IDEAS home Printed from https://ideas.repec.org/a/eee/iburev/v24y2015i6p1009-1024.html
   My bibliography  Save this article

The legends of the Caucasus: Economic transformation of Armenia and Georgia

Author

Listed:
  • Gevorkyan, Aleksandr V.

Abstract

Considered peripheral in economic terms the structurally fragile Armenia and Georgia with obvious limitations are open to international business. This article constructs a compact analytical synthesis of the duo's potential across macroeconomic, industrial, external exposure risk, institutional, and the Diaspora (dispersion) effects within the five forces model of the social and economic transformation. Post-Great Recession dynamic analysis, sketching sectoral and business trends, tackles issues of market entry and foreign investor strategy. Armenia's impressive pre-crisis pattern has yet to be recovered, while Georgia's post-crisis record has been more consistent with earlier years. Armenia's entrepreneurial and innovative capacity, vital to new business accommodation, ranks above Georgia's, where traditional sectors are dominant. All in all there is a need for an individual, not “bulk”, analysis of the post-socialist periphery. Foreign firms’ managers are suited to gain if acquire local context and local (or Diaspora-) based partner (public or private) prior to regional or standalone entry. Despite multiple headwinds, both economies retain strong international business potential and hope for an economic and social resurrection.

Suggested Citation

  • Gevorkyan, Aleksandr V., 2015. "The legends of the Caucasus: Economic transformation of Armenia and Georgia," International Business Review, Elsevier, vol. 24(6), pages 1009-1024.
    • Handle: RePEc:eee:iburev:v:24:y:2015:i:6:p:1009-1024
    DOI: 10.1016/j.ibusrev.2014.12.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969593114001917
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ibusrev.2014.12.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Oleh Havrylyshyn & Ron van Rooden, 2003. "Institutions Matter in Transition, But So Do Policies," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 45(1), pages 2-24, March.
    2. Suhas L. Ketkar & Dilip Ratha, 2010. "Diaspora Bonds: Tapping The Diaspora During Difficult Times," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 1(02), pages 251-263.
    3. Douglass C. North, 1991. "Institutions," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 97-112, Winter.
    4. Jaime Espinosa-Bowen & Mr. Nadeem Ilahi & Fahad Alturki, 2009. "How Russia Affects the Neighborhood - Trade, Financial, and Remittance Channels," IMF Working Papers 2009/277, International Monetary Fund.
    5. Miss Anke Weber & Ms. Chunfang Yang, 2011. "Armenia: An Assessment of the Real Exchange Rate and Competitiveness," IMF Working Papers 2011/020, International Monetary Fund.
    6. Vladimir Popov, 2007. "Shock Therapy versus Gradualism Reconsidered: Lessons from Transition Economies after 15 Years of Reforms1," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 49(1), pages 1-31, March.
    7. Roth, Kendall & Kostova, Tatiana, 2003. "Organizational coping with institutional upheaval in transition economies," Journal of World Business, Elsevier, vol. 38(4), pages 314-330, November.
    8. Smita Kuriakose, 2013. "Fostering Entrepreneurship in Armenia," World Bank Publications - Books, The World Bank Group, number 15783.
    9. Gaidar, Yegor, 2012. "Russia: A Long View," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262017415, April.
    10. Milanovic, Branko, 1993. "Social costs of the transition to capitalism : Poland, 1990-91," Policy Research Working Paper Series 1165, The World Bank.
    11. Wang, Danny T. & Gu, Flora F. & Tse, David K. & Yim, Chi Kin (Bennett), 2013. "When does FDI matter? The roles of local institutions and ethnic origins of FDI," International Business Review, Elsevier, vol. 22(2), pages 450-465.
    12. S. Fisher & R. Sahay & C. A. Vegh, 1997. "Stabilization and Growth in Transition Economies: The Early Experience," Voprosy Ekonomiki, NP Voprosy Ekonomiki, vol. 5.
