Eastward enlargement—Benefits and costs of EU entry for the transition countries

The Central and East European transition countries are pinning considerable hopes for their economic future on entry into the European Union. However, given the huge amount of catching up they still have to do in economic terms, the tough entry conditions they have to meet and the limited amount of help the Union is willing to provide, it is questionable whether the benefits these countries will derive from entering the EU outweigh the corresponding substantial costs.     

Corporate integration in the EU: Recent developments

Corporate integration was expected to play a central role in the process of industrial reorganisation which would follow the creation of the Single European Market. This article investigates the development of corporate integration in the EU and the likely impact of the Single European Market on the pattern of corporate integration.     

The new EU countries and euro adoption

In the new member states of the EU which have not yet adopted the euro, previous adoption strategies have come under scrutiny. The spillovers and contagion from the global financial crisis revealed a new threat to the countries’ real convergence goal, namely considerable vulnerability to the transmission of financial instability to the real economy. This paper demonstrates the existence of extreme risks for real convergence and argues in favour of a new adoption strategy which does not announce a target date for the currency changeover and which allows for more flexible and countercyclical monetary, fiscal and wage policies.     

Intra-industry trade of transition countries: trends and determinants

This paper analyses trends in different components of trade of transition countries. To explain the cross-country differences, the paper points out the important distinction between the determinants of inter-industry trade and intra-industry trade (IIT), and horizontal and vertical IIT. Using varieties of gravity models, it is shown that variables from Increasing Returns Trade Theory, such as scale economies, similarity of income levels, and number of varieties produced play important roles in IIT, especially in horizontal IIT, whereas factors such as comparative advantage, dissimilarity in income levels, and having more developed trade partners from Heckscher–Ohlin Trade Theory are crucial in determining inter-industry trade and vertical IIT to a lesser degree.     

The cyclical impact of EU cohesion policy in fast growing EU countries

Most of the newly acceded central and east European EU countries are among the main beneficiaries of EU Cohesion Policy. The main objective of this policy is to improve the long-term growth and employment prospects of the supported regions, and thereby to support convergence towards higher levels of per capita income. In the short run, however, EU Cohesion Policy may at times amplify macroeconomic challenges for supported countries. In periods of a downturn of the economy it can have a stabilising impact. During periods of unsustainably fast economic growth, however, its short-term demand effects may contribute to internal and/or external macroeconomic imbalances. Economic policymakers should thus ensure that EU Cohesion Policy enhances long-term productivity, while avoiding, in times of overheating, an increased risk of unsustainable developments as a result of the additional demand stimulus from EU Cohesion Policy. The opinions expressed in this article are those of the authors and do not necessarily reflect those of the European Central Bank. The authors are grateful to Martin Bijsterbosch, Gesa Miehe-Nordmeyer, Ad van Riet, Philipp Rother and Desom Weller for their helpful comments.     

e-banking culture: A comparison of EU 27 countries and Portuguese case in the EU 27 retail banking context

The aim of this research is two-fold. Firstly we conducted a wise comparative analysis of EU 27 countries and secondly we identified distinct e-banking user segments of Portuguese citizens. We used a questionnaire for data collection (n=2358) and Latent Class Models (LCM) for data analysis. LCM revealed three segments in EU 27 (Portugal is in the poorest cluster, concerning the indicators used, with Greece, Spain and Cyprus) and two e-banking user segments in Portuguese citizens: Those who do not risk (49%), and Those who risk (51%). Our findings enable e-banking managers for taking appropriate strategic decisions.     

The future of cooperation between the EU and ACP countries

Something over 20 years after the first Lomé Agreement came into force, most of the ACP countries are still among the poorest in the world. Why have these countries' situations not improved despite the Agreements? Why has their share of total EC imports from developing countries fallen in spite of the tariff preferences they are granted? What conclusions ought to be drawn for future cooperation between the EC and ACP countries?     

