This paper deals with the liquidity and profitability of the Macedonian banking sector and attempts to identify the determinants of liquidity mainly focusing on the relationship between profitability and liquidity. First, we analyzed the level of liquidity and profitability and we found that the Macedonian banking system is characterized by high liquidity and relatively high profitability compared with the banking systems of the countries in the region and the more developed economies. Furthermore, the paper examines the determinants of liquidity. The empirical analysis is carried out through the use of the dynamic panel analysis based on the generalized method of moments (GMM) methodology on a dataset of overall banking sector operating in Macedonia in the period from 2007 to 2017. The study uses seven factors as potential determinants of banks liquidity, five of them are internal banks variables (lagged value of liquidity, bank profitability, size of the bank, capital adequacy and non-performing loans) while two of them are macroeconomic variables (GDP growth rate and Central bank reference interest rate). The study showed that profitability is one of the most important factors influencing liquidity in the Macedonian banks. The other determinants with important positive effects on liquidity are lagged value of liquidity, non-performing loans and Central bank interest rate but, to a somewhat lower extent. On the other hand, only the size of the bank is significantly inversely associated with bank liquidity. The capital adequacy and GDP growth rate are not statistically significant factors of Macedonian banks liquidity.

Ever since the dawn of merchanting, traders have sought ways to ease the cost of transactions. The recent growth of information and communication technology provided a wide range of solutions for international and national transactions by introducing ecommerce. As a result of this development, e-commerce recently emerged as a dominant transaction activity with a significant impact on the national economies. In recent years the potential of e-commerce has been widely discussed, with a particular focus on its effects on greater economic welfare and prosperity. Yet, despite an abundance of studies that have been done on investigating the role of e-commerce in an economy, a thorough and detailed econometric examination on its impact is still an underexplored avenue. This paper attempts to bridge this gap by investigating the impact of volume of online transactions (e-commerce) and gross capital formation on economic growth, using panel data on 31 European countries covering a 16 years’ period. The empirical panel data model is estimated by employing the Generalized Method of Moments. The main findings from the study show that e-commerce and gross capital formation have positive and significant effects on GDP per capita based on purchasing power parity, with e-commerce having a weaker development-enhancing effect in comparison to gross capital formation. In addition, this paper proposes a fruitful discussion on how to provide balance between the growth of e-commerce, the focus on improving other aspects and generating optimal economic welfare and prosperity. Our paper ends with directions for future research.