Faculty of Economics
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Item type:Publication, The Role of Institutions in Economic Growth: A Systematic Literature Review(Josip Juraj Strossmayer University of Osijek, Faculty of Economics and Business, 2024); ; Purpose: This paper gives a systematic literature review of the research field of institutions and economic growth. The goal of the paper is to provide information on predominant trends in publishing studies, prevailing sentiments on the role of institutions, and emerging themes in the field, to identify gaps in the existing literature and possible avenues for further research. Methodology: The study systematically reviews papers on institutions and economic growth from the Scopus database following the PRISMA protocol. The research uses descriptive analysis (annual distribution of articles, frequently referenced papers, central and emerging topics), sentiment analysis, and keyword co-occurrence network analysis. Results: A total number of 78 papers published between 2006 and 2023 were analysed. The results suggest a growing interest in the subject, encompassing topics such as governance, human capital, trade openness, and the resource curse. Sentiment analysis suggests that most of the literature is optimistic about the impact of institutions on fostering economic growth. Keyword analysis indicates that institutions, governance, and economic growth remain key areas of interest, with increasing emphasis on region-specific research and empirical approaches. Conclusion: The prevailing research indicates that quality institutions play a crucial role in economic growth, enhancing the impact of other factors like financial development, trade openness, and human capital. The review underscores the pivotal role of institutions in sustaining long-term economic progress and suggests further exploration of less researched areas, such as regional development and entrepreneurship, and the utilisation of additional scientific databases to deepen our comprehension of institutional dynamics. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Institutions and economic growth in European post-transition economies(University of Rijeka, Faculty of Economics and Business, 2024); ; This paper discusses the role of institutions in economic growth in selected European post transition economies. During the 1990s, Central and Eastern European countries faced challenges adapting their political and economic systems to keep up with a rapidly changing global landscape. They needed new institutions like regulations, social norms, and organisations to support a capitalist economy. These institutions provide a framework for economic activity and guide individuals to act in ways that align with economic goals. They are crucial for creating a stable environment for economic growth, promoting investment and innovation, and reducing uncertainty, which is essential for economic success. To analyse this, we conduct an econometric analysis of 16 European post-transition countries from 1998-2019 using fixed-effect, Arellano and Bond’s first difference GMM estimator, and the system GMM estimator. The results indicate that institutions significantly impact economic growth. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Lessons Learned from the Fourth Industrial Revolution for the Global Economy(Institute of Knowledge Management, 2020-12-16); The term Industry 4.0 has been used since 2011, but became known to the world public at the World Economic Forum in Davos in 2016. This industrial revolution represents a new phase in human development, as was the case in the previous three industrial revolutions, and in this case the power stems from the growing reach and interaction of a number of new technologies. The process of the Fourth Industrial Revolution is much more than focusing just on aspect of technology. Therefore, in the new era, we need to understand how new technologies are interconnected, how the level of interconnection affects our decisions concerning investment, design, innovation, and so on. In our everyday life, tools such as online systems, artificial intelligence, robotics, 5G technologies, big data and Industry 4.0 are already being permanently imported. If we fail to understand how people and technology communicate with each other, it will be very difficult to work together on investments, policies and joint activities that will have a positive effect on the creation of the future. In the new era in which we live, governments and institutions are reshaping education, health, transport and many other systems. There is a broad consensus among historians of economic thought that certain technologies are important enough to accelerate economic progress. Thus, we have set our research goal in the direction of determining the key lessons learned from the Fourth Industrial Revolution for the Global Economy. In achieving this goal, we first briefly focus on elaborating the concept of the Fourth Industrial Revolution in the context of the speed, breadth, and systemic effect by which it differs from the previous three industrial revolutions. Therefore, we will analyze in more details the expectations from the process of Industry 4.0 in terms of computerization of the processing industry and equipping the production with the highest technology. In the context of the previous one, the three new goals of the Fourth Industrial Revolution will be elaborated: (1) Minimization of the human factor of production and elimination of the omissions of production made by man; (2) Achieving a high level of flexibility in production and creating conditions for product design that will be fulfilled by the specific needs of the costumer, and (3) Intensification of the production process. In addition, lessons learned will be provided regarding the possibilities and threats posed by the Fourth Industrial Revolution, and especially on the problem of inequality as a systemic threat imposed by these processes of digitization and automation. A special part of the research will be focused on the key theories of economic growth that incorporate technology into their growth models: The differences between Harrod-Domar's growth model and Solow's neoclassical growth model and the new growth theories. Finally, in our analysis, we will make attempt to generally identify the key positive and negative effects that the Fourth Industrial Revolution has on the global economy, employment, and enterprise performance. