Issue 3, 2017

The author’s opinion is that it is the endogenous rather than the exogenous factors that happened to be decisive for overcoming the present and newly arising economic difficulties and obstacles. Various manifestations of the crisis are examined and it is proved that the poor quality of the domestic institutions and their operation underlie the economy in stagnation. The macroeconomic elite conceives its participation in the power as a unique opportunity to get rich and considers its functions as a possibility for a “free riding”, i.e. that economic processes develop almost automatically by their own laws and that an individual misuse will not affect the natural course of developments. Especially dramatic is the situation in the legal system which allows washing ownership rights away and is influential in bringing about distorted non-market norms of behavior. Even commonsense regulatory principles are turned into a caricature. The behavior of economic players at company level gives grounds to claim that the managers’ preparation does not come up to the level required. Ultimately, it is the education system that could raise all the population and the economic players to the point where a real control and improvement of the present system of management of society will become possible.
JEL: A14; B52; H12; Z13

The article presents the results of an econometric study on the impact of social security floors on the informal employment in Bulgaria for the period 2003-2012. The social security floors (SSF) are an economic policy tool that has common features with the minimum wage, but it is different from the later. We analyse seven different indicators of informal employment and assess the impact on them of both SSF and a number of other macroeconomic and mesoeconomic variables. We conclude that the rise of SSF, ceteris paribus, leads to an increase in informal employment.
JEL: J32; J38; J46

The goal of this paper is to examine the determinants of profitability of the 16 banks in the Republic of Macedonia using quarterly data from Q1 2007 to Q4 2013. As a measure of profitability of the banks we will use the ratio of return on assets and the ratio of return on equity. Empirical results provide evidence that among internal factors of bank profitability, the most important ones are credit risk management capital to total assets ratio and operating expense management. From the external determinants, we found only the inflation to be significant for bank profitability.
JEL: G21; P34

This Article includes introduction, two parts and conclusion. It presents a study on the effect of methods of fixed assets depreciation and intangibles amortization on break-even point of sales (volume of identical products sold by a company where the financial result is zero) – a company reports sales profit upon sale of product volume above the even-break point and sales loss upon sale of product volume below the break-even point. In this Article, "depreciation" will be used instead of both terms "depreciation" and "amortization" for convenience purposes.
The presented research work is based on the Bulgarian legal framework regulating fixed assets depreciation and intangibles amortization and current knowledge of break-even point.
We consider the discussed issue materially important as break-even point of sales is directly related to the profit of a company while that profit concerns the interests of company owners, i.e. they may allocate it or any portion of it as dividends. A company may retain such profit or any portion of it to optimize its economic growth.
The issues related to break-even point of sales are the subject of a number of research works and we think that the present study will contribute to that topic.
Jel: L20; М20

Modern conditions of enterprise operation are characterized by a large number of negative factors. First of all, such factors include decrease in business activities  of stock markets, low level of exchange fluctuations predictability etc. These factors generate additional financial risks and lead to significant losses and damages, and as a result they can cause the financial crisis situations. The novelty of scientific challenges contains the following tasks: to develop the complex of economic mathematical models which allows assessing the impact of uncontrollable external factors on financial activity; to create preventive financial strategies ensuring stable functioning and development of the enterprise under threats. The development of models is based on methods of multivariate analysis (principal component analysis, the method of the development level, the method of gravity center, hierarchical agglomerative methods and iterative cluster analysis, discriminant analysis, classification trees), econometric methods (pool data models, logit- and probit-models, vector autoregression technology, error correction models), simulation methods and system dynamics approach. The models implication in companies’ activity has allowed developing financial strategy balanced on various directions while considering the potential financial risks.
JEL: C53; C55; C54; D81

Controlling and evaluating of the effectiveness of the system of providing municipal services in general and the activities of local government in particular is an important milestone of the management system, not only affects the development of the local area, but also on the loyalty and satisfaction of citizens. The purpose of this article is to develop recommendations for improving the methodology for assessing the effectiveness of local governments in the provision of municipal services. To achieve that the comparative characteristics of the existing methods in the international community is implemented and by the example of the Russian municipality method of estimating the efficiency of local government based on the balanced scorecard is described.
JEL: H75 

Social media are a part of the top IT trends of the technology world together with mobility, big data, cloud, and others. Banks and most business organizations are aware of the power of social media and are active on social platforms. They are valuing this media not only as a means to reach out to customers but also to conduct business. In banks’ practice there are four main models for applying of social media banking – use of social platforms as a marketing tool, as a communication channel, as a channel for feedback and reactions and for transactional social banking, where banks allow their customers to realize active operations. Worldwide there are already present successful examples from banks to implement transactional social banking.
Our study focus is on the use of the models of social media banking in the five largest banks in Bulgaria. The results indicate that the banks use the first three models, but currently underestimate the use of transactional social banking with the possibility of active operations on social media platforms.
With the purpose of checking the actual attitudes of one of the main target groups of banks - young customers in Bulgaria, a research with the help of an online questionnaire about the use of social platforms and consumer attitudes on social banking for active operations is conducted. Among active young users and especially ones aged 18-24 in academics, social platforms, mainly Facebook, are very popular and are visited every day. However their current views on active social banking are overwhelmingly negative caused mainly by doubts about security. Our research shows that in perspective customers alter their attitudes and are viewing positively the possibility for transactional social media banking in case banks guarantee higher security levels. Because of the wide reach of social networking among Bulgarian users but also the change in views about the transactional social banking a forecast can be made for growth and affirmation of transactional social banking as an innovative digital channel if banks on Bulgarian market offer adequate level of security.
JEL: L86; C830; G21

An attempt is made to systematize the opinions concerning the causes of the debt crisis in the Euro area. The economic governance of the European Union (EU) and its reaction to the crisis are analyzed. The macroeconomic indicators of the EU member states have been examined for the period 2002-2015 (including the fourteen main indicators for macroeconomic imbalances that are monitored by the EU institutions). The study results suggest that among the EU member states there are macroeconomic imbalances of different nature and this is a factor to provoke the Euro area debt crisis. Further reforms in the institutional framework of the economic and monetary union in EU are recommended in the current economic and political conditions. 
JEL: E00; E60;G01; H60

The study has been conducted in order to analyze the degree of influence of the level of education on the chances of employment, long-term unemployment and self-employment, under conditions of a stable labour market and under a labour market that is destabilized in time of economic crisis. The idea is to find empirical evidence of the changing role of education under the altered parameters of the economic environment in which the labour market functions. It has been shown that the level of education is a factor influencing employment both under conditions of a stable labour market, and under a labour market destabilized by an economic crisis. The influence, however, is manifested in a different manner and in a different degree, depending on the condition of the economic environment. The relation between education and the length of unemployment of jobless individuals is manifested clearly under a stable labour market. During periods of economic instability the role of education for reducing the period of unemployment decreases to insignificant levels. In a different manner there is manifested also the connection between the individual levels of education and the three examined characteristics of economically active individuals – employment, long-term unemployment and self-employment. The chances of employment are affected by all four levels of education – they increase with the transition from a lower to a higher level of education both under a stable, and under an unbalanced labour market. Certain effect on the employment status and on the length of the unemployment period has the low and the high levels of education. The average educational level has no significant influence over these two characteristics both under a stable, and under a crisis economic situation.
JEL: E24;  I25