Author(s): Shkodra, J., Krasniqi, A., & Ahmeti, N.
Government expenditure on a country's economic growth is an important indicator for measuring sustainable economic development. Considering the importance of a country's economic development, as well as the impact of government expenditure on economic development, we have analyzed government expenditure for the period 2002-2019 in the countries of southeastern Europe (Bosnia, Kosovo, Northern Macedonia, Montenegro, Serbia and Albania).
As a dependent variable we have used economic growth while as independent variables the wages and salaries, goods and services, subsidies, social transfers and capital expenditures has been used. The purpose of this research is to examine the effect of government spending on economic growth in the context of Southeast European (SEE) countries. The analysis method used is the regression model between the variables, DW Test and VIF test for multicollonearity between the variables. The result shows that the beta coefficient of wages and salaries, social transfer, subsidies and capital interventions are positive, which means that the higher the investment in wages and salaries and social transfer, the higher would be the economic growth.
As a result, we conclude that our study supports the positive effect of government spending on economic growth.