Studying the Factors of Economic Growth in Countries of Central and Eastern Europe

Abstract

The aim of the article is to study the impact of macroeconomic, technological and institutional indicators on economic growth of countries of Central and Eastern Europe (CEE) using a panel data model. A sample of 12 CEE countries for the period 2006-2015 is analyzed. The following methods are used: 1) ordinary least squares (OLS), 2) fixed effects model (FE); 3) random effects model (RE). As a dependent variable there selected GDP per capita based on purchasing power parity, as an independent one — the exchange rate, export of high- and low-tech products, import of high-tech products, innovations. There used additional control variables: foreign direct investment, government efficiency, human capital, the Gini index, and public debt. The results of the study show that the devaluation of the monetary unit adversely affects the economic growth. Asymmetric results of the impact of high-technology and low-technology exports on GDP are obtained. The development of innovation and the improvement of the quality of human capital demonstrate a positive significant impact in terms of all specifications. The obtained results confirm that European integration supports non-price competition of CEE countries in the world market of high-tech products through participation in production networks of the EU-15.

Keywords

• economic growth
• high-tech exports
• panel data
• CEE countries
• European integration