    13. World Bank, 2013. "International Debt Statistics 2013," World Bank Publications - Books, The World Bank Group, number 12226.
    14. Lev M. Freinkman, 2001. "Role of the Diasporas in Transition Economies: Lessons from Armenia," Annual Proceedings, The Association for the Study of the Cuban Economy, vol. 11.
    15. Olga Aslanidi, 2008. "Dollarization in Transition Economies: New Evidence from Georgia," CERGE-EI Working Papers wp366, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    16. Mr. Stanley Fischer & Mr. Carlos A. Végh Gramont & Ms. Ratna Sahay, 1996. "Stabilization and Growth in Transition Economies: The Early Experience," IMF Working Papers 1996/031, International Monetary Fund.
    17. Stanley Fischer & Alan Gelb, 1991. "The Process of Socialist Economic Transformation," Journal of Economic Perspectives, American Economic Association, vol. 5(4), pages 91-105, Fall.
    18. Branko Milanovic, 1999. "Explaining the increase in inequality during transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(2), pages 299-341, July.
    19. AfDB AfDB, . "African Statistical Journal Vol.16," African Statistical Journal, African Development Bank, number 455.
    20. Dani Rodrik, 2004. "Institutions and Economic Performance - Getting Institutions Right," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 2(2), pages 10-15, October.
    21. Taylor, Lance (ed.), 2006. "External Liberalization in Asia, Post-Socialist Europe, and Brazil," OUP Catalogue, Oxford University Press, number 9780195189322.
    22. Hakob Zoryan, 2005. "The Measurement of Co-Circulation of Currencies and Dollarization in the Republic of Armenia," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 2(1), pages 41-65, June.
    23. Paul Hare, 2013. "Institutions and transition: Lessons and surprises," Society and Economy, Akadémiai Kiadó, Hungary, vol. 35(1), pages 1-24, April.
    24. AfDB AfDB, . "African Statistical Yearbook 2013," African Statistical Yearbook, African Development Bank, number 458.
    25. AfDB AfDB, . "The AfDB Statistics Pocketbook 2013," AfDB Statistics Pocketbook, African Development Bank, number 459.
    26. Gregory Jackson & Richard Deeg, 2008. "Comparing capitalisms: understanding institutional diversity and its implications for international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(4), pages 540-561, June.
    27. Theodore Gerber & Karine Torosyan, 2013. "Remittances in the Republic of Georgia: Correlates, Economic Impact, and Social Capital Formation," Demography, Springer;Population Association of America (PAA), vol. 50(4), pages 1279-1301, August.
    28. Smita Kuriakose, 2013. "Fostering Entrepreneurship in Georgia," World Bank Publications - Books, The World Bank Group, number 15786.
    29. Milanovic, Branko, 2012. "Global income inequality by the numbers : in history and now --an overview--," Policy Research Working Paper Series 6259, The World Bank.
    30. Homi Kharas, 2010. "The Emerging Middle Class in Developing Countries," OECD Development Centre Working Papers 285, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gorynia, Marian & Nowak, Jan & Trąpczyński, Piotr & Wolniak, Radosław, 2019. "Friend or Foe? On the role of institutional reforms in the investment development path of Central and East European economies," International Business Review, Elsevier, vol. 28(3), pages 575-587.
    2. Aleksandr V. Gevorkyan, 2022. "Diaspora and Economic Development: A Systemic View," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(3), pages 1522-1541, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eicher, Theo S. & Schreiber, Till, 2010. "Structural policies and growth: Time series evidence from a natural experiment," Journal of Development Economics, Elsevier, vol. 91(1), pages 169-179, January.
    2. Jana Marková, 2014. "Comparison of the Effects of Foreign Direct Investment on the Current Account of the Balance of Payments of the Czech Republic and Slovakia after the Accession to the European Union [Komparace vliv," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2014(1), pages 19-33.
