External Financing and FDI in Central, Baltic and South-Eastern Europe in 2002-2003

The paper assesses the developments in the financial accounts of the balance of payments in 15 transition countries in Central, Baltic and South-Eastern Europe. It is a follow-up of the IES working paper no. 49 of May 2004, that dealt with the state of current accounts in these countries. In contrast to the early stages of transition when the external balance was often the source of economic instability in the region and required a deep undervaluation of the exchange rate, the performance of financial accounts reflects a high degree of restructuring, progressing advance patterns of integration and stability of these economies. The composition of foreign financing has been changing in the last 5 years. The risk of indebtedness, which would be unsustainable to disburse, has been declining, even though there are still present the dangers of a financial crisis is some countries due to the fiscal indiscipline and immodest wage hikes. In the last 5 years the FDI flows have been gradually changing both their direction and composition. Both of them indicate that financial capital shortage is not any longer the primary constraint on the development of these transition countries. The tendency towards financial flows, whose pattern is typical for stabilised advanced economies and which reflects the needs of post-industrial patterns of development, is present throughout the region.

Current Account Developments in Central, Baltic and South-Eastern Europe in the Pre-enlargement Period of 2002-2003

The paper assesses the developments in the current accounts of transition countries in Central, Baltic and South-Eastern Europe. Attention is given to policy issues, such as the relationship between savings, investments and government deficits, reinvested profits, official transfers from the European Commission and private transfers. The overall situation in the sustainability of current account deficits in studied transition countries is characterised as steadily improving and the majority of economies reached a stage where the current account is not an immanent threat to their growth any longer. However, economic policies in many of the countries need important adjustments in order to keep the economies in macroeconomic equilibrium. Particularly the trade deficit has been causing problems to external equilibrium. It is apparent that fiscal deficits, that have been on a rise in the last 2-3 years, are becoming the dominant factor behind the current account disequlibria. Reinvested profits of foreign investors and current transfers have been becoming gradually the instrument for bringing the current account deficits closer to their sustainable levels. The balance between the repatriation of profits by foreign investors and the reinvestment of such profits in the transition economies will play more important role in the future developments in the current account deficits or even surpluses.

The Factors of Growth of Small Family Businesses: A Robust Estimation of the Behavioral Consistency in the Panel Data Models

The paper quantifies the role of factors associated with the growth (or decline) of micro and small businesses in European economies. The growth is related to employment and value added in enterprises as well as to ten institutional variables. We test the data for consistency of behavioural patterns in various countries and gradually remove outlying observations, quite a unique a pproach in the panel data analysis, that can lead to erroneous conclusions when using the classical estimators. In the first part of this paper we outline a highly robust method of estimation based on fixed effects and least trimmed squares (LTS). In its second part we apply this method on the panel data of 28 countries in 2002-2008 testing for the hypothesis that micro and small businesses in Europe use different strategies for their growth. We run a series of econometric tests where we regress employment and total net production in micro and small businesses on three economic factors: gross capital returns, labour cost gaps in small relative to large enterprises and the GDP per capita. In addition, we also test the role of 10 institutional factors in the growth of familty businesses.Family business, robust estimator, LTS, fixed effects

Economic Factors in the Choice of Profession and School in the Case of Secondary Education in Prague

n this paper we study three crucial questions of economic decision-making: a) How are the people motivated in the choice of profession (career) and schools? This is also a decision that deals with the criteria for building the human capital of various specialisations. b) Can enterprises rely on the supply of new workers that should be qualified by skills for filling the future specialised demands of enterprises? c) Do the admissions into secondary schools, as intermediaries between the previous two, adjust to labour inputs with specific skills as required by firms? We have found by analysing the data for the agglomeration of Prague that the specialisation structure the supply of new cohort of workers (i.e. the school leavers) was highly consistent with the structure of expected demand of empoyers (i.e. enterprises). Our analysis working with 28 professional types of secondary schools in Prague reveals that the choice of school and profession depends primarily on the industrial structure of both employment opportunities and unemployment threats. As a secondary observation, the structure of new admissions to schools is related to the level of wages, profits, unemployment rates and R&D expenditures in industries. At the same time we could see that the existing official statistics about educational specialisation are insufficiently structured for serving as an efficient instrument for underpinning the labour market-dependent decision making in both families and schools.education; human capital; supply and demand for working skills; employment in industries

Determinants of Austrian international trade: Analysis based on the gravity model

The purpose of this paper is to examine Austrian foreign trade and estimate the country's export function. The analysis is based on the gravity model of trade in the log-log form, augmented by additional variables in order to control for the impact of institutions on decision-making. Our panel dataset consists of 3,396 observations of Austrian exports to 211 countries over the period from 1995 to 2011. At that time, the Austrian export was very closely dependant on the German market, which the model proved to be a natural outcome. In other respects it has been, however, diversified among many smaller trade partners whose importance has been gradually shifting eastwards. We employ Fixed Effects and Random Effects as estimation techniques. By taking advantage of the panel data structure, we estimate the gravity equation as two alternative one-way estimators - as 17 segments of cross-sections and as 211 time series. This allows us to estimate factors related to two complementary questions of "where to export" and "how much to export over time". For each question we test and quantify the relevance of nine economic and ten institutional factors

