Issue 7, 2022

The paper aims to verify the existence of labour productivity convergence of Central and Eastern European (CEE) countries with the euro area over the period 2000-2020 at aggregate and sectoral levels. For this purpose, the study uses the beta and sigma convergence methods. The application of the ordinary least squares fixed effects panel regression proves the existence of beta convergence of the countries of Central and Eastern Europe with the euro area at both aggregate and sectoral levels. Stronger convergence is observed in the agriculture, forestry and fishing sector and in the industry sector (including construction) than at aggregate level. The weakest convergence is observed in the services sector. The results of the linear trend model of the coefficient of variation for the σ-coefficient confirm the hypothesis of sigma convergence between the average level of labour productivity of the countries of Central and Eastern Europe and the average of the euro area at aggregate and sectoral levels. At the same time, the differences in the degree of convergence between the three sectors resulting from the application of beta convergence are confirmed. The comparison according to the degree of sigma convergence with the euro area in the different countries of Central and Eastern Europe shows stronger convergence in the countries that have adopted the euro than in the countries outside the euro area, which is considered to be a consequence of the Europeanisation effect.
Keywords: Labour productivity convergence; Beta and Sigma convergence; countries from Central and Eastern Europe; Euro area; Panel regression model
JEL: E24; F02; L16; O47

Accurate forecasting of the timing and magnitude of macroeconomic recessions caused by unexpected shocks remains an area where both statistical models and judgmental forecasts tend to perform poorly. Inspired by the value-at-risk concept from financial risk management, a growing body of research has been focused on developing a framework to model and quantify macroeconomic risks and estimate the likelihood of adverse macroeconomic outcomes, which has become known as growth-at-risk assessment. The current study proposes an improvement to an established two-step procedure for empirical evaluation of the future growth distribution, which involves directly modelling the parameters of the conditional distribution in one step within an artificial neural network. The proposed procedure is tested on macroeconomic data from four small European open economies covering the coronavirus pandemic lockdown period and the recession related to it. The model achieves a better performance across the four countries compared to the established two-step procedure.
Keywords: Forecasting; Macroeconomic Risks; Artificial Neural Networks; Density Forecasts; Recessions
JEL: C53; E17; E27; E32

Purpose: This research aims to analyze the correlation and causality between investments and sales revenues through an econometric analysis of manufacturing enterprises in Kosovo. Since investments are essential for enterprises, studying their impact and sales revenues on manufacturing enterprises is crucial.
Methodology: Empirical data to be used in the research is secondary and will be based on the annual reports of the Minister of Finance. This paper will also refer to many studies by different authors that have analyzed the relationship between investments and sales revenues. The years that will be analyzed in this research are 2018-2019.
Expected results: Through the analysis of this research conducted between investments and sales revenues and other variables, we expect to get some positive results which can tell us that the investments made by a company will positively affect sales income in manufacturing enterprises.
Practical implications: Through the analysis made between these variables, different manufacturing companies in Kosovo can see the effect that investments have on sales revenues and other variables, i.e., the correlation between them. The results of this study will also serve as good scientific and empirical evidence for future studies to be conducted in investments or economics.
Originality: This scientific paper presents actual and consistent results about the relevant conclusions. The analyzed period (2018-2019) is a convincing period for drawing competent conclusions and recommendations.
Keywords: investments; sales revenues; capital; firm size; manufacturing enterprises
JEL: E22; H32; L11; L22

