Absorption of the financial resources allocated from the EU funds is a very important aspect of the European integration process, while there is a lack of empirical researches on the determinants of a country/region's abilities to efficiently absorb the money. This study investigates the influence of the chosen territorial economic preconditions important for successful absorption of EU funds over the last two Cohesion Policy programming periods, on the sample of convergence and developed NUTS 2 regions of the EU. The analysis is based on 86 regions that have GDP per capita less than 75% of the EU average (convergence regions) and 186 regions that have GDP per capita above 75% of the EU average (developed regions). By using panel data analysis, it is confirmed that the absorption of EU funds is conditionally affected by regional economic characteristics. The results of the study contribute to empirical researches on the determinants of regional absorption capacity in the EU and can be important in discussions surrounding Cohesion Policy planning and programming.
The trade-offs involved in boosting the competitiveness of EU member states, while reducing within-country regional inequalities, constitute an important, but underinvestigated relation in competitiveness and regional policy analyses. The article studies the influence of regional inequalities in human capital on the competitiveness of the EU member states, drawing on a panel dataset of 22 EU countries and 266 NUTS 2 regions, over the period 2000-2011. The analysis is extended with the variables that can have a significant influence on the observed relationship, including the EU's Structural and Cohesion Funds, and differences in the levels of development between EU member states and regions. Applying different panel data estimators, it is determined that higher regional inequalities in human capital reduce the competitiveness of the EU member states. The EU's Structural and Cohesion Fund payments have a positive influence on competitiveness in the long run. The EU's new member states, as well as the EU countries in which most of the regions are classified as less developed regions, have lower competitiveness. The conclusions imply that the absorption of the EU's Structural and Cohesion Funds in less developed regions does not contribute sufficiently to the strengthening of national competitiveness. The results also confirm the need to integrate a more place-based approach into the EU's regional, and even national, competitiveness policies. With its approach in analysing the influence of regional inequalities in human capital, this article adds empirically to the existing studies about the ambiguous relation between regional inequalities and competitiveness. The conclusions can be used in the future EU regional policy planning that places special emphasis on measures, which are directed towards developing human capital potential.
The aim of this study was to determine the influence of foreign direct investments (FDI) on regional development in Croatia and to contribute to previous studies that deal with regional FDI re-allocations. Our analysis was conducted at the NUTS 3 level (21 Croatian counties) and applied panel data analysis to determine the influence of FDI as well as other factors that proved to be significant in regional development in Croatia. The results point out that investment (i.e., both domestic and foreign direct investments), labor productivity, and export have a positive and significant influence on regional development, while absorptive capacity has a negative influence. It is therefore important to strengthen the absorptive capacity of Croatian regions to create a favorable investment environment and to provide good preconditions for the development of other factors of regional development. Findings are relevant for policy makers who Ines Kersan-Škabićshould take more proactive roles in attracting FDI as a way of strengthening regional development in Croatia. This may help policy-makers to act locally to achieve cohesion, but it can also be important for foreign investors that observe regional FDI determinants in the European Union.
The Challenges of Competitiveness in Southeast European CountriesThe article examines the problem of competitiveness in Southeast European countries, with a special emphasis on the position of these countries in World Economic Forum rankings of competitiveness, as well on their potential membership in the European Union. The article determines the most problematic factors for doing business in the region. These factors represent the most important determinants of business sector competitiveness and have implications on national competitiveness. A TOWS matrix was created and established the common characteristics (strengths, weaknesses, opportunities and threats) of the countries in the region. The matrix was also used to suggest strategies for increasing competitiveness. A maxi-maxi strategy ("expansionary strategy") was suggested because it represents the best way to utilise the countries' strengths and opportunities. Cross-section analysis established that increasing gross enrolment ratio in tertiary education and direct foreign investments have the most the positive impacts on GCI scores.
Emigration flows and their relations with economic development can be observed through different aspects, where one of the important questions is the role of the remittances, and transfer of foreign money to home countries. The objective of this study is to investigate the impact of remittances on economic development in Central and Eastern European countries. A review of previous research on the role of emigration and the impact of remittances on economic development is presented in the first part of the paper. This is followed by panel data analysis. The analysis covers the period after the enlargement of the European Union (EU) in 2004 till the nowadays. The results confirm the positive and statistically significant influence of personal remittances on the economic development of the new EU member states, as well as the positive and statistically significant influence of final consumption, gross fixed capital formation, external trade balance, and foreign direct investments. The positive influence of remittances on economic development should be observed with caution, regarding that remittances are the results of emigration and also are connected with the unfavourable effects of emigration. This study adds to previous research about the significance of remittances in the economies of the new EU member states.
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