Eurasian Business and Economics Perspectives

Table of Contents

1. Frontmatter

2. Eurasian Business Perspectives: Corporate Governance

   1. Frontmatter

   2. Board Diversity and Sustainability: Indonesian Evidence

      Zuraida Zuraida, Said Musnadi

      Abstract

      This study examines the relationship between board diversity and sustainability. The research sample consists of 38 companies listed on the Indonesia Stock Exchange from 2012 to 2018. Research data was collected from annual and sustainability reports and then analyzed using multiple regressions. We find that the level of sustainability disclosure in the sample companies is still relatively low, with an average of 17.49 points out of the 83 points listed in the Global Reporting Initiative standards. We find that the nationality and education level of the board of directors have a positive and significant relationship with sustainability disclosure. In contrast, board gender, age, and independent directors have a negative and significant relationship with sustainability disclosure. We also find that board education level has a positive and significant relationship with sustainability spending. However, gender has a negative and significant relationship with sustainability spending. We further find that the amount spent on sustainability initiatives does not match the level of sustainability disclosure. This suggests that companies disclosing higher sustainability factors do not necessarily spend more money on sustainability activities. Thus, in line with agency theory, there appears to be a practice of managerial entrenchment by outlining sustainability activities more extensively than the value invested. This study sheds light on the hidden lack of commitment to corporate sustainability, contributing to the debate in the sustainability literature.

   3. The Impact of Audit Committee Composition on Corporate Risk Disclosure in Emerging Countries

      Musa Uba Adamu, Irina Ivashkovskaya

      Abstract

      The study examines corporate risk disclosure and the audit committee’s effect on corporate risk disclosure in emerging African economies. The study analyzes 42 financial and non-financial firms listed on the Nigerian and Johannesburg stock exchanges. We use manual content analysis to ascertain the risk information reported by firms. Besides, we use the regression method to ascertain the relationship between audit committee composition and corporate risk disclosures. According to the findings, operational risks are more frequently disclosed by firms than strategic and environmental risks. However, the greater visibility of non-monetary risk information, as well as historical and positive news, has diminished the importance of risk information, as monetary, future, and negative news are increasingly important for stakeholders’ decision-making. Moreover, the results indicate that the audit committee size is negatively connected with corporate risk disclosure, implying that risk disclosure practices decrease as people in the audit committee increases. Additionally, an audit committee composes of a greater number of independent directors, as well as an audit committee chairs by an independent director, tends to encourage firms to disclose additional risk information. In contrast, the risk disclosure policies are unaffected by the presence of non-executive members on the committee or the frequency with which members meet.

3. Eurasian Business Perspectives: Entrepreneurship

   1. Frontmatter

   2. The Dynamic Capability and Ambidexterity in the Early-Stage Startups: A Hierarchical Component Model Approach

      Prio Utomo, Florentina Kurniasari

      Abstract

      This study investigates the implication of startup ambidexterity toward competitive advantage. It integrates a model that combines the dynamic capability and ambidexterity concept through organizational learning, innovation, and adaptation. This research is a cross-sectional quantitative research. There are 121 startup founders and co-founders participated in the survey distributed through questionnaires at a regional event in Indonesia. The Hierarchical Component Model (HCM) was established using Partial Least Square – Structural Equation Model (PLS-SEM), which analyzes the high-order and low-order construct through measurement and structural model evaluation. The study has two main results; first, it shows that start-ups have more exploration behavior than exploitation at the early stage of startup development by measurement model evaluation. The second result shows that startup ambidexterity has a positive and significant effect on competitive advantage. This study integrates dynamic capability and ambidexterity through learning ambidexterity, innovation ambidexterity, and alignment/adaptation and seeks to understand its implication for competitive advantage. The study also stresses the importance of future research from methodological and substance to reconcile the dynamic capability and organization ambidexterity.

   3. The Impact of Institutional Framework On Entrepreneurship in OECD Members Countries

      Ante Zdilar

      Abstract

      Achieving high-quality institutional framework is one of the basic assumptions for achieving a higher degree of welfare state. In addition to the existence of the “game rules” in the market that is equally valuable to all economic agents, it is also a condition without which a higher degree of entrepreneurial activity in the economy cannot be achieved. The aim of this research is to examine which determinants of the institutional framework are crucial for increasing entrepreneurial activity in 24 OECD member countries in the period 2010–2018. The results of Hausman test indicate that a panel with fixed effects is a suitable method for this research. The results of the investigation suggest that Political Rights, Civil Liberties, Freedom of Expression and Belief, Functioning of Government and Rule of Law are important determinants of entrepreneurial activity in observed countries. Furthermore, policies aimed at increasing media freedom and freedom of expressing personal views increase the New business density in OECD member countries. Moreover, when making certain institutional changes, policy makers should be aware of the time gap between the moment of making a decision and its reflection in the economy. Introduction of certain institutional decision may have completely different repercussions in the economy after some period of time. Consequently, particular institutional decisions may require some changes in a longer period after their adoption.

