Marjan Petreski

• PhD
• Professor at University American College Skopje

The objective of this study is to measure the effects of state aid distributed to private enterprises in North Macedonia on the enterprises’ efficiency. We examine the governmental Plan for Economic Growth (PEG) pursued through the Financial Support of Investment Law (FSIL) and the Fund for Innovation and Technological Development (FITD). We rely o...

This study examines the impact of foreign direct investment (FDI) on job creation across 109 regions in the old EU member states from 2012 to 2023. Using dynamic and spatial econometric models combined with a unique dataset of FDI projects, we find that increased FDI inflows significantly enhance regional job creation, but the relationship is nonli...

Using a panel vector error correction (VAR) model, we assess foreign exchange rate stability in the Central-East European and Balkan countries. Literature defines foreign exchange stability within the Mundell-Fleming dilemma. We show that currency stability is not only reinforced by the monetary policy but also by inflation, workers’ remittances an...

The objective of the paper is to understand whether the minimum wage plays a role in the labor share in the manufacturing sector in North Macedonia. We decompose the movements of the labor share into those along a share-capital curve, shifts of this locus, and deviations from it. We use the capital-output ratio, total factor productivity and input...

Publications list

This study explores the differential impacts of global value chain (GVC) participation on foreign direct investment (FDI)-related job creation in EU-27, emphasizing the role of sector-specific and regional factors. The study is based on a rich set of project-level data on FDI-generated jobs. It utilizes a labor demand function estimated through GMM...

This paper evaluates the impact of the Ukraine conflict-induced crisis on firms in North Macedonia using data from a survey conducted with 112 firms in April and May 2023. Through descriptive statistics and probit regression analysis, we find that small firms in low-wage sectors predominantly coped with the crisis by raising prices of final product...

The objective of the paper is to understand the role of workers’ bargaining for the labor share in transition economies. We rely on a share-capital schedule, whereby workers’ bargaining power is represented as a move off the schedule. Quantitative indicators of bargaining power are supplemented with self-constructed qualitative indices derived from...

This article investigates the impact of investment in environmentally sustainable practices on employment and labor productivity growth in transition economies. It explores the influence of labor skill composition and geographical variations on sustainability dynamics. Utilizing data from the World Bank's Enterprise Survey 2019 across 24 transition...

The fiscal space of the Western Balkan 6 (WB6) economies has been significantly tested by recent crises, including the COVID-19 pandemic and the Energy and Food Price Crisis. This paper investigates the role of pre-crisis fiscal space in shaping fiscal stimulus measures during crises, by endogenizing an expanded set of fiscal space measures. Result...

This chapter provides an overview of the performance of the Macedonian economy from the time of abandoning a centrally planned economy until the present day. In particular, this chapter describes the thorny road Macedonia took after gaining independence from Yugoslavia, faced with a bad process of privatisation, a collapse in trade, large workforce...

The purpose of this paper is to understand who the unregistered micro-performers of business activity (MPBA) in North Macedonia are and why they decided to stay informal. We rely on a specifically designed Survey on Unregistered Micro- Enterprises collected from 151 unregistered MPBAs in May 2022. Results reveal that most common forms of unregister...

This study describes the multidimensionality of child poverty and produces the first multidimensional child poverty indices in North Macedonia. We use the Alkire-Foster method to develop two age-specific (0–4 years and 5–17 years) child multidimensional poverty indices (MPIs) by leveraging secondary data from Multiple Indicator Cluster Survey (MICS...

In this paper, we examine the role of the globalization factors for the labour share in transition economies. We rely on firm-level data from the Enterprise Surveys of the World Bank and EBRD. We base the analysis on the predictions of the classic trade and efficient bargaining models, which under globalization suggests that factors that work to in...

Exports experienced extraordinary growth rates during the last decade in North Macedonia capturing above 50% share of the country’s GDP. However, the COVID-19 crisis interrupted the positive export series imposing various constraints in multiple dimensions on export-oriented firms. This study explores the multidimensionality of the COVID-19 impact...

Purpose The purpose of this paper is twofold, namely, to investigate if living and working abroad influences the (subjective) health of return migrants and to understand if there are any spillovers of return-migrant members onto health conditions of the family members left behind. Design/methodology/approach To that end, this paper uses the DoTM (...

