Economic Growth in EU and Non-EU Countries

Abstract

This article empirically compares the level of economic growth by investigating key macroeconomic variables between countries that have been members of the European Union within the specified timeframe and candidate countries over the period 2000-2023. We build a comprehensive model using GDP growth, unemployment rate, inflation rate, foreign direct investments, export volume, remittances, corruption control, and population growth as variables and employ a Fixed Effects regression. We find that high unemployment and population growth rates are the main factors hindering economic growth. We also assess a positive relationship between corruption and economic growth, thus viewing corruption from the different perspective of being a factor that countries can utilize. Trade, in the form of exports and foreign direct investment, is associated with positive economic growth due to the creation of new opportunities for organizations and their impact on increasing market efficiency by forcing out less productive firms. Moreover, the paper concludes that member countries, especially founding members, of the European Union foster steadier economic growth. Therefore, policymakers should view the fulfillment of European Union requirements as opportunities to grow and take advantage of them by emerging candidate countries that are attempting to integrate their domestic economies and increase welfare within their countries.

Received: 22 May 2025 / Accepted: 20 July 2025 / Published: 01 August 2025