Human capital and exports: A micro-level analysis of transition countries

ABSTRACT

This paper investigates the impact of human capital endowments on export intensity employing firm-level data for 29 transition economies. A particular focus is placed on comparing and contrasting Central and Eastern Europe countries (CEECs) with those from the former Soviet Union, the Commonwealth of Independent States (CIS). The impact of the share of employees with higher education, provision of on-the-job training, years of experience of the top manager and labour cost on export intensity is assessed. To test these relationships, Tobit and Fractional Logit approaches are adopted. The estimation results suggest that, overall, having a more educated workforce exerts a positive impact on the export intensity of firms in transition economies, the magnitude being larger for CEECs. Average labour cost, as an alternative measure, also turns out to exert a positive but stronger impact. Insufficient evidence is found of a role for training programmes and years of experience of the top manager.     

Export product range and economic growth in the EU countries

We analyse the number of different HS8 products in the EU countries’ exports in 1995–2015. We review what share, or coverage, of the total possible number of these products the countries have exported each year. The EU15 countries have typically witnessed a slow rise in this coverage rate, that is, a widening of their extensive margins. The exception is Finland where the share has declined considerably. On the other hand, Ireland, Greece, Portugal and the new member countries have seen a dramatic increase in their export product coverage. We analyse how the development in the coverage rate and, as a comparison, the diversification of exports as measured by the Herfindahl–Hirschman index are associated with GDP per capita growth. We find that changes in the former measure are positively associated with economic growth after we have controlled for GDP per capita catching‐up as well as investment and export activity. We also find that smaller EU economies do not specialise more than large ones in their exports as could perhaps be assumed.     

Impact of EU agricultural policy on developing countries: A Uganda case study

Despite substantial reforms, the European Union (EU)'s Common Agricultural Policy (CAP) is still criticised for its detrimental effects on developing countries. This paper provides updated evidence on the impact of the CAP on one developing country, Uganda. It goes beyond estimating macrolevel economic effects by analysing the impacts on poverty. The policy simulation results show that eliminating EU agricultural support would have marginal but nonetheless positive impacts on the Ugandan economy and its poverty indicators. From the perspective of the EU's commitment to policy coherence for development, this supports the view that further reducing EU agricultural support would be positive for development.     

Genetically modified foods: Consumer awareness,opinions and attitudes in selected EU countries

The dynamic development of biotechnology in recent years has raised serious public concerns about the possible risks arising from genetically modified organisms (GMOs). The aim of this study was to investigate consumer opinions regarding genetically modified (GM) foods. The research also aimed at verifying the differences in the attitudes of respondents from two, relatively culturally diverse research sites. To obtain empirical data a face‐to‐face survey was conducted in 2015. It covered a total of 976 randomly selected individuals. The study was performed in the capital of the United Kingdom—London and the Polish capital—Warsaw. The results of the study show that almost half of the respondents were familiar with the GMO concept. According to the respondents, the greatest benefits arising from the genetic modification are: enhanced shelf‐life of food and crops' resistance to extreme climatic conditions. The main disadvantages were: unpredictable consequences of deoxyribonucleic acid (DNA) modification, production of species‐specific toxins and food allergenicity. Over two thirds of people surveyed support the idea of the obligatory labeling of GM foods. The information presented on food packaging should primarily include potential contraindications to the consumption, indication that food was produced using transgenic sources and a warning about potential allergenicity. An almost equal number of respondents showed intention for purchasing GM food products, an intention to act otherwise, or was not decided. As many as 27.7% of survey participants showed negative attitudes toward GM foods, whereas only 19.8% predominantly positive. It is worth noticing that, with only one exception, no statistically significant differences were observed between the opinions of Polish and British respondents.     

The risk and predictability of equity returns of the EU accession countries

This paper investigates the importance of global risk factors and the predictability of returns of the 13 EU accession countries, using both unconditional and conditional asset-pricing tests during the turbulent period of 1997–2002. Applied for the first time to the full sample of EU accession countries, we conclude that the world excess return has only somewhat importance for Hungary, Poland and Turkey, indicating low financial liberalization and low integration with the world. The real G-7 interest rate followed by the world excess return, global foreign exchange rate and global inflation rates are the most influential in their explanation of the variation of local market returns. Predictability of local returns is high and variant; global instrumental variables have higher predictive power for eight countries, especially for Bulgaria, Cyprus, Estonia, Lithuania, Romania and Hungary, whereas local instruments are more important for the Czech Republic, Latvia, Poland and Slovenia. The failure of the conditional asset-pricing model to correctly price assets confirms partial integration with the world. Except for Bulgaria, Hungary, Latvia and Malta, predictability cannot be explained by time variation in economic risk premiums, but by local information, market inefficiency and/or investor irrationality.     

