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Balkan Countries: Catching Up and their Integration in the European Financial System

Author

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  • Fabienne Bonetto

    () (University of Nice-Sophia Antipolis CEMAFI, France)

  • Srđan Redžepagić

    () (Institute of Economic Sciences Belgrade, Serbia)

  • Anna Tykhonenko

    () (University of Nice-Sophia Antipolis CEMAFI, France)

Abstract

This paper aims to illustrate the impact of financial variables on the process of convergence between selected European Union countries and the Balkan countries. Following a delay in the realization of structural changes resulting from the historical legacy and circumstances in which the transition process took place, Balkan countries began essential reforms in their financial systems at the end of 1990s. This included the adoption of concrete measures directed towards the growth and increase of the financial sector efficiency. Given this we use panel data over the period 1999-2007 for a sample of 21 countries, to test the convergences hypothesis by the Bayesian iterative estimation method. Here two financial variables are introduced to control the differences in steady-state. Our empirical results sustain the importance of the domestic credit and the market capitalization in the catching-up process by a significant increase in the speed of convergence.

Suggested Citation

  • Fabienne Bonetto & Srđan Redžepagić & Anna Tykhonenko, 2009. "Balkan Countries: Catching Up and their Integration in the European Financial System," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 56(4), pages 475-489, December.
  • Handle: RePEc:voj:journl:v:56:y:2009:i:4:p:475-489
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    References listed on IDEAS

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    1. Brada, Josef C. & Kutan, Ali M., 2001. "The convergence of monetary policy between candidate countries and the European Union," Economic Systems, Elsevier, vol. 25(3), pages 215-231, September.
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    6. Anna Tykhonenko, 2005. "La convergence réelle dans l'Europe des Quinze : un réexamen à partir de l'approche sur données de panel," Post-Print halshs-00855607, HAL.
    7. Kocenda, Evzen, 2001. "Macroeconomic Convergence in Transition Countries," Journal of Comparative Economics, Elsevier, pages 1-23.
    8. Anna Tykhonenko, 2007. "La persistance des ecarts de richesse au sein de leurope elargie: lapport de leconometrie des panels heterogenes non-stationnaires," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 54(1), pages 69-86, March.
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    Cited by:

    1. Valerija Botric, 2013. "Output Convergence between Western Balkans and EU-15," Research in Economics and Business: Central and Eastern Europe, Tallinn School of Economics and Business Administration, Tallinn University of Technology, vol. 5(1).
    2. E.Tsanana & C. Katrakilidis, 2016. "The issue of convergence: New empirical evidence for the Central Eastern Europe area," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 16(1), pages 53-62.
    3. Saša Obradović & Vladimir Mihajlović, 2013. "Synchronization of Business Cycles in the Selected European Countries," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, pages 759-773.
    4. Antje Hildebrandt & Isabella Moder, 2015. "Business cycle synchronization between the Western Balkans and the European Union," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 8-25.
    5. Srdjan Redzepagic & Malisa Djukic, 2012. "Macroeconomic Aspects and Perspectives of Serbia within the Process of Enlargement of the Uropean Union," Book Chapters, Institute of Economic Sciences.
    6. Marta C. N. Simões, 2011. "Education Composition and Growth: A Pooled Mean Group Analysis of OECD Countries," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, pages 455-471.

    More about this item

    Keywords

    Balkan countries; European Union; Financial systems; Convergence; Empirical analysis; Finance-growth model estimations;

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • N2 - Economic History - - Financial Markets and Institutions
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P34 - Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

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