Empirical Modeling of Education Expenditures for Balkans: Evidence from Panel FMOLS and DOLS Estimations

Abstract

The focal point of this study is to investigate the possible determinants of public education expenditures for Balkan countries. Panel cointegration, FMOLS, DOLS, panel causality tests have been conducted throughout this study. The empirical findings reveal that GDP per capita income, economic stability, school enrolments and technological development are found to be the main determinants which have dynamic significant relationships on public education expenditures in the long-run. Dumitrescu-Hurlin panel causality test with individual coefficients mirror (i) bi-directional causalities between education expenditures and school enrolments and between education expenditures and GDP per capita income; (ii) unidirectional causalities running from technological development to education expenditures and from education expenditures to financial risk.