Issue 5, 2018

The data show that there is a significant and persistent gap in innovation performance between new and old EU Member States. Most of Eastern European countries (EEC) are moderate innovators, except for Slovenia, while Bulgaria and Romania belong steadily to modest innovators. Obviously the new member states face more challenges in creating and implementing effective innovation policies.
Therefore, the goal of this paper is to analyze biases in innovation policy of the new member states (NMS), including Bulgaria, and to suggest some measures to overcome these. It includes an analysis of EU and national EEC innovation policies, investigation of main theoretical approaches underpinning these policies, effects of path-dependency, innovation policy biases, the role of transnational corporations, global value chains, and human capital. It concludes with some propositions to the improvement of EEC’ innovation policies.
The necessity of such research originates from the fact that often the EEC policymakers accept uncritically the elements of innovation policy from more developed countries without considering the specificity of local context. The uncritical acceptance of “best practices” approach leads inevitably to biased innovation policies. For example, the EEC innovation policies tend to be based on rather linear understanding of innovation with an accent on R&D and high-tech sectors at the expense of demand-side and medium- and low-tech sectors. It seems that these countries fall into the so-called “periphery paradox”. It consists in policy efforts to promote innovation, which are however detached from efforts to strengthen the local actors (firms, universities, and institutions) which demand and offer the knowledge for innovation. This way the innovation policy addresses missing actors.
In order to close the innovation performance gap between old and new EU member states there is a need to modify the innovation policies in EEC as the prevailing R&D based model is less relevant compared to a model of creating local innovation capabilities.
JEL: O32, O38

Human Capital is of great importance in every sector of the economy. Hence, its forms of participation in shaping the economy may differ over the years, due to e.g. increasing robotization and automatization, human capital will remain crucial as a development factor. In the knowledge-based economy, human capital plays a significant role, especially in creating innovation. While Western Europe is leading in innovation in the EU, most of the Visegrad countries are way behind the leaders. Therefore, they need to make an effort to catch-up with Western Europe. One of the most important factors of innovation is human capital. It seems, however, that the Visegrad countries do have a potential for innovation with regards to human capital. There is a growing number of university graduates across these countries, R&D personnel or doctoral students. However, it does not necessarily influence the level of innovation, meaning that some countries may have a higher potential of human capital and a lower level of innovation than others with a relatively lower level of such potential.
JEL: O3; J24; F63

The aim of this article is to present the author’s thesis for company competitiveness based on intellectual property /IP/.
The author presents definitions for the following terms: company competitiveness, IP, IP portfolio

1. Company competitiveness – a general review.
2. Intellectual property as a content and as a business factor.
3. IP portfolio for the company competitiveness – theoretical base and methods.
4. Good practices in Bulgaria.

First of all the author presents hers point of view for company competitiveness and the matrix for its evaluation including economic and noneconomic indicators such as purchases, turnover and profit, revenues from IP and profitability. Special attention is paid to IP as a factor of company competitiveness and IP portfolio of the company - list and structure, expert assessment of their value.
Then the author presents the relations between IP and company competitiveness through revelation of the aspects: IP as innovations and IP as business indicators and then IP as a market factor and as a factor of consumer behavior.
The final part of this article is focused on the IP portfolio of the company as a content and as a factor of company competitiveness following the points:

1.  Identification of IP portfolio as elements and characteristics.
2. Analysis of current status of the IP portfolio of the company.
3. Presenting of IP portfolio as a factor for obtaining and sustain the company competitiveness

The practical issue of this thesis is presented as examples from the Bulgarian successful companies.
JEL: K49

