Country Experiences in Economic Development, Management and Entrepreneurship

Table of Contents

1. Frontmatter

2. International Trade

   1. Frontmatter

   2. Trade Competition Between Asia and the European Union in Africa

      Wioletta Nowak

      Abstract

      The paper studies trade in goods between the European Union (EU) and 54 African countries and between four Asian countries (China, India, Japan, and South Korea) and Africa over the period from 2000 to 2013. The analysis is based on the data retrieved from the UN Comtrade Database. The EU is a major trading partner for Africa. However, its role in Africa’s trade has been declining since the beginning of the global crisis. On the other hand, a significant increase in Asia-Africa trade has been observed. Since 2006, bilateral trade of four Asian countries with 34 Africa’s least developed countries (LDCs) have been surpassing trade of the EU with Africa’s LDCs. Both, the European Union and Asian countries combine trade policy with development policy.

   3. Central Asian Integration and Its Impact on Regional Trade and Economy

      Bulat Mukhamediyev, Azimzhan Khitakhunov

      Abstract

      Central Asian region includes five Former Soviet Union republics such as Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan. All countries follow totally different national development strategies. While Kazakhstan and Kyrgyz Republic are outward looking and the most integrated to world economy, Turkmenistan and Uzbekistan keep isolationism policy. Since 1991 many Preferential Trade Agreements have been signed in Central Asia. However, the countries could cooperate in only a few areas. Majority of these agreements led to more conflicts and contradictions, which became the beginning of Central Asian disintegration. All countries of the region in their trade policies have largely followed the path of policy autonomy. Thus, this paper analyzes the impact of integration agreements on the regional trade and economy of Central Asia with the special focus on Kazakhstan. The paper also covers the analysis of possible impact of the newly created Eurasian Economic Union (EAEU) and the World Trade Organization (WTO) on Central Asian countries, taking into consideration that Kazakhstan and Kyrgyz Republic are the member countries of EAEU.

   4. ASEAN and Trade Regionalism: An Opportunity for Convergence or Threat of “Two Speeds”?

      Sebastian Bobowski

      Abstract

      The paper is studying Association of Southeast Asian Nations (ASEAN)—integration grouping, through the prism of trade regionalism and the concept of two-speed. Author provided an indicatory analysis in order to embrace different dimensions of development gap between ASEAN-6 (Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore and Thailand) and CLMV (Cambodia, Lao PDR, Myanmar, Vietnam), while pointing out the context of convergence and perspectives of narrowing the distance successfully. A special emphasis was put on the context of competitive mega-regional projects of Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP), with overlapping memberships of four ASEAN states, namely, Brunei Darussalam, Malaysia, Singapore and Vietnam. Author attempts to draw implications of eventual successful establishment of two trade blocks led by the United States on the one side, and China on the other, including the threat of internal decomposition of ASEAN and division into pro-TPP and pro-RCEP coalitions, while affecting ASEAN’s centralist role in Asian regionalism. Two-speed ASEAN was studied both in economic and political terms in this matter, while Vietnam was recognized as prospective member of the ASEAN’s core operating at higher speed.

   5. Interdependence of Real, Financial and Export Import Indicators in a DSGE Model of Multiple Countries

      Bulat Mukhamediyev, Azimzhan Khitakhunov

      Abstract

      Interdependence, which is a consequence of the international division of labor and use of the world’s natural resources, increases at the global level. Macroeconomic indicators of each country are more exposed to shocks arising in the country and in partner countries. In this paper, we propose a model of dynamic stochastic general equilibrium (DSGE) of many countries. For each country, the variables of output, inflation, interest rate, exchange rate, terms of trade, as well as exports and imports for each pair of countries are included in the model. In accordance with the number of countries the model contains equations of dynamic IS and New Keynesian Phillips curves and equations of monetary policy. The estimation of the model was implemented for the economies of Kazakhstan, Russia and the EU. An asymmetrical interaction of large and small economies is taken into account. The analysis of the impact of internal and external shocks on the macroeconomic variables is performed for each country/region. Responses of indicators on various shocks are obtained. For example, a positive technology shock in the country leads to the negative reaction of output, inflation and interest rate variables, as well as having a positive impact on imports and the negative impact on exports in each partner country. Cost-push as well as monetary policy shocks reduce imports and increase exports, and this is also observed for a couple of countries where there is no such a shock. It is revealed that the value of the response does matter to the size of the economy. The model allows analyzing the effects of the macroeconomic policies of trading partners to the fluctuations of the various shocks. The model can be extended in various directions.

