Economic Growth in the European Union : Analyzing SME and Investment Policies

This book studies the economic recovery of individual European Union member states more than ten years after the beginning of the global economic crisis. In light of austerity policies and conservative government investments in many EU countries, it explores how higher growth rates can be achieved by stimulating firms and economic sectors with a high accelerator potential. The contributing authors analyze the effects of EU policies on small and medium-sized enterprises (SMEs), while also studying EU policies with the potential to foster investments and economic growth. Furthermore the book assesses the EU policy on foreign direct investment (FDI) in the member states, in comparison with similar policies in Russia and the US. The authors demonstrate that FDI, besides providing financial resources, can facilitate modernization especially in the high technology sectors. Finally, the book provides a sector analysis and policy recommendations on tourism and immigration, as well as economic protectionism, since tourism has proved to be the most dynamic sector, especially in the European South, while immigration is one of the most serious issues the EU is currently facing. This book will appeal to scholars in economics and related fields, as well as decision-makers and professionals at governmental institutions looking for policy measures and tools to stimulate economic growth. Foreword 6 European Union Funding Instruments and Juncker Plan for Entrepreneurship Development 6 Foreword 9 The Juncker Plan and the Opportunities for Greek SMEs 9 Acknowledgments - About the Jean Monnet Centre of Excellence 13 Disclaimer 15 Contents 16 Contributors 18 Introduction 22 Part I: International Growth Concerns 27 Economic Nationalism: Constrained and Fragmented, If Any? 28 1 Introduction 28 2 The Meaning of Economic Nationalism: Protectionist, Statist or Liberal? 30 3 Undermined Sovereignty, Specific Business/Government Relations and Fragmented Policies 32 4 Conclusions 36 References 37 Digitalization: Disrupting the Business Models of Multinationals 40 1 Introduction 40 2 Digital Technology: Business Models and Operations 41 2.1 Digitalization and Operations 41 2.2 DMNCs: Digitalization and Strategy 42 2.3 DMNCs: Connectivity and Servification 44 3 Digitalization and the International Presence of DMNCs 44 3.1 DMNCs: Assets and Sales 45 3.2 DMNCs: Profits 46 4 Digitalization, DMNCs and Investment Policy 46 4.1 An Investment Policy Framework for the Digital Era 47 4.2 Investment Policies and Digital Divide 48 5 Conclusions 50 References 50 Part II: EU Policies for Growth 52 EU Corporate Governance Framework: The Role of the EU Institutions 53 1 Introduction 53 2 Corporate Governance 54 3 The Stages of Development in the Approach of the Commission 55 3.1 The Infant Stage, the EU Corporate Governance Framework Before 2009 55 3.2 The Adolescent Stage, the Impact of the Financial Crisis of 2008 55 4 Conclusions: The Quest for the Proper Motivators for the Development of SMEs 57 References 58 The EU Digital Single Market and the Platform Economy 60 1 Introduction: The Digital Agenda and Its Impact on EU Growth 60 2 The Digital Single Market Strategy (2015) 61 3 The Platform Economy and Its Impact on Growth 63 4 The Regulation (EU) 2019/1150 on Promoting Fairness and Transparency for Business Users of Online Intermediation Services 64 5 Specific Issues of the Regulation (EU) 2019/1150 65 5.1 Field of Application and Uniform Definitions 65 5.2 Transparency and Fairness of Contract Terms (Articles 3 and 8) 67 5.3 Ranking Issues 68 5.4 Most Favoured Customer Clauses or Restrictions to Offer Different Conditions Through Other Means 68 5.5 Redress Mechanisms (Articles 11-14 and 17) 69 6 Conclusion 70 References 71 SMEs and State Aid 75 1 EU State Aid Policy 75 2 SMEs ́ Significance and Specific Problems 76 3 Categories of State Aid for SMEs 77 4 The SME Definition 79 4.1 Commission Recommendation 2003/361/EC 79 4.2 EU Case-Law and Commission ́s Practice on the SME Definition 81 5 Conclusion 83 References 83 Funding from EU Structural Funds Towards SMEs: Findings and Suggestions on Increasing SMEs Financial Capacity 85 1 Introduction: Definition of SMEs 85 2 SMEs in Europe 86 3 The Support Provided by EU to SMEs 88 4 EU Cohesion Policy and SMEs ́ Financial Capacity 90 5 The Audit of the European Court of Auditors 95 6 Considerations for the New Generation of Financing Instruments 98 7 Concluding Remarks 100 References 101 EFSI 2.0: The Extension and Enhancement of the European Fund for Strategic Investments as a Case Study for the Review of Europ... 