Export behaviour of SMEs in transition countries

Melitz’s dynamic model of export participation is the basis of our empirical specification that accounts for a wide range of internal and external factors affecting the export behaviour of small and medium-sized enterprises (SMEs) in Transition Countries (TCs). Using firm-level data, our estimates highlight the particular importance of the human and technology-related factors to the export behaviour of SMEs in TCs. Other important factors for SME exporting activities are productivity-enhancing spillovers from industry—especially vertical—linkages, firm size, ownership type, type of activity, the availability of external finance, networking through business associations, and market share. In addition, significant period and country differences are identified. This paper contributes to the transition literature by filling an important gap in the understanding of the SME internationalisation process and by identifying a comprehensive set of variables to explain firms’ export behaviour in TCs.     

Exporting status and success in innovation: evidence from CIS micro data for EU countries

Using a large sample of micro data from four waves of Community Innovation Survey for EU member states, we investigate the relationship between firms’ export status and different sorts of innovation activities. We find systematically positive relationship between the two, whereby the strongest correlation is found in case of product innovation and the weakest in case of organizational innovations. While aggregate data show that innovation success is increasing in firm size, we find that exporting has the strongest effect on innovation in the medium-sized firms. We also explore cross-country differences in the impact of export status on innovation. Countries with a higher share of exports in GDP and greater share of spending on research and development generally display a stronger correlation between exporting status and innovation.     

Countertrade: Forms,motives, pitfalls,and negotiation requisites

The impressive growth in countertrade necessitates a careful look at this trade financing mechanism and a new attitude by American policy makers and businessmen toward it. This study looks at the various forms of countertrade, at the motivating forces behind it, at the pitfalls that countertrade could engender, and at some imperatives in the negotiation of countertrade deals. The issues are examined from the perspective of a policy maker and that of a businessman. The two perspective are distinct but overlap sufficiently to merit a joint examination. It is the conclusion of this study that countertrade is here to stay, and that American businessmen better learn to cope with it if they are to maintain and improve their competitiveness in the world markets.     

Falling walls and lifting curtains: analysis of border effects in transition countries

Since McCallum's (1995 McCallum, J. 1995. National borders matter: Canada-US regional trade patterns. American Economic Review, 85(3): 615–23. [Web of Science ®] , [Google Scholar]) finding of surprisingly high border effects on trade between the US and Canada, there have been a number of studies on other parts of the world, and improvements made to the gravity model to measure this effect accurately. This paper suggests some other modifications to the model, and applies it to a region of the world that presents a distinctly interesting case. Changes in border effects of formerly socialist countries in Central and East Europe, and countries in the former Soviet Union are analyzed during 1976–2002 at country and sectoral levels, and also with respect to blocs of countries. A discussion on cross-country variations in border effects follows the computations.     

International financial integration: Stock return linkages and volatility transmission between Vietnam and advanced countries

This paper investigates the interdependence between the Vietnamese stock market and other influential equity markets in terms of return linkage and volatility transmission covering the period including pre, during and post the 2008 Global Financial Crisis. A VAR model is utilized to estimate the conditional return linkage among these indices and a GARCH-BEKK model is employed to investigate the volatility transmission. We find evidence of statistically significant correlation, return spillover and volatility linkage between Vietnamese stock market with other leading equity markets of the US, Hong Kong and Japan. Moreover, we find that during the financial crisis, stock markets become more interrelated.     

The integration of the developing countries into the world economy

Despite decades of efforts, it has not yet been possible to integrate the developing countries satisfactorily into the world economy. Professor Glastetter examines the reasons for the failure of the integration strategies pursued hitherto and discusses the prospects of success with alternative approaches. Abridged version of a paper presented at a conference organised by the Evangelical Academy, Loccum, between 16th and 18th September 1988.     

Problems of integration theory in relation to the developing countries

The opportunities for the integration of developing countries and the limitations to such integration have not received enough attention in the scientific discussion on the reform of the international economic order, with the result that a considerable research backlog has been accumulating in this field. The following article shows that the established integration theory which has been evolved primarily with the problems of the European integration movement in mind is not able to evolve adequate criteria for decisions on integrations of developing countries.