Summary statistics
6 Preliminary results
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6 Preliminary results
The below preliminary results will help to construct assumptions about the expected development of the outcome variables. Overall, in terms of GDP per capita, the Czech Republic is the richest country in the sample, while Poland’s values are the lowest. After joining the EU, Slovakia reached the highest level of economic growth. Hungary seems to have achieved much less from the EU membership than the other V4 countries.
GDP per capita
The graph below presents the values of the GDP per capita for the V4 countries over the studied period, where the Czech Republic reaches the highest level of GDP per capita, while Poland and Hungary reached the lowest values in the last years.
Furthermore, the Slovak GDP per capita grew much faster after year 2004 and its values overgrew the Hungarian values of GDP per capita. Moreover, the gap between the Slovak and Czech GDP per capita seems to close over the last years. Furthermore, Czech Republic, Slovakia and Poland show strong growth after joining the EU, while the line for Hungary show much less strong positive trend.
Figure 1: GDP per capita in the treated countries and EU15
Source: World Bank, author’s calculations
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The above graph also shows that even though the Polish gross GDP value is a lot higher compared to the other countries in the V4 group, the Polish GDP per capita was the lowest over the studied period. During the studied years, Poland reached the lowest value of GDP per capita in 1991 with GDP per capita reaching only 9 522 USD.
Meanwhile, the highest GDP per capita of 32 571 USD was reached in 2017 by the Czech Republic. The growth of the GDP per capita largely decreased due to the economic crisis in all V4 countries, except for Poland. The above graph also shows the average GDP per capita of the old EU states34. The average GDP per capita for the EU15 is well above the values for the V4 countries and the graph shows some, but low, convergence level after V4 joined the EU. The V4 countries (except of Hungary) experienced constant growth of GDP per capita and therefore, the results of the SCM for GDP per capita are expected to be positive35.
Overall, the mean GDP per capita of the studies countries is 20 637 USD with standard deviation of 5 659 USD. From the V4 countries, Slovak Republic reached the highest GDP growth and in 2017, the GDP growth reached almost 11%. Nonetheless, the positive effect was offset in 2009 by the global economic crisis when Slovakia’s GDP per capita growth fell nearly to -6%.
Trade balance per capita
When looking at import and export per capita over the studied period, Poland is much less economically open than the other V4 countries, which is caused by the greater internal market compared to the others. The studied countries experienced a slump due to the global economic crisis in both, exports and imports. Both variables follow the same pattern. The graph shows that Slovakia reached in the last years the highest export per capita, which can be associated with the EU accession and also the latter eurozone accession.
Based on the below graphs, we can assume that the EU participation caused a large increase of the trade balance as the new EU countries joined the single market and benefited from trade with the EU countries.
34 The GDP per capita is averaged for the old EU15.
35 The results for Hungary are expected to be negative.
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Figure 2: Trade balances for the V4 countries
Source: World Bank, author’s calculations
Government spending per capita
Overall, government spending per capita experienced an increasing trend in all the studied countries with a slump in 2009. Just as for the previous GDP components, Poland shows the most stable growth of government spending. The graph also shows a large drop in government spending per capita in Hungary few years after joining the EU, which is however due to a change in the strategy of the government to decrease the budget deficit of Hungary by cutting on government investment. After joining the EU, government spending increased in each of the V4 countries. Arpaia and Turrini (2008) found proportional relation between the growth of government spending per capita and output level. Therefore, we expect the government spending per capita to follow the same trend as for GDP per capita, however, the positive effect is expected to be smaller.
The positive effect probably will not be experienced by Hungary as due to the large slump after the economic crisis.
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Preliminary results
Figure 3: Government spending per capita in the treated countries
Source: World Bank, author’s calculations
Private consumption per capita
The below graph for this GDP component shows an interesting pattern over the studied period. In all the treated countries, private consumption per capita shows increasing trend after year 2004. Furthermore, Slovak Republic seems to experience a large increase in its private consumption per capita after joining the EU, reaching the highest values from the V4 countries since year 2008. Private consumption per capita dropped with the global crisis in all V4 countries, with the exception of Poland. Even though before joining the EU, Hungary’s private consumption per capita was one of the highest in the V4, in the latter years, it remained the lowest from the studied countries.
