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China's Outward Foreign Direct Investment in CEE Countries--Based on Gravity Analysis
Xiong, Xiaoyi ; Paulus, Michal (advisor) ; Li, Yating (referee) ; Semerák, Vilém (referee)
Over the past decade, economic and trade co-operation between China and Central and Eastern European countries has developed at a high rate. In the year of 2022, China has developed into an important trading partner with most CEE countries in terms of the ranking and share of total trade volume. However, problems such as trade surpluses and economic downturns in the post-pandemic era have made future cooperation between China and CEE countries facing a lot of new challenges. Based on the panel data of China and 16 selected countries in Central and Eastern European region from 2012 to 2021, this paper conducts empirical analyses and uses the extended gravity model to figure out the influencing factors of China's OFDI towards CEE countries. In addition, this paper also calculates the efficiency of China's OFDI based on Stochastic Frontier Gravity Model and finally give suggestions for the future.
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The correlation between the automotive industry output cycle and the business cycle in the Czech Republic
Yin, Shiqi ; Jeřábek, Petr (advisor) ; Merrino, Serena (referee) ; Čech, František (referee)
This paper aims to investigate the correlation between the output cycle and the business cycle of the Czech Republic's core industry, the automotive industry. The paper begins by analysing the volatility of each variable, and finds that the trends of the automotive industry output cycle and the business cycle align, while the automotive industry output cycle keeps lagging behind the business cycle. Secondly, this paper adopts the VAR model to examine the relationship between the Czech automotive output and its macroeconomic indicators, using the real GDP and the Gross Value added (GVA) to represent the macroeconomic situation. The results show that there is a correlation between Czech automotive industry output and the macroeconomy, but the correlation is asymmetric, which means the automotive industry is more sensitive to macroeconomic shocks but has weaker impact on the macroeconomy. Finally, this paper also measures the correlation between the automotive industry and monetary policy (M2) and finds that the monetary policy shows strong stability and independence, which can affect the progress of the automotive industry, but no reverse effect has been observed.
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The Role of FDI in the Green Transition of Central and East Europe Countries: From Empirical Evidence
Huang, Shiyuan ; Svoboda, Karel (advisor) ; Li, Yating (referee) ; Paulus, Michal (referee)
This paper empirically examines the role of FDI in the green transition for CEE countries from the perspectives of greenhouse gas emissions and renewable energy production. For the analysis of the two perspectives, the PMG and MG estimators based on nonlinear EKC and the fixed effect model were applied to the sample of CEE countries from 2001 to 2021. The results demonstrate that FDI has an inverted U-shaped relationship with greenhouse gas emissions, indicating that FDI accelerates the transition to a greener economy by reducing emissions after the turning point. However, the effect is only significant in the long term, and the turning point threshold varies by income group. On the other hand, there was no evidence of a correlation between FDI and the growth of renewable energy production, but energy intensity would substantially reduce the growth of renewable energy production. To maximise FDI's positive impact on their green transition, empirical evidence suggests CEE nations should implement policies to encourage FDI inflow and direct more investment towards renewable production and sustainable development. Key words: FDI; Green transition; CEE countries; EKC
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Checkmate! Losing with borders, winning with centers. The case of European integration
Kapanadze, Ketevani
This paper studies two major stages of European integration, the expansion of the European Union (EU) in 2004 and the Schengen Area in 2008, and their impacts on economic performance in subregions of Central and Eastern European (CEE) countries. Using European regional data at the NUTS3 level and disaggregated synthetic control method, I construct counterfactuals for sub-regions of CEE countries. This approach allows me to assess regional treatment effects (RTEs) and to study the heterogeneous effects of European integration. I find that the benefits of EU and Schengen memberships to annual GDP per capita are approximately 10% less in border regions, relative to interior areas. The results expose regional economic disparities, as border regions lose relative to interior regions since European integration. Furthermore, integration facilitators in border regions such as fewer geographical barriers, more service employment, and positive attitudes toward the EU did not reduce economic disparities. The results show that the gap persists, regardless of some complementarities. Thus, the main implication of this paper is that sub-regions of CEE countries are far from being fully converged, and that European integration instead seems to have spurred sub-regional divergence.
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Career-breaks and maternal employment in CEE countries
Bičáková, Alena ; Kalíšková, Klára
Post-birth career breaks and their impact on mothers’ labor market outcomes have received considerable attention in the literature. However, existing evidence comes mostly from Western Europe and the US, where career breaks tend to be short. In contrast, Central and Eastern European (CEE) countries, where post-birth career interruptions by mothers are typically much longer, have rarely been studied. In the first part of this study, we place CEE countries into the EU context by providing key empirical facts related to the labor market outcomes of mothers and the most important factors that may affect them. Besides substantial differences between CEE countries and the rest of the EU, there is also large heterogeneity within CEE itself, which we explore next. In the second part, we review the main family leave and formal childcare policies and reforms that have occurred in CEE countries since the end of Communism and provide a comprehensive survey of the existing scientific evidence of their impact on maternal employment. While research on the causal impacts of these policies is scarce, several important studies have recently been published in high-impact journals. We are the first to provide an overview of these causal studies from CEE countries, which offer an insightful extension to the existing knowledge from Western Europe and the US.
