Business Environment and Economic Growth in the European Union Countries: What Can Be Explained for the Convergence?

Abstract

Objective: The objective of this article is to present the results of research on the economic growth and business environment of the European Union countries in the context of convergence processes. Additionally, the article presents the results of investigation on the impact of business environment on economic growth. Research Design & Methods: Methods applied in the study are analysis and synthesis of the literature on the subject, as well as quantitative tools: descriptive statistics and multivariate regression. The analysis includes 28 countries of the European Union in the years 2000-2016 for economic growth and 2010-2018 for business environment. Findings: Changes in the business environment across the European Union, as well as upward trends indicate a gradual approach of member economies in these areas. A quantitative analysis of the dependence of growth on business environment has also been confirmed. Implications & Recommendations: The results can be important for policy makers. Demonstrating a positive link between business environment and economic growth should be viewed as a guideline for reforms, changes and regulatory improvements. This elaboration can be treated as a preliminary study on interrelation between business environment and economic growth in the context of economic convergence. Further research on the influence of business environment on economic convergence within the European Union countries is highly recommended. Contribution & Value Added: The originality of this work lies in the connection of two different research problems: economic growth and business environment, as well as the study of links between these two areas.