growth and competition to access to finance. Neither was there any evidence showing any causal relationship between economic growth and access to finance and competition.

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Foreign Direct Investment Inflows and Oil Price Fluctuations in Developing Oil Exporting Countries: the Case of Nigeria

Author(s): Olawunmi Omitogun,Adedayo Emmanuel Longe,Kayode Daniel Ajulo / Language(s): English Issue: 2/2018

The study investigates the impact of oil price fluctuations on foreign direct investment inflows in developing oil exporting countries using Nigeria as a case study by ARDL method and VECM granger causality test to analyse the data spanning from 1970 to 2015. It was observed that oil price fluctuations do not favour foreign direct investment in Nigeria both in the long-run and shortrun. This implies that as oil price changes foreign direct investment inflows falls. VECM granger causality test revealed that there is no direction of causality between oil price fluctuations and foreign direct investment inflows in Nigeria. We therefore concluded that oil price is not an important determinant of foreign direct investment inflows. The study recommends that government should take the advantage of times of positive change in the oil price to fix the needs to attract foreign direct investment inflows in the economy.

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Government Policy, Foreign Direct Investment and Unemployment in Emerging Economies

Author(s): Abayomi T. Onanuga,Olaronke T. Onanuga / Language(s): English Issue: 2/2018

The broad objective of this study is to determine how government policy influences FDI as well as how FDI affects the level of unemployment as a proportion of labour force in emerging economies. The techniques of analysis are a descriptive statistic and panel regression based on Ordinary Least Squares Method. Evidence from the descriptive analysis affirms that the variables of the study for each country exhibit contradictory behaviour in 1991-2016. In the same period, the foremost beneficiaries of the net inflow FDI are not experiencing the lowest unemployment rate.Panel regression results (2000-2015) suggest that net inflow of FDI has a negative influence on unemployment while government policy has no significant effect on the net inflow of FDI. The study concludes that a continuous inflow of net foreign investment is a good source of creating jobs in emerging economies. Due to the lack of influence of government policy on the net inflow of FDI, the study recommends that emerging economies should revise the regulation on the freedom to trade internationally so as to enhance the continuous flow of foreign direct investment.

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Foreign Direct Investment in Nigeria: Its Role and Importance in Industrial Sector Growth

Author(s): Philip Ifeakachukwu Nwosa / Language(s): English Issue: 2/2018

This study examined the role of foreign direct investment in industrial sector growth in Nigeria for the period spanning 1970 to 2016. The study utilized the error correction modelling technique and the result of the study showed that foreign direct investment had negative and significant impact on industrialization in Nigeria. The study concluded that the role of foreign direct investment in the growth of the Nigerian industrial sector had been harmful rather than enhancing it.Thus, the study recommended the need for the Federal government to shift her focus and policy directives from the oil sector to the industrial sector as this will attract the attention of foreign investors into the industrial sector. Also, there is the need for improve strategies to enhance the competitiveness of Nigerian industrial sector in attracting foreign direct investment.

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The Role of Capital Requirements on the Stability of Kosovo Banking Sector

Author(s): Besnik Livoreka,Rrustem Asllanaj / Language(s): English Issue: 2/2018

After the failure of the Bretton Woods system, it was more than necessary to create a stable, acceptable and strong banking system. The way to achieve this was to form the Basel Committee on Banking Supervision. The committee has set a number of requirements that banks should fulfil in order to be a part of the banking sector. These rules have been adopted by many countries on an individual basis; one of the countries which has adopted the Basel regulations on banking supervision is Kosovo. Based on the committee’s regulation on capital adequacy, the Central Bank has created the Local Capital Regulation. The aim of this adoption is to completely integrate the Basel regulation in the near future. The major harmonisation was performed in 2012, when the new law on banking supervision was enforced. This paper provides us information on the impact of the new law requirements on capital adequacy ratios.

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Analysis of the Main Economic Indicators of the World

Author(s): Gina Ioan,Cătălin Angelo Ioan / Language(s): English Issue: 2/2018

The article analizes the main economic indicators of the World for each of the developing countries or regions of the world. A number of indicators are analyzed, such as: Expenses, Exports of goods and services, Imports of goods and services, GDP, Gross capital formation, Inflation, consumer prices, Revenue, excluding grants.

