Research aim: to evaluate the relationship between labour market regulations and foreign direct investment in the new European Union countries. Research tasks: 1) To overview empirical research on the relationship between labour market regulations and foreign direct investment, to highlight the key areas of evaluation, to summarize the results; 2) To group the new European Union countries into clusters according to two indicators of foreign direct investment: the amount of direct foreign investment and its annual flow; 3) To analyze labour market regulations and identify their relationship with foreign direct investment in the new European Union countries. Research methods: analysis, synthesis, generalization, systemization, statistical data analysis, cluster analysis. Labour market regulations are an important factor attracting foreign direct investment; they may have impact on both labour costs and labour force qualification. Labour market regulations may be viewed as an independent factor that determines foreign direct investment and acts as an additional barrier in hiring and dismissing employees. When the investor has to make a choice between two countries similar in all aspects but different according to labour market regulations, he will opt for the one where labour market regulations are flexible. It is difficult to evaluate labour market regulations because of a lack of statistical data and the system of common indicators; moreover, most indicators are qualitative and cannot be used in the models of quantitative econometrics. It is difficult to perform comparative analysis because different areas are chosen and different indicators are analysed in most empirical research. It is almost impossible to single out one or more common areas of labour market regulations and find any direct or indirect link with foreign direct investment. [.]
Research aim: to evaluate the relationship between labour market regulations and foreign direct investment in the new European Union countries. Research tasks: 1) To overview empirical research on the relationship between labour market regulations and foreign direct investment, to highlight the key areas of evaluation, to summarize the results; 2) To group the new European Union countries into clusters according to two indicators of foreign direct investment: the amount of direct foreign investment and its annual flow; 3) To analyze labour market regulations and identify their relationship with foreign direct investment in the new European Union countries. Research methods: analysis, synthesis, generalization, systemization, statistical data analysis, cluster analysis. Labour market regulations are an important factor attracting foreign direct investment; they may have impact on both labour costs and labour force qualification. Labour market regulations may be viewed as an independent factor that determines foreign direct investment and acts as an additional barrier in hiring and dismissing employees. When the investor has to make a choice between two countries similar in all aspects but different according to labour market regulations, he will opt for the one where labour market regulations are flexible. It is difficult to evaluate labour market regulations because of a lack of statistical data and the system of common indicators; moreover, most indicators are qualitative and cannot be used in the models of quantitative econometrics. It is difficult to perform comparative analysis because different areas are chosen and different indicators are analysed in most empirical research. It is almost impossible to single out one or more common areas of labour market regulations and find any direct or indirect link with foreign direct investment. [.]
In recent years, Lithuania has been perfectly satisfying the convergence criteria for the national debt and the budget deficit, i.e. has not exceeded the settled 60 percent and 3 percent respectively of the reference values of the Maastricht Agreement. On the other hand, recently it has been more and more frequently noticed in the economist forums that the aspects of the country's borrowing are sufficiently problematic and an increase in the fiscal deficit seems inevitable at an early date, thus actually it will not be easy to shape fiscal policy. Taking into consideration the defined problematic arguments in terms of the state financial stability, it is relevant to analyse the tendencies of meeting the above mentioned criteria and the essential factors influencing them, to evaluate involvement with other macroeconomical indices which would help to disclose problematic aspects, possible ways of problem solution and to avoid the risk of not repeatedly becoming a full member of EVS in future. In order to investigate stability of Lithuanian economic convergence in the context of the fiscal provisions of the Maastricht Agreement, the article presents a conception of convergence and outlines possible ways of its cognizance and evaluation in terms of macroeconomical theory and the Maastricht Agreement. The analysis of the debt of the government sector and the budget deficit as well as of the tendencies of variation in percent indices compared to the GDP revealed the characteristics of the situation and the spread of the latter, cohesion was evaluated by applying regression analysis. [.].
In recent years, Lithuania has been perfectly satisfying the convergence criteria for the national debt and the budget deficit, i.e. has not exceeded the settled 60 percent and 3 percent respectively of the reference values of the Maastricht Agreement. On the other hand, recently it has been more and more frequently noticed in the economist forums that the aspects of the country's borrowing are sufficiently problematic and an increase in the fiscal deficit seems inevitable at an early date, thus actually it will not be easy to shape fiscal policy. Taking into consideration the defined problematic arguments in terms of the state financial stability, it is relevant to analyse the tendencies of meeting the above mentioned criteria and the essential factors influencing them, to evaluate involvement with other macroeconomical indices which would help to disclose problematic aspects, possible ways of problem solution and to avoid the risk of not repeatedly becoming a full member of EVS in future. In order to investigate stability of Lithuanian economic convergence in the context of the fiscal provisions of the Maastricht Agreement, the article presents a conception of convergence and outlines possible ways of its cognizance and evaluation in terms of macroeconomical theory and the Maastricht Agreement. The analysis of the debt of the government sector and the budget deficit as well as of the tendencies of variation in percent indices compared to the GDP revealed the characteristics of the situation and the spread of the latter, cohesion was evaluated by applying regression analysis. [.].
