New Member States Of EU Research Articles

IMPACT OF INCOME INEQUALITY ON EMIGRATION: CASE OF LITHUANIA AND OTHER NEW EU MEMBER STATES

Purpose – The objective of the article is to analyse how income inequality affects population decisions on emigration. Research methodology – Correlation and regression analysis are used to determine the relationship between the analysed social phenomena. Firstly, the correlation between income inequality (its change) and emigration rates is calculated. Secondly, the static and dynamic aspect is evaluated, as well as the influence of data delay (lag) on decision-making. Finally, a regression equation is constructed, showing how one variable affects the other. Findings – The analysis identifies the conditions and severity of population income inequality that may influence their emigration decisions. On the one hand, the impact is more substantial in the crisis and post-crisis period, and, on the other, in the new EU member states. Research limitations – Sensibility of emigration to different conditions like accessibility (i.e. the opportunity to emigrate freely, such as being a member of the Schengen area) and the income gap between countries of origin and destination is a major limitation of the article which should be examined more closely in later works. Practical implications – The analysis of emigration problem and the identification of its possible links with income inequality would allow economists to assess a priori potential of various measures suggested in practice and, consequently, would allow for the more targeted formulation of the State economic policy. Originality/Value – The novelty of the article is defined by insufficient scientific research of relationships between income inequality and emigration as socio-economic phenomena within the new EU member states. A scientific analysis of the problem of emigration and the identification of its possible links with income inequality would contribute to a more detailed study of the scientific aspects of emigration and income inequality.

Revisiting the pass-through of exchange rate in the transition economies: New evidence from new EU member states

This paper revisits the exchange rate pass-through (ERPT) for a set of transition economies, namely for 10 new EU Member States (NMS), over the period 1996–2015. As the transition process has entailed a deep transformation in their economies and institutions, the extent of pass-through is expected to be regime-dependent on this changing macroeconomic environment. We propose to implement a nonlinear panel smooth transition regression (PSTR) approach, where transitional factors related to EU accession are captured properly from the data. Our empirical results suggest that the inflation regime is the main macroeconomic driver of the extent of ERPT. When inflation levels exceed the threshold of 4.56%, i.e., within a high-inflation environment, the degree of pass-through is higher and reaches a full ERPT. However, with the shift towards a stable and low-inflation regime, i.e., when inflation levels are below a threshold of 4.56%, the extent of pass-through significantly declines in the NMS group. Our findings shed further light on how the credibility gained through the commitment to euro area membership is beneficial and would ensure better control of inflation.

An Evaluation of the Scale of Undeclared Work in the European Union and Its Structural Determinants: Estimates Using the Labour Input Method

An Evaluation of the Scale of Undeclared Work in the European Union and Its Structural Determinants: Estimates Using the Labour Input Method

Does Europeanization Foster Constructive Individualization?

This paper aims at explaining changes in the conditions for individualization in ten central and eastern European (cee) countries after they have joined the European Union in 2004 and 2007. The expected changes had to follow the transfer of theeu’sacquis communautaireto theceeand the accompanying Europeanization understood as upgrading of governance. Indicators used in longitudinal studies are identified in order to test the assumption. Synchronic and diachronic comparison of outcomes of studies on the topic is carried out. The results don’t support the hypothesis about relevant changes in the conditions of individualization in theceecountries due to their Europeanization. The upgrading of governance quality affects the individualization in the old and neweumember states similarly. Declining quality of the conditions for individualization appears in both groups of countries with the same frequency and intensity too.