4. Eurasian Business Perspectives: Management Information System

   1. Frontmatter

   2. Combining Robotic Process Automation with Artificial Intelligence: Applications, Terminology, Benefits, and Challenges

      Lewin Schaudt, Dennis Schlegel

      Abstract

      The relevance of Robotic Process Automation (RPA) has increased over the last few years. Combining RPA with Artificial Intelligence (AI) can further enhance the business value of the technology. The aim of this research was to analyze applications, terminology, benefits, and challenges of combining the two technologies. A total of 60 articles were analyzed in a systematic literature review to evaluate the aforementioned areas. The results show that by adding AI, RPA applications can be used in more complex contexts, it is possible to minimize the human factor during the development process, and AI-based decision-making can be integrated into RPA routines. This paper also presents a current overview of the used terminology. Moreover, it shows that by integrating AI, some unseen challenges in RPA projects can emerge, but also a lot of new benefits will come along with it. Based on the outcome, it is concluded that the topic offers a lot of potential, but further research and development is required. The result of this study help researches to gain an overview of the state-of-the-art in combining RPA and AI.

   3. Google Analytics Best Practices in Slovak and Czech Online Business

      Miroslav Reiter, Andrej Miklosik

      Abstract

      This paper describes some of the typical mistakes in web analytics in various organizations. It identifies the most common errors in Google Analytics accounts. We have also compiled a list of best practices for using Google Analytics by online businesses. The basis of our research was an audit of data from Google Analytics accounts of selected Slovak and Czech companies that sell their products and provide services through e-shops. The qualitative research was conducted through personal, semi-structured interviews with two web analytics experts who are Google-certified trainers. Web analytics, measurement, and Google Analytics are of great importance to any type of organization regardless of its size. That is why we attempted to highlight the most common mistakes and compile a list of recommendations applicable to most e-shops. Individual errors are categorized according to the group of problems and their severity. Web analytics and measurement are key to the continuous improvement of products and services not only in online business. If an organization is to improve, it needs the most accurate information about traffic, users, and conversions such as purchases, sign-ups, video and content viewing, and more. The main aim of this paper is to provide a list of specific analytics recommendations for any of the websites and e-shops in Google Analytics to support online business.

5. Eurasian Business Perspectives: Sustainability

   1. Frontmatter

   2. Product Sustainability in Spatial Competition with Consumer Environmental Awareness

      Hamid Hamoudi, Carmen Aviles-Palacios

      Abstract

      Sustainable management of natural stock resources can be promoted through government intervention. This paper analyzes the policies that authorities should use to promote the sustainable use of these resources and the effects on market functioning. A model of differentiated products with environmental regulations and environmentally conscious consumers is applied—the Hotelling’s linear city model. The analysis is conducted from two perspectives: business and society. In the first case, a theoretical regulatory agency establishes the sustainability characteristics and then the level of awareness, and then, privately managed firms compete over characteristics and prices. In the second case, decision-making lies exclusively within the government, with a public manager and an environmental regulator. With both approaches, the sustainable management of natural resources and the promotion of the bioeconomy are optimized when consumer awareness corresponds to consumer preferences. In the business approach, this outcome can be achieved when the authorities have a minimum capacity to raise awareness among the population. Environmental regulation improves competitiveness by reducing prices and product differentiation. This article contributes to the environmental economics and industrial management literature by providing a framework to investigate the effects of awareness campaigns. It is shown that consumer awareness is the key to improving sustainability.

   3. Is the Green Economy the Key Factor in Reducing Urban Pollution in Romania?

      Alin-Cristian Maricuț, Giani-Ionel Grădinaru

      Abstract

      The study aims to give an answer to the question “Is green economy the key factor in the process of reducing urban pollution in Romania?”. In this respect, the paper focuses on finding the nature of relationship between green economy and urban pollution in territorial profile. Hence, in order to achieve the main scope of the study, it was selected and collected data for variables which characterizes both concepts, green economy and urban pollution. Data allow a spatial statistical analysis due to its disaggregations in territorial profile (cities, development regions), being collected in order to assure completeness and comparability of data. Spatial statistical analysis among Romanian development regions and cities was conducted by using appropriate statistical methods, like: descriptive statistics, Random Forest Model, and K-Means Clustering Method. Results of study show differences in territorial profile from the perspective of relationship between green economy and urban pollution. These differences could be removed by using an integrated plan which aims to deploy green economy in multisectoral profile.

