Europe as a Convergence Engine : Heterogeneity and Investment Opportunities in Emerging Europe

This paper provides empirical evidence that countries in emerging Europe reaped the benefits of international financial integration over the past 12 years by attracting sizeable foreign capital inflows and accelerating medium-term growth. But the a...

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Main Authors: Stojkov, Aleksandar, Zalduendo, Juan
Format: Policy Research Working Paper
Language:English
Published: 2012
Subjects:
Online Access:http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111006170943
http://hdl.handle.net/10986/3604
id okr-10986-3604
recordtype oai_dc
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic ABSOLUTE VALUE
ABSORPTIVE CAPACITY
ACCESSION COUNTRIES
ADVANCED ECONOMIES
ANNUAL GROWTH
ANNUAL GROWTH RATE
ASSETS
AVERAGE GROWTH
AVERAGE GROWTH RATE
BALANCE OF PAYMENTS
BANKING SYSTEM
BENCHMARK
BUSINESS CYCLE
CAPITAL ACCOUNT
CAPITAL ACCOUNT RESTRICTIONS
CAPITAL ACCOUNT TRANSACTIONS
CAPITAL CONTROLS
CAPITAL FLOW
CAPITAL FLOWS
CAPITAL FORMATION
CAPITAL GOODS
CAPITAL INFLOW
CAPITAL INFLOWS
CAPITAL MOBILITY
CAPITAL STOCK
CENTRAL PLANNING
COLLATERAL
CONSUMER CHOICE
CONSUMPTION SMOOTHING
CONTROL VARIABLES
CONVERGENCE HYPOTHESIS
COUNTRY DUMMY
CREDIT BOOM
CURRENCY
CURRENCY CRISES
CURRENT ACCOUNT
CURRENT ACCOUNT BALANCE
CURRENT ACCOUNT BALANCES
CURRENT ACCOUNT DEFICIT
CURRENT ACCOUNT DEFICITS
CURRENT ACCOUNT POSITIONS
CURRENT ACCOUNT SURPLUSES
CURRENT ACCOUNT TRANSACTIONS
DEBT
DEPENDENCY RATIO
DEPENDENT VARIABLE
DEPOSITS
DEPRECIATION
DEVELOPING COUNTRIES
DEVELOPMENT ECONOMICS
DEVELOPMENT POLICY
DISTORTIONS
DOMESTIC BANKS
DOMESTIC FINANCIAL SECTOR
DOMESTIC SAVING
DOMESTIC SAVINGS
DUMMY VARIABLE
DUMMY VARIABLES
DYNAMIC PANEL
ECONOMETRIC ANALYSIS
ECONOMETRICS
ECONOMIC GROWTH
ECONOMIC HISTORY
ECONOMIC INTEGRATION
ECONOMIC MODEL
ECONOMIC POLICY
ECONOMIC REFORMS
ECONOMIC RESEARCH
ECONOMIC THEORY
ECONOMICS
EDUCATIONAL ATTAINMENT
EMPIRICAL EVIDENCE
EMPIRICAL LITERATURE
EMPIRICAL RESULTS
EMPIRICAL STUDIES
EMPIRICAL WORK
ENDOGENOUS GROWTH THEORIES
ENDOGENOUS VARIABLES
EQUATIONS
ERROR TERM
ERROR TERMS
ESTIMATED COEFFICIENT
ESTIMATED COEFFICIENTS
ESTIMATION RESULTS
EXCHANGE ARRANGEMENTS
EXCHANGE RATES
EXCHANGE RESTRICTIONS
EXPLANATORY VARIABLE
EXPLANATORY VARIABLES
EXPORTS
EXPOSURE
EXPOSURES
EXTERNAL FINANCING
EXTERNAL IMBALANCES
FINANCIAL ASSETS
FINANCIAL CRISIS
FINANCIAL DEPTH
FINANCIAL DEVELOPMENT
FINANCIAL INTERMEDIATION
FINANCIAL LIBERALIZATION
FINANCIAL MARKETS
FINANCIAL OPENNESS
FINANCIAL SECTOR
FOREIGN ASSET
FOREIGN ASSET POSITION
FOREIGN ASSET POSITIONS
FOREIGN ASSETS
FOREIGN CAPITAL
FOREIGN EXCHANGE
FOREIGN EXCHANGE RESERVES
FOREIGN LIABILITIES
GDP DEFLATOR
GDP PER CAPITA
GENERAL EQUILIBRIUM
GLOBAL ECONOMY
GLOBAL IMBALANCES
GLOBALIZATION
GRADUAL CAPITAL ACCOUNT LIBERALIZATION
GROSS CAPITAL FORMATION
GROWTH DETERMINANTS
GROWTH EQUATION
GROWTH IMPACT
GROWTH LITERATURE
GROWTH MODEL
GROWTH MODELS
GROWTH PERFORMANCE
GROWTH PROCESS
GROWTH RATE
GROWTH RATES
GROWTH REGRESSION
GROWTH REGRESSIONS
GROWTH THEORIES
GROWTH THEORY
HIGH GROWTH
HUMAN CAPITAL
IMBALANCE
IMBALANCES
IMPORTS
INCOME
INDICATOR VARIABLE
INFLATION
INFLATION RATE
INTERNATIONAL ECONOMICS