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Consequences of Money Laundering on Economic Growth – The Case of Kosovo and its Trade Partners

Author(s): Alban Hetemi,Safet Merovci,Ozan Gulhan / Language(s): English Issue: 3/2018

The main purpose of this paper is to explore the impact of money laundering phenomenon on economic growth level, respectively focusing on Republic of Kosovo and its trade partners’economic growth. In order to achieve this objective, the authors used a dynamic panel generalised methods of moments (GMM) technique. This paper provides results about measure of effect of money laundering on economic growth and the objective is to provide reasonable evidence that money laundering empirically impacts the macroeconomic indicators, respectively the economic growth of the country. When compare with past literature, similar results are found about negative effect of money laundering on economic growth. Through this paper, it is concluded that reductions in annual growth rates were associated with increases of variables related with money laundering. The key contribution of the paper is that it provides clear results about the effect of this phenomenon on economic growth which is very important for academics, researchers and universities. Moreover, the study is original and unique because puts Republic of Kosovo to the centre which is not studied in the past. As conclusion,through this paper is proved the hypothesis that money laundering has a significant effect on economic growth and this effect is negative.

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A SEA OF TROUBLE. BLACK SEA SECURITY POLICIES BETWEEN NATO AND THE EUROPEAN UNION

Author(s): Oana Elena Brânda / Language(s): English Issue: 14/2019

Although a nice leisure destination for summer hot days, the Black Sea is an incredible security landmark for both NATO and the EU. Situated on the eastern border of both, the waters of the Black Sea stem much trouble, when it comes to who is controlling them and who is benefiting from their resources. Being situated on the border of both NATO and the EU, this area has been the object of many strategies aiming to maximize its economic potential and enhance its role of stabilizer in the region. The Black Sea became part of the Three Seas Initiative and has its own Synergy, issued by the EU, looking forward to strengthen its position as an actor of its own within the international community. Despite a clear delineation of maritime borders, the Black Sea remains an object of dispute among the regional powers, looking forward to expand their control and influence over its waters. The aim of the present article is double-folded. On the one hand, it aims to investigate the security-related matters surrounding the Black Sea region, while on the other, it will look at the main EU and NATO security policies concerning the Black Sea. The second part of the article shall focus on a compare and contrast perspective, intended to highlight the differences in perspective of the two organizations and their separate views in approaching the Black Sea area.

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Macroeconomic Imbalances in the Euro Area

Author(s): Jacek Pietrucha / Language(s): English Issue: 4/2019

Macroeconomic imbalances constitute one of the most importantthreats to the cohesion of the monetary union. The aim of this articleis to examine the current state of imbalances using the new compositeindicator of macroeconomic stability. The calculated compositeindicators of macroeconomic stability allow for the formulation of thefollowing interpretations regarding changes and the current level of macroeconomic imbalances in the Euro area: 1. The aggregate pressurefrom macroeconomic imbalances in the Euro area is currently the lowestin the whole period for which data is available; 2. The imbalances in theEuro area have been partially limited, but more precisely, it should be saidthat they have changed their face rather than disappeared; 3. A signifi cantreduction of imbalances occurred in the case of variables which, in themajority of interpretations, were directly blamed for the exacerbation ofthe post-2008 crisis phenomena: current account balance, unit labour costs,or credit growth. At the same time, imbalances in terms of internationalnet investment position and public and private debt, as well as imbalancesin the labour market, have significantly increased.

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On the Economic and Cultural Coordinate of Globalization

Author(s): Ionuț Ștefan,Sebastian Șoimu / Language(s): English Issue: 1/2013

This text represents a sequel to our demarche concerning the globalization phenomenon understood in the analytical theoretical perspective. The economic coordinate of globalization represents a highly important element for the theoretical outlining of the concept of globalization. The world‘s markets, especially the financial ones, represent the best proof that globalization encompasses a powerful economic component. In this context, the issue of the nation-state represents a new challenge for the theorists of globalization. Welfare, the certainty of the workplace, related to the phenomenon of global unemployment, represent only a few problematic concepts which require reflection, resemantization and an authentic intellectual debate. The sovereignty of the nation-state is seriously shaken especially from an economic perspective. All the other conceptual components of globalization are directly influenced in that ―multicausal logic‖ brought forth by Giddens, by this economic coordinate. The economic, as a semantic horizon which melts into the concept of globalization, may be related to another semantic horizon just as important, namely the cultural one. At a first superficial review, the two coordinates seem rather stuck in their strict specific identity, but, after a more profound analysis, the connections between them may be brought forth. Because we have mentioned the financial markets, which, at their turn, are instrumented by money, well, this economic instrument holds, in the first instance, a strong cultural charge. The most important forms of human behavior, namely the cultural ones, are directly influenced by the way the individual understands and interprets the concept called money. At the same time, we will not be able to overlook the fact that the most important states, from an economic point of view, the states initially making up G8, and then GX, are the states which ―set the style‖ for the various cultural trends and courses at a global level. These two coordinates analyzed in this text are interconnected, making up a first semantic horizon of economic coordinate of globalization; cultural coordinate of globalization; Giddens; welfare system; nation-state;globalization.

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