6. Eurasian Economic Perspectives: Agricultural Economics

   1. Frontmatter

   2. Rural Development in the Context of Agricultural Models: Evidence from Bulgaria

      Julia Doitchinova, Albena Miteva

      Abstract

      This article analyzes the changes in the agricultural sector over a ten-year period and their impacts on rural areas. Based on the derived characteristics of the Southern and Northern models of agriculture in the various statistical regions, several hypotheses about their effects are tested. The drawn conclusions are based on the analysis of statistical information and qualitative assessments of more than 160 experts from all areas of the country. The predominant part of the analysis reveals the results of the implemented measures from the Program for Development of Rural Areas of Bulgaria (2014–2020) and the attitudes of farmers to apply agro-ecological practices, to make a transition to organic farming, to make direct sales from their farms, and to diversify the activity, etc. It is concluded that the implementation of the Common Agricultural Policy is the cause of the accelerated adverse changes in the socio-economic characteristics of the regions with predominant Northern agriculture. As a result we observe a relatively faster decrease in population, deterioration of qualitative educational and age characteristics and of ecological footprint. These trends are relatively less pronounced in the South-Central and South-West regions, where the importance of small family farms is significantly greater.

   3. Risk Management in Agriculture: Lesson from Bulgaria

      Hristina Harizanova-Bartos, Zornitsa Stoyanova

      Abstract

      Agriculture is a traditional sector in Bulgaria. The relevance of the challenges faced by the agricultural sector and the achievement of sustainability leads to a practical need to minimize the risks of the activity. The aim of the article is to evaluate the risk management mechanisms in Bulgaria and on this basis to be prepared conclusions about the most applicable for the Bulgarian agricultural holdings and to be given recommendation for improvement of risk management. In 2020, a survey was conducted among 50 farmers by prepared special questionnaire to study the risk. The contributions are related to proposals for improvement of risk management processes in Bulgarian agriculture. Our findings demonstrate that many risk-reduction mechanisms are not applied, and that there is a considerable disparity in risk-reduction mechanisms used between different agricultural specializations and according to the economic size. Greater attention should be paid to the specifics of activities in different agricultural sub-sectors and to manage those which will reduce the economic losses from the activity.

7. Eurasian Economic Perspectives: Banking

   1. Frontmatter

   2. Impact of Merger Announcements on Stock Price of Participating Banks

      Tamy Al-Binali

      Abstract

      Mergers and Acquisitions are one of the most effective approaches toward horizontal growth and expansion of businesses especially in the banking sector. Merger events come hand in hand with a plethora of information that affects the stock price behavior of participating firms. Although the impact of such events has been widely studied in developed economies, not many studies have been conducted in the Gulf region or, more specifically, in Qatar. This study explores the effect of merger announcements by Masraf Al-Rayan (Bank) and Khaliji Bank by using the event study method for two different events, i.e. the announcement regarding entering merger negotiations and the announcement regarding the finalization of the merger deal. Market Model has been used to calculate the abnormal returns and cumulative abnormal returns for examining the effects of the merger announcement on stock prices of both banks. The results present mixed findings as to the behavior of the shareholders and the stock price performance of both the banks after the merger announcements. The study reflects that stocks of Masraf Al-Rayan have performed negatively after the merger announcements. In contrast, stocks of Khaliji Bank showed significantly positive performance after event 1 and remained almost insensitive after event 2.

   3. Impact of Macroprudentiality on Customer Protection of Banking Services: The Case of the Republic of Moldova

      Cociug Victoria, Turcan-Munteanu Natalia

      Abstract

      Banks provide services that are indispensable to customers’ confidence in their financial stability. The protection of customers of banking services also includes maintaining the financial stability of the provider of such services. Macro-prudential supervision aims to maintain this stability and from this perspective contributes to the protection of consumers of banking services. The study is based on the analysis of theoretical concepts regarding the role of macroprudentiality and the possibility of its extension on consumer protection. The practical detailing is carried out on the case of the Republic of Moldova. The conclusions reflect the need to coordinate the supervisory function and the consumer protection function at the central bank level in the case of countries where the level of trust and financial inclusion of the population is low. This article aims to initiate a discussion about the relationship between the protection of consumers of banking services and macroprudentiality, because the subject of the connection between macroprudentiality and the behavior of consumers of banking services is not discussed as much.

