1. bookVolume 21 (2021): Issue 2 (December 2021)
Journal Details
License
Format
Journal
eISSN
1898-0198
First Published
06 May 2008
Publication timeframe
2 times per year
Languages
English
access type Open Access

Are EU Members’ Economies an “Engine” of the EU Candidates’ Economies?

Published Online: 26 Nov 2021
Page range: 97 - 117
Received: 22 Jul 2021
Accepted: 11 Oct 2021
Journal Details
License
Format
Journal
eISSN
1898-0198
First Published
06 May 2008
Publication timeframe
2 times per year
Languages
English
Abstract

Research background: Economic relations between countries members of the EU and EU candidates are very strong. Germany and France have the leading economies of the EU, are in the top ten economies worldwide, and drivers of EU development. Serbia has strong economic relations with Germany and France, especially with Germany. Therefore, it is necessary to examine whether Germany and France impact the development of Serbia.

Purpose: The purpose of the study is to determine if there is a positive influence of a developed country on a developing country. The aim of the paper is to determine whether there is a long- and short-term positive relationship between Germany and France (EU members) and the Serbian economy (EU candidate).

Research methodology: A Vector Error Correction Model is used to analyze quarterly data from 2002Q2 to 2018Q2.

Results: The results showed a statistically significant long-term relationship between Germany and France and Serbia’s real GDPs, so EU members have a long-term positive impact on the economy of EU candidates. In the case of the French, there is a short-run positive impact on the Serbian economy. For Germany, it is not the case.

Novelty: This paper fills the literature gap about the influence of a developed country on a developing country. Recommendations for policymakers in EU candidates could be that if they want to motivate people to accept the process of access to the EU, they must provide them with more information about long-run economic benefits from the association to the EU.

Keywords

JEL Classification

Arora, V., Vamvakidis, A. (2006). The Impact of US Economic Growth on the Rest of the World: How Much Does It Matter? Journal of Economic Integration, 19 (1), 1–18.10.11130/jei.2004.19.1.1 Search in Google Scholar

Arora, V., Vamvakidis, A. (2005). The Implications of South African Economic Growth for the Rest of Africa.” South African Journal of Economics, 73 (2), 229–242. DOI: 10.1111/j.1813-6982.2005.00015.x.10.1111/j.1813-6982.2005.00015.x Search in Google Scholar

Bahmani-Oskooee, M., Niroomand, F. (1999). Openness and economic growth: an empirical investigation. Applied Economics Letters, 6 (9), 557–561. DOI: https://doi.org/10.1080/135048599352592.10.1080/135048599352592 Search in Google Scholar

Bahovec, V., Erjavec, N. (2009). Uvod u ekonometrijsku analizu. Zagreb: Element. Search in Google Scholar

Baliamoune-Lutz, M. (2011). Growth by Destination (Where You Export Matters): Trade with China and Growth in African Countries. African Development Review, 23 (2), 202–218. DOI: 10.1111/j.1467-8268.2011.00281.x.10.1111/j.1467-8268.2011.00281.x Search in Google Scholar

Bajec, J., Jovanović, N., Milenović, N., Nikolić, G., Veljović, D. (2012). Serbian-German relations: the real and the possible. Friedrich Ebert Stiftung. Belgrade. Search in Google Scholar

Ben-David, D. (1993). Equalizing exchange: trade liberalization and income convergence. Quarterly Journal of Economics, 108 (3), 653–679.10.2307/2118404 Search in Google Scholar

Ben-David, D. (2001). Trade liberalization and income convergence: a comment. Journal of International Economics, 55 (1), 229–234.10.1016/S0022-1996(01)00099-X Search in Google Scholar

Ben-David, D., Kimhi, A. (2004). Trade and the rate of income convergence. Journal of International Trade & Economic Development, 13 (4), 419–441.10.1080/0963819042000300591 Search in Google Scholar

Chang, H.L., Shen, P.L., Su, C.W. (2013). Are real GDP levels non-stationary across Central and Eastern European countries? Baltic Journal of Economics, 13 (1), 99–108. DOI: 10.1080/1406099X.2013.10840528.10.1080/1406099X.2013.10840528 Search in Google Scholar

Chang-Shuai, L., Zi-juan, L. (2012). Study on the relationship among Chinese unemployment rate, Economic growth and inflation. Advances in Applied Economics and Finance, 1 (1), 1–16. Search in Google Scholar