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, The Impact of Remittances on Economic Growth in Western Balkans - A Panel Approach(Ss Cyril and Methodius University in Skopje, Faculty of Economics - Skopje, 2021-11-13); ; ; The migration is one of the constitutive features of Western Balkans’ historical specificity, which significantly changed Balkan societies in the last two centuries. One crucial effect of intensive emigration is high remittances. Cross-country analyses and evidence from household surveys suggest that migration and remittances reduce poverty in the origin communities. In addition, remittances lead to increased investment in education, health, and small businesses. The diaspora can be a source of capital, investment, knowledge, and technology transfer. The inflow of remittances can contribute to the economic development of the remittance-receiving country, provided that the country can use these funds to finance investments that will enable it to produce export or investment goods to replace imports. This paper examines the impact of remittances on economic growth in the Western Balkans (North Macedonia, Serbia, Albania, Kosovo, Montenegro, and Bosnia and Herzegovina) last two decades. The relationship between economic growth, remittances, final household consumption, domestic investments, and trade is examined through a panel approach. The paper uses annual data obtained from the World Bank World Development Indicators. The results of the empirical analysis help determine the relationship between remittances and economic growth and provide a solid base for policymakers to direct remittances into productive investments. The general conclusion for the region is the need to implement policies that will strengthen the financial system to enable a more significant positive impact of remittances from migrants on economic growth. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Remittances, Institutions, and Economic Growth: The Case of the European Union(Eurasia Business and Economics Society, 2022-07); Theoretical and empirical research on the impact of remittances on the economy has produced very different results. International remittances stimulate economic growth for many countries, mainly by increasing national disposable income. The paper empirically investigates the role of remittances and institutions in the economic growth of the 27 member states of the European Union (EU) from 1995-to 2019. The selected group of countries includes countries from different levels of economic development and countries from the former socialist system, countries that are in transition, countries that have successfully overcome that process, and traditionally capitalist countries with different quality of institutions. Using the generalized method of moments (GMM) in a data analysis panel, we found evidence that institutions play an essential role in how remittances affect economic growth. It has been found that a healthy institutional environment affects the volume and efficiency of investments; hence, in the presence of good institutions, remittances could be channeled more efficiently, which will eventually lead to greater output. The paper also proves that with better institutional quality in the country, the effect of remittances and other economic and financial activities is more pronounced. Thus, to the extent that policies that promote greater freedom of economic activity are promoted, national economies will benefit more from remittances. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, The Economic Costs of Youth Unemployment in North Macedonia(Institute of Knowledge Management, 2022-12-16); ; Youth unemployment is an issue that seriously concerns many countries, both developed and developing countries. Youth unemployment rates (as % total labor force ages 15-24) in North Macedonia is (36.9% in 2020), and despite recent improvements in labor market indicators, it has remined relatively high in comparison with the rest of Western Balkans countries (35.08% in 2020) and the EU average level (14.4% in 2019). High youth unemployment and inactivity provoke many negative consequences both for young individuals and for the whole society. For young people the long-term unemployment status negatively affects their prospects to find decent jobs, increase the social exclusion by losing of their skills and qualifications; and have negative impact on health status. For society the costs of youth unemployment and inactivity include higher fiscal costs due to unemployment benefits, forgone earnings, and taxes; increase poverty and income inequality; and reduce the aggregate consumption. Also, the high rates of youth unemployment provoke migration process of young population from a country, which may jeopardize the prospects of country’s future economic growth. Facing with the problem of high youth unemployment rates, in the several past years, North Macedonia have proposed and implemented different policies and measures to decrease the youth unemployment rates (National Youth Strategy 2016-2025, Youth Employment Action Plan 2016-2020, Youth Guarantee plan (2020-2022, and etc). In that context, North Macedonia was the first country, outside from the European Union, that has implemented the Youth Guarantee program in 2018, as a pilot project. And since 2019, the Youth Guarantee program has become a regular part of the youth labour policy. All these policies put the focus on improving education and working skills because it is expected that education increases chances for employment of young people, especially for those that belong to NEET category. Output and unemployment commonly move together. There are a number of empirical research with focus on the link between the output change and change in the unemployment. The most prominent one is the empirical research of Okun (1962) who defined the relationship between the change in the unemployment rate and the change of output growth rate. Therefore, the concept of the Okun’s Law is often used as a basis for developing of econometric models for estimation of the cost of unemployment in the economy. Calculation of economic costs is very useful for policy makers as a tool for evaluation of the costs and benefits of policy measures for increasing the employability in the economy. Thus, the focus of this research is to calculate the costs of GDP form youth unemployment in North Macedonia in the period from 2010 to 2021. For that purpose, based on the MakStat database of the State Statistical Office of the Republic of North Macedonia (SSO), authors developed an econometric model to calculate the loss of GDP form youth unemployment. From the obtained results, costs from total unemployment are on average 1.62% from potential GDP over the period 2010-2020, while the costs from youth unemployment varies from 0.57% in 2011 to 0.14% in 2020. Also, authors discuss results and give some recommendations for overcoming the challenges of high youth unemployment.