Journal Transition Studies Review

The Impact of Public Debt on Private Consumption in Developing European Countries

Bekim Marmullaku — 2022-12-21

This study will investigate the relationship between public debt and private consumption. In the last decade, public debt and its impact on the economy has become a very current and vital topic for many scholars in developed and developing countries.
Therefore, the primary purpose of this study is to show the effect of public debt on the growth of private consumption in developing countries, where about 20 countries will be analyzed. The source of data for the realization of this study will be based on international financial institutions such as World Bank, International Monetary Fund, and European Bank for Reconstruction and Development, while the analysis period includes data from 1995 to 2020. Drafting and the research will be organized by applying a diverse methodology, which includes advanced econometric methods and techniques such as OLS, Fixed Effects, Random Effects, and GMM.
The main findings of this study show a non-linear relationship between public debt and private consumption in developing European countries. More specifically, the increase in public debt negatively affects private consumption expenditures.
The results provided through this study present data on developing European countries’ policies about the ratio of public debt to private consumption.

Innovation and Development after Transition. The Case Study of Gorizia Region, Slovenia

Cristian Gangaliuc — 2022-12-21

Central and Eastern Europe’s transition to a market economy was not homogeneous. It led to many developmental paths available for its regions. The study aims to see the results of this process and describe the contemporaneous innovation status and struggles. The analysis considered Gorizia (Slovenia) as an example of a non-capital region close to the European developmental average.
Based on data collected through an expert focus group organised with local stakeholders, the research revealed that Gorizia’s innovation process relies on endogenous and exogenous forces. The region reconstituted the economy from big producers into multiple smaller companies. Their integration into the global production chains proved essential in the transition and further development. This allowed for overcoming the issue of limited local and national resources, market size, and demand.
Similarly, it has widened regional stakeholders’ perspectives and contributed to local clusters’ development. Thus, the Regional Innovation System is heavily oriented toward foreign collaboration, especially with Italian partners. Local institutions and organisations are responsible for implementing the most significant projects within the region. Their susceptibility to the needs of the private sector strengthens the entrepreneurial origins of the innovation process. Gorizia’s innovation performance positively influences its competitive position. The value chain Flagships and original manufacturers show interest in local innovation. It is seen through the acquisition of Intellectual Property or parts of the companies to utilise in their production and innovation processes.

The Evolution of the Foreign-Ownership Wage Premium in Poland

Vera A Adamchik — 2022-12-21

The study examines the foreign-domestic wage differential in Poland during 2014-2017. The individual-level data come from ongoing surveys conducted by a major Polish HR consulting firm. The empirical analysis shows that during this period, there was a substantial (albeit decreasing) raw wage advantage for workers whom foreign-owned firms employed. This differential reduced significantly after controlling for personal, work, and workplace characteristics. Foreign firm employees at the lower end of the earnings distribution faced a smaller wage gap than those at the upper end; the wage gap showed a noticeable decline at all the percentiles over the years. Wage gap decompositions reveal that a predominant portion of the wage differential was due to differences in observed characteristics; nevertheless, a substantial portion of the wage gap remained unexplained.

Tax unification in the context of migration and the activities of international corporations

Nataliia M. Boreіko — 2022-12-21

The purpose of the article is to carry out a comprehensive analysis and scientific substantiation of current trends in labor migration and tax unification in the context of the development of international corporations in today’s globalized world. The leading approach to studying the issue under consideration was generally theoretical, economic, and mathematical methods of scientific cognition. Historical and abstract-logical methods helped to study the causes of the emergence and the strengthening of sentiments towards migration on a global scale. Analogy and extrapolation were used to study the global trends in tax unification under the development of international corporations and define vectors for Ukraine’s development.
The article presents the research results concerning the migration situation and the level of human capital development in Ukraine. The article analyzes how remittances from migrant workers affect the economy of Ukraine and the world in the context of the development of international corporations. The authors describe the world trends on the feasibility of introducing unified income taxation in the context of the development of international corporations and outline vectors for Ukraine’s development.
The materials of this article can be helpful for scientists and practitioners working on labor migration, tax unification, and the development of international corporations in the globalized world for the following purposes: for planning and forecasting scientific research, teachers of higher education institutions for training highly qualified personnel, and other interested persons.

A Panel Data Analysis of Albania’s Trade: The Gravity Model Approach

Flora Merko — 2022-12-23

International trade allows countries to expand markets for goods and services that otherwise may not have been available. These trade benefits have encouraged countries to strengthen trade ties and seek new trade opportunities, Adam Hayes (2022). This paper aims to investigate the role of distance and economic mass in gravity regressions. It also estimates a non-linear gravity model for 24 main European trade partners with Albania from 2008 to 2020. This paper uses a data set of 312 observations for each of the three variables (a total of 936), organized in panel data obtained from the World Bank during the mentioned period. Three research questions are designed to achieve the goal related to economic mass and distance’s role in international trade, estimated elasticity coefficients, and the methods to evaluate the gravity model. The main findings explain that the Gravity Model successfully explains Albania’s bilateral trade, and the estimated elasticity coefficients can explain the extent of the trade response to the change of the variable in percentage. This information may be helpful for policymakers to improve the trade balance and to orient the economy toward sustainable development.

The Impact of Electronic Banking Products on Economic Growth: The case of Kosovo

Fatmir Gashi — 2023-01-27

This study aims to investigate the impact of access and usage of electronic retail banking products or services on economic growth, with particular emphasis on the case of Kosovo. Specifically, the study will identify the impact of electronic retail payment products such as ATMs, POS, and E-banking and their impact on economic growth. The paper employs data from the Central Bank of Kosovo from 2007-2019, consisting of a times series data set. The methodology employed is a linear regression model. The results confirm that the development of retail banking products positively impacts real GDP. The study will promote the development of electronic payment products in Kosovo, and increase financial inclusion, to create possibilities for households and businesses to have better access to and use of retail financial products, leading to higher economic growth and increased macroeconomic benefits. The study findings will be valuable to the Central Bank of Kosovo, financial institutions, and other policymakers in Kosovo.

The Impact of Tax Rates on the Economic Performance of IT Companies: the Case of Moldova and Romania

Giorgio Dominese — 2023-01-27

This article analyzes the IT sectors of Romania and Moldova when examining the impact of the tax policy of states on the economic performance of companies in the sector. The IT sector is a rather promising component for countries to develop; with the proper involvement of international companies and support for companies with local capital, the overall economic indicators in the country will improve. Theoretically, the systematic effect of tax changes for the sector on the economic performance indicators of IT companies was determined. Based on autoregression-built models, when performing the Granger and Wald tests, it was noted the impact of tax rates on the economic performance of companies in the IT sector. The central tax rates discussed in the article are the tax on company income, payroll tax, and social and medical insurance contributions. Changes in time for each tax were worked out to build the most reliable model of the interdependence between indicators. In addition, the general trends of improvement in the IT sectors of the countries are reflected, and a shared understanding of the impact of new changes in tax policy is noted. After introducing new preferential conditions or the reduction of standard taxes, there was an increase in the number of companies in the sector, investment in the sector, foreign investment, and turnover in the sector.