The factors of growth of small family businesses: A robust estimation of the behavioral consistency in the panel data models

The paper quantifies the role of factors associated with the growth (or decline) of micro and small businesses in European economies. The growth is related to employment and value added in enterprises as well as to ten institutional variables. We test the data for consistency of behavioural patterns in various countries and gradually remove outlying observations, quite a unique a pproach in the panel data analysis, that can lead to erroneous conclusions when using the classical estimators. In the first part of this paper we outline a highly robust method of estimation based on fixed effects and least trimmed squares (LTS). In its second part we apply this method on the panel data of 28 countries in 2002-2008 testing for the hypothesis that micro and small businesses in Europe use different strategies for their growth. We run a series of econometric tests where we regress employment and total net production in micro and small businesses on three economic factors: gross capital returns, labour cost gaps in small relative to large enterprises and the GDP per capita. In addition, we also test the role of 10 institutional factors in the growth of familty businesses

Command Economy after the Shocks of Opening up: The Factors of Adjustment and Specialisation in the Czech Trade

This analysis focuses on factors determining the transition of international trade in the Czech economy. Even though the Czech economy was exposed to several structural shocks during 1993–2002 and grew at a very low rate, its external trade flows sustained an annual growth at around 10%. The restructuring in the pattern of specialisation with the EU-15 was exceptionally intensive and our results confirm that its progress can be explained by the variables used in the theories of open economies. The undergoing changes were profound and painful, but their positive final outcome is undisputable. In the econometric part of this study we quantify the determining factors of Czech exports and imports during 1993–2002 when the trade flows have undergone intensive structural and qualitative changes facilitating the trade creation. Our findings lend significance to the variables of aggregate demand and the real exchange rate, in addition to liberalisation of tariffs, evolution of unit prices of exports and imports, changes in quality, diversion in factor usage and economies of scale. Unimpeded opening-up can be a crucial driver of an in-depth restructuring, which brings positive results from the very start, even though its spillovers into an overall fast growth can be delayed.industrial specialisation; export and import dynamics; dynamic estimation; trade determinants

Reformy sociálně-ekonomických modelů v zemích EU: Teoretické přístupy

Rozsáhlé reformy v zemích EU jsou reakcí na nové trendy objevující se ve světě po pádu komunismu, s nimiž je minulý vývoj "státu blahobytu" v západní Evropě často v konfliktu. Těmi trendy jsou: globalizace ekonomiky, politiky a kultury, koexistence transnacionální oligopolizace korporátního sektoru bezprecedentní vlnou fúzí a akvizicí se současnou revitalizací významu malých a středních podniků lokálního významu, divergence mezi postavením mezinárodně obchodovaných a neobchodovaných statků v národní ekonomice, rostoucí napětí mezi zastánci sociálně-politického internacionalismu a zastánci nacionalismu a lokálního izolacionismu, rostoucí váha občanské společnosti ve vztahu ke státu, změny v náhledech na správu veřejných statků, nutnost revize jak struktury, tak způsobu řízení veřejných financí. Odlišnosti ve výchozích stavech společností v EU a široká škála alternativ při volbě sociálně-ekonomických cílů reforem způsobují, že reformy nemohou mít uniformní charakter a ladění jejich detailů je konfrontováno se střety v zájmech různých aktérů

Reformy sociálně-ekonomických modelů v zemích EU: Teoretické přístupy

Rozsáhlé reformy v zemích EU jsou reakcí na nové trendy objevující se ve světě po pádu komunismu, s nimiž je minulý vývoj "státu blahobytu" v západní Evropě často v konfliktu. Těmi trendy jsou: globalizace ekonomiky, politiky a kultury, koexistence transnacionální oligopolizace korporátního sektoru bezprecedentní vlnou fúzí a akvizicí se současnou revitalizací významu malých a středních podniků lokálního významu, divergence mezi postavením mezinárodně obchodovaných a neobchodovaných statků v národní ekonomice, rostoucí napětí mezi zastánci sociálně-politického internacionalismu a zastánci nacionalismu a lokálního izolacionismu, rostoucí váha občanské společnosti ve vztahu ke státu, změny v náhledech na správu veřejných statků, nutnost revize jak struktury, tak způsobu řízení veřejných financí. Odlišnosti ve výchozích stavech společností v EU a široká škála alternativ při volbě sociálně-ekonomických cílů reforem způsobují, že reformy nemohou mít uniformní charakter a ladění jejich detailů je konfrontováno se střety v zájmech různých aktérů

Fiscal convergence to the countries of european union and the state burden

There is no doubt that the same economic regularities are effective in economies in the stage of advanced economic transformation as in traditional market economies. But the low productivity and relics of institutions from the totalitarian system make them very different. Some immature markets of these economies, e.g. labor, money, capital and real property ones, are combined with a huge burden of the non-market public sector, which is mainly borne by budgets of central and local governments. It is not true in any case that any of the former Comecon economies would suffer from an excess of market dictate . It would be worth asking a question to what extent all these economies suffer from market imperfections (e.g. absence of some markets or rent seeking) and from the fact that the government and bureaucracy are still involved in numerous non-market and regulatory responsibilities. As shown by some comparative studies, the government's economic influence significantly goes beyond the scope of their rampant state budgets.