The influence of research and development policy: the case of Estonia in the EU

Purpose – The purpose of this paper is to evaluate the international position of Estonia among the member states of the EU and countries closely associated with the EU, from the perspective of the effect of research and development (R & D) policy on innovation activities in the business sector. Design/methodology/approach – Based on existing scientific research literature on the relationships between R & D policy and business sector R & D activities and innovation performance, a set of indicators describing R & D policy measures was created for the business sector. Using principal component analysis (PCA) method, independent robust dimensions of R & D policy were brought out. After eliminating the problem of multicollinearity in R & D policy indicators, robust multiple regression models were conducted to present a comprehensive empirical description of the shaping of business sector R & D and innovation activities in the sample of investigated countries. Findings – Based on the literature, the influences of R & D policy measures on business sector R & D activities and innovation performance were systemised; public R & D policy dimensions were empirically defined; the intensity of R & D policy influence on business sector R & D activities was estimated; the differences between real and prognostic values of business sector performance indicators in Estonia were calculated in order to characterise the efficiency of Estonian R & D policy and the influence of the socioeconomic environment. Research limitations/implications – The lack of comparable data describing R & D policy and R & D activities and innovation performance in the business sector limits the comprehensiveness of the analysis (i.e. the number of analysed indicators). Practical implications – The assessment and comparative analysis of the influence of R & D policy components on business sector R & D activities and innovation performance in different countries makes it possible to identify directions for increasing the efficiency of R & D policy under the specific influence of the socioeconomic environment, especially in new member states of the EU. Originality/value – Using the PCA method significantly increased the robustness of the macro-quantitative description of R & D policy dimensions. By combining the set of new synthetic R & D policy indicators created by the PCA with the multiple regression analysis method, a significant increase in the robustness of model coefficients (i.e. the assessments of influence intensity) was achieved. These robust models create the basis for reliable empirical assessment of the influence of R & D policy and a comparative analysis of the results.

THE USAGE OF STRATEGIC MANAGEMENT IN LATVIAN TRADE UNIONS

Trade union management issues are relevant in all of the European Union, but especially in the new member states of the EU, one of them being Latvia. The aim of the article is to analyse the usage of strategic management in Latvian trade unions. The tasks are: to examine trade union as an organisation; to provide a historical overview of trade union strategic planning and strategic management; and to offer a new trade union strategic management model, created by the author. The theoretical and methodological basis of the article consists of the scientific literature, publications and the Internet resources from the EU countries, as well as those from Canada, Australia, and the USA. The results from the author’s empirical research on Latvian trade unions have also been used.

Growing Lemons or Cherries? Pre and Post‐acquisition Performance of Foreign‐Acquired Firms in New EU Member States

AbstractForeign acquisitions are an increasingly important mode of FDI in the new EU member states (NMS). Using firm‐level data and a common estimation framework for seven NMS, we study pre‐ and post‐acquisition performance of acquired firms. This paper, to the best of our knowledge, represents the first comprehensive study of the pre‐ and post‐acquisition performance of foreign‐acquired firms in NMS. Distinguishing between the impact of target selection and post‐acquisition improvements on performance, we find that, on average, foreign investors are targeting ‘lemons’ with growth potential rather than ‘picking cherries’. Regardless of targeting ‘cherries’ or ‘lemons’, performance of acquired firms improved after the acquisition, whereby the boost in productivity is not achieved by reducing employment but mostly by increased efficiency in the use of production factors especially labour.

Agri-environmental schemes in the European Union

Some details on agri-environmental measures in EU have been presented in this paper. Territorial, financial and regulation-specific aspects have been investigated based on statistics from EUROSTAT and ENFRD reports. It has been concluded, that AES shows a much diversified picture in the EU. For example, by 2009 the old members and new member states of EU had different proportions of agricultural area (25% and 10%, respectively), where AES had been introduced. Differences in AES are remarkable both at the level of member states as well as in the amounts of payments per hectare. The reasons behind this are the different national conditions and approaches on AES as well as differences in time these measures had been introduced in member countries. The final conclusion is that further increases may be expected in the coming years regarding the area involved in different agri-environmental measures and the total amount of AES payments in the EU.

