Page 77 - COMENIUS MANAGEMENT REVIEW

75

In general, positive correlation between country’s growing economic influence on

international markets and its economic growth occurs in most cases. And vice versa, we can easily

find countries, were a falling international influence is accompanied by an economic slowdown.

The correlation between these two variables is obvious; nevertheless it does not tell us anything

about the causality. We believe that the position on international markets is a result of real economy

performance. Therefore it is not possible to improve country’s status on international markets if

there are no economic fundaments beyond. This leads in to two conclusions: Firstly, the economic

influence of the European Union is a result of the economic performance of its member states and

not vice versa. Secondly, even if common foreign policy theoretically could improve the perception

of EU’s economic power abroad, it would probably not lead to a better economic performance of its

member states. As a result, we cannot support the statement that common foreign policy can

positively influence economic growth of member states via enhancing international economic

influence of the European Union.

International trade and financial flows

There are many research papers analysing the impact of international trade or foreign direct

investments on the economic growth and there is a wide consensus on positive impact of these

factors on economic growth. Our linear regression model confirmed the influence of selected

variables representing openness of economy on economic growth on a sample of 85 countries on

data from 1965 to 1985. In this model, annual real growth of GDP per capita adjusted by purchase

power parity was calculated as a dependent variable. Explanatory variables were five-year averages

of import to GDP (IM), export to GDP (EX), geographical distance form the most developed

countries (DIST), index of tariff trade barriers (OWTI) and index of non-tariff barrier (OWQI):

log(GDP)

i

= α + β

0

log (IM)

i

+ β

1

log (EX)

i

+ β

2

log (DIST)

i

+ β

3

log(1+OWTI)

i

+ β

4

log(1+OWQI)

I

+



Not surprisingly, coefficient

β

1

have a positive sign, while

β

0

and

β

2

have negative signs,

which means positive impact of exports on economic growth, while imports and geographical

distance have the opposite effect. As a result of this, we might expect a positive effect of tariff and

not tariff barriers, since these tools are developed and used to protect a country from imports.

However, these variables have negative coefficients, what means a negative impact on economic

growth. There are two basic explanation of this paradox. Firstly, a trade barrier can, in fact, protect

a country from imports, but it is usually accompanied by a similar instrument from the trade partner,