Environmental governance in a contested state:the influence of European Union and other external actors on energy sector regulation in Kosovo

This article examines environmental governance in Kosovo, with a particular focus on the energy sector. The article considers the degree to which the emerging model of environmental governance is characterised by hierarchical and non-hierarchical modes of coordination. We examine the roles of a number of domestic institutions and actors – ministries, agencies, and regulatory bodies– and the influence of external actors, including the EU, the US, and Serbia. The EU is building Kosovo’s own hierarchical governance capacity by strengthening domestic institutions, whilst the US focuses primarily on market liberalization, whilst simultaneously supporting EU efforts. Moreover, environmental policy change is not wholly or predominantly driven by domestic actors, which can partly be attributed to Kosovo’s limited domestic sovereignty. We conclude that the emerging model of environmental governance in Kosovo is characterized by a weak hierarchy, partly as a result of external actor involvement, which disincentivises the government from responding to domestic non-state actor pressure.

Institutions and firm ownership structure:evidence from Central and Eastern Europe

FDI plays a key role in development, particularly in resource-constrained transition economies of Central and Eastern Europe with relatively low savings rates. Gains from technology transfer play a critical role in motivating FDI, yet potential for it may be hampered by a large technology gap between the source and host country. While the extent of this gap has traditionally been attributed to education, skills and capital intensity, recent literature has also emphasized the possible role of institutional environment in this respect. Despite tremendous interest among policy-makers and academics to understand the factors attracting FDI (Bevan and Estrin, 2000; Globerman and Shapiro, 2003) our knowledge about the effects of institutions on the location choice and ownership structure of foreign firms remains limited. This paper attempts to fill this gap in the literature by examining the link between institutions and foreign ownership structures. To the best of our knowledge, Javorcik (2004) is the only papers, which use firm-level data to analyse the role of institutional quality on an outward investor’s entry mode in transition countries. Our paper extends Javorcik (2004) in a number of ways: (a) rather than a cross-section, we use panel data for the period 1997-2006; (b) rather than a binary variable, we use the percentage foreign ownership as continuous variable; (c) we consider multi-dimensional institutional variables, such as corruption, intellectual property rights protection and government stability. We also use factor analysis to generate a composite index of institutional quality and see how stronger institutional environment could affect foreign ownership; (d) we explore how the distance between institutional environment in source and host countries affect foreign ownership in a host country. The firm-level data used includes both domestic and foreign firms for the period 1997-2006 and is drawn from ORBIS, a commercially available dataset provided by Bureau van Dijk. In order to examine the link between institutions and foreign ownership structures, we estimate four log-linear ownership equations/specifications augmented by institutional and other control variables. We find evidence that the decision of a foreign firm to either locate its subsidiary or acquire an existing domestic firm depends not only on factor cost differences but also on differences in institutional environment between the host and source countries.