Small and medium enterprises are an essential part of all business entities, especially regarding economic growth and regional inequalities in transition countries. Several researchers show that, over the years, the significance of SMEs is reflected not only on regional but also on rural development. The main aim of this paper is to determine the contribution of SMEs to rural development in selected SEE countries about institutional and government financial support. Regional distribution of SMEs varies across countries and primarily depends on business attractiveness, employment conditions and institutional support for proper development of rural areas. Differences between poorer and richer regions lead to disproportions in some employers in small and medium enterprises, the value of net profits and the migrations of inhabitants from devastated areas. The research results which are presented in this paper show that SMEs, especially in agribusiness, are significant for sustainable rural development in selected SEE countries. Financial support is identified as a common barrier of successful business in all sectors as well as in agriculture.
The choice to be an entrepreneur or employee is relatively new phenomena for the former socialist and communist countries that went through the process of transitions, mass privatization and restructuring. The first perquisite that enabled this choice were structural changes and reform measures. On the other hand, privatization, restructuring or shutting down the enterprises with socially owned capital left number of people jobless. This created a space for the development of entrepreneurial sector, where former employees could create job for themselves, but also could employ other people and create new jobs. During the period of transition new segment, of small and medium private enterprises and entrepreneurs, that emerged was supposed to be one of the main drivers for economic growth and development in Serbia. Unfortunately, policy makers missed an opportunity to create a sustainable and favourable business environment that would stimulate and foster entrepreneurial spirit in transitional years. Stable macroeconomic environment is essential perquisite for favourable business environment, boosting entrepreneurial spirit and developing the SMEs segment. Unfortunately, the business environment in Serbia is not favourable and is characterized by high unemployment, high level and constant growth of external and public debt, low level of investment and slow level of recovery from the economic crisis. On the other hand starting a business has a lot of obstacle. Bureaucracy is complicated, no enough sources of finance are available for startups and existing companies and also there are a lot of fiscal and para-fiscal burdens. The labour market in Serbia is underdeveloped with low labour mobility, devastated transition downturn in conditions of political instability, wars and economic sanctions. Since the beginning of the transition, the employment rate is falling, but on the other hand the number of people employed in the public sector is rising (with the exception of the last year and the program of downsizing in public sector). This led to the paradox that the average wages in the private sector are lower than in the public administration, while terms and conditions are harder. Having this in mind, a trend of aspiration towards employment in public sector is identified in Serbia. Job is relatively easier than in the private sector, wages and conditions are better. However, it is necessary to mention that the last downsizing in public sector brought uncertainty in this segment also. The most optimistic estimates are that during 2015 and 2016 the number of employees will be reduced by 20 percent in the public sector. Having in mind all this it is not surprising that the option of being an entrepreneur gains importance.
Seven years after the EU enlargement, when Romania and Bulgaria joined EU, and a year later that Croatia became a member country, other five South East European countries (Serbia, Montenegro, Bosnia and Herzegovina, Albania and Macedonia) are waiting for the membership in European Union. Labour markets of SEE must adapt to fast changes of European labour market where opportunities for life-long jobs will be very rare and job mobility will be even more intensified in the future. In order to find adequate answers to these challenges labour markets in the region should become more market-driven. Process of transition in most of the countries of the region started nearly 25 years ago and countries in the SEE region have been trying to implement the best solutions and practices into local labour markets and to move in the right direction. The main purpose of this paper is to make comparison of labour markets among the countries in the region of South East Europe, especially comparison of non-EU members with the labour markets of Bulgaria and Romania, from the aspects of gender, age and other characteristics, and to draw the conclusions about the changes on the labour market of the region in the last decade when it comes to the employment, unemployment and participation rates and other labour market indicators. Through implementation of principal components analysis and factor analysis changes of regional labour market in last decade were monitored and key factors were identified. Comparative analysis of labour markets in the region was made and conclusions were drawn about differences in the case of key labour market indicators.
This paper evaluates the effectiveness of active labour market policies on two largest vulner able groups at Serbian labour market — women and youth. By means of adapting methodology of other authors we concentrate on in depth empirical research within the target groups to determine what policies bring most gains. Moreover, by using econometric matched pair design methodology we have undertaken a microevaluation of several different ALMP used in Serbia with a goal of obtaining precise information on the difference in effects among measures. The results that we have achieved are to a certain extent surprising, showing that widely utilised matching methodology can be altered and improved. On the other hand, we found that women and youth perform better than average in effectiveness of active labour market policies.
