Skip to main navigation menu Skip to main content Skip to site footer

Vol. 5 No. 4 (2017)
International Competitiveness

Other Articles

Business Environment and Economic Growth in the European Union Countries: What Can Be Explained for the Convergence?

https://doi.org/10.15678/EBER.2017.050409

Published 2017-12-29

  • Agnieszka Głodowska

Agnieszka Głodowska
Cracow University of Economics

Abstract

Objective: The objective of this article is to present the results of research on the economic growth and business environment of the European Union countries in the context of convergence processes. Additionally, the article presents the results of investigation on the impact of business environment on economic growth.

Research Design & Methods: Methods applied in the study are analysis and synthesis of the literature on the subject, as well as quantitative tools: descriptive statistics and multivariate regression. The analysis includes 28 countries of the European Union in the years 2000-2016 for economic growth and 2010-2018 for business environment.

Findings: Changes in the business environment across the European Union, as well as upward trends indicate a gradual approach of member economies in these areas. A quantitative analysis of the dependence of growth on business environment has also been confirmed.

Implications & Recommendations: The results can be important for policy makers. Demonstrating a positive link between business environment and economic growth should be viewed as a guideline for reforms, changes and regulatory improvements. This elaboration can be treated as a preliminary study on interrelation between business environment and economic growth in the context of economic convergence. Further research on the influence of business environment on economic convergence within the European Union countries is highly recommended.

Contribution & Value Added: The originality of this work lies in the connection of two different research problems: economic growth and business environment, as well as the study of links between these two areas.

    

Keywords

business environment, economic growth, convergence, European Union, multivariate regression

