Issue 5, 2022

The main objective of the article is to obtain an estimate for the size and the trend of the shadow economy in Bulgaria. Based on the monetary approach, we find that the shadow economy in Bulgaria for the period 2006-2019 tends to decline as a ratio to GDP: from 31.7%, it shrinks to 21.1%. This trend could be explained by the country’s accession to the European Union, as this process is associated with the harmonisation of the domestic legislation, stricter procedures, and targeted measures to curb the shadow economy by several successive governments. Despite the declining trend, the share of the shadow economy in the country remains still relatively high. This is an obstacle to its economic and social development and there is a clear need for an in-depth analysis of this phenomenon and further measures to limit it and bring it to a much lower level.
Keywords: shadow economy; monetary approach; currency-demand approach; Bulgaria
JEL: E26; E41; F15; O17; O43

Economic cooperation of countries across the world has led to the integration of stock and commodities markets. The group of seven countries (G7) represents the world’s most industrialised and developed economies. In an integrated market, understanding the price discovery mechanism and volatility spillover across markets is crucial for traders, investors and other stakeholders. This paper investigates the return dynamics and volatility Spillover among the stock markets of G7 countries, oil and gold. We apply VAR and GARCH to examine the relationship between the returns and the transmission of volatility between commodities and stock markets. The research is based on the major stock indices of G7 countries for the years between 2009 and 2018. Oil and gold are taken as a proxy for the commodities market. This study begins by examining the cointegration of the stock and commodities market using the Johansen cointegration test. Stochastic volatility models are used to estimate the volatility and its spillover effect. We estimate the volatility spillover index using variance decomposition. The results indicate the presence of an asymmetric volatility spillover effect between the stock and commodities market. The outcome of the study would facilitate the investors and portfolio managers to understand the return dynamics and volatility spillover effect, which is a prerequisite for an investment decision.
Keyword: Return dynamics; Volatility spillover; Cointegration; Commodities market
JEL: C23; O51; O52; O57; Q02

The paper reveals that social entrepreneurship as a type of activity aimed at solving certain problems of society, first emerged in the former Soviet Union in the form of enterprises in the society of the blind; and, accordingly, in Ukraine, which at that time was part of the Soviet Union. These events took place more than fifty years earlier than in the United Kingdom, which is now considered the founding father of social enterprises. The conditions in which the first social enterprises were created and functioned, the influence of public administration and regulations on this process are shown, and it is shown how social enterprises created on the basis of humanism became an instrument of coercion by the state and thus lost their essence. The example of Costa Rica (first place in the world in the Happy Planet Index) and Norway (second place in the world in terms of Prosperity) shows that methods of supporting social entrepreneurship can range from full-fledged institutional support at all levels to almost complete lack of influence and control by the state. The existing classifications, features and concepts of social enterprises were analysed, mistakes made in the past were taken into account, and in particular, the need for non-discrimination was emphasised. And on this basis, the authors proposed to identify four features that are mandatory and relevant to each social enterprise. It is emphasised that none of the components of the “Triple Bottom Line” can be defined as the most important because they are all equally important. It is shown that a social enterprise is not identical to a charitable organisation. It has been established that a classic enterprise may have the characteristics of a social enterprise, but a social enterprise obligatory must have these characteristics in order to fulfil its mission. It has been shown that the same organisations can be sources of funding or social entrepreneurs, depending on what services it provides in specific conditions. The instruments of state support of social entrepreneurship in Ukraine are considered and it is shown that they are insufficient. The labour market and the number of people with disabilities in Ukraine are analysed, the existence of problems with the employment of people with special needs is shown and the need to strengthen state aegis and provision of regulatory and legal support for social entrepreneurship in Ukraine is emphasised. The obtained results are planned to be used in further research, which will relate to the opportunities for social entrepreneurship in the field of environmental services.
Keywords:social entrepreneurship; humanism; innovation; social values; environment; people with special needs
JEL: L26; L31; М29

