Economic growth and its determinants in countries in transition

AuthorKestrim Avdimetaj Mensur Morina
PositionUniversity Haxhi Zeka of Kosovo - University College Fama of Kosovo
IIPCCL Publishing, Tirana-Albania
Academic Journal of Business, Administration, Law and Social Sciences Vol. 1 No. 3
November 2015
ISSN 2410-3918
Acces online at
Economic growth and its determinants in countries in transition
Msc. (C.) Kestrim Avdimetaj
University Haxhi Zeka of Kosovo
Msc. Mensur Morina
University College Fama of Kosovo
Main purpose of this scientific research is to analyze the countries in transition; in particular,
through this research we will explain the economic growth and its determinants in the countries
in transition. Referring to the fact that many ex-communist countries were faced with a
transition from a socialist economic system into the economic system of free market, and this
phase of transformation is also known as transition, we will analyze this phase in details. The
materials contained in this research are based on data taken directly from Financial Institutions,
European Central Bank, as well as many other relevant prestigious institutions of countries in
transition. The first section of this research begins with the introduction, presenting broadly
the economic growth in countries in transition and the manner of their transformation, as
well as the identification of hypothesis contained in this research. The second section contains
the review of the literature, where we have cited parts from many authors who conducted
studies in this broadly and productive field. In the third section are explained the mathematical
formulas, that specify the econometric model, as well as the method of assessment, i.e. multiple
regression analysis. Then, through the calculations of STATA, we will substitute the values of
variables obtained in formula and test them through the selected model. In the last section we
will interpret the outcomes derived from calculations in the program, supporting or dismissing
hypothesis presented in this scientific research. This scientific research is limited, because
many other important variables impacting the economic growth, such as instruments of
monetary and fiscal policy, economic freedom, etc., have not been incorporated.
Keywords: Economic Growth, Foreign Investments, Corruption.
2. Introduction
This paper analyses several factors that had greater influence in the process of
economic growth in countries in transition. Communism in Eastern Europe and the
Soviet Union collapsed about twenty years ago. Despite this, the former communist
countries in general are still countries in transition, i.e. countries that are constantly
subject of reforms. However, an extremely long period of time has passed since the
end of communism and the transition process is, or should have been completed
largely, where based on this is reached the assessment on how the countries have
made efforts and progress in the transformation from a socialist economy into the
free market economy. Specifically, when communism began to fall in different
countries of the world, the western states had the hope that these countries will make
reforms in the judicial, economic, constitutional and democratic system and
commence, as soon as possible, the transition process by being transformed into free

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