The study examines especially the current problems related to the establishment and protection of women against discrimination in the field of employment.
The main objective of the study is to synthesize the following: based on an assessment of the degree of transposition of the European legislation into the Bulgarian legislation and its actual implementation, as well as of the positions of women in employment, to identify the threatened to discriminatory risk women in different profiles and mainstreaming the main policies/measures to protect them.
The study points out that the Bulgarian legislation is highly harmonized with the European legislation, which allows the efforts to be directed towards its observance and application, incl. through monitoring control. It has been pointed out that the highest legal weight in the country's legislation is the Protection against Discrimination Act and the Law on Equality between Women and Men.
As a result of relevant analyzes and evaluations it is summarized that in the sphere of employment, the qualitative characteristics of the female workforce are clearly outlined as the main factor for its positioning in horizontal and vertical terms. The prerequisites for the occurrence of horizontal and vertical segregation of women, often at the limit of discrimination, result from this.
The main communities of women at higher discriminatory risk in the employment field are defined. Multi-profile analysis and employment assessments of women have been conducted revealing the differences between women and men in terms of employment, the employment status and the payment.
The study recommends that the gender policies and measures be directed primarily towards limiting/overcoming the differences in the level of quality assessment of human resources by gender. The need to combine them with policies and measures for prevention and protection against discrimination is highlighted. In this context, it underlines that substantial importance have the actions of the Commission for Protection against Discrimination which applying the Law achieves real protection against discrimination, incl. also for women in the field of employment.
JEL: J21; J31; J64; J71

In November 1937 Ronald Harris Coase published his fundamental article "The Nature of the Firm", throwing the gauntlet to neoclassical economics, which could not be responded properly already 80 years. The task presented by Coase to the economic community is simple to failure. Reminding us, that in the economic system, led by the free price movements in which all resources are allocated by the price mechanism, we find, in the words of a contemporary economist, "islands of conscious power in this ocean of unconscious co-operation like lumps of butter, which coagulating in a pale of butter", the great scholar asked: why do we need that at all? Why, in the coordinating role of the market does appear the inevitable figure of entrepreneur-coordinator, who leads the production? Indicating that the company and the market are alternative ways of organizing, Coase released genie out of the bottle, because the answer he provided, actually launched an endless string of debates, hypotheses, competing explanations - what exactly is the nature of the company. This paper aims to provide a more detailed look at the essence of the dilemma posed by R. Coase, paying tribute to the anniversary of the issue of his genius work.
JEL: D21; D23

The company of the 21^st century exists in a business environment characterized by a high degree of uncertainty that implies both opportunities and challenges. An essential condition for sustainable competitors is its functioning as a social enterprise, whose basic parameters are related to the management of the relationships with the stakeholders, the brand, the increase of employees' commitment as well as their retention, emphasis on authentic leadership and networking, corporate culture. Above mentioned must be in the context of a clear understanding and action consistent with continual change and adaptation. The sustainability of strategies and good organizational practices must become an essential element of the corporate mission of the successful 21^st-century company.
JEL: M14

The theory and practice of broadband entrepreneurship is a fact, already. As stated in some research, "...In the modern world of business, entrepreneurship is becoming increasingly broadband and affects the creation of changes in every business space, at every level in every industrial and territorial dimension“. This is entrepreneurship driven by broadband shopping of goods and services, instant communications, negotiations and orders. It is based on the ideas of Complex Reengineering theory, the three-star model and the seven concepts of this theory.
This study focuses on opportunities to create broadband business opportunities. An attempt is made to reveal the underlying factors for creating these conditions. The main purpose of this study is to analyze the factors for creating conditions for broadband business entrepreneurship in order to draw attention to the opportunities for achieving lasting success for the Bulgarian society.
JEL: L26; L81; L87

The capital market attracts many investors and public companies, therefore their protection is a major objective of the regulations system. This is a complex system, subject to continuous improvement due to market and technology developments.
New markets face the choice of adopting the modern regulations of previous markets or building their own system, adequate for their yet undeveloped and illiquid capital market. Introducing complex restrictions operating in the most developed markets, given the low administrative capacity of the supervisory authorities and insufficient capital base of issuers and financial institutions, gives rise to problems.
The complex norms are "too much of a good thing" and lead to the outflow of both public companies and investment intermediaries and investors, due to over-regulation of the investment environment. This phenomenon is called "bilateral restriction of access" and it leads to restricted access to capital of local companies and depriving investors of high-quality assets.
The liquidity of the young markets is low, however, this is one of the main attributes of the attractiveness of each capital market. Part of the new norms introduced since 2018 have significantly worsened key indicators of liquidity and environment uncertainty, so their impact on new capital markets is negative. The new Markets in Financial Instruments Directive (MiFID2) and two EU Regulations, enacted since January 2018, have deepened the problems of over-regulation and have additionally created new ones related to market liquidity as far as the young Bulgarian capital market is concerned.
JEL: G10