The objective of this paper is to investigate the nexus between the labor share and globalization in transition economies, with a reference to the skill intensity. We put these developments in the context of the structural and reform developments in transition economies. We rely on the predictions of the efficient bargaining model, whereby globaliz...

Due to structural and policy shifts, pension deficit in North Macedonia doubled over a decade and significantly outpaced the central budget deficit. The objective of the paper is to examine fiscal and development effects of few pension-reform designs. We constructed MK-PENS Dynamic Microsimulation Pension Model and simulated the effects of few refo...

The objective of this article is to qualitatively assess the scope of diaspora contribution to the economic development of North Macedonia. The author’s key argument is that diaspora presents an indispensable source of opportunities for helping the development of the country. The author collected qualitative data and used existing quantitative data...

The objective of this study is to investigate if workers in transition economies have been winners or losers of globalisation. We base our key argument on the postulates of the Heckscher–Ohlin model, whereby countries benefit from the production and export of the good produced with the abundant factor of production. We analyse the period 1996–2016...

The objective of the paper is to assess the relationship between a set of competitiveness indicators and foreign direct investment (FDI) inflows with reference to the size and transition-economy status of a heterogeneous set of 60 countries. Results suggest that an increase of competitiveness is robustly, statistically and sizably related to an inc...

The objective of the paper is to revisit the role of remittances for labour-supply responses. Previous studies documented conflicting results, while the key methodological concern – remittances’ endogeneity about labour supply – has not been resolved convincingly. We construct behavioural tax and benefit microsimulation model and simulate labour-ma...

The objective of the paper is to revisit the role of remittances for labour-supply responses. Previous studies documented conflicting results, while the key methodological concern-remittances' endogeneity about labour supply-has not been resolved convincingly. We construct behavioural tax and benefit microsimulation model and simulate labour-market...

The paper aims to investigate if the minimum wage increase of September 2017 resulted in better wage equality in North Macedonia. The increase of 19% was sizable and included levelling up in the three sectors with a lower minimum wage: textiles, apparel, and leather. We extend the ‘cell’ approach of Card (1992a) and rely on data from the Labour For...

The objective of the paper is to investigate if previous informal employment experience of youth affects later labor-market outcomes in transition economies. We consider the effects on employment, decent job and wages. Some theories suggest that previous informal job experience may extend informality later and negatively impact decent employment an...

Purpose The objective of the paper is to investigate if public provision of employment-support services to youth leads to reduced informality and increased wages in transition economies. Design/methodology/approach We use the School-to-Work Transition datasets of the ILO for seven transition economies of Southeast Europe and the Commonwealth of...

Macedonia receives about 10 per cent of GDP as cash remittances per year while a third of the population faces poverty. The study aims to investigate whether remittances improve the poverty and health of individual remittance-receivers in Macedonia. To that end, we rely on the 2008 Remittances’ Survey and a sequential structural model linking remit...

The objective of the paper is to estimate the motherhood wage gap and its contribution to the gender wage gap in Macedonia, after considering workers’ characteristics and selectivity bias into the labour market for the childbearing-age population. In particular, it aims to disentangle the extent to which the natural role of women to have and raise...

This paper aims at forecasting the size and effects of remittances and emigration in Macedonia, Albania, Serbia, and Kosovo, using a qualitative forecasting method, a Delphi questionnaire. The authors examined consensus building within and between two groups of respondents: ten experts and twenty remittance receivers per country, in three subsequen...

The objective of the paper is to measure the effect of the Central European Free Trade Agreement (CEFTA) in its today’s composition on members’ mutual trade. Special consideration is given to CEFTA endogeneity stemming from members’ will to form a trade bloc as a vehicle to approximate EU sooner and prevent further misunderstandings in the Balkan....

The aim of the study is to examine the factors that affect educational achievements of children from low-income households in Macedonia. In addition, we compare the two distinctive social programs that provide assistance for children from poor households in the country. Our empirical strategy is based on the education production function, which is...

In this paper, we investigate if tariffs affected manufacturing value added in 25 countries from Central and Southeast Europe, the Commonwealth of Independent States, and the Middle East and North Africa over the period 1990–2010. We identify and test three channels through which tariffs may affect industry value added. We use various fixed effects...