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Credit risk of subsidiaries of foreign banks in CEE countries
Cheng, Jiamin ; Hanzlík, Petr (advisor) ; Silva, Rui (referee) ; Baxa, Jaromír (referee)
This thesis aims to study the banking characteristics of the parent bank of foreign banks and the influence of the economic environment of the home country on the credit risk of subsidiaries. The study collected a data set of 32 foreign banks in eight CEE countries (joining the EU in 2004) from 2009 to 2020 and conducted an empirical analysis using a fixed-effect panel regression model. Credit risk (NPL) is used as the dependent variable, and the explanatory variable is divided into four groups according to the home country and host country, the bank level, and the macroeconomic level. The regression results show that the profitability of the parent bank has a negative impact, while the liquidity, size, capital, and credit risk of the parent bank has a positive impact on the credit risk of the subsidiary. Moreover, the inflation in the country where the parent bank is located has a negative influence on the credit risk of the subsidiary, while the GDP growth and unemployment rate in the country where the parent bank is located leads to an increase in credit risk. These results show that international risk is transferred from the parent country to the host country through a new channel for foreign banks. Key words: credit risk, fixed effects model, CEE countries, banking sytem, foreign bank
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An investigation of Foreign Currency loans exposure contribution to the soundness of the Financial System
Özalan, Eda ; Tůma, Zdeněk (advisor) ; Jakubík, Petr (referee)
This thesis investigates the impact of foreign currency lending on financial stability for the case of Balkans, CEE and Balkans and CEE together. Such investigation has been carried out by identifying the impact of foreign currency lending across 3 main channels, which are: 1) households, 2) non-financial corporations, and 3) central government. This thesis was able to prove the foreign currency lending relevance, significance, main impact, and remarkable heterogeneity characterizing the Balkans and CEE samples. With respect to each of the subsamples and the full sample, the results can be summarized in 3 main points. For the case of Balkans, the financial instability has been identified to be transmitted through the household and government channels. Regarding the CEE, the dynamics are completely different as household channel provides mixed evidence, while the non-financial corporation one serves as the main transmission channel. When investigating the full sample, it has been pointed out that the prevailing dynamics reveal the non-financial corporation and government channels as the ones with the largest contribution to financial instability. JEL Classification C33, C36, F34, G20, G21, G32 Keywords Financial stability, foreign currency lending, household, non-financial corporation, central...
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The Impact of Unconventional Monetary Policy of ECB to Central and Eastern European Countries: A Panel VAR Analysis
Hálová, Klára ; Horváth, Roman (advisor) ; Džmuráňová, Hana (referee)
In this thesis we examine the macroeconomic interactions of unconventional monetary policy introduced by European Central bank during crisis by estimating a panel vector autoregression. We study impact of such policies using monthly data from 13 Central and Eastern European countries within seven-year period from 2008 to 2014. We find a positive reactions of output and prices to expansionary unconventional monetary policy shock. Our results provide evidence that decrease in shadow policy rate of ECB leads to rise in output as well as temporary rise in inflation, however, the effect on inflation is weaker and less persistent. We also find that unconventional monetary policy positively influences market uncertainty, but we do not find any significant effect on exchange rates. Individual country estimates suggest that the reaction of exchange rates to non-standard monetary policy shock significantly vary across countries.
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The Growth Effects of Education in CEE and Balkan Countries
Radonjić, Marija ; Baxa, Jaromír (advisor) ; Cingl, Lubomír (referee)
This study applies the cross-country growth accounting regressions derived from the augmented Solow-Swan model to ascertain the growth effects of education in CEE and Balkan countries. We firstly test whether the total stock or accumulation of education matters more for corresponding countries' growth and afterwards we decompose the total stock into educational stocks at primary, secondary and tertiary levels to test whether the disaggregated educational levels have different growth effects. We do so by applying the panel fixed effects technique on 17 CEE countries during the 1990-2010 period. In addition, we address the endogeneity of education by using the lags of different educational proxies as instruments. The results suggest that the average stock of education is significantly contributing to economic growth of CEE countries with the biggest growth effect of tertiary education. Regarding the Balkan countries only, the growth effect of education is almost a null. We conclude that one cannot have economic growth without a good educational system and efficient usage of human capital. Thus, the policy implications should be related to the proper identification of the quality of educational governance, problem of mismatch on labor market and better utilization of human capital. Keywords:...
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European Union 2004 Eastern enlargement: introduction of new procedures?
Šelepová, Eva ; Váška, Jan (advisor) ; Šlosarčík, Ivo (referee)
The Bachelor's thesis "Eastern Enlargement of the European Union: Implementation of New Procedures?" examines the changes to criteria for new member accession, particularly members from Central and Eastern Europe. Enlargement to the East was the fifth sequential enlargement of the EU although due to the large number of applicants from post-communist states it was necessary to implement further procedures, to change pre-accession strategy and to state further conditions for candidates in order to become full-value members of the European Union. The thesis first addresses the history of EU enlargement in the 1970s and in the early 1990s. The second part, the largest part of the thesis, examines the process of Eastern enlargement of the European Union and describes the first interaction between Central and Eastern Europe and the European Community through signing association agreements, implementation of the Copenhagen criteria, opening of accession discussions up to the accession of ten new EU members in 2004 and a further two in 2007. The final part of the thesis is the analysis of the question of why these changes have to take place and the identification of fundamental differences.
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