Abstract
The contribution of this paper is twofold. First, it uses the available official Input–Output data for the Western Balkans economies to estimate the output and value added multipliers of the sectors identified as being either current or emerging strengths within the context of Smart Specialisation. These multipliers indicate the potential impact of changes in final demand for certain products and sectors. This permits the identification of the industries associated with high indirect and induced effects, and to form ideas about the sectoral interdependencies of the economies. For instance, it appears that many sectors related to construction are promising in terms of economic potential related to demand-side monetary injections in Albania. Second, a Multi-Regional dataset is used to investigate the international integration of the Western Balkans economies in terms of participation in the Global Value Chains. The latter has increased over time in the region, but it appears that some economies are benefitting relatively more than others from it.
Highlights
The Western Balkans economies (Albania, Bosnia and Herzegovina, Kosovo1, Montenegro, North Macedonia, and Serbia) were severely hit by the 2008 economic and financial crisis and struggled to get back to the pre-crisis economic growth rates they enjoyed after the armed conflicts of the nineties.According to the World Bank (2017a), the policy mix needed to improve the economic perspectives in the region should include, among other things, a fundamental role of private entrepreneurship and greater international integration with the global economy, and with the EU in particular.As for the latter, four of the six economies have applied for future membership of the EuropeanUnion (EU): North Macedonia in 2004, Montenegro in 2008, and Albania and Serbia in 2009
This paper contains an analysis of the industrial strengths and of the international trade performance of the Western Balkans economies carried out with an IO framework
The available official national statistics were used to estimate the output and value added (VA) multipliers associated with the industrial strengths identified in the context of the Smart Specialisation strategy, the European place- based policy, targeting economic growth and job creation through innovation and R&D
Summary
The Western Balkans economies (Albania, Bosnia and Herzegovina, Kosovo , Montenegro, North Macedonia, and Serbia) were severely hit by the 2008 economic and financial crisis and struggled to get back to the pre-crisis economic growth rates they enjoyed after the armed conflicts of the nineties. According to the World Bank (2017a), the policy mix needed to improve the economic perspectives in the region should include, among other things, a fundamental role of private entrepreneurship and greater international integration with the global economy, and with the EU in particular. The IO multipliers are useful to understand the potential impact of changes in final demand for certain products and sectors, to identify the industries associated with high indirect and induced effects, and to form ideas about the sectoral interdependencies of the economy This type of quantitative evidence should be considered as one of the many elements to be considered both when trying to gauge the potential benefits of Smart.
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