Issue 3, 2018

The present study examines whether demand factors cause volatility in the economic growth of European Union (EU) with 28 member countries for the data from 1995 to 2016. The relative significance of household final consumption spending, investment, government spending and net exports has been tested by estimating linear regression model, running variance decomposition and applying impulse response function. Results indicate that all the four demand factors seem to be significant in the economic growth of EU. The consumption spending of the households influences the economic growth in the short run to medium run. While, investment and net exports are very significant to sustain growth in the medium to long run. It also appears from the result that too much interventions of national governments in Europe will de-stabilise the economic growth. It could be inferred that the sharp decline in the consumption spending of the households in Europe was the immediate cause of prolonged economic slowdown since 2008 which trickles down the investment, affects net exports and derails economic growth. Thus, the revival of marginal propensity to consume is the key factor for revival of European economy.
JEL: E12; E21; E22

In line with European standards and international practice the current legislation in Bulgaria soundly guarantees the protection of consumer rights. Nevertheless, the consumers are not always familiar with it and don’t always feel protected and it is a precondition for wrong decisions. Regarding that we analyse the correlation between the level of consumer’s legal competence in the case of quality mismatch and his consumer behaviour when deciding a purchase and the warranty service of durable goods. Statistically we defend the thesis that the lack of legal knowledge influences the consumer behaviour in a negative way and favours the existence of unfair commercial practices. Proposals for increasing consumer legal awareness and guidelines for refinement of the legal base are highlighted.
JEL: D18; M31

The purpose of this study is to explain dynamics of global growth and trade patterns with wealth and utilizing knowledge as basic determinants. It builds a multi-country growth model with economic structure and research. Global economy composes of any number of countries and each country has one production sector and one university. Knowledge is through learning by doing and research. Knowledge is global public good and is applied by countries with different utilization efficiencies. The production sector is the same as in the one-sector growth Solow model (Solow, 1956), while capital mobility and trade patterns are determined like in the Oniki-Uzawa model (Oniki and Uzawa, 1956). We use a utility function proposed by Zhang (1993) to determines saving and consumption. The movement of the system is given by differential equations. We simulate the model. Our comparative analysis provides some insights into the complexity of international trade with endogenous wealth and knowledge.
JEL: F11; O30

This study is an attempt to apply a hybrid model for a SWOT-AHP-TOWS strategic analysis. The methodology and results of a survey are presented, it was conducted with the subject – the Neurological Ward (NW) of the Multi-profile Hospital for Active Treatment “Saint Panteleymon” – Plovdiv. The combination of the methods SWOT (Strengths, Weaknesses, Opportunities, Threats) and AHP (Analytic Hierarchy Process) is infamous in the academic field, however it is weakly represented in the practice of health care management. The purpose of integrating AHP with SWOT is to reach an expert proportionality of every individual factor and the assessment of their significance. As a logical final phase of applying the SWOT-AHP, a TWOS analysis is carried out to determine the strengths, weaknesses, opportunities and threats. The strategic alternatives that were identified for the NW through the drawn up TOWS matrix may be used by the Senior Management of the Multi-profile Hospital for Active Treatment “Saint Panteleymon” – Plovdiv in the process of generating development ideas and to facilitate future decision-making.
JEL: M31; L22

The development of the banking sector in Kazakhstan after 2015 raises a number of questions regarding the growth strategies that should be applied to overcome the problems with its sustainable development in a business environment, influenced by low prices of crude oil and an underdeveloped real sector. The state policy for bank consolidation and the active support of the National Bank of the Republic of Kazakhstan in solving liquidity problems of particular banks, namely Qazkom and Halyk Bank, has not led to the expected results. This analysis shows that a combination of external factors with organic growth strategy through intensive innovation of the crediting process as well as training of the personnel to minimize the influence of biases in the decision-making process, should be applied as well. Based on our overall analysis it is suggested, that hybrid strategy, which combines the benefits of external and organic growth strategies, would be more suitable under the specific conditions of Kazakhstan, and probably in any other country with similar market environment.
JEL: G21; G28

