Issue 8, 2021

Energy integration is considered to play a key role in the successful development of the European Union. It is assumed that purely market-based mechanisms in this sector, according to the neo-liberal model, can secure a constant supply at low prices. This is the basis of the Union’s energy policy, launched by the European Commission (EC). The main goal of this paper is to examine the adequacy of this model and the extent to which the energy policy succeeds in achieving its objectives. There is a difficult combination of technological, economic and political factors expressed in the Union’s energy mix. In particular, the document examines the gap between neo-liberal free-market postulates and the practices of modern protectionism, assessing the sustainability of the EU’s energy strategy and policy, which often avoid taking efficiency into account. Significant attention is paid to the link between energy and national security, as well as the politically justified intervention of the European Commission in energy projects related to energy supplies for the whole Union. Our research is based on statistics for a long period of time, allowing a comparison between stated intentions and achieved results. Our results stress on the direct link between energy, foreign policy and national security. This link, the cause of the unsatisfactory results, casts doubt on the full integration of the industry and contradicts the views of the Commission.
Keywords: energy strategy; energy efficiency; “Green Deal”; European Commission; common energy policy; electricity market; nuclear energy, neoliberal model; protectionism
JEL: F52; Q42

Although international financial integration is an essential topic in economics and finance disciplines, researchers do not have a clear consensus on the relationship between financial integration and economic growth. The main reason for this situation is that financial integration can be heterogeneous and may differ according to the countries’ income levels. On the other hand, most studies on the subject have accepted that financial integration has a homogeneous effect on growth by using a sample of countries with a heterogeneous structure. In this study, unlike traditional methods, the generalized method of moments and quantile regression analysis allows a comparison according to the countries’ income levels, used together. Fifty-two countries were taken as a basis for the 2000-2019 period. The effect of financial integration and control variables on economic growth was tried to be measured. As a result of the study, direct foreign capital investments, portfolio investments, and current account balance have positive and significant effects on economic growth, and the effects of direct foreign capital and portfolio investments, current account balance, and inflation on economic growth differ between countries with high and low-income levels.
Keywords: Financial Integration; Economic Growth; GMM, Quantile Regression
JEL: F15; F36; F43

In this paper, we aim to explore and explain the rise in the number and magnitude of negative balance equity (NBE) cases in Ukraine over the last decade. We systematize existing approaches to interpret NBE and scrutinize the interrelation between zombie firms and firms with NBE. We use an original database of 212 big Ukrainian firms to study basic dynamics of the number, volume and longevity of NBE cases in 2006-2019. Our findings indicate that a sufficiently large share of Ukrainian NBE cases does not appear to fully adhere to any of the existing hypotheses, and their number and longevity tend to be abnormally high. We offer two possible explanations for such a phenomenon. The first is a quasi-risk financing model, based on substituting equity with debt financing from associated firms usually registered in tax heavens. The second one is a fraudulent financing model, based on the exploitation of legal and political backing discrepancy between debtor and creditor. The use of said models is indicated by positive operational cash flow in conjunction with the continued business activity of NBE firms that otherwise qualify for bankruptcy. We suggest the Value Gap Ratio as a rule of thumb indication of these financing models being used.
Keywords:corporate finance; capital structure; net equity; bankruptcy; zombie firms
JEL: G32; G33

Nowadays, economic globalisation has developed an increasingly challenging and competitive market environment that many firms should adapt to perform adequately in order to ensure profitability, sustainability, and economic development. Workers across the globe are becoming bigger, diversified, further cultured, and dynamic. A substantial existing proof demonstrates that firms around the world experience a powerful challenging situation concerning talent. Attracting, developing, and keeping highly talent individual is considered critical in private and public sector. These sectors are faced with condensing talent competitiveness between each other. Yet, talent management is an understudied area of discussion in public organisations. The objective of this article is to define and describe talent management based on a public sector framework through placing it within the human resource management system and relating it to developments, improvements, and trends of the public sector. This paper employs a comprehensive approach for talent management drawing on experiences based on public management and administration, and human resource management. Firstly, this paper identifies features and improvements related to the public industry. Second, it describes and defines talent and talent management from public perspectives focusing on recent studies and publications; it analyses talent management major problems, internal and external influences, conflicts, and contradictions in the public sector. Lastly, this paper recommends a potential road map for the research and discussion of talent management in the public industry and raise several suggestions for future studies.
Keywords: Public Sector; Public Administration; Talent Management; Public Management; Human Resource Management
JEL: H83; M12; O15