Dickey, D.A., Fuller, W.A. (1981). Likelihood ratio statistics for autoregressive time series with a unit root, Econometrica, 49, 1057–1072. DOI: https://doi.org/10.2307/1912517.10.2307/1912517 Search in Google Scholar

Dolado, J.J., Lütkepohl, H. (1996). Making wald tests work for cointegrated VAR systems, Econometric Reviews, 15 (4), 369–386. DOI: 10.1080/07474939608800362.10.1080/07474939608800362 Search in Google Scholar

Dollar, D. (1992). Outward-Oriented Developing Economies Really do Grow More Rapidly: Evidence from 95 LDCs, 1976–1985. Economic Development and Cultural Change, 40 (3), 523–544.10.1086/451959 Search in Google Scholar

Edwards, S. (1998). Openness, Productivity and Growth: What Do We Really Know? Economic Journal, 108 (447), 383–398. DOI: https://doi.org/10.1111/1468-0297.00293.10.1111/1468-0297.00293 Search in Google Scholar

Enders, W. (2015). Applied econometric time series. 4th edition. New York: John Wiley and Sons. Search in Google Scholar

Field, A. (2009). Discovering Statistics Using SPSS. 3rd edition, London: Sage. Search in Google Scholar

Jang, C.J. (2006). Can openness be an engine of sustained high growth rates and inflation?: Evidence from Japan and Korea. International Review of Economics & Finance, 15 (2), 228–240. DOI: 10.1016/j.iref.2004.03.005.10.1016/j.iref.2004.03.005 Search in Google Scholar

Jarque, C.M., Bera, A.K. (1980). Efficient tests for normality, homoscedasticity and serial independence of regression residuals. Economic Letters, 6 (3), 255–259.10.1016/0165-1765(80)90024-5 Search in Google Scholar

Jenkins, R., Edwards, C. (2006). The economic impacts of China and India on sub-Saharan Africa: Trends and prospects. Journal of Asian Economics, 17 (2), 207–225. DOI: 10.1016/j.asieco.2006.02.002.10.1016/j.asieco.2006.02.002 Search in Google Scholar

Johansen, S. (1991). Estimation and hypothesis testing of cointegration vectors in Gaussian vector autoregression, Econometrica, 59 (6), 1551–1580.10.2307/2938278 Search in Google Scholar

Kirchgässner, G., Wolters, J. (2007). Introduction to modern time series analysis. Berlin: Springer.10.1007/978-3-540-73291-4 Search in Google Scholar

Lütkepohl, H. (2006). New Introduction to Multiple Time Series Analysis. Berlin and Heidelberg: Springer. Search in Google Scholar

Manni, U.H., Siddiqui, S.A., Afzal, M.N.I. (2012). An empirical investigation on trade openness and economic growth in Bangladesh economy. Asian Social Science, 8 (11), 154–159. Search in Google Scholar

National Bank of Serbia (2014). International Economic Relations. Retrieved from www.nbs.rs/internet/cirilica/80/index.html#eoi. Search in Google Scholar

Nelson, R.C., Plosser, C. (1982). Trends and random walks in macroeconomic time Series. Journal of Monetary Economics, 10 (2), 139–162.10.1016/0304-3932(82)90012-5 Search in Google Scholar

Nikolic, I., Zoroja, M. (2016). The Estimation of a long-run relationship between Serbian and German economic growth. Industrija, 44 (2), 55–66.10.5937/industrija44-10016 Search in Google Scholar

Ray, R., Fernandez, C. (2019). Does India’s growth matter? Evidence from the SAARC nations. Journal of Public Affairs, 19 (2), 1–8. DOI: 10.1002/pa.1909.10.1002/pa.1909 Search in Google Scholar

Sachs, J.D., Warner, A. (1995). Economic Reform and the Process of Global Integration. Brookings Papers on Economic Activity, 1, 1–118. DOI: https://doi.org/10.2307/2534573.10.2307/2534573 Search in Google Scholar

Vamvakidis, A. (2002). How Robust is the Growth-Openness Connection? Historical Evidence. Journal of Economic Growth, 7 (1), 57–80. DOI: https://doi.org/10.1023/A:1013418610712.10.1023/A:1013418610712 Search in Google Scholar

Wacziarg, R., Welch, K.H. (2008). Trade Liberalization and Growth: New Evidence.” The World Bank Economic Review, 22 (2), 187–231. DOI: https://doi.org/10.1093/wber/lhn007.10.1093/wber/lhn007 Search in Google Scholar

Recommended articles from Trend MD

Plan your remote conference with Sciendo