In this paper, the causal relationship between interest rate and stock market performance is investigated using a VECM-based Granger causality test on annual time series data from 1975 to 2016. The rationale for this study emanates from the unpredictable behaviour of the Nigerian stock exchange from the outset of the global financial economic crisis from 2007/8 till date couple to the increasingly high key policy rates like interest rate by the CBN that has refused to drop. The results reveal that the interest rate exerted a negative but statistically insignificant relation to stock market performance in the long run. In addition, Granger causality test result noted that there is no causality between interest rate and stock market performance. Thereby, advocating that other macroeconomic factors predict stock market activities better than the interest rate as suggested by the bi-directional causality between exchange rate and All Share index in the result. The implication is that a proper portfolio diversification should be ensued; via a fair exchange rate policy can stimulate the activities of the stock market and vice-versa. Consequently, the paper recommends that the government should do justice to her monetary policy by way of trimming down its interest rate in such a way that will encourage both local and foreign investors to borrow funds at a cheaper rate to invest in the stock market which in turn boost economic well being of the country.
JEL: C51; E52; E44; G10

The authors have studied the contemporary system and features of the railway industry reform in Ukraine and the preconditions for its development in the context of European integration. The main paper objective is to form strategic directions of an investment model for the railway industry development in the context of European integration processes in order to increase the competitiveness of the Ukrainian railway industry and to achieve an increase in its investment attractiveness. The conducted analysis of rail transport productivity with the use of international methods has proved the limited number of indicators of its assessment for Ukraine, which prevents the reliable assessment of the industry investment potential for foreign and domestic investors. The study of the investment attractiveness of the railway industry in the infrastructure section has determined that the development of Ukraine's rail infrastructure nowadays does not correspond to the best indicators of EU leaders and has weak dynamics, which has allowed to assert the low industry investment attractiveness. The authors have proposed the main elements of the investment model for the railway industry development in the conditions of European integration, which will lead to effective integration of the national rail transport system into the world transport space, improve the industry investment attractiveness and competitiveness, and increase the Ukrainian railway infrastructure productivity.
JEL: О12; О19; L92; R42

The definition, classification and diagnostic-expert assessment of economic sustainability threats of the shipyards are presented in this article. The external factors suggested to divide into factors of direct and indirect impacts, and factors of the internal environment to classify as the factors shaping the economic sustainability, and the factors that affect it. Using this classification, it is possible to develop a set of indicators of assessing the economic sustainability of the enterprise in both the long and short term.
Using the method of expert estimations and Pareto’s method the effect of exogenous and endogenous factors on the economic sustainability of the shipbuilding industry was determined; the most influential external and internal factors were established.
JEL: D21; L60; M21

Over the last years, the rapid pace of development of the nanotechnology industry has placed it as one of the leading industries, which occupies a significant part of the total world production share. The specific technology used in the nanotechnology industry, the distinctive features and characteristics of the final nano-production are prerequisites to seek for the proper mechanisms and methods of the implementation of internal control in nanotechnology enterprises. Therefore, the main objective of this study is to present the major control problems that exist and can be found in a nanotech company and the main control stages, procedures and methods for the implementation of internal control.  Based on everything stated hereto, it can be assumed that the main objects of internal control in food-related enterprises which apply nanotechnology are: nanotech production; nanoproducts and products of nanotechnology development. Regarding the research problem of internal control of nanotechnology manufacturing and nano-production and internal control of research and development, the following main conclusions and recommendations can be drawn: 1) Internal control of the research control objects - nanotechnology manufacturing, nano-production, research and development - has not yet been established as the main means of revealing the behavior and modification of these objects; 2) No particular attention is paid to the analysis as a means of internal control. With the help of the analysis, the control process achieves a better diagnosis of the actual state of the controlled object, its planned and expected state. Applying the approved methodology of the internal financial analysis, together with the published data from the management accounting, the controllers can determine the reasons and the factors that influence the change of the controlled objects; 3) There is no interaction between internal control and controlling in the control practice, which in turn targets management and optimization of expenses, revenue management and management of the financial result of the enterprise. The two control concepts concerning internal control and controlling are still considered in isolation from each other. Because of the complexity of intertwining these two types of control (internal and controlling), the scope of the report has not been studied for their mutual application.
JEL: M40; M42; L65