The subject of this research is the performance of the S&P 500 index during the last decade, including in the context of the 2020 Covid pandemic. The main issue of interest is whether the index price levels are supported by fundamentals, or there is a bubble on the US stock market. The study is based on the use of the price-earnings ratios (PE) and price-to-book ratios (PBV) of the index during this period. The 2020 PE and PBV of the index are compared with historical market PE and PBV ratios. Another aspect of the analysis also involves fundamental PE and PBV ratios of the S&P 500 index, which are derived from the fundamentals, determining the value of stocks in the index. The results of the analysis do not confirm the validity of the high current PE and PBV ratios and do not justify the high stock price levels of the S&P 500 during most of 2020.
Keywords: stock markets; PE and PBV ratios; fundamentals; stock market bubble
JEL: G11; G12; G15

The purpose of the study is to develop a methodological approach to quantifying the degree of harmonization of industrial and trade policies in agricultural engineering.
The article analyzes the scientific approaches to the study of the problems of harmonization of industrial and trade policy. The authors reveal the specifics of industrial and trade policy in agricultural engineering in Russia, identify the imbalance between supply and demand in the industry, as well as systematize the main problems that prevent their harmonization. The authors propose a methodological approach to quantifying the degree of harmonization of industrial and trade policies based on the use of mathematical integration tools.
The developed methodology for calculating the integral index of industrial and trade policy harmonization allows us to quantify the degree of industrial and trade policy harmonization in agricultural engineering in order to obtain a generalized characteristic for diagnosing the industry situation and making informed management decisions in terms of eliminating the imbalance between the supply and demand of agricultural machinery. Diagnostics of the development of the industry using the proposed integral index is objective, since the integral index has a managerial value not in absolute terms, but in dynamics.
The practical significance of the study. The authors’ recommendations can be used to justify the priority areas of harmonization of industrial and trade policies in agricultural engineering.
Originality/significance. The scientific understanding of the harmonization of industrial and trade policies is expanded by applying the author’s approach to its quantitative assessment using the integral index of harmonization. This creates an additional information base for state regulation of the industry.
Research methods: critical analysis of monographic and periodical literature, general scientific research methods, historical and logical analysis, generalization, economic and static methods, system approach.
Keywords: industrial policy; trade policy; harmonization; agricultural engineering; organizational and economic conditions; integral index; indicators; mathematical statistics
JEL: L16; L52; O24; Q14

In today‘s dynamic, electronic and open market world, the focus is on transformations of policies, strategies, systems, models and mechanisms related to the entrepreneurial and innovation potential of the business for effective management of the changes. This direction requires adequate analyses, assessments and control of the entrepreneurial and innovation potential through the prism of an overall view of the changes providing balanced benefits for the business, as well as for the nature and society. The more and more complex and fast transformations of the business require answers to the following questions:

• What priorities and where should the analysis and control be focused on?
• What is the update of the algorithms and the technologies for analysis and control?

For some answers to these questions, developed and recommended are:

• algorithm of a modern system for analysis and control in four main directions (value qualities of the subject; quality of the situation of current work or future work; quality of work, activity; quality of the result of the activity);
• model for proactive analysis (GS1 system standards are combined with certain QMS standards);
• model for analysis and assessment of the entrepreneurial and innovation potential of the enterprises;
• algorithm of process innovations in the relation “business – circular economy – complex reengineering”;
• model of digital infrastructure for the interrelation of the economic entities.

Keywords:business prevention; complex reengineering; GS1; ISO 14 000; digital infrastructure
JEL: L21; L25; L53

Despite growing environmental issues and increasing public and private interests, scientific studies on the management of agroecosystem services are at the beginning stage. This article incorporates the interdisciplinary New Institutional Economics framework and identify and assess diverse private, market, collective and public modes of management of ecosystem services applied by the Bulgarian farms. The study has found out that farms of the country maintain or produce a great number of essential ecosystem services, among which provisioning food and feed and conservation of elements of the natural environment prevail. A great variety of private, market, collective and public modes of governance of farm activity related to agroecosystem services have been used. There is significant differentiation of employed managerial forms depending on the type of ecosystem services and specialisation of agricultural holdings. Management of agroecosystem services is associated with a considerable increase in the production and transaction costs of participating farms as well as big socio-economic and environmental effects for holdings and other parties. Factors that mostly stimulate the activity of Bulgarian producers for protection of agroecosystems and their services are participation in public support programs, access to farmers’ advice, professional training, available information and innovation, received direct subsidies, personal conviction and satisfaction, positive experience of others, long-term and immediate benefits for the farm, and integration with suppliers, buyers and processors. A suggested holistic framework for analysing the system of management of agroecosystem services is to be extended and improved and widely and periodically applied in the future.
Keywords: ecosystem services; modes of management; Bulgarian farms
JEL: O13; Q12; Q13; Q15