The aim of this study is to examine whether the prevalent and fairly long unemployment spell of young Macedonians, Serbians and Montenegrins early in their career has negative effects on their subsequent labour-market performance: the so-called employment scarring. We first model unemployment spell as a function of individual and household characte...

The objective of this article is to assess how the duration of unemployment spells for Macedonian youth affects their later employment (employment “scarring”) and wage outcomes (wage “scarring”). The discrete-time duration method is used to determine the unemployment spell and the standard employment and Mincer earnings functions. The School-to-Wor...

The objective of this article is to investigate whether remittances sent to Macedonia have a role to play for shielding vulnerable households, by highlighting the importance of a strictly exogenous instrument in an IV context. Results suggest that remittance-receiving households have, on average, a 20.1 per cent lower vulnerability than non-receivi...

The purpose of the book is mainly to describe the economic structures of ten European small states and to discuss their performance, referring to the benefits or disadvantages that EU membership has offered or is likely to offer to these states. In this publication country size is measured in terms of population size, and, as defined here, small st...

The objective of this paper is to investigate the correlation between domestic savings and investment in Macedonia, so as to find evidence of the extent to which the country is open to capital. The theoretical framework of the analysis is the Feldstein-Horioka puzzle. We use annual data for the period 1991-2014 and the Johansen cointegration techni...

Macedonia faces the highest poverty and inequality in Europe. At the same time, it receives very high amount of remittances. The objective of this study is to investigate whether there is a link between these two, that is, whether remittances reduce poverty and inequality in Macedonia. Two surveys are used for the analysis, conducted in 2008 and 20...

This article simulates the effects of two alternative social policies—individual and family in-work benefits—on labor market choices in Macedonia, with special reference to the poor, females, and informal workers. The ex-ante analysis relies on a combined tax and benefit micro-simulation model for Macedonia (MAKMOD) and a structural model for labor...

Macedonia has a large diaspora, a high emigration rate and receives larger volume of remittances. This paper aims to describe the current inclination to emigrate from Macedonia, in the light of the dissatisfaction with the domestic political and economic environment and the potential feeling of gender and ethnic inequalities. Particular reference i...

The objective of the paper is to investigate if remittances sent to Macedonia have a role to play for shielding socially-vulnerable households. To that end, we devise an index of social vulnerability, comprehending income poverty, unemployment of both spouses, single parents, as well conditions of impaired health, undernourishment, material depriva...

This report presents the findings of the impact evaluation carried out on a selection of active labour market programs implemented by the Employment Service Agency (ESA) of Macedonia during the period 2008-2012. We evaluate the following six programs: program for self-employment (implemented in 2008), internship (implemented in 2010 and 2012), trai...

The objective of this paper is to examine the factors influencing workers' job satisfaction aside from the conventional factors, in the light of basic cultural values and beliefs, and then to set this into a comparative perspective for three groups of countries: South-East European (SEE) countries, Central and Eastern European countries (CEE) and W...

The objective of this paper is to examine the factors influencing worker’s job satisfaction aside the conventional factors, in the vein of the basic cultural values and beliefs, and then to put this into a comparative perspective for the South-East European (SEE) countries and for Macedonia, in particular. Cultural values are grouped into tradition...

The objective of this study is to investigate whether youths in households receiving remittances in Macedonia have a higher probability of establishing their own businesses. In addition, we investigated whether the effect of remittances on youth labor supply is homogenous across the genders and across ethnic and rural/urban divides. We used the Dot...

The objective of this paper is to test the exchange rate regime-growth nexus in transition economies by looking at if, and how, some inherent characteristics of the transition process might have affected the classification of de facto exchange rate regimes. Twenty-eight transition countries of Central and Eastern Europe and the Commonwealth of Inde...

The objective of this research is to understand if large gender employment and participation gaps in Macedonia can shed some light on the gender wage gap. A large contingent of inactive women in Macedonia including long-term unemployed due to the transition process, female remittance receivers from the male migrant, unpaid family workers in agricul...

The objective of this paper is to assess whether the levels of unionization and the rigidity of exchange rates represent a constraint for the monetary policy in South-Eastern Europe and the Commonwealth of Independent States, with a particular focus on the recent economic crisis. Towards that end, a New Keynesian model with price and wage rigiditie...

The objective of this paper is to assess if inflation targeting post-communist economies performed better, in terms of output growth, during the crisis than their non-inflation targeting counterparts. The paper also puts the issue in the context of the preconditions of inflation targeters to adopt this regime. 26 post-communist economies of Central...