103 1 Introduction 103 2 An Investment Plan for Europe in Times of Austerity: Description of the EFSI and of the Need to Extend and Enhance It 105 3 The Plan ́s Political Dimension: Governance, Transparency, and Accountability 107 4 The Plan ́s Financial Dimension: Additionality or Crowding Out Effect? 112 5 The Plan ́s Investment Dimension: Possible Geographic Allocation in Investment Choices 116 6 Conclusion: An Air of Financial Ease in a Universe of Fiscal Restraint 121 References 124 Foreign Direct Investment and Growth Causality in the EU Countries and in the Transition Economies 129 1 Introduction 129 2 FDI in Europe: Current Literature and Stylized Facts 130 3 Correlation Between FDI and GDP 134 4 FDI and Growth in the EU: Discussing the Results 136 5 Conclusions 137 References 137 Part III: Country Specific Analyses on Foreign Direct Investment and Economic Growth 141 FDI to and from the Russian Federation: A Case Study of the Western Balkans and the Role of the EU 142 1 Introduction 142 2 Literature Review 143 3 Foreign Direct Investments in the Russian Economy 144 3.1 The Russian Federation as an Economy in Transition 145 3.2 The Course of FDI in the Russian Federation 146 3.3 The Russian Federation, FDI Offshoring, and Round-Trip Investments 148 3.4 Import Substitution: Stimulating Domestic Production 149 4 Sanctions Against Russia and Russia ́s Response 150 4.1 The State of Play of the European Sanctions 150 5 Western Balkans, FDI, and Transition Economies 152 6 Western Balkans: Competition Between the Russian Federation and the European Union 152 6.1 EU ́s Footprint in the Western Balkans: Power of Attraction 154 6.2 Modus Operandi in the Region: The Russian Federation 156 6.3 Russian Economic Connections in the Western Balkans 157 7 Conclusions 159 References 161 Sovereign Debt Crisis in Greece and Its Relation with Foreign Direct Investment and Competitiveness in Greece 169 1 he Sovereign Debt Crisis in Greece as ``Part of a Broader European Problem ́ ́ 170 2 Foreign Direct Investments, Competitiveness, and Their Importance in the Sovereign Debt Crisis 171 3 The Competitiveness of the Greek Economy 174 3.1 Measures to Strengthen the Competitiveness of the Greek Economy for the Benefit of Small and Medium Enterprises 175 4 Summary and Conclusions 176 References 177 Sector Analysis and Economic Growth in Greece: The Domination of Tourism over Other Sectors 181 1 Introduction 181 2 Literature Review 183 3 Methodology and Results 185 4 Conclusions 188 References 188 Immigration and Economic Growth: The Case of Greece 191 1 Introduction 191 2 A Theoretical Perspective on the Impact of Migration 194 3 Literature Review 196 4 Immigration Surplus in Greece 197 5 The Relationship Between Immigration and Economic Growth 199 6 Conclusion 202 References 203 Front Matter ....Pages i-xxii Introduction (Christos Nikas)....Pages 1-5 Front Matter ....Pages 7-7 Economic Nationalism: Constrained and Fragmented, If Any? (Yorgos Rizopoulos)....Pages 9-20 Digitalization: Disrupting the Business Models of Multinationals (Konstantinos Axarloglou)....Pages 21-32 Front Matter ....Pages 33-33 EU Corporate Governance Framework: The Role of the EU Institutions (Vasileios Koniaris)....Pages 35-41 The EU Digital Single Market and the Platform Economy (Despoina Anagnostopoulou)....Pages 43-57 SMEs and State Aid (Eftychia Mouameletzi)....Pages 59-68 Funding from EU Structural Funds Towards SMEs: Findings and Suggestions on Increasing SMEs Financial Capacity (Dimitrios Skiadas)....Pages 69-86 EFSI 2.0: The Extension and Enhancement of the European Fund for Strategic Investments as a Case Study for the Review of European Policies (Ioannis Papadopoulos)....Pages 87-112 Foreign Direct Investment and Growth Causality in the EU Countries and in the Transition Economies (Nikolaos Apostolopoulos, Zacharias Dermatis, Panagiotis Liargovas)....Pages 113-124 Front Matter ....Pages 125-125 FDI to and from the Russian Federation: A Case Study of the Western Balkans and the Role of the EU (Iulia N. Sushkova, Antonia Koumpoti)....Pages 127-153 Sovereign Debt Crisis in Greece and Its Relation with Foreign Direct Investment and Competitiveness in Greece (Aristides Bitzenis)....Pages 155-166 Sector Analysis and Economic Growth in Greece: The Domination of Tourism over Other Sectors (Konstantinos Spinthiropoulos, Christos Nikas, Eleni Zafeiriou)....Pages 167-176 Immigration and Economic Growth: The Case of Greece (Anastasia Blouchoutzi, Christos Nikas)....Pages 177-191