The purpose of this study is to determine if the capital markets of fourteen European countries are efficient or not. Additionally, we examine the impact of VIX and GEPU returns on the market efficiency of the analyzed capital markets. We apply the Augmented Dickey-Fuller (ADF) test and Threshold GARCH (TGARCH) Model. The period under examination is 2003-2016. Our results show that the explored European markets are highly integrated, and in the context of the Efficient Market Hypothesis (EMH), a division along the line of the developed-developing market has been revealed. The Bulgarian capital market shows a strong degree of integration with the other explored economies in the conditions of EMH. The efficiency of the explored markets is improved by adding to the model VIX and GEPU returns. We prove that diversification can be achieved based on emerging markets of the EU Member States. Prolonged periods of low volatility can further reduce correlations, encouraging further risk-taking.
Keywords: Efficient Market Hypothesis; VIX; GEPU; capital markets volatility; financial crisis
JEL: C22; G01; G14; G15; G32

Within the paper, an analysis of the situation in North Macedonia caused by the emergence of the new coronavirus (SARS-CoV2) was performed. The first part of the analysis is based on the official statistics in the country related to the occurrence of the infection and the intensity of its spread, number of infected cases, number of deaths, etc. The second part of the analysis is based on the results of our own survey conducted in order to obtain additional information to assess the impact of the pandemic on human lives in the country. The questionnaires used as an instrument for data collection were distributed electronically to the respondents (adult population). The data collection period was one week (from 15 to 21 May, 2020). The survey was responded by 313 participants. The survey results give us a more comprehensive picture about the situation in the country, referring to: the familiarity of the population with the coronavirus and with the potential health and economic implications from the virus; the impact of the new situation on the people’s lives and on the daily habits; the pandemic impact on employment and income; the population risk perception regarding the COVID-19 infection and regarding their personal concerns about the uncertain future.
Keywords: COVID-19; survey; economic and social implications
JEL: D01; I18; J64

With the advantage of being an economically dynamic and geographically close region, Vietnam – ASEAN trade relations have had high growth rates in recent decades. This has helped open new opportunities for Vietnamese exporters to get access to and expand its markets internally in a region of about 625 million population and larger external markets, as well as to get deeper engagement in the global value chain. However, the export of Vietnamese goods to these countries is always unpredictable and highly risky. Potential risks come from the policy of the states, from the parties and exporters involved, from the protection of domestic trade, from the customs and practices of the consumers. This has been especially true since the ASEAN Economic Community is officially established by the end of 2015. Risk identification is an important step to minimize and prevent risk and vulnerability in export activities for Vietnamese exporters while integrating into the region. By using a systematic, multi-dimensional approach, the paper uses a combination of quantitative and qualitative research methodologies to identify the risks for Vietnamese exports to the ASEAN market, which is based on data of export status and studies about the actual situation of exporters. At the same time, on the basis of the development orientation between Vietnam and AEC, the article is to provide solutions to reduce risks that are applicable for the state and industrial communities, thereby improving the efficiency of Vietnamese exports to the ASEAN markets.
Keywords: Vietnam; ASEAN; export; import; measures; risk; mitigate; trade
JEL: O01

The article is relevant because the coffee market is one of the most profitable and e-commerce brands. The paper aims to study the theoretical foundations of developing a strategy for promoting a foreign company to the domestic market and to develop practical recommendations for the promotion of “Blue Bottle Coffee” in the coffee market in Ukraine. The methodology of the article is based on a few stages of implementation of marketing strategy. According to the results of the research, the level of potential demand for products and services of “Blue Bottle Coffee” in the Ukrainian market will increase in 2021-2022, but under the condition that the company will develop and expand points of sale, to carry out an effective marketing communication policy. In the next 3 years, potential consumers will become acquainted with the activity of “Blue Bottle Coffee” in the Ukrainian market. However, neither a perfect commodity policy nor a well-balanced pricing policy and a well-chosen distribution system will not be able to provide the appropriate economic result to production and marketing enterprises without an effective system of implementation of promotion strategies.
Keywords: marketing strategies; SWOT analysis; international companies; coffee market; enterprise; consumer; product; price
JEL: D24; D47; M31; P42