Relationship Between Economic Climate and the Level of Barriers to Doing Business in the Services Sector in the EU Countries

Development of the whole economy and sectors of the economy is influenced by cyclical fluctuations, what can be observed as slowdown or acceleration of the economic processes. The identification of the leads and lags between the economic indicators, that reveals cyclical fluctuations is very important. The paper attempts to diagnose the lead and lag relationship between the economic sentiment indicators and the indicators of barriers to doing business in the services sector. The growth cycle approach was applied in the paper. A cross correlation analysis was conducted to identify the lead / lag relationship between the variables. The results of the analysis enable to conclude if the confidence indicator is a leading or lagged indicator and what is the length of lead / lag in relation to the indicators of barriers to doing business in the services sector in the EU countries. The study indicate the number of quarters from the peak or through of the business cycle in the services sector after that the level of factors limiting business activity will start to grow or drop. The results of the study can be useful both to the managers of firms as well as the governments.