INTERNATIONAL FINANCIAL INTEGRATION
INTERNATIONAL TRADE
INVESTMENT DEMAND
INVESTMENT OPPORTUNITIES
INVESTMENT RATES
LAGGED DEPENDENT
LEVEL OF INVESTMENT
LONG RUN
LONG-RUN GROWTH
LOW-INCOME COUNTRIES
spellingShingle ABSOLUTE VALUE
ABSORPTIVE CAPACITY
ACCESSION COUNTRIES
ADVANCED ECONOMIES
ANNUAL GROWTH
ANNUAL GROWTH RATE
ASSETS
AVERAGE GROWTH
AVERAGE GROWTH RATE
BALANCE OF PAYMENTS
BANKING SYSTEM
BENCHMARK
BUSINESS CYCLE
CAPITAL ACCOUNT
CAPITAL ACCOUNT RESTRICTIONS
CAPITAL ACCOUNT TRANSACTIONS
CAPITAL CONTROLS
CAPITAL FLOW
CAPITAL FLOWS
CAPITAL FORMATION
CAPITAL GOODS
CAPITAL INFLOW
CAPITAL INFLOWS
CAPITAL MOBILITY
CAPITAL STOCK
CENTRAL PLANNING
COLLATERAL
CONSUMER CHOICE
CONSUMPTION SMOOTHING
CONTROL VARIABLES
CONVERGENCE HYPOTHESIS
COUNTRY DUMMY
CREDIT BOOM
CURRENCY
CURRENCY CRISES
CURRENT ACCOUNT
CURRENT ACCOUNT BALANCE
CURRENT ACCOUNT BALANCES
CURRENT ACCOUNT DEFICIT
CURRENT ACCOUNT DEFICITS
CURRENT ACCOUNT POSITIONS
CURRENT ACCOUNT SURPLUSES
CURRENT ACCOUNT TRANSACTIONS
DEBT
DEPENDENCY RATIO
DEPENDENT VARIABLE
DEPOSITS
DEPRECIATION
DEVELOPING COUNTRIES
DEVELOPMENT ECONOMICS
DEVELOPMENT POLICY
DISTORTIONS
DOMESTIC BANKS
DOMESTIC FINANCIAL SECTOR
DOMESTIC SAVING
DOMESTIC SAVINGS
DUMMY VARIABLE
DUMMY VARIABLES
DYNAMIC PANEL
ECONOMETRIC ANALYSIS
ECONOMETRICS
ECONOMIC GROWTH
ECONOMIC HISTORY
ECONOMIC INTEGRATION
ECONOMIC MODEL
ECONOMIC POLICY
ECONOMIC REFORMS
ECONOMIC RESEARCH
ECONOMIC THEORY
ECONOMICS
EDUCATIONAL ATTAINMENT
EMPIRICAL EVIDENCE
EMPIRICAL LITERATURE
EMPIRICAL RESULTS
EMPIRICAL STUDIES
EMPIRICAL WORK
ENDOGENOUS GROWTH THEORIES
ENDOGENOUS VARIABLES
EQUATIONS
ERROR TERM
ERROR TERMS
ESTIMATED COEFFICIENT
ESTIMATED COEFFICIENTS
ESTIMATION RESULTS
EXCHANGE ARRANGEMENTS
EXCHANGE RATES
EXCHANGE RESTRICTIONS
EXPLANATORY VARIABLE
EXPLANATORY VARIABLES
EXPORTS
EXPOSURE
EXPOSURES
EXTERNAL FINANCING
EXTERNAL IMBALANCES
FINANCIAL ASSETS
FINANCIAL CRISIS
FINANCIAL DEPTH
FINANCIAL DEVELOPMENT
FINANCIAL INTERMEDIATION
FINANCIAL LIBERALIZATION
FINANCIAL MARKETS
FINANCIAL OPENNESS
FINANCIAL SECTOR
FOREIGN ASSET
FOREIGN ASSET POSITION
FOREIGN ASSET POSITIONS
FOREIGN ASSETS
FOREIGN CAPITAL
FOREIGN EXCHANGE
FOREIGN EXCHANGE RESERVES
FOREIGN LIABILITIES
GDP DEFLATOR
GDP PER CAPITA
GENERAL EQUILIBRIUM
GLOBAL ECONOMY
GLOBAL IMBALANCES
GLOBALIZATION
GRADUAL CAPITAL ACCOUNT LIBERALIZATION
GROSS CAPITAL FORMATION
GROWTH DETERMINANTS
GROWTH EQUATION
GROWTH IMPACT
GROWTH LITERATURE
GROWTH MODEL
GROWTH MODELS
GROWTH PERFORMANCE
GROWTH PROCESS
GROWTH RATE
GROWTH RATES
GROWTH REGRESSION
GROWTH REGRESSIONS
GROWTH THEORIES
GROWTH THEORY
HIGH GROWTH
HUMAN CAPITAL
IMBALANCE
IMBALANCES
IMPORTS
INCOME
INDICATOR VARIABLE
INFLATION
INFLATION RATE
INTERNATIONAL ECONOMICS
INTERNATIONAL FINANCIAL INTEGRATION
INTERNATIONAL TRADE
INVESTMENT DEMAND
INVESTMENT OPPORTUNITIES
INVESTMENT RATES
LAGGED DEPENDENT
LEVEL OF INVESTMENT
LONG RUN
LONG-RUN GROWTH
LOW-INCOME COUNTRIES
Stojkov, Aleksandar
Zalduendo, Juan
Europe as a Convergence Engine : Heterogeneity and Investment Opportunities in Emerging Europe
geographic_facet Europe and Central Asia
Europe and Central Asia
relation Policy Research working paper ; no. WPS 5837