In this paper, we study three long-term projects, with a life cycle of several centuries, where the environment and the economic conditions change: as well as the borders and the political regimes of the countries, the behaviours and the aspirations of men, the daily life and the perception of the world. For these large projects, their life cycle, including the classic stages of beginning, maturity and completion, the end may be far away... but sometimes it already gives an idea of the outcome of the project. To show the relativity of their success and failure, we have chosen to evoke three large projects of the same nature: whose failure or success can be appreciated nowadays. We will first study, respecting the chronology, the oldest waterway, the Canal du Midi, the most important large project of the 17^th century (1667-1682), which was a success as long as it enjoyed a natural monopoly. We will then evoke the Suez Canal, which was a success, and which remains so (1859-1869). Finally, we will study the Panama Canal, which was a resounding failure under the French government (1881-1903), but which later became an undisputed success when completed by the Americans (1904-1914). Many factors have modified the destiny of these great projects, and we will try to analyze them. For these three projects, we have used archives and testimonies somewhat forgotten in time, which raises our second objective – to inform and communicate the existence of these resources because their volume requires much more effort than ours.
Keywords: Large project financing; Controversial markets; Natural monopoly; Large project risks; Man-made waterways
JEL: N60; N61; N63; N65; N65; N70; N71; N73; N75; N77; O18

There has been an ongoing debate amongst economists about whether or not the economic reforms of the early 1990s induced a spurt in the growth of the Services sector in India. The focus of this paper is thus to analytically re-examine the nature and magnitude of the structural breaks in the growth of the share of the Services sector in the gross domestic product over 1950-1951 to 2013-2014 with an intention to further probe this issue. The results of this exercise show that the structural break in the growth of the share of the Services sector in gross domestic product occurred in the early 1980s, much before the economic reforms set in, coinciding with the hypothesis that the early 80s marked the structural break in India’s economic growth. The increases in per capita incomes over 30 years since independence seemed to have led to the structural break in this sector in the early 1980s, plausibly because the demand for services is highly income elastic. There is no denying though that economic reforms in the 1990s helped in maintaining and propagating the growth of the Services sector triggered in the early 1980s. The sub-period analysis has also hinted at the slowdown in the growth of the Services sector, which could have serious economic implications in coming times.
Keywords: Services sector; Structural Breaks; Gross Domestic Product; Indian Economy; Dummy Variable Technique
JEL: C1; C22; H00; F63

Although the field of strategic entrepreneurship in business organisations is well-established, it is relatively understudied in government organisations and NGOs. It is even more understudied as regards economic zones. The main goal of this article is to prove the leading role of strategic entrepreneurship in developing economic zones. In view of achieving this goal, the article presents the main types of economic zones and the factors for developing their competitiveness. Three main stakeholder organisations related to the economic zones are set forth, considering their characteristic Entrepreneurship-Strategic Management Interface – ESMI. A theoretical framework of strategic entrepreneurship in economic zones is proposed, and qualitative research is carried out by considering two case studies in Bulgaria. These two cases differ in ownership (public and private), goals,  strategies, and management. The research results show the importance of strategic entrepreneurship as a factor for the development of economic zones in Bulgaria. This significance is manifested in both surveyed organisations.
Keywords: economic zones; entrepreneurship; strategic management; strategic entrepreneurship; total entrepreneurship
JEL: L21; L31; L12

Standard non-parametric Data Envelopment Analysis (DEA) introduced by Charnes, Cooper, Rhodes (1978) does not provide adequate detail to identify the specific sources of inefficiency embedded in the activities on the level of production sub-processes of an enterprise, without considering the internal structure of the business. One of the DEA applications is to evaluate the efficiency of two-stage processes, where all outputs of the first stage are intermediate measures, which are considered as inputs of the second stage. In recent years, there has been an exponential growth in the number of publications related to theory and applications of efficiency measurement for two-stage systems. These models assess both the overall efficiency score of the whole process and each of the individual sub-processes. Results from the analysis give an approach to the significant more detailed information that would otherwise remain hidden in the ,,black box” of efficiency analysis. Opening the black box of efficiency analysis offers managers to monitor and measure the efficiency of their production sub-processes. The management is able to early detection of the inefficiencies in the production process.
The aim of the paper is twofold. The first task is to survey and classify the Two-stage DEA models and present the applications of these models across the literature. The second aim is to offer important support to future researchers, providing a ,,new” knowledge base regarding network DEA methods and encourage researchers to collect data suitable for this type of network analysis.
The objective of the work is to review the network DEA literature, because the number of studies which seek to measure the efficiency and productivity of decision-making units with internal structures has increased in the last years dramatically. This paper aims to support future researchers on this topic.
Keywords: Data Envelopment Analysis; Efficiency; Intermediate product; Internal structures; Two-stage process; Two-stage NDEA
JEL: C61; Q12; Q19