The objective of this paper is to investigate the effect of the regulatory environment and the institutional quality on economic growth and the share of the informal economy in transition economies. We use a sample of 30 transition economies over the period 2005 - 2011 and observe the relationships within three geographic sub-groups, three regulato...

In this paper we analyze the determinants of real wages in Macedonia's manufacturing sector. We emphasize the macroeconomic aspects involved, and use econometric panel data techniques to model the behaviour of real wages for the period 2005-2010, using monthly data. We find non-negligible persistence of real wages. We further find a role for overal...

The objective of this paper is to shed some light on the role of the qualitative instruments for monetary policy conduct in China. The unobservable qualitative instruments are calculated by Kalman filtering and then are used in a Taylor rule regression, to estimate if and how they react to inflation and the output gap. The results are compared to t...

The objective of the paper is to examine whether monetary policy responses to inflation, output gap and exchange rate changed in seven countries of Central and South Eastern Europe between 1991 and 2010. Results suggest that monetary policy has been governed by: (i) three regimes in the Czech Republic and Poland – the initial pegging, the eclectic...

The objective of this paper is to analyze the impact the Central European Free Trade Agreement of 2006 (CEFTA-2006) has had on trade and provide quantitative comparison with the original CEFTA and with trade liberalization under the EU integration process. The paper belongs to the strand of literature analyzing a free trade agreement in a gravity f...

The aim of this paper is to empirically examine the effect of switching regimes, from exchange rate targeting to inflation targeting, on monetary policy conduct in developing economies. An augmented Taylor rule is estimated within a panel switching regression for a group of developing countries that have historically experienced such a switch and a...

The objective of this study is to investigate the developmental effects of remittances on poverty, inequality and self-employment in three Balkan countries: Macedonia, Kosovo and Bosnia-Herzegovina, and to put them in the light of three pertinent issues therein: ethnicity, the urban-rural divide and the gender of the household head. To that end, tw...

This paper assesses whether the exchange rate pass-through in transition economies changed due to infl ation targeting and the ongoing crisis. The economies of Central and South Eastern Europe and the Commonwealth of Independent States, of which nine are infl ation targeters, are examined over the period 1993-2011. Results suggest that the exchange...

This book emerged as a result of my continuous research interest in the issues related to inflation targeting. In essence, the book represents a compilation of a couple of research papers devoted to different facets of inflation targeting, with particular focus to emerging market and developing economies. Approximately half of the book makes a crit...

The objective of this paper is to examine empirically the determinants of bilateral trade of Macedonia, with particular emphasis on the trade with the EU and CEFTA-2006 countries. The standard gravity model is used to measure the determinants of the bilateral trade in a panel framework. Results suggest that Macedonian GDP per capita and foreign GDP...

This paper empirically applies the New Keynesian model for monetary policy analysis in a small open economy with a fixed exchange rate. Official reserves are included in the interest rate rule to account for the constraint that these impose on monetary policy when the exchange rate is fixed. Also, the foreign interest rate is included in order to r...

Any attempt to model monetary policy in China has to take into account two ‘specifics’ of the Chinese monetary policy: the reliance on several operational instruments, both quantitative (open market operations, discount rate, reserve requirement) and qualitative (selective credit allowances, window guidance etc.), as well as the combined strategy p...

The objective of this paper is to assess whether the level of unionization and the rigidity of the exchange rate affected wages and monetary policy in SEE and CIS during the ongoing economic crisis. Towards that end, a New Keynesian model with price and wage rigidities is used. The model is estimated with a panel GMM over the period January 2002 –...

The objective of the paper is to offer a critique on the theoretical and empirical literature on inflation targeting (IT). It seems to exist a consensus in the theoretical literature that this monetary regime reduces both inflation and output volatility, mainly through building monetary policy credibility. When the role of the exchange rate is disc...

The objective of this paper is to empirically examine if monetary policy conduct has significantly changed in nine emerging economies, including the Czech Republic, Poland and Hungary, after the switch from exchange rate targeting to inflation targeting. An augmented Taylor rule is estimated with a Markov switching method for each of the nine count...

