The impact of Trade Balance in the Current Account of Kosovo’s Balance of Payments

The trade deficit and specifically the current account deficit are the main challenges that Kosovo’s economy is facing. According to the Balance of Payments Statistics (BOP), the trade balance of goods is the largest component, expressed in absolute and relative terms and consequently it determines the behavior of the current account balance. Trade deficit to GDP ratio is very high - more than 50 percent. Regarding this, financing the constant deficit of the current account is becoming a real problem, because in the long run it is impossible for a country to spend more than its income without becoming a debtor to the rest of the world. Given the unchanged structure of the current account of the Balance of Payments, we conclude that, an improvement of the trade balance is a precondition to the improvement of the current account balance. This can be done through long-term and sustainable substitution of imports with domestic production and also with effective export promotion. Increasing foreign direct investment and export promotion can be considered, in the longer term, the main way to improve Kosovo's Trade Balance. &nbsp

Do-it-yourself Marketing and Digital Marketing Adoption: Evidence from a Developing Country

Background: Digital marketing is a new form of business management and promotion, namely promoting services and products of (SMEs)small and medium enterprises. Despite the importance of digital marketing, SMEs in developing and post-transition countries still do not fully utilize the benefits of digital marketing. Objectives: This study aims to analyse the DIY (do-it-yourself) model and the impact that this model has on digital marketing adoption. Methods/Approach: The online survey research was conducted among 194 SME managers in Kosovo. The proposed research model was analysed by partial least square structural equation modelling (PLS-SEM). Results: Findings show that the degree of perception of ease of use impacts the process of digital marketing adoption. Moreover, the degree of control seems to be the most important factor impacting process of the digital marketing in SMEs. Conclusions: SMEs use DIY marketing and adopt digital marketing because this form of practicing marketing activities offers more control for companies in their marketing activities. In addition, perceived ease of use of technology facilitates the process of digital marketing adoption among SMEs. Finally, the study provides insights for managers and businesses using DIY marketing and adopting the process of the digital marketing in SMEs

Consequences of money laundering on economic growth – The Case of Kosovo and its Trade Partners

Abstract: The main purpose of this paper is to explore the impact of money laundering phenomenon on economic growth level, respectively focusing on Republic of Kosovo and its trade partners’ economic growth. In order to achieve this objective, the authors used a dynamic panel generalised methods of moments (GMM) technique. This paper provides results about measure of effect of money laundering on economic growth and the objective is to provide reasonable evidence that money laundering empirically impacts the macroeconomic indicators, respectively the economic growth of the country. When compare with past literature, similar results are found about negative effect of money laundering on economic growth. Through this paper, it is concluded that reductions in annual growth rates were associated with increases of variables related with money laundering.  The key contribution of the paper is that it provides clear results about the effect of this phenomenon on economic growth which is very important for academics, researchers and universities. Moreover, the study is original and unique because puts Republic of Kosovo to the centre which is not studied in the past. As conclusion, through this paper is proved the hypothesis that money laundering has a significant effect on economic growth and this effect is negative

Impact of Investment Environment on Foreign Direct Investment (FDI): Case of the Republic of Kosovo

The main objective of this paper is to investigate the impact of the investment environment on Foreign Direct Investment (FDI) in the Republic of Kosovo, by employing IV-GMM times series estimator, where Control of Corruption and Political Stability, Absence of Violence/Terrorism and Distance to frontier score (Doing Business) are used as main variables, while as pull factors are used GDP per capita, unemployment rate and profit tax rate.Further, The empirical findings reveal that Control of Corruption and Political Stability and Absence of Violence/Terrorism have positive and significant effect on attracting FDI flows, while Distance to frontier score (Doing Business) has shown negative effect on FDI flows in the case of Republic of Kosovo for the time period 2009q1 -2016q4.Furthermore, This paper for the first time tries to address the Kosovo case, using the IV-GMM estimator method and handling the above mentioned variables over this time period, presenting a unique case with regard to the Republic of Kosovo because, from our best knowledge, has not been addressed before such nexus for the case of Kosovo.In addition, This paper will also contribute to the existing literature rather than solving the existing debate among scholars, by using these measures to investigate their impact on attracting FDI in a transition country such as the Republic of Kosovo. Keywords: FDI, investment environment, IV-GMM, time series, transition. DOI: 10.7176/RJFA/10-10-07 Publication date:May 31st 201

Effect of corruption on foreign direct investment inflows in countries of the Western Balkans