Active labour market policies are commonly used tool to fight unem‐ ployment. In the late 1970s in most developed countries of OECD government ex‐ penditures on those policies reached up to 1.5% of GDP. This created a need to evaluate the impact of such measures and perform cost‐benefit analyses. Evalua‐ tions have in the previous 30 years been undertaken by using several methods: experimental and quasi‐experimental, measurements and evaluations of processes performance, micro and macro analyses. In this paper we have presented and test‐ ed a modified approach of cost‐benefit analysis of ALMP viewed as an investment made by a government. The goal was to determine whether by using such an ap‐ proach it is possible to provide new information to policy makers and to deepen research and further develop a methodology which will be robust enough to serve as a proof of ALMP effectiveness. Initial results of the empirical research in Serbia show very positive results, indicating that especially in the period of recessions, active measures can significantly improve labour market conditions, thus create high levels of return to investments (taking ALMP as an investment). Using aggre‐ gate data on all persons being registered as unemployed at the beginning of 2008 and 2009, we have tested how the ALMP impact the potential growth of tax re‐ turns. Our findings say that in 2008 there has been a net gain of € 269 million and in 2009 € 166 million in tax returns collected.
Active labour market policies are commonly used tool to fight unemployment. In the early 1960s all Scandinavian countries have introduced several different measures to have an effect on their labour markets. In the late 1970s in most developed countries of OECD government expenditures on those policies reached the level of 1-1.5% of GDP. High levels of expenditures created a need to assess the impact of such measures and perform their cost-benefit analysis. Evaluations have in the previous 30 years been undertaken by using different methods: from experimental and quasi-experimental, to micro and macro analyses. Most precise evaluations are based on complex econometric methods. Moreover, during last decade there have been several meta-analyses to make crossanalysis of evaluations made worldwide in a long time-span. General conclusions of most papers are that ALMP do not have very high influence on the employability. The best results are experienced in services provided by local national employment services, as well in training programs, especially in on-job training. In the last few years there have appeared some indications that subsidized employment has high positive effects, however there is no general consensus on that matter. Despite large number of published papers on evaluations, there has been no research aimed on analysing overall ALMP effects on the economy, and creation of a model which could ex-ante estimate future effects of ALMP.
Serbia has in 2006 adopted a Law on "Organic production and organic products". This was a first step towards improvement of this, very prosperous field of agriculture. Unfortunately, in the same year, the state has invested only 50 million dinars (600.000 €) for subvention of this production. This was mostly related to licensing of fields for organic production. Unlike that, in neighboring Croatia, which is trailing in organic production to Serbia government has adopted a regulation by which all organic manufacturers are subsidized by400€ per hectare.
There have been several attempts to benchmark competitiveness of nations and show that its levels have significant impact on the wealth measured by growth of GDP per capita, especially during the recession. Countries of South Eastern Europe including Serbia and Romania are going through deep recession, and some authors have confirmed that the level of competitiveness, measured by several existing indices, is highly influential on welfare and wealth of those countries. Some studies have confirmed that the Global Competitiveness Index - GCI is the most appropriate measurement tool for countries in the SEE region. However, the large number of variables composing GCI index does not allow observing particularities of individual countries. By the mean of factor analysis in this paper it was confirmed that it is possible to extract 11 statistically significant factors which explain the competitiveness level of the country, and enable comparison among countries differently than the original index. Moreover factorsLegal rights and Government impact stand out as a common variable for most SEE and especially for Romania and Serbia as principal generator for increasing competitiveness.
The aim of the paper is the analysis of the current situation related to the spot and non-standardised term commodity exchange market, as well as to provide a proposal for further improvement of commodity-trading in Serbia. The system of commodity-exchange trading in Serbia has not been developed and legislation has not been fully enacted. According to the analysis of price variability on three commodity markets it can be concluded that the fluctuations of prices of agricultural products in the last decade were very high, which led to market participants' need for term commodity exchange instruments. The paper presents suggestions for further improvement of the spot market as well as the clearing model on the forward market. The adoption of the Law on Commodity Exchange and amendments to the Law on Capital Market would improve the spot trading, trading of non-standardised and standardised term contracts.
