Tag: O4

FINANCIAL GLOBALIZATION AND GROWTH REVISITED – INTERNATIONAL AND REGIONAL EVIDENCE

Vladimir ŠIMIĆ

Faculty of Economics, Business and Tourism Split, University of Split; Croatia, Associate professor, and CERGE-EI Teaching Fellow

vsimic@efst.hr

Abstract

The effects of financial globalization on economic growth have been put in focus by a more recent branch of globalization literature. In academic circles and international policy arena a strong push towards capital openness and free movement of capital across borders had been seen during the 1990s. While the early arguments suggested positive effects of financial globalization on economic growth, more recently, both theoretical and empirical studies have started seriously questioning this benign view of financial globalization calling for additional evidence. This paper revisits the link between financial globalization and growth using the KOF index of globalization in a sample of 134 world economies in the period 1970-2015. With a large number of countries and application of the panel data estimations techniques this paper provides strong evidence on the link between financial globalization and economic growth. In the broad sample of world economies financial globalization exerts a negative and statistically significant effects on economic growth. The paper also investigates this relationship in the regions of East Asia and Pacific, Middle East and North Africa, Latin America and the Caribbean, Sub-Saharan Africa and Europe and Central Asia and the negative effects are also predominant in the regional grouping of countries.

Keywords: Financial globalization, Growth, International evidence

JEL classification: F4, F6, O4

pp. 43-55

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RELEVANCE OF TYPE OF INVESTMENT FOR GROWTH: EVIDENCE FROM EU-10 COUNTRIES

Vladimir ŠIMIĆ

Associate professor, University of Split, Faculty of Economics, Business and Tourism, Split, Croatia and CERGE-EI Teaching Fellow

vsimic@efst.hr

Lena MALEŠEVIĆ PEROVIĆ

Full professor, University of Split, Faculty of Economics, Business and Tourism, Split, Croatia and CERGE-EI Teaching Fellow

lena@efst.hr

Abstract

Whilst investment in both theoretical and empirical literature stands out as one of the most prominent determinants of growth, evidence on the importance of different types of investment for growth appears to be missing. This paper aims at filling this gap. The paper, thus, primarily contributes to the empirical literature by investigating the effects of different types of investment on growth in a group of EU-10 economies covering the period from 1995 to 2019. The panel data analysis provides some important and interesting findings. While overall investment is found to be strongly significant and positive, being in accordance with previous studies, the results provide new insights into the importance of different types of investment for growth. Not all types of investment affect growth (positively and significantly), thus sending also important message that it matters in which activities investment goes.

Keywords: Type of investment, Growth, EU-10 countries

JEL classification: E22, O4, O47

 pp. 105-115

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MACROECONOMIC EFFECTS OF TELEWORKING IN EU27: STOCHASTIC FRONTIER APPROACH

Lena MALEŠEVIĆ PEROVIĆ

Full professor, University of Split, Faculty of Economics, Business and Tourism, Split, Croatia and CERGE-EI Teaching Fellow

lena@efst.hr

Abstract

The main aim of this paper is to investigate macroeconomic effects of teleworking during the COVID-19 pandemic, using an atypical approach. We apply stochastic frontier analysis to a Cobb-Douglas production function broadened with teleworkability variable, and analyse the level of (in)efficiency of EU27 countries in producing their GDPs. We find that increasing the percentage of jobs that can be done at home by 1 percentage point reduces the level of technical inefficiency by 3.5%. Additionally, we use a unique e-survey conducted in April and May of 2020, which provides the data on the share of people who started working from home as a results of a COVID-19 situation, and combine it with the teleworkability variable. Overall, our findings suggest that more developed EU countries have a higher share of teleworkable jobs, which in turn reduces their inefficiencies, and furthermore results in more people beginning to work from home in the pandemic. 

Keywords: teleworking, production function, stochastic frontier analysis, EU, COVID-19

JEL classification: C21, O4, O33, O52

 pp. 33-42

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