The research is devoted to a comparison of the level of Russian companies’ innovation activity for the period 2011-2020. The authors propose the Index of Innovative Activity based on the integrated indicator calculation, which combines a range of factors reflecting different aspects of business innovation activities. The generalised principal component approach, which was the basis of this study, didn’t neglect any residual dispersion of source data and allowed us don’t give any subjective weights to the factors. Based on the study results, the authors try to identify the reasons for the growth or decline in innovative activity in the specified period. The research illustrates that the role of barriers to innovation is gradually decreasing, and factors that promote innovations are becoming more important. Our study lays the foundation for the regular calculation of the index to assess the trends.
Keywords: Industry 4.0; innovations; technological development; principal component analysis (PCA)
JEL:  С38; L21; O14; O31

Food security should be achieved not only by developing the production capacity and improving the living standards of the population, but also by raising consumer awareness of rational consumption and environmental protection. The aim of this article is to establish the cause-and-effect relationships of socio-psychological determinants of food security and to find ways to improve the approaches to food packaging, strengthen the potential of food affordability and increase consumer awareness of the environmental aspect of food security. The study substantiates the marketing feasibility of greening packaging, developing the mobility of workers in the labour market and choosing the idea of caring for the next generation as a basis for increasing conscious consumption. The methodological framework makes use of existing statistical and factual data, retrieved via the survey run within the period of the study.
Keywords: food security; sustainable development; patterns of consciousness; economic affordability of food; greening
JEL: D12; D31; F18; F64

The article presents findings of the research on the institutional environment of land resources and land use management in Ukraine as a sustainable development factor (safe human living and social welfare). The work highlights the main institutional problems of the country, which have consequently caused ineffective use of the land and resource potential and have resulted in soil degradation and economically unjustified use of land, as well as exacerbation of other global problems. According to the official statistical data, Ukraine’s arable lands occupy 54 % of its area, but its land resource potential is insufficiently used, whereas, in the countries of Europe, the area of arable land is only 27.4 %. Another considered problem is that in Ukraine, some authorities are repeated, whereas some responsibilities concerning land and land use are dropped out. Analysis of the current institutional environment confirms the authors’ hypothesis that it requires substantial transformations in the system of governmental management of land resources and land use.
Keywords: land reform; land resources management; management of land use; land fund; sustainable development; public welfare; institutional environment; State Service of Ukraine for Geodesy; Cartography and Cadastre (StateGeoCadastre); climate change; land degradation
JEL: H83; Q15; Q24; Q28; Q56

The purpose is to develop a methodological approach and confirm the hypothesis of low risk of the entire market of life insurance companies in Ukraine according to the financial statements to ensure private pensions. Subject – methodological support for risk assessment of insurance companies for life insurance according to the financial statements to ensure private pension. Object – the process of assessing the risk of the activities of insurance companies for life insurance. Research base – the whole market of insurance companies for life insurance of Ukraine, which provide services for non-state pension. The adaptation method of integral risk index (hereinafter – IRI), which allows to divide insurance companies into four zones, was used in the study: catastrophic IRI; critical IRI; acceptable IRI; risk-free IRI. Each zone is determined by the level of compliance of the insurance company’s performance indicators with the regulatory limits in Ukraine. A complete list of life insurance companies providing private pension provision in Ukraine was selected as a study. The method is based on a score on T. Saaty’s scale, which allows determining the rank of the entities in the insurance market according to their risk. All evaluated life insurance companies in the Ukrainian private pension market reliably build a risk management strategy which allows to assess this market with low risk. In order to have risk-free activity, it is necessary for the companies of allowable risk zone to strengthen some indicators, namely to increase the appropriate level of investment and balance the levels of accounts payable and receivable. The obtained results of establishing the risk levels of all life insurance companies which provide private pension provision through the definition of IRI allow to form an individual risk assessment of the insurance company and develop measures for prevention and counteraction of risks, establish general trends of the insurance market development from the private pension scheme of the country by means of the detailed assessment of particular indicators. The practical effectiveness of the suggested experimental approach is potential and it can be tested in the activities of other insurance companies, while new indicators of changes in the regulation system of the Ukrainian insurance market as to the suggested algorithm will be the basis for determination of risk zones which are adapted for the changes. The scientific novelty is to develop a methodological approach to risk assessment of life insurance companies to provide private pensions, which consists in a systematic combination of evaluation stages using the proposed financial indicators, how to measure and integrate them, the formation of the proposed scale risk and its interpretation, which allows for constant monitoring of the level of risk of the entire market of life insurance companies to provide private pensions on the basis of public financial reporting. This approach allowed to assess the risk of all life insurance companies in the market of private Ukrainian pension scheme that proved the low level of risk in this market which is positive for consideration of its development strategies.
Keywords: Integral risk index; life insurance companies; private pension; risk zone; financial services market
JEL: G22; G23