中東欧のEU新規加盟国とユーロ

First, this paper considers the impact of the global financial crisis on new EU Member States (NMS) from Central and Eastern Europe. In the case of Slovenia, the best performer among the NMS, the situation has been very serious. Second, the mechanism of the crisis in Slovenia is examined in detail. Since the EU accession in May 2004, especially the adoption of the ERM II in June in the same year, in the financial area barriers between the Eurozone economy and the Slovenian economy practically disappeared. The sovereign risk premium decreased. Domestic banks borrowed a huge amount of funds at international wholesale financial markets and actively financed companies’ ambitious investments. Financial authorities in the country were not alert to cross-border movement of a huge amount of capital. Due to the Lehman shock, however, international financial markets became tight suddenly and demands in the Western markets sharply decreased. The direction of international financial flows reversed. The banking sector was obliged to dispose a huge amount of non-performing loans and recorded negative pre-tax profit for consecutive three years since 2010. One of the reasons why the Slovenian economy fell into such a serious crisis is that domestic banks increased their borrowings abroad too quickly within a short time from 2005 through 2008. In addition, there were the following circumstances: 1) the second wave of privatization of state-owned companies was implemented on the method of Management Buyout from 2006 and domestic banks gave loans to managers. Unfortunately, this was done immediately before the Lehman shock; 2) the weight of foreign-owned banks has been smaller in this country. In other NMS foreign-owned banks have been predominant in the banking sector, and their parent banks managed to support their affiliates in the global financial crisis. In contrast, in the case of Slovenia, the government has been required to inject fresh capitals into domestic banks to protect the banking system. The type of Slovenian crisis is different from that of the Greek crisis and the Cypriot crisis. Finally, the paper considers the significance of euro for NMS from Central and Eastern Europe. The NMS, which have not adopted euro yet, will sooner or later advance toward the adoption of euro. After joining the Eurozone, these countries will be required to steer their economic policies cautiously on the basis of lessons from Slovenia’s failure.

Mapping values in old vs new members of the European Union

Purpose – The purpose of the paper is twofold. The first purpose is to provide a synthesis of the dominant cross-cultural models and to present the more recent tri-axial model as a promising alternative that responds well to the limitation of prevailing models. Consequently, the second purpose is to employ the model to explore key differences in the culture and values of public service organisations in old and new EU member states. Design/methodology/approach – The paper surveyed public sector employees in four different countries, two old EU (OEU) states (Germany, The Netherlands) and two new EU (NEU) states (Estonia, Lithuania). The employees were asked to classify 60 values on the three axes of the tri-axial model and to select the five most important values in their organization. The survey replies were analyzed and mapped to facilitate comparison of the tri-axial cultural profile of the two EU clusters. Findings – The results show differences in value orientation between the two groups of countries: the public sector in the OEU member states appears to be more ethically and less pragmatically oriented than in the NEU member states. Findings show that in the new member states, value congruence is very high across demographic groups, in contrast to the situation encountered in the OEU member states. Research limitations/implications – Further research should include more countries before generalising the conclusions of this study to the rest of the OEU and NEU countries. Furthermore, although collecting data from a homogeneous unit (e.g. public sector) suggests more valid comparison, in the future, research should strive to also examine additional units, for example private companies. Practical implications – The conclusions derived from this exploratory cultural mapping provide useful knowledge for improving international collaboration across public sector organizations. Originality/value – This study is the first study that maps the values in the public sector using the tri-axial model.

Market Analysis of Direct Payment Options for New EU Member States Using the AGMEMOD Partial Equilibrium Modelling Tool

This paper presents an analysis of the impact of different direct payment policy scenarios on agricultural markets for 10 new EU member states (NMS). The study is based on the AGMEMOD EU-27 dynamic econometric partial equilibrium models. The baseline scenario assumes the preservation of current policy, which would lead to further growth in production for most agricultural markets, resulting from accelerated technological development and the opportunities provided by the EU common market. The only exceptions are the dairy and beef sectors, in which NMS would face a reduction in competitiveness. According to model simulations, reducing the level of payments or abolishing them entirely would not result in any dramatic medium-term changes to agricultural markets in NMS by 2020, which could serve as an argument for supporting future CAP reform.

Príčiny zaostávania nových členských krajín EÚ: empirická analýza na základe Montgomeryho dekompozície

We use the method of ideal Montgomery decomposition to explain differences in product per capita in new member states of EU and selected benchmark country of EU5 ? Netherlands ? on differences in total factor productivity (TFP), capital per inhabitant, rate of capacity utilization, rate of employment, average number of hours worked and in human capital. We find that in 2009 average TFP in new member countries reached only 60% of TFP of the Netherlands. Differences in TFP explain almost 80% of differences in product per capita. We investigate the role of technology and of allocative efficiency in low TFP. Our analysis suggests that unless a lag in technology is longer than 20 years, most part of low TFP is due to inferior allocative efficiency and not due to technology.