The purpose of this study was to investigate the effect of corruption on Foreign Direct Investment (FDI) in the Western Balkans countries, including Bosnia and Herzegovina, Croatia, Kosovo, Montenegro, North Macedonia, Serbia, and Albania. Secondary data from The World Bank, Transparency International, and International Monetary Fund databases were utilized to complete this study for 2012-2020. The built model of multiple linear regression included four independent variables, namely: Corruption Perception Index (CPI), Western Balkan Corruption Ranking (WBCR), Exchange Rate (EXG), and Inflation Rate (INFL), as well as FDI as a dependent variable, and data effects were analyzed through the SPPS scientific research software program. The results found that if CPI and WBCR were to increase by one unit, FDI would decrease by 0.088, namely 0.624, while if EXG and INFL were to increase by one unit, FDI would increase by 0.165, namely 0.236. In order to fight corruption and potentially attract more foreign direct investment, the governments of these countries should work to harmonize their anti-corruption laws with those of the European Union. In order to prevent the negative consequences of FDI inflows, they should also maintain a balanced rate of inflation, which entails stabilizing exchange rate fluctuations

Perceptions of the Students Related to Entrepreneurship as an Option of the Career

What is the importance of entrepreneurship for the economic development of a country? How are the entrepreneurs seen in the society? Are the entrepreneurship and the entrepreneur considered as a positive, negative or intermediate occupation and how important it is for a society? In order to answer these questions, an appropriate questionnaire has been drafted, meanwhile, the sample has included 285 interlocutors. This study evaluates the importance the entrepreneurship has in an economy of a country, based on the evaluation of young people/students of Kosovo. The study aims to review and evaluate the possible causes which foster the students to consider the entrepreneurship as their future career, and will research the students' perceptions toward the entrepreneurship as an option for the career and also to evaluate the beliefs and stands the students have for establishing new enterprises.Keywords: entrepreneurship, students perception, SMEs, Kosovo,entrepreneurship career, start-ups

The impact of the Ease Doing Business Indicators on Foreign Direct Investment in the European transition economies

The objective (aim) of this paper is to explore the impact of the Ease of Doing Business Indicators on FDI on transition economies in Europe. Authors have used the dynamic panel methodology, by using three methods: Pooled Ordinary Least Square (POLS), Fixed Effect (FE), and Two Step-System Generalised Method of Moments (GMM) estimation techniques. By referring to the GMM technique, it can be seen that variables such as: Starting a Business, Registering property, Getting electricity and Resolving insolvency have a positive and significant impact in attracting FDI in 16 European transition countries, while variables as: Dealing with construction permits, Getting credit, Paying taxes, Protecting minority investors, have shown negative impact, whereas Trading Across Border and Enforcing contracts have not shown any impact on attracting FDIs in European transition countries. This paper contributes to the enrichment of existing literature in this field by using these three methods

The Current Global Financial Crisis 2008-2011

The current global financial crisis is considered as one of the biggest crises after the crisis of the years of 30’s.  The global financial crisis has affected all countries including developed and developing ones. It also has affected all the industries. Population with the low-income faced the greatest consequences. The last hope for the survival of the market economy was to undertake important steps for the nationalization of bankrupted banks and companies, thereby developing policies for the preservation of jobs.   Through this analysis, we have included briefly some of the development followed the period of 2008 and onwards. A summary of statistics for some important economic indicators such as employment, foreign direct investment, exporting and importing is covered in this study as well.&nbsp

Consequences of Money Laundering on Economic Growth – The Case of Kosovo and its Trade Partners

The main purpose of this paper is to explore the impact of money laundering phenomenon on economic growth level, respectively focusing on Republic of Kosovo and its trade partners’ economic growth. In order to achieve this objective, the authors used a dynamic panel generalised methods of moments (GMM) technique. This paper provides results about measure of effect of money laundering on economic growth and the objective is to provide reasonable evidence that money laundering empirically impacts the macroeconomic indicators, respectively the economic growth of the country. When compare with past literature, similar results are found about negative effect of money laundering on economic growth. Through this paper, it is concluded that reductions in annual growth rates were associated with increases of variables related with money laundering. The key contribution of the paper is that it provides clear results about the effect of this phenomenon on economic growth which is very important for academics, researchers and universities. Moreover, the study is original and unique because puts Republic of Kosovo to the centre which is not studied in the past. As conclusion, through this paper is proved the hypothesis that money laundering has a significant effect on economic growth and this effect is negative