The risk management in the banking sector has always been of primary concern, especially after the cases of mismanagement, which lead to big losses, and even closing down banks. For obvious reason, in the case of internet banking the risk management (RM) issues become much more complicated. This study focuses on the specifics of RM in the case of Kazakhstani banks, using as an example the policy of one of the leading banks in this area – BankCentrCredit. Kazakhstan has all the characteristics of a country which has to develop intensively the internet banking – large territory, low density of the population and as a result – very expensive coverage with bank services with the traditional methods – bank offices. We especially address the specifics of risks in case of providing digital financial services, based on artificial intelligence solutions and related robotized systems.
JEL: M15; G21; L86

The report presents a modelling approach for forecasting Bulgarian net exports of electricity based on an empirical analysis of the factors affecting trade with this specific commodity. A brief overview of the models and approaches for forecasting the production and export of electricity is made and their adequacy is assessed regarding the situation of the electricity market in Bulgaria and the region. On this basis, a modelling approach is foreseen to predict the net exports of electricity by 2035, taking into account the current situation and prospects for the development of the electricity sector in Bulgaria and Europe.
JEL: C13; F10; F47

In the sixties and seventies of the 20th century, military regimes were established in South America, carrying a long-term structural project for national development. Civil rights, legal norms, parties are suspended in order to carry out the pre-determined policy and to accomplish the tasks set by the military institution.
The factors that determine this trend are multi-layered and interconnected. Among these are the economic changes that are unfavorable for the Latin American countries and especially the devaluation of their main export products after the Second World War, the need to close or restructure unprofitable state-owned enterprises and the conduct of socially unpopular steps, the lack of a nationally responsible political elite, highly developed and corrupt institutions. The external political factors can also be added to the economic factors.
The Cuban Revolution of 1959 and its engagement with the Soviet bloc is one of the reasons for rethinking the US foreign policy towards the entire Latin American region. Under President Kennedy, the Strategic Doctrine "Alliance for Progress" was adopted, where serious attention was given to new challenges and ways to overcome them. The ideological basis of the military regimes is the Doctrine of National Security. Therefore, it is precisely the correlation between painful socio-economic reforms and the repressive nature of military dictatorships that is part of the present study.
JEL: F5

The paper argues that cross-border cooperation is important for border regions for building productive economies and inclusive societies. It justifies also the need of integrating sustainable development principles into regional development practice. The paper analyses levels and dynamics of key socio-economic indicators of the Northeast Region of Macedonia and Kyustendil district in Bulgaria such as – regional GDP, gross value added, employment, economic structure, demographic indicators. It concludes by presenting prospects for development of cooperation in the observed regions.
JEL: R10; R58

The main purpose of the study is to develop the model for transaction costs measurement in the Collective Waste Recovery Systems. The methodology of New Institutional Economics is used in the research. The impact of the study is related both to the enlargement of the limits of the theory about the interaction between transaction costs and social costs and to the identification of institutional failures of the EU concept for the circular economy. A new model for social costs measurement is developed.
JEL: A13; C51; D23; L22; Q53

The article considers the problems of increasing economic security and quality of life, which are the strategic priority of the world community. Authorial methodology for assessing regional differentiation in the housing and communal sector has been developed. It was tested on the example of 17 regions of Russia. The statistical data for 45 years were used. The proposed methodology was first applied to identify links between sectoral indicators, levels of economic security and the quality of life of the population. Comparison of indicators with threshold values allowed to conduct an economic security assessment, identify dangerous trends, identify regions with high, medium and low levels of security. The authors argue that in Russia, considering its size and uneven distribution of resources, the problem of sectoral and regional differentiation is most acute. The high volatility of the development of certain industries significantly affects the quality of life of the population in different regions of one country.
JEL: I31