Growing Lemons and Cherries? Pre- and Post-Acquisition Performance of Foreign-Acquired Firms in New EU-Member States

Foreign acquisitions are an increasingly important mode of FDI in the new EU member states (NMS). Using firm-level data and a common estimation framework for seven NMS we study pre-and post- acquisition performance of acquired firms. We find that selection criteria of target firms differ significantly across countries. In some countries the evidence supports the idea of “cherry picking” with better firms being chosen as targets for acquisition, while in the others “lemons” with growth potential tend to get selected. Regardless of whether “cherries” or “lemons” are targeted, performance of acquired firms improved after the acquisition, whereby the boost in productivity has not been achieved by a reduction in employment, as it even increased, but rather by increased efficiency in the use of labor and especially capital. Additionally, foreign ownership is found to yield biggest rewards to small, less productive firms.

The quality and variety of exports from the new EU member states

The goal of this article is to evaluate the variety and quality of exports from the new EU member states (NMSs) in the period 1999–2009. The practical relevance of such an analysis is threefold: recent studies underline the importance of export variety for economic growth; empirical results show that export variety was influenced by the EU membership; and looking separately at export quality permits a better understanding of price competitiveness. Our results show that all NMSs significantly increased the average number of brands exported to the EU market, the largest increases being observed in 2004 and after. This indicates that integration into the EU market occurs in the extensive as well as the intensive dimension. We also find that all NMSs increased the average quality of their exports during the decade studied although there are differences between countries. Thus, a large part of the increase in the prices of exports from NMSs resulted from improving quality and did not result in a loss of competitiveness. Finally, estimates of relative quality are much more stable than relative prices, suggesting that our measure of relative quality is better than the traditional proxy.

COULD THE RADICAL CHANGES OF DIRECT PAYMENTS POLICY DESTROY AGRICULTURAL MARKETS IN THE EU NEW MEMBER STATES

The form and scope of direct payments under the Common Agricultural Policy are controversial for several reasons: high budgetary costs, unfair distribution between old and new Member States and weak argumentation of payments; consequently, they will have to be redefined for the period 2013-2020 and this calls for a need for policy impact assessment. The paper presents an analysis of the impact of different direct payments policy scenarios on the agricultural markets of the ten new EU Member States (NMS). The study is based on the AGMEMOD (AGricultural MEmber states MODelling) EU-27 dynamic econometric partial equilibrium models. The Baseline Scenario assumes that from 2013 on, the Single Area Payment Scheme would continue, dairy quotas would be abolished and some other policy instrument changes would take place as agreed in the 2008 Health Check policy conclusions. Preservation of the current policy would lead to further growth in production of most agricultural markets, resulting from accelerated technological development and the opportunities provided by the EU common market. The only exceptions are dairy and beef sectors, where NMS would face a drop in competitiveness. The Scenario Abolish implies total abolishment of the Pillar I direct supports and according to the Reduced EU-Wide Flat Rate Payments Scenario, payments at the entire EU area would be made more uniform, but would be – owing to the expected overall reduction of budgetary funds for Pillar I of CAP – at a substantially lower level. According to the model simulations, reducing the level of payments or their abolishing would not result in any dramatic medium-term changes on agricultural markets in NMS by 2020, which could serve as an argument for the future CAP reforms.