3. Growth and Development

   1. Frontmatter

   2. The Role of Creative Industries in Economic Development of Lithuania and Latvia

      Ugnė Daubaraitė, Gražina Startiene˙

      Abstract

      Creative industries are of constantly growing significance both on national level as well as when comparing competitiveness internationally. While creative industries are an often used term, different concepts of it still exist, varying from country to country. In this paper we aim to compare and measure the role of creative industries in economic development of two culturally and historically similar countries, Lithuania and Latvia. We find that though concepts of the creative industries in both countries are alike, certain differences are present. Impact of creative industries on economic development is measured through its role in employment and GDP. In addition to measuring creative industries role on national level, impact on economic development is compared between the selected countries.

   3. Institutions and Economic Growth in the Resources Intensive Use Economies

      Taisya Pogodaeva, Nadezhda Senchenko

      Abstract

      Nowadays the opinion that there are other essential factors except capital, labor and access to technology as in Solow model is quite widespread. In this way many economists and scientists consider institutional environment as one of the key elements that form countries’ socio-economic development. This work is aimed to develop the empirical case that economic development in the resources intensive use economies depends on institutions. The role of institutions is not the same in every group of resources intensive use economies that we divided them according their level of income. In the paper, we investigate the institutions influence on economic development of resources intensive use economies according different level of income. Our analysis reveals the increasing influence of institutional variables on the economic growth in accordance with the rise of income.

   4. Spending on Innovation as a Factor of Competitiveness of Market Economies

      Paweł Dobrzański

      Abstract

      International competitiveness is frequent topic in the world’s economic literature. Nowadays, attention is also drawn to the efficiency of the economy in addition to a comparative analysis of economies. The paper presents different approaches of competitiveness and efficiency of the economy and their measurement. The study carried out an analysis of one of the major factors of competitiveness of economies—innovation. Calculations were performed using the method of DEA.

   5. Finding the Determinants of FDI Inflows to EU Member States

      Daiva Dumciuviene, Aiste Paleviciene

      Abstract

      In the last two decades world economy has seen an extensive inflow of foreign direct investment into economic development of countries. More and more countries are competing with each other to attract this investment as an alternative economic growth accelerator. Thus it is important to understand the values and factors determining the choices of investors. The aim of this study is to identify the main determinants which have impact on foreign direct investments in European Union member states. The important issue is structural investments in the economy of member states. Current research on this topic indicates the correlation among intensity of structural support and foreign direct investments flow to the economies of member states. Panel data analysis of European Union member states is performed in this paper. It shows that macroeconomic development, trade and other economic indicators are related with foreign direct investments inflows to European Union member states. Also, the regulatory framework of European Union is evaluated in terms of structural investments flows. The impact of foreign direct investments inflows on economic growth on the economies of European Union countries and the impact of European structural support attracting foreign direct investments are investigated in this article.

   6. Assessment of Government Activity in the Economy: USA–Germany–Japan–China

      Paweł Dobrzański

      Abstract

      The main goal of the article is to present diversified roles of government in case of different economies, which nowadays play big role in the global economy. For this purpose, a general concept of the role of government in economy is illustrated, after which the variances and similarities of state interventionism in the United States, Germany, Japan and China are presented. The article presents an evaluation of state activity in the studied countries, using inter alia The Global Competitiveness Report, World Competitiveness Report and Human Development Index. Main research methods are comparative analysis and historical case studies used to present role of government in studied countries. The analysis shows a clear gap between market economies and state capitalism. China is being classified as efficient-driven economy, as opposed to the USA, Germany and Japan, which are classified under innovation-driven economies. China records good score for economic performance, but government and business efficiency are assessed poorly. The greatest challenges for the Chinese economy are: limited access to financing, inflation, policy instability, inefficient government bureaucracy and corruption. Summarizing China accomplishes good results in terms of economic indicators, but the economy is inefficient and doesn’t achieve the social goal of providing a good quality of life.