Overall, Czech Republic, Slovakia and Poland reached high values of household consumption in the last studied years and the values experienced convergence, while Hungary experienced a slowdown in its private consumption growth. The values seem to have recovered during the last years and started to converge to the rest of the countries in the V4 group. Therefore, the results of the SCM analysis based on the below graph are expected to be positive36.
36 The positive results are expected for Poland and Slovak Republic, where the private consumption per capita increased largely after joining the EU. For Czech Republic, the results are expected somehow positive and for Hungary the results are expected to be negative.
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Figure 4: Private consumption per capita in the treated countries
Source: World Bank, author’s calculations
Investment per capita
The treated countries experienced large increase in investment per capita after joining the EU, except for Hungary. Overall, Czech Republic had the highest investment per capita over the studied period, while in the last years, Hungary and Poland reached the lowest values. Once again, we can see Hungary losing its position to Slovak Republic due to its policies that led to large current account and budget deficit that together with the global crisis led to the need to receive a financial aid from the IMF (Valentinyi, 2012). Furthermore, the below graph shows relatively unstable patterns for the V4 countries and therefore, significant positive or negative change in levels of the investment per capita for the V4 group is not expected.
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Preliminary results
Figure 5: Investment per capita in the treated countries
Source: World Bank, author’s calculations
To complete the preliminary analysis, the below graphs were created to compare the average values of GDP components before joining the EU and after37. The GDP components are expressed as % value in GDP. The graphs show that joining the EU caused a large positive increase in the import and export values. However, investment and government spending show a slight decline after joining the EU. The private consumption also decreased for all studied countries, but Slovak Republic. Nonetheless, the changes in those GDP components are lower compared to those experienced for trade. Therefore, even though the graphs show some pattern, the SCM will provide a further and more accurate estimates. Furthermore, negative effect on some of the GDP components may be caused by the 2008 economic crisis. Hence, the drop showed in the graphs may not be caused by the EU membership. Overall, investment experienced the highest drop in values, which may have led to lower values after 2004 compared to the previous years. The investment share in GDP was not fully restored until the last studied years.
37 The dark-shaded bars show mean of the GDP component in % of GDP over the period 1991 to 2003 and the light-shaded bars show the mean of the GDP component in % of GDP between 2004 and 2017.
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Figure 6: Comparison of GDP components before and after the EU accession
Source: World Bank, Author’s calculations
Summing up, the preliminary analysis showed that after joining the EU, the levels of GDP per capita increased in the treated counties, nonetheless after the global crisis, the values for Hungary fell sharply. Therefore, we expect positive results for Czech Republic, Poland and Slovakia, but the effect of the EU accession for Hungary is uncertain. Similar, but smaller, trend was experienced by the government spending and
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國立 政 治 大 學
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Preliminary results
private consumption per capita, therefore, for these variables, small positive effects are expected for the three V4 countries with uncertain results for Hungary.
Net exports per capita largely increased in all the V4 Countries after the EU accession, thus we expect a positive effect, nonetheless, the values for Hungary dropped after the global crisis. Investment per capita was highly volatile during the post-treatment period with large immediate increase generated right after year 2004 with a large drop during the global crisis, therefore, the expected impacts are uncertain.
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This chapter illustrates the main findings of the SCM analysis for each of the treated countries. According to the preliminary analysis, the results of the SCM estimates are expected to show a positive effect of the EU membership on the treated countries except for Hungary.
Overall, the GDP per capita results are positive for three countries, Czech Republic, Slovakia and partly for Poland. However, the results for Hungary suggest a negative effect of joining the EU on the economy. Furthermore, the results show that the main driving force of the economic growth was increased trade with the EU member countries gained by the single market accession. During the EU membership, V4 countries experienced large increase in net exports. For the rest of the GDP components, the results were not unanimous and were mostly statistically insignificant.