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The Effects of the Crisis on the Convergence Process of the Western Balkan Countries towards the European Union

Author

Listed:
  • Dzenita Siljak

    (PhD in Economics, EU studies expert)

  • Sándor Gyula Nagy

    (Corvinus University of Budapest, Hungary
    Institute for Foreign Affairs and Trade, Hungary)

Abstract

The aim of the paper is to analyze economic convergence of the Western Balkan countries towards the European Union member states with two types of measurement methodology, sigma and beta convergence. Sigma convergence measures the dispersion of real per capita GDP among the countries and beta convergence is based on the neoclassical growth theory. The main hypothesis of the paper is that the recent financial crisis has negatively affected the convergence process of the Western Balkan countries towards the twenty-eight member states of the European Union (EU-28). The relationship between selected macroeconomic variables and the rate of per capita GDP growth are econometrically tested. Sigma and beta convergence are estimated for the period 2004-2013 and two sub-periods: 2004-2008 and 2009-2013. The empirical findings support the hypothesis of economic convergence. The negative effects of the crisis on per capita GDP growth are confirmed, resulting in a slower convergence process. Dissimilarities between the growth patterns of the analyzed groups show the considerable heterogeneity of growth, i.e. the convergence clubs.

Suggested Citation

  • Dzenita Siljak & Sándor Gyula Nagy, 2018. "The Effects of the Crisis on the Convergence Process of the Western Balkan Countries towards the European Union," Society and Economy, Akadémiai Kiadó, Hungary, vol. 40(1), pages 105-124, March.
    • Handle: RePEc:aka:soceco:v:40:y:2018:i:1:p:105-124
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    Citations

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    Cited by:

    1. Siljak Dzenita, 2018. "Beta Convergence among Former Socialist Countries," South East European Journal of Economics and Business, Sciendo, vol. 13(2), pages 72-83, December.
    2. Viktória ENDRŠDI-KOVà CS & Oleg TANKOVSKI, 2022. "A composite indicator for economic integration maturity: the case of Western Balkan countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 13, pages 148-166, June.
    3. Esat Durguti & Emine Gashi & Filloreta Kunoviku-Demiri & Milaim Mehmeti, 2020. "Evaluation of Economic Indicators for Western Balkans Countries: Policy Recommendations for the Financial and Economic Growth," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 9(1), pages 36-46, January.
    4. Sándor Gyula Nagy & Dzenita Siljak, 2019. "Economic convergence of the Western Balkans towards the EU-15," Revista Finanzas y Politica Economica, Universidad Católica de Colombia, vol. 11(1), pages 41-53, February.

    More about this item

    Keywords

    real convergence; European Union; Western Balkans; economic growth; club convergence;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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