    3. Mushtaq, Faisal & Mat, Ramli & Ani, Farid Nasir, 2014. "A review on microwave assisted pyrolysis of coal and biomass for fuel production," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 555-574.
    4. Lawrence King & Patrick Hamm, 2005. "Privatization and State Capacity in Postcommunist Society," William Davidson Institute Working Papers Series wp806, William Davidson Institute at the University of Michigan.
    5. Facchini, Giovanni & Segnana, Maria Luigia, 2003. "Growth at the EU periphery: the next enlargement," The Quarterly Review of Economics and Finance, Elsevier, vol. 43(5), pages 827-862.
    6. Cevdet Denizer & Holger C. Wolf, 1998. "Household Savings in Transition Economies," NBER Working Papers 6457, National Bureau of Economic Research, Inc.
    7. Yermakov, Yuri Y., 1997. "Credibility of economic reform and foreign direct investment in the former Soviet Union region," ISU General Staff Papers 1997010108000012835, Iowa State University, Department of Economics.
    8. Thorsten Beck & Luc Laeven, 2006. "Institution building and growth in transition economies," Journal of Economic Growth, Springer, vol. 11(2), pages 157-186, June.
    9. Jan Babecky & Tomas Havranek, 2014. "Structural reforms and growth in transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 22(1), pages 13-42, January.
    10. Igor Pelipas & Alexander Chubrik, 2008. "Market Reforms and Growth in Post-socialist Economies: Evidence from Panel Cointegration and Equilibrium Correction Model," William Davidson Institute Working Papers Series wp936, William Davidson Institute at the University of Michigan.
    11. Dalibor Roháč, 2013. "What Are the Lessons from Post-Communist Transitions?," Economic Affairs, Wiley Blackwell, vol. 33(1), pages 65-77, February.
    12. Karsten Staehr, 2005. "Reforms and Economic Growth in Transition Economies: Complementarity, Sequencing and Speed," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 2(2), pages 177-202, December.
    13. Davidsson, Simon & Grandell, Leena & Wachtmeister, Henrik & Höök, Mikael, 2014. "Growth curves and sustained commissioning modelling of renewable energy: Investigating resource constraints for wind energy," Energy Policy, Elsevier, vol. 73(C), pages 767-776.
    14. Falcetti, Elisabetta & Lysenko, Tatiana & Sanfey, Peter, 2006. "Reforms and growth in transition: Re-examining the evidence," Journal of Comparative Economics, Elsevier, vol. 34(3), pages 421-445, September.
    15. Lawal, Abiola S. & Servadio, Joseph L. & Davis, Tate & Ramaswami, Anu & Botchwey, Nisha & Russell, Armistead G., 2021. "Orthogonalization and machine learning methods for residential energy estimation with social and economic indicators," Applied Energy, Elsevier, vol. 283(C).
    16. Ohunakin, Olayinka S. & Adaramola, Muyiwa S. & Oyewola, Olanrewaju. M. & Fagbenle, Richard O., 2014. "Solar energy applications and development in Nigeria: Drivers and barriers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 32(C), pages 294-301.
    17. Flisi, Sara & Goglio, Valentina & Meroni, Elena Claudia & Vera-Toscano, Esperanza, 2019. "Cohort patterns in adult literacy skills: How are new generations doing?," Journal of Policy Modeling, Elsevier, vol. 41(1), pages 52-65.
    18. Yang, Liangcheng & Ge, Xumeng & Wan, Caixia & Yu, Fei & Li, Yebo, 2014. "Progress and perspectives in converting biogas to transportation fuels," Renewable and Sustainable Energy Reviews, Elsevier, vol. 40(C), pages 1133-1152.
    19. Nauro F. Campos & Abrizio Coricelli, 2002. "Growth in Transition: What We Know, What We Don't, and What We Should," Journal of Economic Literature, American Economic Association, vol. 40(3), pages 793-836, September.
    20. Weiping Liu & Jiatao Li, 2019. "Unbalanced Institutions in Market Transition: How Do They Matter for Firm Strategic Choices and Performance in Emerging Economies?," Management International Review, Springer, vol. 59(5), pages 675-702, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:iburev:v:24:y:2015:i:6:p:1009-1024. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.