Effects of Trade Openness on Economic Growth in the Western Balkans Countries in Time of Crises – Empirical Evidence

Shiret Elezi – University of Tetova, Faculty of Economics, Str. Ilinden, nn., 1219 Tetova, Republic of North Macedonia

Marija Midovska Petkoska – University “St. Kliment Ohridski”-Bitola, Faculty of Economics – Prilep, Republic of North Macedonia

Milena Boshkoska Klisaroski – Ss. Cyril and Methodius University in Skopje, Institute of Economics – Skopje, Republic of North Macedonia

Abstract: This research aims to analyze the effects of trade openness on economic growth in Western Balkans Countries. The empirical analysis of this study consists on 22-year frame using panel data for the period from 2000-2022. Due to this period, the world faced several crises among which the biggest crises in the last 100 years: The Global Financial Crisis of 2007-2009, and the Pandemic COVID -19. The empirical model provides control variables such as the initial level of income per capita, human capital, gross capital formation, FDI, and unemployment rate. Economic growth is a dependent variable on trade openness. The estimation results indicate that the positive effects of trade openness on growth towards regional cooperation and with the EU countries are conditioned by the initial income per capita and other explanatory variables. Moreover, trade openness is more beneficial to countries with higher levels of initial income per capita, lower fiscal deficit, and higher FDI. The financial crisis indicated a significant decline in GDP per capita, along with the negative impacts on trade openness and FDI. The COVID crisis indicated a higher deficit and lower GDP and smaller trade openness.

10th International Scientific Conference ERAZ 2024 – Conference Proceedings: KNOWLEDGE BASED SUSTAINABLE DEVELOPMENT,  hybrid – online, virtually and in person, Lisbon, Portugal, June 6, 2024

ERAZ Conference Proceedings published by: Association of Economists and Managers of the Balkans – Belgrade, Serbia

ERAZ conference partners: Faculty of Logistics, University of Maribor, Maribor (Slovenia); University of National and World Economy – UNWE, Sofia (Bulgaria); Center for Political Research and Documentation (KEPET), Research Laboratory of the Department of Political Science of University of Crete (Greece); Institute of Public Finance – Zagreb (Croatia); Faculty of Tourism and Hospitality Ohrid, University of St. Kliment Ohridski from Bitola (North Macedonia)

ERAZ Conference 2024 Conference Proceedings: ISBN 978-86-80194-86-8, ISSN 2683-5568,

DOI: https://doi.org/10.31410/ERAZ.2024

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-Non-Commercial 4.0 License (https://creativecommons.org/licenses/by-nc/4.0/) which permits non-commercial use, reproduction and distribution of the work without further permission. 

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