8. Eurasian Economic Perspectives: Empirical Studies on Finance and Economics

   1. Frontmatter

   2. The Lack of Public Health Spending and Economic Growth in Russia: A Regional Aspect

      Olga Demidova, Elena Kayasheva, Artem Demyanenko

      Abstract

      This essay investigates the influence of an increase of government healthcare expenditures on regional economic growth in Russia. This particular fiscal policy measure can significantly stimulate recovery of the regional economy after the crisis caused by COVID-19 pandemic. Studies have shown that an increase in healthcare expenditures stimulates an increase of gross domestic product through several channels. First, it improves the quality of the labor force that can lead to an increase of labor productivity. Secondly, an increase in the productivity and size of the labor force leads to consumption extension and then to firms’ income growth, so there is a multiplication effect. Including the presupposition that the relationship between healthcare expenditures and economic growth may be non-linear we formed the hypothesis of the existence of the optimal share of health expenditure in gross regional product that maximizes the impact on regional economic growth. Focusing on data from 2005 to 2018, we used the spatial Durbin model to show that this optimal share is 5.9% with an inclusion of spatial effects and 6.4% without them, outlining the importance of considering the interconnection between Russian regions. The regional statistical analysis showed the failure to reach the recommended share by most Russian regions, which can be viewed as a possibility of the future economic growth stimulation if there is an increase of governmental spending on healthcare.

   3. Analysing the Asymmetric Effect of Oil Price Shock on Inflationary at the Aggregate and Disaggregated Levels in Malaysia

      Wong Hock Tsen, Kasim Mansur, Cheong Jia Qi

      Abstract

      Oil price shock creates uncertainty about future oil price movement, making complicated for policymakers to protect economic welfare. A sharp increase in the price of oil raises production costs, which raises consumer prices and thus leads to inflation. High inflation can reduce consumer surplus and economic welfare in an economy. This study examines the asymmetric effect of oil price shock on inflationary at aggregate and disaggregated levels in Malaysia using an open-economy structural vector autoregressive (VAR) model. The impulse response function analysis reveals that the impact of an oil price shock on aggregate price, food index and transport and communication index is large and positive, regardless of whether the shock is positive or negative. The responses for other consumer price index (CPI) sub-groups differed in response to positive and negative oil price shocks, confirming the existence of an asymmetric effect of disaggregated price levels. The asymmetric impact of real oil price changes (both positive and negative) on the transport and communication index is the largest and most persistent among the CPI sub-groups as confirmed by forecasting error variance decomposition. In addition, asymmetric changes in real oil price exert inflationary pressure on aggregate and disaggregated price levels in Malaysia.

   4. Qatari Real Estate Market and Its Response to Shocks

      Alanoud Hamad Fetais

      Abstract

      This study analyzes the real estate market in Qatar and its response to local and international shocks and crises. Shocks that are addressed in the study are of a different nature, starting from the global financial crisis and the decrease in oil prices, moving to the Gulf Crisis, and recently the COVID-19 pandemic. To assess the situation, the paper begins by examining the factors that affect local and international investors’ decisions in this market. In a second step, the study explores the Qatari government’s role in the real estate sector through diverse initiatives and legislations. It is found out that this role supports the real estate sector, especially in crisis periods, and presents recommendations for a sustainable real estate market. This study addresses the Qatari real estate sector by using the real estate price index (REPI) issued by Qatar Central Bank (QCB) and covering the period from April 2006 to August 2021. Furthermore, it highlights the sold properties by the Ministry of Justice for the same period. Analysis of the data reveals that the global financial crisis had the strongest impact on the Qatari real estate sector, exceeding the effects engendered by the political crises, the decrease in oil prices, and the COVID-19 pandemic during the studied period.

