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The binding constraint on growth in less developed Western Balkan countries

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  • Gabrisch, Hubert

Abstract

The study applies an adjusted growth diagnostic approach to identify the actual binding constraint on financing growth in the West Balkan countries. This group of economies includes combined structural and systemic transformation problems. The results of the analysis indicate that the binding constraint on credit and investment growth in the region is the high and still increasing share of non-performing loans primarily in the private household sector due to policy failures. The analysis is performed in comparison with a group of advanced transition economies. Single-country and panel regressions indicate that demand side factors do not play a constraining role in the West Balkan countries but in the advanced transition economies.

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  • Gabrisch, Hubert, 2014. "The binding constraint on growth in less developed Western Balkan countries," MPRA Paper 60018, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:60018
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    More about this item

    Keywords

    Growth diagnostics; financing; non-performing loans; Western Balkans;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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