New EU member states and the Euro: economic readiness, benefits and costs

All of the new EU member states (NMSs) have made a commitment to adopt the Euro. This essay considers the countries’ economic readiness to adopt the Euro as well as the economic benefits and costs of adoption. Paper applies a method suggested by Bayoumi and Eichengreen (1997) and finds that the changes of real effective exchange rates between the Euro area and the new EU member states follow the pattern predicted by the optimum currency area theory. This finding allows the construction of the readiness for adoption index for every NMS. The tangible benefits (for NMSs) of adoption are also examined in this essay. Analyses suggest that the costs of currency exchange and hedging against the uncertainty in foreign exchange markets account for about 0.08–0.012% of the countries’ GDP. In addition, countries that adopt the Euro might expect lower inflation and interest rates. This essay also examines the possible costs of adoption. These are in the forms of the lost ability to use monetary policy tools and set the level of seigniorage. Analysis suggests that many countries had given up their independence over monetary policy even before the accession to the EU. In addition, bigger NMSs have not used seigniorage as the source of fiscal income. However, they used exchange rate flexibility to depreciate their currencies during the recent crisis.

Migration and Recession: Polish Migrants in Post-Celtic Tiger Ireland

In this paper we explore the impact of the current economic downturn on Polish migrants in the Irish labour market. Ireland appears to be well suited to study the impact of the recession on intra-European migration. The country has not only experienced large-scale inward migration from the new EU Member states (NMS) in recent years, but has also been severely hit by a recession. At times of an economic crisis, questions have begun to be asked about the future intentions of migrants. By drawing on an ongoing Qualitative Panel Study on the experience of Polish migrants in the Irish labour market, we argue that simplistic assumptions about migrants leaving the country ‘when times are getting tough’ are misplaced. No doubt some NMS migrants will leave because of the worsening economic situation and new opportunities elsewhere. As East-West migration has adopted a more temporary and circular character facilitated by a free movement regime, NMS migrants have the opportunity to move on elsewhere at times of a downturn. At the same time, many Polish migrants are ‘here to stay’, for the moment at least. This is for at least three reasons. A clear majority of NMS migrants remains in employment, in spite of the downturn. Furthermore, even if migrants should lose their jobs, welfare state arrangements in the host country offer some protection against destitution. Moreover, the decision to migrate, and consequently to stay or move on, is not just reached on the basis of economic considerations alone. Particularly social networks are of importance in sustaining the migration process relatively independent from short-term economic change, including an economic downturn.

Alternative monetary policies and fiscal regime in new EU members

I investigate the relevance of a fiscal regime for disinflation in new EU member states (NMS). I generalize the framework of [Obstfeld, M., Rogoff, K., 1995. Exchange rate dynamics redux. Journal of Political Economy 103, 624–660] to incorporate the non-Ricardian fiscal regime and two monetary feedback rules: inflation targeting and depreciation targeting. Euro accession requires disinflation and stabilization of the exchange rate and thus restrictive monetary policy. The model illustrates that a sustainable and prudent fiscal policy is a necessary condition for successful stabilization of inflation. Thus, the lack of prudent fiscal policy, through its effects on inflation, may undermine the EMU accession of large NMS even when their fiscal outcomes fall within the Maastricht range.

Economic and political effects on European Parliamentary electoral turnout in post-communist Europe

The relatively low voter turnout rates in the June 2004 European Parliamentary elections in many of the post-communist states surprised observers. While the average turnout rate for these new-EU member states barely surpassed 30%, turnout exhibited much variance at the national and sub-national levels. In this article, we study the economic and political determinants of European Parliamentary voter turnout in the post-communist countries using a unique region-level dataset. Our regression results reveal that regional unemployment rates have a statistically significant impact on turnout. Regions with higher unemployment rates experienced lower turnout, even after controlling for political and socio-demographic factors. In contrast to some previous work on the impact of EU support on EP turnout, our study uncovers a positive relationship between these two variables. Further, we show that the timing of the election relative to the next national election and the frequency of elections affected turnout.

Assessing Ricardian equivalence for the New Member States: Does debt-neutrality matter?

Using a structural model based on dynamic optimizing agents, we empirically test the Ricardian equivalence proposition (REP) for 11 New EU-Member States (NMS). We extend the basic model by including the government budget constraint, thus being able to evaluate whether individuals take the evolution of public debt into account. In the basic setting we cannot reject the validity of the REP for four NMS, in the extended model the relevance of the REP changes for six countries, implying that the development of government debt and long-term sustainability of public finances matters with regard to the validity of the REP.