description This paper provides empirical evidence that countries in emerging Europe reaped the benefits of international financial integration over the past 12 years by attracting sizeable foreign capital inflows and accelerating medium-term growth. But the aggregate pattern masks substantial heterogeneity across countries; namely, new European Union member states and the European Union candidate countries are different from the European Union neighborhood. The growth benefits are supported from both a flow and a stock perspective in terms of the link between foreign savings and growth. While foreign savings might in part substitute for national savings, the analysis finds that the channel to high growth in these countries is, primarily, through making possible the pursuit of investment opportunities that would otherwise remain unfunded; in turn, this seems to be intimately linked to the opportunities created by European Union membership. Although this conclusion does not disappear if the outlier observations of the credit boom period that preceded the financial crisis are dropped from the sample, it does suggest that these excesses did not play as positive a role for growth.
format Publications & Research :: Policy Research Working Paper
author Stojkov, Aleksandar
Zalduendo, Juan
author_facet Stojkov, Aleksandar
Zalduendo, Juan
author_sort Stojkov, Aleksandar
title Europe as a Convergence Engine : Heterogeneity and Investment Opportunities in Emerging Europe
title_short Europe as a Convergence Engine : Heterogeneity and Investment Opportunities in Emerging Europe
title_full Europe as a Convergence Engine : Heterogeneity and Investment Opportunities in Emerging Europe
title_fullStr Europe as a Convergence Engine : Heterogeneity and Investment Opportunities in Emerging Europe
title_full_unstemmed Europe as a Convergence Engine : Heterogeneity and Investment Opportunities in Emerging Europe
title_sort europe as a convergence engine : heterogeneity and investment opportunities in emerging europe
publishDate 2012
url http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111006170943
http://hdl.handle.net/10986/3604
_version_ 1764387405619527680
spelling okr-10986-36042021-04-23T14:02:11Z Europe as a Convergence Engine : Heterogeneity and Investment Opportunities in Emerging Europe Stojkov, Aleksandar Zalduendo, Juan ABSOLUTE VALUE ABSORPTIVE CAPACITY ACCESSION COUNTRIES ADVANCED ECONOMIES ANNUAL GROWTH ANNUAL GROWTH RATE ASSETS AVERAGE GROWTH AVERAGE GROWTH RATE BALANCE OF PAYMENTS BANKING SYSTEM BENCHMARK BUSINESS CYCLE CAPITAL ACCOUNT CAPITAL ACCOUNT RESTRICTIONS CAPITAL ACCOUNT TRANSACTIONS CAPITAL CONTROLS CAPITAL FLOW CAPITAL FLOWS CAPITAL FORMATION CAPITAL GOODS CAPITAL INFLOW CAPITAL INFLOWS CAPITAL MOBILITY CAPITAL STOCK CENTRAL PLANNING COLLATERAL CONSUMER CHOICE CONSUMPTION SMOOTHING CONTROL VARIABLES CONVERGENCE HYPOTHESIS COUNTRY DUMMY CREDIT BOOM CURRENCY CURRENCY CRISES CURRENT ACCOUNT CURRENT ACCOUNT BALANCE CURRENT ACCOUNT BALANCES CURRENT ACCOUNT DEFICIT CURRENT ACCOUNT DEFICITS CURRENT ACCOUNT POSITIONS CURRENT ACCOUNT SURPLUSES CURRENT ACCOUNT TRANSACTIONS DEBT DEPENDENCY RATIO DEPENDENT VARIABLE DEPOSITS DEPRECIATION DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISTORTIONS DOMESTIC BANKS