We are aiming to evaluate the impact of the tax burden on economic growth in the EU 28 and also the lagging impact of the tax burden. The analysis is based on the multivariate regression model in the general country group as well as in the group of less developed countries of the EU, assessing the possible differences. The research results confirm the differences in impact in the analyzed country groups – the higher impact of the tax burden on the economic growth is identified in the group of less developed countries compared with the general group of the 28 EU countries.
Growing municipal borrowing is not surprising today because not only municipalities but also the state itself borrows actively. We live in a period when the funds of EU are actively being absorbed, and according to regulations, in order to use these funds, it is necessary, albeit a small part, to add own funds. The borrowing requirement which exists at all levels of government is aggregated, and borrowed funds represent the total public debt. When the need arises, municipalities, like the state, can borrow financial resources, but their borrowing is more regulated than the state. The research problem. The annual public resources generated by municipalities represent only a small fraction of public finance flows circulating in state jurisdiction. The financial situation of municipalities is complicated due to the fact that insufficient funds are allocated from the state budget to ensure the performance of state-delegated functions. This article looks at the answers to questions of what are the reasons for municipal borrowing and what are the opportunities of growing borrowing to continue borrowing? The object of the researchis municipal debt. The purpose of the researchis to analyze municipal debt and borrowing as a phenomenon and to reveal the borrowing situation of Lithuanian municipalities. The statistical data of theDepartment of Statisticsto the Government of the Republic ofLithuania, the Ministry of Finance of the Republic of Lithuania and the Association of Lithuanian Municipalities were used for the analysis. For the analysis of the municipal debt situation the budget income and expenditures of all sixty municipalities and municipal net annual borrowing were analyzed. Research period is 2005–2014.This choice of the research period allows to partially eliminate the influence of economic cyclicality, because this period covered rapid economic growth after Lithuania's accession to the European Union, a period of economic recession since 2008, and the last economic recovery period. Based on the analysis, municipal borrowing in Lithuania and other countries is strictly regulated with established borrowing limits and borrowing objectives, usually borrowing is in the domestic banking market for a long or short period. The reasons for borrowing are varied, but usually they are aimed at attracting additional investment by contributing to the borrowed funds of the municipality.In most cases, municipalities pay off in the implementation of EU structural funds projects, to which they themselves have to contribute. In 2013–2014, the debt for these projects amounted to about 50% of all municipal debts. Due to EU projects, debt grows in all municipalities. Another reason for borrowing is related to the increasing trend of municipal functions in Lithuania, although self-generated municipal income is decreasing. All this also becomes the reason for borrowing. The total debt of all municipalities in Lithuania, per capita, is increasing every year. During the analyzed period, this debt increased by 4.68 times. However, the municipal debt of Lithuania compared with the debt of municipalities of other EU countries shows that this debt is not high and has a potential for future growth. However, since 2014, the debt of Lithuanian municipalities, albeit insignificant, has been decreasing. Very similar debt is also in Estonia, slightly more in Latvia. The most indebted are the municipalities of France, Germany, Italy, and the United Kingdom. The growing responsibilities of municipalities in Lithuania reflect the development of active regions, which invest heavily in infrastructure, community projects and economics, and therefore EU funds provide funding to municipalities in implementing targeted projects. On the basis of rules in Lithuania, in order to receive EU funds, the municipality must itself contribute with its own funds to the ongoing project. In such cases, the state gives the municipalities the right to increase their obligations. During the analyzed period, in comparison with the Lithuanian metropolitan municipalities, Vilnius city, Klaipeda City, and Kaunas City municipalities borrowed the most. It is considered that the high level of indebtedness of major cities of Lithuania is determined by both the desire to create an attractive and balanced environment for a large flow of people and business entities to live and work as well as implementation of a large and strategic state infrastructure projects. Borrowing is an inevitable macroeconomic process that can spur economic growth. If borrowed funds are diverted to productive investments and the level of debt does not endanger economic stability, municipalities could increase their debts, of course guaranteeing the repayment of debt in a timely manner. The problem arises when borrowed funds are used only for consumption or short-term projects, thus these funds do not generate the necessary income in order to timely repay the debt, therefore the situation becomes difficult without the additional state financial support. This scientific article is funded by the Research Council of Lithuania according to the project "The evaluation of municipalities' fiscal competitiveness in the context of economic growth" (2015–2018), registration No. MIP-013/2015.
