Economic growth and its determinants in countries in transition

• Author: Kestrim Avdimetaj Mensur Morina
• Position: University Haxhi Zeka of Kosovo - University College Fama of Kosovo
• Pages: 214-224

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 www.iipccl.org

214

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

Abstract

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