The aim of the paper is the analysis of the current situation related to the spot and non-standardised term commodity exchange market, as well as to provide a proposal for further improvement of commodity-trading in Serbia. The system of commodity-exchange trading in Serbia has not been developed and legislation has not been fully enacted. According to the analysis of price variability on three commodity markets it can be concluded that the fluctuations of prices of agricultural products in the last decade were very high, which led to market participants' need for term commodity exchange instruments. The paper presents suggestions for further improvement of the spot market as well as the clearing model on the forward market. The adoption of the Law on Commodity Exchange and amendments to the Law on Capital Market would improve the spot trading, trading of non-standardised and standardised term contracts.
The aim of the paper is the analysis of the current situation related to the spot and non-standardised term commodity exchange market, as well as to provide a proposal for further improvement of commodity-trading in Serbia. The system of commodity-exchange trading in Serbia has not been developed and legislation has not been fully enacted. According to the analysis of price variability on three commodity markets it can be concluded that the fluctuations of prices of agricultural products in the last decade were very high, which led to market participants' need for term commodity exchange instruments. The paper presents suggestions for further improvement of the spot market as well as the clearing model on the forward market. The adoption of the Law on Commodity Exchange and amendments to the Law on Capital Market would improve the spot trading, trading of non-standardised and standardised term contracts.
Economic trends in recent years have led to rising unemployment across Europe. This trend is particularly evident among youth. At the same time, the negative demographic trends in many countries show that the number of young people is decreasing. Problems among young people are the reflection of the future state of the nation. Therefore there is a need to analyse whether the government can reduce youth unemployment rate using available regulatory tools. In this paper, the authors have analysed the impact of three groups of factors on the youth unemployment rate by using multiple regression analysis and controlling the long-term determinants of unemployment. The results show that the level of unemployment is largely impacted by a tax rate on low wages, primarily in the mid-term. Factors related to the general rate of unemployment, as well as the other demographic factors have showed no statistically significant impact on mid-term and long-term youth unemployment rate.
Economic trends in recent years have led to rising unemployment across Europe. This trend is particularly evident among youth. At the same time, the negative demographic trends in many countries show that the number of young people is decreasing. Problems among young people are the reflection of the future state of the nation. Therefore there is a need to analyse whether the government can reduce youth unemployment rate using available regulatory tools. In this paper, the authors have analysed the impact of three groups of factors on the youth unemployment rate by using multiple regression analysis and controlling the long-term determinants of unemployment. The results show that the level of unemployment is largely impacted by a tax rate on low wages, primarily in the mid-term. Factors related to the general rate of unemployment, as well as the other demographic factors have showed no statistically significant impact on mid-term and long-term youth unemployment rate.
Strategic approach to foreign investments in Serbia has changed significantly at the beginning of XXI century. Before 2000 Serbia was a country that used high level of custom and non-custom barriers to protect its economy. During the period of nine transitional years Serbia shifted to completely liberal approach of an open market economy. A starting impulse to foreign investments in Serbia was given by the new approach to privatization process of state companies, which attracted over 3 billion euros of investments. Stable and transparent political model that was created made significant impact to an increase of foreign investments into the country and growth of foreign capital share in the market as a whole, with over € 13 billion of inflow. Since transition in Serbia in its full scale begun with ten years delay compared to other eastern and southeastern European countries, so was the first stage of the transition process completed with significant delay. For that reason it is important to understand in which way Serbia will approach second stage of transition, which is critical for sustainable development in the next period. Past experience of other countries should be used to understand what should and what should not be done in order to achieve so called "Virtual Circle of Foreign Investments". Clear strategy and vision of Serbia in the future is required in order to attract not only those FDI which are seeking for fast turnover and use of natural resources, but rather those which are able to provide high level of added value and able to transfer technology and skills to economy as a whole.
The aim of this paper is to improve on the methodology set in previous attempts to estimate the impact of gross government debt to primary balances in a wide set of 21 CESEE countries. Since the result of the longlasting crisis in those countries is rising imbalance of public finances it is necessary to analyze what factors are causing such effects. Running the fixed effects, pooled and GMM regression it was found that both lagged government debt and output gap are positively related to primary balance. Moreover there was found evidence of non-linear relationship between primary balance and lagged debt, with fiscal fatigue occurrence at 70% threshold. Estimation of the augmented model shows that countercyclical response of primary balance is more pronounced in economic downturn relative to boom in cycle.
