We analyse the effects of bank wholesale and retail funding swings triggered by the real economy and foreign financial flow shocks, as well as the effects of the corresponding policy interventions in three emerging countries (Croatia, Montenegro, and Slovenia) throughout the boom (2007–2008), bust (2009–2010), and recovery (2011–2013) periods of the Great Recession. We find evidence that supply-side factors were crucial for the huge procyclical credit swing, and that the cyclicality of credits to firms was amplified the most. The paper also documents that policy contribution was of a second-rate order compared to funding effects. The effectiveness of macroprudential and other policies (standard macro, structural) in supporting the stability of financial systems is discussed, and external flow, policy, and regulation effects on the credit activities of banks are disentangled.
Based on the contemporary literature, a structural measurement model was constructed that serves to test whether resources, such as financial flexibility and a firm’s capability to explore and take up investment opportunities, are related to the investment ability of firms, which contributes to achieving better financial and non-financial performance. By employing structural equation modelling (SEM) on a sample of Slovenian large and medium-sized enterprises, this paper shows a positive relation between its investment ability and performance. Moreover, in addition to financial flexibility, an internal organisation that empowers people, stimulates technological knowledge, and stimulates work in project teams represents an important asset in developing a firm’s investment ability and through it also its performance.
Our study focuses on examining the relationship between productivity (or productivity growth) and state aid allocation in Slovenia during the period of 1998 to 2012. The country itself represents almost an ideal case as the amount of subsidies being allocated in the relevant period decreased significantly after joining the EU. Our study builds on the theoretical model of Aghion et al. (2015) arguing that sectorial policy can enhance growth and efficiency if it is made competition-friendly. The main results show, that by increasing dispersion of subsidies within particular sectors by one standard deviation, the productivity growth increases by 0.03 percentage points on average, ceteris paribus. The state aid has been especially important in the period of economic downturn (2009-2012). However we found evidence that firms receiving higher portion of subsidies were less productive when compared with counterparts from the same sector receiving less or no subsidies. The difference was the biggest during the period of economic downturn
The paper deals with the performances of former Yugoslav countries in the Great Recession. It compares the performances of peripheral countries (Slovenia and Croatia) with those of super-peripheral countries (Bosnia, Kosovo, Macedonia, Montenegro, and Serbia). Four channels of crisis transmission and amplification are in the focus of the analysis: the capital surge as the external channel on the one hand, and the financial accelerator, the banking credit extension, and liquidity as internal channels on the other. While the external channel drove the dynamics of the crisis, internal channels amplified, broadened and prolonged its drastic economic consequences. The paper depicts the trajectory of the consequences of the Great Recession for both peripheral and super-peripheral countries. It shows that, regarding financial stability, peripheral countries outperformed super-peripheral countries in the boom phase, but not in the bust and recovery phases. The crucial factor influencing such a deterioration of the financial stability of peripheral countries were policy measures enforced by the European Commission and ECB, calibrated to the needs of the largest and strongest economies of the euro area while neglecting the asymmetric dynamics of European economies in the bust and recovery phases. Both peripheral and super-peripheral countries thus paid the cost of the eurozone crisis in the same way. The paper concludes with a warning that something similar could happen in the present crisis triggered by the coronavirus.
The recent productivity growth slowdown, experienced both in the developed as well as emerging EU economies, has become a major worry for both companies and policy-makers. The emerging technologies of Industry 4.0, spurring the fourth industrial revolution, are expected to slow down the decline and improve productivity trends. However, the implementation of new technologies in Europe is slower than desirable, with significant differences across countries,sectors, company sizes, and export-orientation. This paper explores the effects of new technologies on productivity growth in emerging economies and proposes a comprehensive policy approach that would stimulate companies to adopt Industry 4.0 technologies. It must be built on the analytical-diagnostic approach, taking into the account the already achieved levels of development and the specifics of a country. It should consider domestic and foreign experiences (i.e.,have an eclectic view) as well as tit-for-tat (carrot and stick) strategies.