4. Political Economy

   1. Frontmatter

   2. Contradictions of Development of Civil Society as Economic Actor in Georgia

      Inga Balarjishvili

      Abstract

      Relying on neo-institutionalism methodological approach paper analyzes contradictions of development of civil society as economic actor in Georgia and its socioeconomic results in post-soviet transformation. Paper reveals imperfections of civil society displayed in social, political and economic characteristics: low quality of externality internalization—absence of agreed labor division between state and civil society; poor abilities of equalization of bargaining power—accomplishment of individual’s representative functions by organizations with insignificant resources does not strengthen individuals bargaining positions. Paper discusses: submissive role of society in triad “state–business–civil society”; negligible amount of relational goods supply caused by concentration of civil society organizations in capital city; their closed, elite-corporate character; low level of investment in social capital by citizens; society dominated by participants and not by servants; non-existence of middle class which represents mostly life style than social group; free-rider problem; elite character of institutional transformation and passive role of society which caused transformation of institutions into club goods. Research showed that in Georgia vertical social contracts were developed and state spread “principle of hierarchy” over economic and public relations. Only strengthening of civil society can initiate new social contract where society will become an active participant of institutions controlling process.

   3. The Price Elasticity of the Demand on Selected Types of Commodities and Its Influence on the Value Added Tax Collection

      Eva Hamplová, Pavel Jedlička, Jaroslav Kovárník

      Abstract

      Taxes are on one side the burden of both companies and individuals, so called tax payers, while on the other hand are also important source for every public budget. This article is focused on analysis of price elasticity of selected commodities, or more precisely, on the analysis where the opinions of the respondents of the questionnaire on the price changes of selected commodities are to find. Analyzed issue is part of broader context which is solved within the project of specific research of team from Department of Economics, University of Hradec Králové. The aim of this project is to identify the key factors of tax incidence and their scope according the different groups of inhabitants. The main aim of this particular article is to verify the basic hypothesis that the decrease of VAT rates will eventually lead into the increase of VAT collection, and vice versa. However, the results of obtained questionnaires show that this hypothesis has to be denied. More information can be found within the text of this article.

   4. From the Economic and Financial Aspects of Forgery in France: The Analysis of Statistical Data

      Joanna Brzezińska

      Abstract

      The article concerns the economic and legal aspects of crime of forgery in France. The main goal of the article is to highlight the negative consequences of this phenomenon for the French economy and problems with his regulation. Due to the varied forms of forgery (e. g. counterfeiting credit cards, clothes, medicines, food, luxury goods), the French legislature decided on penalization, not only in the Penal Code, but also in Monetary and Financial Code, or in the Code of Consumption. Statistical data contained in the paper (for the period of 2005–2010) clearly shows that the phenomenon of counterfeiting is one of the most important economic problems in France, considering its steady, strong growth in almost all sectors of the economy. Thus, it is clear that making active efforts to fight against this pathology (especially by the Police, Military Police, as well as by specialized organizations, for instance Direction Génerale des Douanes et Droits indirects) does not bring the expected results. Considering the scale of the counterfeiting of products, we can assume that presented in the paper indicators are only estimates and are much lower than actual data.

   5. Two-Factor Model of Stratification of the Population of the Republic of Kazakhstan “Income”—“Quality of Life Index”

      Tatyana Kudasheva, Svetlana Kunitsa, Bulat Mukhamediyev

      Abstract

      There are acute problems of income inequality and poverty around the world. In each particular case, it is important to study the causes and to develop mechanisms for their elimination. In Kazakhstan there have been many attempts to study poverty, but there have not been studies of groups near poverty or at risk of becoming impoverished. This paper presents a model of classifying the population into four groups according to two factors: income and quality of life. The study of each group’s profile can assist in the development of an effective social policy strategy on the basis of targeted support for each group through the consideration of their needs. It could help Kazakhstan to resolve issues of poverty and income inequality and increase the level and quality of life of the population.

   6. Corruption and Geography: Case of Mena Regions

      Dorsaf Elbir, Mohamed Goaied

      Abstract

      In this work we have achieved an empirical estimation for the growth experiences in MENA regions, from 1990 to 2010, by measuring the spatial effects that is related to corruption and geography. We use the institution quality index corruption control (CORR) to measure the absolute location effect owing to country specific institution. We use the latitude of country’s centroid to measure the absolute location effect owing to geography (GEO). The spatial diagnostics indicates that there is a spatial autocorrelation. The obtained results indicate that we have to use the spatial error model rather than the spatial lag model. These effects have been modeled by using spatial error model and by using a spatial weight matrix. In this framework, the corruption control is strongly and positively related to the economic growth rate than the geography. The control of corruption has a dominant role than geographical factor to determine the growth in MENA region. The obtained result confirms the primacy of institutions over geography.