DOMESTIC FINANCIAL SECTOR DOMESTIC SAVING DOMESTIC SAVINGS DUMMY VARIABLE DUMMY VARIABLES DYNAMIC PANEL ECONOMETRIC ANALYSIS ECONOMETRICS ECONOMIC GROWTH ECONOMIC HISTORY ECONOMIC INTEGRATION ECONOMIC MODEL ECONOMIC POLICY ECONOMIC REFORMS ECONOMIC RESEARCH ECONOMIC THEORY ECONOMICS EDUCATIONAL ATTAINMENT EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPIRICAL WORK ENDOGENOUS GROWTH THEORIES ENDOGENOUS VARIABLES EQUATIONS ERROR TERM ERROR TERMS ESTIMATED COEFFICIENT ESTIMATED COEFFICIENTS ESTIMATION RESULTS EXCHANGE ARRANGEMENTS EXCHANGE RATES EXCHANGE RESTRICTIONS EXPLANATORY VARIABLE EXPLANATORY VARIABLES EXPORTS EXPOSURE EXPOSURES EXTERNAL FINANCING EXTERNAL IMBALANCES FINANCIAL ASSETS FINANCIAL CRISIS FINANCIAL DEPTH FINANCIAL DEVELOPMENT FINANCIAL INTERMEDIATION FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL OPENNESS FINANCIAL SECTOR FOREIGN ASSET FOREIGN ASSET POSITION FOREIGN ASSET POSITIONS FOREIGN ASSETS FOREIGN CAPITAL FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVES FOREIGN LIABILITIES GDP DEFLATOR GDP PER CAPITA GENERAL EQUILIBRIUM GLOBAL ECONOMY GLOBAL IMBALANCES GLOBALIZATION GRADUAL CAPITAL ACCOUNT LIBERALIZATION GROSS CAPITAL FORMATION GROWTH DETERMINANTS GROWTH EQUATION GROWTH IMPACT GROWTH LITERATURE GROWTH MODEL GROWTH MODELS GROWTH PERFORMANCE GROWTH PROCESS GROWTH RATE GROWTH RATES GROWTH REGRESSION GROWTH REGRESSIONS GROWTH THEORIES GROWTH THEORY HIGH GROWTH HUMAN CAPITAL IMBALANCE IMBALANCES IMPORTS INCOME INDICATOR VARIABLE INFLATION INFLATION RATE INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL TRADE INVESTMENT DEMAND INVESTMENT OPPORTUNITIES INVESTMENT RATES LAGGED DEPENDENT LEVEL OF INVESTMENT LONG RUN LONG-RUN GROWTH LOW-INCOME COUNTRIES This paper provides empirical evidence that countries in emerging Europe reaped the benefits of international financial integration over the past 12 years by attracting sizeable foreign capital inflows and accelerating medium-term growth. But the aggregate pattern masks substantial heterogeneity across countries; namely, new European Union member states and the European Union candidate countries are different from the European Union neighborhood. The growth benefits are supported from both a flow and a stock perspective in terms of the link between foreign savings and growth. While foreign savings might in part substitute for national savings, the analysis finds that the channel to high growth in these countries is, primarily, through making possible the pursuit of investment opportunities that would otherwise remain unfunded; in turn, this seems to be intimately linked to the opportunities created by European Union membership. Although this conclusion does not disappear if the outlier observations of the credit boom period that preceded the financial crisis are dropped from the sample, it does suggest that these excesses did not play as positive a role for growth. 2012-03-19T18:05:23Z 2012-03-19T18:05:23Z 2011-10-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111006170943 http://hdl.handle.net/10986/3604 English Policy Research working paper ; no. WPS 5837 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper Europe and Central Asia Europe and Central Asia