The dynamic changes in the banking industry as a result of the AI application and robotisation lead to substantial organisational changes and redefining the roles of bank employees. This, of course, has an impact on bank employees’ work motivation. In 2020-2021 the businesses, including banking, encountered one more influencing factor – the Covid-19 pandemic and related quarantine and lockdown measures, leading to forced move to remote work. This research aims to find out if the work motivation of the bank employees has changed, and if yes – in what directions.
The analysis is based on the findings of a survey, conducted in the two countries in the period November 2020 – February 2021 and the results show some significant differences between the work motivation in the banking industry in the two countries. The questionnaire items target the main work motivation factors. Two working hypotheses were studied in this research: H1: The intensive implementation of AI in the banking sector positively affects the work motivation of bank employees in Russia and Kazakhstan. H2: The age of the employees matters for appreciation of the AI implementation, as younger employees 18-40 are more positive compared to employees beyond 40. H1 was confirmed, while H2 was confirmed regarding the difference in the opinions and motivation of the two age groups (under 40 and above 40 years of age), but not in regard to the appreciation of the changes by the two age groups.
The main beneficiaries of the results of this research are the bank managers, both HRM and line managers, who are directly responsible for supporting the work motivation in the process of intensive implementation of AI and robotisation, e.g., chatbots, in the sector. It is also believed that the managers in the other sectors of the economy may benefit from these findings as well.
Keywords: Work motivation; Hertzberg theory; motivators; Equity theory; Expectancy theory; intrinsic motivation; financial and non-material motivation; banking
JEL: O15; E24; G20; J24 

The study aims to register the attitudes of managers and experts from banking institutions on the specifics of the green economy by identifying and assessing challenges facing the financial sector of Bulgaria, in the context of the European Green Pact, at the main stages of its implementation. The focus of the study on the financial sector is the development of the banking sector and the capital market in the context of the green transition, and the study includes an empirical study of changes in the banking sector in the transition to a green economy.
Keywords: green economy; green finance; green banking
JEL: O38; O44; Q01; Q28; Q56; Q58

This study presents the state and dynamics of Bulgarian and foreign trademark activity in Bulgaria as measured by the NICE classes of the trademark applications for the period 2010-2020. The aim of the development is to study the interaction between the Bulgarian and foreign trademark applicant activity in Bulgaria for the period 2010-2020 to identify the priority classes under the Nice Classification and the priority economic sectors, i.e. those with the greatest potential for economic development. The analyses of trademark activity presented in the study show how by using the trademark statistics and by applying the System of Concordance developed for the purposes of this study, priority and most promising economic sectors can be identified, which brings out trademark activity as a valuable and unique information resource. The proposed research can be used for information support of management decisions and to make trademark and brand management strategies more effective.
Keywords: trademark; applicant activity; Nice classification; ISIC; NACE
JEL: O30; O34; O50

The study examines the issue of the place and role of environmental insurance in the security concept of the industrial enterprise. The priority importance of liability insurance against the risk of “environmental pollution“ in economic entities is outlined. Emphasis is placed on the positioning of environmental insurance among the mechanisms for increasing environmental security in the context of corporate risk management. The results of the marketing research among operating companies in the Bulgarian insurance market are presented and give an idea of the state, problems and guidelines for the development of insurance for environmental risks in our country. The analysed marketing information is supplemented by the results of similar research among companies in the chemical industry as consumers of environmental insurance in order to cover the two elements – supply and demand – in the market of environmental insurance.
Keywords: environmental insurance; environmental risk; risk management; corporate security; insurance company; industrial enterprise
JEL: G22; Q59

This study examines the relevance of the quarterly Consumer Confidence Survey conducted by the Reserve Bank of India by analyzing consumers’ spending behaviour vis-a-vis their expectations and perceptions of inflation in the Indian context. The ordered probit regression results demonstrate the positive influence of expected and perceived inflation and the negative influence of expected change in current real income and perceived change in current real income on the expected change in real spending. These results are not commensurate with underlying economic theories, which render the relevance and purpose of these surveys questionable. A few other results and observations from the respondents’ demographic profile further strengthened our argument. In an emerging economy such as India, such surveys and their analyses are at a budding stage, and this is the first study to question the validity and relevance of these surveys. The present study also contributes to our understanding of how households expect and perceive inflation and incorporate them into their decision-making, which is pertinent for the efficacy of central banks as inflation targeting is the main objective of monetary policy.
Keywords: Inflation expectations; Perceived inflation; Consumer spending; Real income; Consumer Confidence Survey; Ordered probit
JEL: D12; D84; E20; E70