PDF

References

  1. Alexe, I. (2012). How Does Economic Crisis Change the Landscape of Real Convergence for Central and Eastern Europe?. Romanian Journal of Fiscal Policy (RJFP), 3(1), 1-8.
  2. Ani, T.G. (2015). Effect of Ease of Doing Business to Economic Growth among Selected Countries in Asia. Asia Pacific Journal of Multidisciplinary Research, 3(5), 139-145.
  3. Antonakakis, N., Christou, C., Cunado, J., & Gupta, R. (2017). Convergence patterns in sovereign bond yield spreads: Evidence from the Euro Area. Journal of International Financial Markets Institutions & Money, 49, 129-139. doi: 10.1016/j.intfin.2017.03.002
  4. Ayal, E.B., & Karras, G. (1998). Components of economic freedom and growth: An empirical study. Journal of Developing Areas, 32, 327-338.
  5. Barro, R.J., & Sala – i – Martin, X. (2003). Economic Growth. Cambridge – London: The MIT Press.
  6. Belniak, M. (2015). Factors Stimulating Internationalisation of Firms: An Attempted Holistic Syn-thesis. Entrepreneurial Business and Economics Review, 3(2), 125-140. http://doi: 10.15678/EBER.2015.030209
  7. Bobenič-Hintošová, A., Kubíková, Z., & Ručinský, R. (2016). Does Quality of Business Environment Influence Foreign Direct Investment Inflows? A Case of Cenral European Countries. European Journal of Management, 3(1). doi: 10.5817/CEJM2016-1-1
  8. Boermans, M.A., & Roelfsema, H. (2016). Small firm internationalization, innovation, and growth. International Economics and Economic Policy, 13(2), 283-296.
  9. Castro, R., Clementi, G.L., & MacDonald, R. (2004). Investor Protection, Optimal Incentives, and Economic Growth. The Quarterly Journal of Economics, 119(3), 1131-1175.
  10. Cuestas, J.C., Monfort, M., & i Ordonez, J., (2012). Real Convergence in Europe; A cluster analysis (Sheffield Economic Research Paper Series SERP no. 2012023). Sheffield: University of Shef-field.
  11. Deichmann, J.I., Eshghi, A., Haughton, D., & Li, M. (2017). Socioeconomic Convergence in Europe One Decade After the EU Enlargement of 2004: Application of Self – Organizing Maps. East-ern European Economics, 55(3), 236-260. doi: 10.1080/00128775.2017.1287547
  12. Dawson, J.W. (1998) Institutions, investment and growth: new cross-country and panel data evi-dence. Economic Inquiry, 36, 603-619.
  13. Dawson, J.W. (2006). Regulation, Investment, and Growth across Countries. Cato Journal, 26(3). 489-509.
  14. De la Fuente, A. (1997). The Empirics of Growth and Convergence: A Selective Review. Journal of Economic Dynamics and Control, 21(1), 23-73.
  15. Dickson, P.H., Weaver, K.M., & Vozikis, G.S. (2013). The Impact of the Institutional Environment on SME Internationalization: An Assessment of the Environmental Assumptions of Emerging In-tegrated Models of Internationalizatoin. Journal of Applied Business and Economics, 15(3), 43-55.
  16. Djankov, S., La Porta, R., Lope-de-Silanes, F., & Shleifer, A. (2002). The Regulation of Entry. The Quarterly Journal of Economics, 117(1), 1-37.
  17. Djankov, S., McLiesh, C., & Ramalhom, R. (2006). Regulation and growth. Economics Letters, 92(3). 395-401
  18. Easton, S., & Walker, M. (1997). Income, growth, and economic freedom. American Economic Review, 87(2), 328-332.
  19. Edrees, A. (2015). Foreign Direct Investment, Business Environment and Economic Growth in Sub-Saharan Africa. Pooled Mean Group Technique. Journal of Global Economy, 3(2), 144-149. doi:10.4172/2375-4389.1000144
  20. European Commission (2010). Investment in Europe’s Future. The Fifth Cohesion Report. Brussel: European Commission.
  21. European Commission (2014). Investment for Jobs and Growth. Promoting Development and Good Governance in EU Regions and Cities. The Sixth Cohesion Report. Brussel: European Commis-sion.
  22. European Commision (2016). Report on Single Market integration and competitiveness in the EU and its Member States. Brussel: European Commission.
  23. Eurostat Database. Economy and Finance Database. Retrieved on October 12, 2017 from http://ec.europa.eu/eurostat/data/database
  24. Furková, A., & Chocholatá, M. (2016). Spatial Econometric Modelling of Regional Club Convergence in the European Union. Ekonomicky Casopis, 64(4), 367-386.
  25. Ganni, A. (2011). The Relationship between Business Environment and Foreign Direct Investment in Developing Countries. Global Review of Business and Economic Research GRBER, 7(1), 71-86.
  26. Giannetti, M. (2002). The effects of integration on regional disparities: Convergence, divergence or both?. European Economic Review, 46, 539-567.
  27. Głodowska, A., Pera, B., & Wach, K. (2016). International Environment and its Influence on the Entrepreneurial Internationalisation of the Firm: The Case of Polish Businesses, in: K. Wach & A. Żur (Eds.), Advancing Research in Entrepreneurship in Global Context: Conference Proceed-ings of the 8th ENTRE Conference. Kraków: Cracow University of Economics [Later published also as: Głodowska, A., Pera, B., & Wach, K. (2016). International Environment and its Influ-ence on the Entrepreneurial Internationalisation of the Firm: The Case of Polish Businesses. Problemy Zarządzania, 14(3), 107-130].
  28. Głodowska, A. (2017). Problem zbieżności dochodowej państw Unii Europejskiej w świetle kla-sycznych modeli konwergencji. In M. Maciejewski & K. Wach (Eds.), Handel zagraniczny i biz-nes międzynarodowy we współczesnej gospodarce (pp. 75-89). Kraków: Uniwersytet Ekonomiczny w Krakowie.
  29. Haider, J.I. (2012). The impact of business regulatory reforms on economic growth. Journal of The Japanese and International Economies, 26, 285-307.
  30. Hanusch, M. (2012). The Doing Business Indicators, Economic Growth and Regulatory Reform (World Bank Policy Research Working Paper no. 6176). Washington: World Bank.