The study investigates whether a switch from exchange-rate targeting to inflation targeting will facilitate a more appropriate monetary policy and a more stable macroeconomic environment in developing economies. The research finds that the exchange-rate regime is not significant in explaining growth. The empirical evidence on its effect on output v...

The aim of this paper is to empirically examine the effect of a regime switch, from exchange-rate targeting (fixed exchange rate) to inflation targeting, on monetary policy in developing economies, hence adding to evidence on whether inflation targeting along with a managed float provides a better monetary policy compared to exchange-rate targeting...

The aim of this paper is to empirically investigate the relationship between exchange-rate regime and economic growth, building on underlying theoretical examination and shortcomings of empirical literature. Channels through which regime might influence growth could be distinguished at: i) level of uncertainty imposed by certain regime, which than...

The study aims to explore the relationship between exchange-rate regimes and output volatility, building on the flaws of the existing, though scarce literature. It discusses the measure of output volatility; explores the endogeneity bias doubted to be present in the literature; tests non-dynamic vs. dynamic model. The empirical investigation covers...

The aim of this paper is to examine the theoretical and empirical arguments for the relationship between the exchange-rate regime and economic growth. As a nominal variable, the exchange rate (regime) might not affect the long-run economic growth. However, there is no unambiguous theoretical evidence what impacts the exchange-rate target exhibits o...

The aim of this paper is to examine the theoretical and empirical arguments for the relationship between the exchange-rate regime and economic growth. As a nominal variable, the exchange rate (regime) might not affect the long-run economic growth. However, there is no unambiguous theoretical evidence what impacts the exchange-rate target exhibits o...

The aim of this paper is to offer some less-explored theoretical insights into the exchange rate economics. The debate of whether to fix or to float is still lively, even in the context of output volatility under alternative exchange rate regimes; specifically, the effect of the exchange rate regime on output volatility remains unclear. The very sc...

The aim of this study is to empirically test the export-led growth hypothesis in the Republic of Macedonia, as small and open economy. In other words, the question trailed is whether by export promotion the country could impinge on its overall economic development. For that purpose, quarterly data for the period 1998-2006 are plugged into the produ...

The paper assesses the nominal convergence of Macedonia and Croatia towards the EU. As the two countries are in a process of European integration, both economies should converge to the EU economy, so that the accession to be smoother. One channel for faster nominal convergence is pegging the national currency to the euro. Macedonia does this for mo...

The aim of this paper is to assess whether the Euro zone is an optimal currency area. The judgement is made on the basis of the existing literature and available data for several criteria as a part of the OCA Theory. The ultimate conclusion is that the Euro zone is not an optimal currency area, albeit significant advancements towards it were made p...

The aim of this paper is to acknowledge macroeconomic performance effects of different exchange rate regimes. Principally, regime's effects on inflation and growth are comprehensively discussed and examined. Literature acknowledged that regime's pegging contributes to lowering inflation and stabilizing the economy. On the other hand, regime's effec...

The paper aims at acknowledging the differences among the most common exchange rate regimes. In that sense, the characteristics, similarities and differences among fixed, floating regime and crawling peg are accentuated and discussed.

The aim of this paper is to provide some arguments for the effects of the adoption of the International Accounting Standards on firms. Therefore, IAS impact on firms' management and financial statements are analysed. Provided financial statements intend to support or reject findings in the literature for IAS effects on them.

Venture capital is an important alternative for companies that have difficulties accessing more traditional financing sources and it is a strong financial injection for early-stage companies that do not have evidence for persistent profitability yet. Firstly, deep prescreening process should be performed before investing in small, start-up business...

The paper examines what determined inflation in Britain in the post-WWII era. Several determinants are on hand as regards the inflation, depending on the examined period. For instance, wages and budget deficits are accentuated as main determinants in the 1950's and 1960's. However, growing inflation in the 1970's made Ms. Thatcher engage in severe...

The exchange rate regime is an issue which continuously captures academic interests. Since the exchange rate regime affects all macroeconomic variables in every national economy, the choice - whether fixed or flexible, is quite a sensitive and significant decision. Both, fixed and flexible exchange rate regime, have their advantages and disadvantag...

The aim of this paper is to arrive with a valid model that represents the determinants of inflation in Britain. Hence, the period from 1970 to 2003 is taken in consideration. Multiple regression analysis is used to test the hypotheses, which evokes an econometric model. Further, the significance of the included variables is tested and their economi...