Cointegration analysis of the monthly time-series relationship between retail sales and average wages in Croatia

A dynamic econometric model of Croatian monthly retail sales and wages is estimated through testing sequential model reduction validity. Such an approach aims at developing well-performing and interpretable dynamic relationships as data-description models. In addition to the model in levels a more economically interpretable error correction model was estimated enabling direct evaluation of the short-run impact of wage change to retail change as well as the periodic adjustment to the long-run equilibrium. It was established that, both in the short-run and in the long run, retail sales respond to wages thus forming a stable dynamic relationship

Information and communication technology (ICT) policy in the Central and South-Eastern Europe

Primary social aspects relevant for ICT include economic (commercial) and political issues as well as the traditionally ICT-intensive fields of high-tech and sciences. Aside of being the highest-growth sector in most western economies, ICT is inevitably a major factor in successful transition of the post-Communist and developing societies in the Central and South Eastern Europe (CSEE). The Stability Pact incorporated ICT policy issues as part of the “Third Wave” infrastructure reconstruction of the CSEE region strongly emphasising issues such as electronic networks and reforms to modernise business and governmental procedures. Among most crucial aspects are legislation and the role of government specially regarding the de-regulation and ICT market liberalisation issues. These are precisely the aspects that individual CSEE countries should solve themselves though the Stability Pact process should provide help and guidance (same holds for EU processes and pre-accession criteria)

Multivariate analysis of the European economic and defence

In this paper we model the defence and economic structure of 39 European countries using cluster and factor analytic methods. Initial results from standard cluster analysis performed on the original variables are compared with the results obtained from a confirmatory factor model estimated with maximum likelihood method within the general LISREL framework. Namely, a K-means cluster analysis is performed on latent scores calculated from the LISREL model. The results indicate that general clustering patters do not cut across East-West or transitional/non-transition division lines, rather it is found that a more subtitle grouping of countries exists where the more developed transitional countries clearly cluster closer to some West European countries than to the other transitional countries. It is subsequently found that noted differences exist also among the EU countries, which generally do not belong to a single cluster, regardless of the methods used

Multivariate analysis of the European economic and defence

In this paper we model the defence and economic structure of 39 European countries using cluster and factor analytic methods. Initial results from standard cluster analysis performed on the original variables are compared with the results obtained from a confirmatory factor model estimated with maximum likelihood method within the general LISREL framework. Namely, a K-means cluster analysis is performed on latent scores calculated from the LISREL model. The results indicate that general clustering patters do not cut across East-West or transitional/non-transition division lines, rather it is found that a more subtitle grouping of countries exists where the more developed transitional countries clearly cluster closer to some West European countries than to the other transitional countries. It is subsequently found that noted differences exist also among the EU countries, which generally do not belong to a single cluster, regardless of the methods used

Fiscal policy and regional development: an empirical analysis of the war-affected regions in Croatia

The paper analyses the effectiveness of the current Croatian regional fiscal policy in terms of its potential effects on stimulating economic growth in the war-affected regions. It is investigated whether sector (production vs. services), firm size, and the after-tax profit affect the investment behaviour in terms of the profit share re-investment. We estimate single and multigroup structural equation models treating firm size and re-investment behaviour as latent variables. The result suggest significant differences between production and service sector firms, and also some differences between firms of different sizes in respect to their re-investment tendencies. Namely, we find the relationship between the latent size normalised to net profit and re-investment share most pronounced among small and medium production firms, while such effect was not found for service sector and large firms. The results suggest that the enterprise size and sector do affect profit-share re-investment and that a more efficient fiscal policy could be designed by differently treating firms of different sectors and sizes

A multivariate methodology for modelling regional development in Croatia

This paper proposes a multivariate statistical approach based on covariance structure analysis for assessment of the regional development level with an application to development ranking of 545 Croatian municipalities. Municipality-level data ware collected on economic, structural, and demographic dimensions and preliminary factor and principal component analysis were computed to analyse empirical groupings of the variables. Next, confirmatory factor analytic models were estimated with the maximum likelihood technique and subsequently their implied structure was formally tested. Testing was extended to a joint model including all three dimensions (economic, structural and demographic) and their covariance structure was modelled with a recursive structural equation model. Finally, scores were estimated for latent variables thereby allowing (i) estimation of the latent development level of the territorial units, (ii) ranking of all units on an interval scale in respect to their latent development level, and (iii) selection of a given percentage of units for inclusion into special state-care subsidy programme

A multivariate methodology for modelling regional development in Croatia

This paper proposes a multivariate statistical approach based on covariance structure analysis for assessment of the regional development level with an application to development ranking of 545 Croatian municipalities. Municipality-level data ware collected on economic, structural, and demographic dimensions and preliminary factor and principal component analysis were computed to analyse empirical groupings of the variables. Next, confirmatory factor analytic models were estimated with the maximum likelihood technique and subsequently their implied structure was formally tested. Testing was extended to a joint model including all three dimensions (economic, structural and demographic) and their covariance structure was modelled with a recursive structural equation model. Finally, scores were estimated for latent variables thereby allowing (i) estimation of the latent development level of the territorial units, (ii) ranking of all units on an interval scale in respect to their latent development level, and (iii) selection of a given percentage of units for inclusion into special state-care subsidy programme