  31. Helliwell, J.F. (1994). Empirical Linkages Between Democracy and Economic Growth. Journal of Political Science, 24, 225-248.
  32. Hussain, M.E., & Haque, M. (2016). Impact of Economic Freedom on the Growth Rate: A Panel Data Analysis. Economies, 4(5), 1-15. doi: doi:10.3390/economies4020005
  33. Islam, N. (2003). What have we learned from the convergence debate?. Journal of Economic Sur-veys, 17(3), 309-362.
  34. Klapper, L., & Love, I. (2010). The Impact of Business Environment Reforms on New Firm Registra-tion (World Bank Policy Research Working Paper no. 5493). Washington: World Bank.
  35. Knack, S., & Keefer, P. (1995). Institutions and Economic Performance: Cross – Country Tests Using Alternative Institutional Measures. Economics and Politics, 7(3), 207-227.
  36. Kormendi, R.C., & Meguire, P.G. (1985). Macroeconomic Determinants of Growth: Cross-Country evidence. Journal of Monetary Economics, 16(2), 141-163. https://doi.org/10.1016/0304-3932(85)90027-3
  37. Lejko, I., & Bojnec, Š. (2011). Internationalization and Economic Growth: The Comparison of Euro-pean Economies. Proceedings of 8th International Conference “Economic Integration, Compe-tition and Cooperation”, 6-9 April, Opatija, University of Rijeka. Retrieved on November 14, 2017 from https://ssrn.com/abstract=2232632 or http://dx.doi.org/10.2139/ssrn.2232632
  38. Leonardo, R. (2005). Have Regions Converged? Sigma and Beta Convergence in Objective 1 and Other EU Regions between 1988 and 1999. In R. Leonardi (Ed.), Cohesion Policy in the Euro-pean Union (pp. 89-106). London: Palgrave Macmillan.
  39. Lisowska, R. (2016). The Potential of Business Environment Institutions and the Support for the Development of Small and Medium-sized Enterprises. Entrepreneurial Business and Econom-ics Review, 4(3), 85-101, http://dx.doi.org/10.15678/EBER.2016.040307
  40. Lizińska, W., Marks-Bielska, R., & Serocka, I. (2014). Operations Performed by Business Environ-ment Institutions in the Process of Foreign Investment Acquisition: a Case Study of Investor Service Centres. Equilibrium. Quarterly Journal of Economics and Economic Policy, 9(4), 65-78. https://doi.org/https://doi.org/10.12775/EQUIL.2014.025
  41. Maciejewski, M. (2017). Zróżnicowanie kondycji gospodarczej państw Unii Europejskiej. Studia Ekonomiczne, 219, 117-126.
  42. Matkowski, Z., & Próchniak, M. (2005). Zbieżność rozwoju gospodarczego w krajach Europy Środ-kowo – Wschodniej i w stosunku do Unii Europejskiej. Ekonomista, 3, 293-320.
  43. Matkowski, Z., & Próchniak, M. (2014). Realna konwergencja dochodowa w UE - pozycja i szanse Polski. In M.A. Weresa (Ed.), Polska. Raport o konkurencyjności 2014. Dekada członkostwa Pol-ski w Unii Europejskiej (pp. 45-63). Warszawa: Instytut Gospodarki Światowej, Szkoła Główna Handlowa w Warszawie.
  44. Mello, M., & Perrelli, R. (2003). Growth Equations: A Quantile Regression Exploration. Quarterly Review of Economics and Finance, 43(4), 643-667.
  45. Messaoud, B., & Teheni, Z.E.G. (2014). Business regulations and economic growth. What can be explained?. International Strategic Management Review, 2(2), 69-78.
  46. Milanovic, B. (2003). Income Convergence during the Disintegration of the World Economy, 1919-39 (World Bank Policy Research Working Paper no. 2941). Washington: World Bank.
  47. Militaru, C., & Pavel, A.P. (2012). Euromanagement and European Business Environment. Interna-tional Journal of Academic Research in Accounting, Finance and Management Sciences, 2(1), 96-102.
  48. Próchniak, M., & Witkowski, B. (2016). On the use of panel stationarity tests in convergence analy-sis: empirical evidence for the EU countries. Equilibrium. Quarterly Journal of Economics and Economic Policy, 11(1), 77-96. https://doi.org/https://doi.org/10.12775/EQUIL.2016.004
  49. Rapacki, R., & Próchniak, M. (2014). The Impact of EU Membership on Economic Growth and Real Convergence of the Central and Eastern European Countries. Ekonomia Journal, 39, 39-87.
  50. Recher, V., & Kurnoga, N. (2017). European Integration Perspectives: From Cohesion to Diver-gence?. Acta Oeconomica, 67(2), 195-214.
  51. Scully, G.W. (1988). The Institutional Framework and Economic Development. Journal of Political Economy, 96(3), 652-662.
  52. Smolny, W. (2000). Post-War Growth, Productivity Convergence and Reconstruction. Oxford Bulle-tin of Economics and Statistics, 62(5), 589-606.
  53. Stanišić, N. (2012). The effects of the economic crisis on income convergence 506 in the European Union. Acta Oeconomica. Periodical of the Hungarian Academy of Sciences, 62(2), 161-182.
  54. Verblane, U., & Vahter, P. (2005). An Analysis of the Economic Convergence Process in the Transi-tion Countries (Working Paper Series no. 37). Tartu: University of Tartu. Retrieved on July 24, 2017 from ftp://ftp.repec.org/opt/ReDIF/RePEc/mtk/febpdf/febawb37.pdf
  55. Wach, K. (2016). Otoczenie międzynarodowe jako czynnik internacjonalizacji polskich przedsię-biorstw. Prace Komisji Geografii Przemysłu Polskiego Towarzystwa Geograficznego, 30(1), 7-20.
  56. Wałęga, A. (2014). Spójność ekonomiczna regionów Polski przed i po przystąpieniu do Unii Euro-pejskiej. Badania Ekonometryczno-Statystyczne w Teorii i Praktyce, 203, 172-180.
  57. Witkowska, J. (2007). Foreign Direct Investment in the Changing Business Environment of the European Union’s New Member States. Global Economy Journal, 7(4), 1-32. https://doi.org/10.2202/1524-5861.1233
  58. World Bank (2017). The Easy of Doing Business Indicator. Retrieved on November 15, 2017 from http://www.doingbusiness.org/Custom-Query

Downloads

Download data is not yet available.

Similar Articles

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 > >> 

You may also start an advanced similarity search for this article.