9. Eurasian Economic Perspectives: Investment

   1. Frontmatter

   2. Investor Sentiment and Efficiency of the Cryptocurrency Market: The Case of the Crypto Fear & Greed Index

      Blanka Łęt, Konrad Sobański, Wojciech Świder, Katarzyna Włosik

      Abstract

      This paper aims to simulate cryptocurrency investment strategies using the Crypto Fear & Greed Index and verify whether they outperform passive buy-and-hold investment. Consequently, the study assesses the efficiency of the cryptocurrency market, since no investment strategy generates higher returns than the passive one in an efficient market. The Crypto Fear & Greed Index measures market sentiment using several factors, including price volatility, market volume and momentum, posts on social media, Google Trends data, and Bitcoin’s dominance of the market. The performance assessment is based on two measures: the Sharpe ratio and the mean return. The research concentrates on the 20 largest non-stable cryptocurrencies and uses daily time series for the period starting on 1 February 2018 and ending on 31 December 2021. The findings of the heteroscedasticity and autocorrelation robust testing procedure have both practical and theoretical implications. They indicate that contrarian strategies based on the Crypto Fear & Greed Index may generate significantly better results than the passive investment in the cryptocurrency market. This, in turn, indicates that generally, the cryptocurrency market is still inefficient. Nevertheless, the results show that cryptocurrencies should not be treated as a set of homogeneous coins, as the performance of strategies can vary from one to another.

   3. The Key Determinants of Financial Risk Tolerance Among Gen-Z Investors: Propensity for Regret, Propensity for Overconfidence and Income Level

      Florentina Kurniasari, Prio Utomo

      Abstract

      Gen-Z investors in the Indonesian stock market have grown in recent years. Propensity for regret, overconfidence along with individual income are determinant elements in measuring investor’s acceptance level toward risk. The aim of the research is to analyze the effects of propensity for regret and overconfidence with the addition of individual income level variable toward financial risk tolerance behavior in the context of Indonesian Gen-Z investors. The study was performed by collecting questionnaires from 186 unmarried Gen-Z stock investors domiciled in Greater Jakarta areas. The finding showed that the propensity for overconfidence had the best effect on risk tolerance followed with the income level. Meanwhile, the propensity for regret had the lowest impact in the Gen-Z risk tolerance in stock investment. Since propensity for overconfidence is associated with the individual understanding of cognitively complicated financial principles, it’s essential for the stakeholders in the financial ecosystem to educate better about financial information and knowledge to Gen-Z investors. They need to provide necessary data available and reachable for the Gen-Z investors as an early consideration when making investment decisions.

   4. Profiling the Victims of Ponzi Schemes: The Role of Financial Literacy

      Abdur Rafik, Dwipraptono Agus Harjito, Bagus Panuntun, Anisa Rahmadani

      Abstract

      In many countries, including Indonesia, the number of victims of investment fraud is still vast, even though prevention efforts from juridical and non-juridical aspects have been carried out. Generally, victims fall into this investment trap because they are attracted by the promise of return far exceeding the average market return. This study attempts to profile the victims of investment fraud by analysing whether or not the financial literacy of the victims is lower than the financial literacy of those who are non-victims. The survey approach was chosen, and questionnaires were distributed conveniently online and offline to those who had experienced and never experienced investment fraud. In total, 267 respondents were collected, of which 80 were the victims of Ponzi, and the remaining 187 were non-victims. The data was then analysed using regression to capture the difference in financial literacy between victims and non-victims. The results found that the victims of Ponzi had lower levels of financial literacy than non-victims. Alternative testing using the vulnerability level to investment fraud as an independent variable also confirmed that those with high exposure to investment scams tend to have lower financial literacy than those with low exposure. This finding confirms the importance of financial literacy as an initial instrument to prevent victims of investment fraud.

10. Eurasian Economic Perspectives: Public Economics

    1. Frontmatter

    2. Chosen Central European Countries Compared in Measuring Efficiency of General Government Expenditures

       Petr Makovský, František Hřebík

       Abstract

       The primary objective is to compare the efficiency of general government expenditures in the data sample of the chosen Central European countries. This analysis would be useful in the evaluation of the European Union Presidency expanses planned to be made in the second half of the year 2022 by the Czech government. The final decision of the Czech government will be made on the analysis of the data sample of chosen Central European countries. Motivation is due to a research gap in comparison of the Presidency that has been held so far. It is not clear which activities and costs are necessary and which are done only to increase the reputation of a particular country. Methodologically, we used a comparison based on the macroeconomic analysis approach on the data sample of the selected countries’ secondary data from the particular national accounts system. In general, government expenditure information is obtained from this system. The less known alternative information system is the general government part of the National Account System, harmonized according to the European System of Accounts (ESA 2010).

    3. A Contribution to the International Trade Theory

       Truong Hong Trinh, Tran Thi Ngoc Duy

       Abstract

       This paper seeks a rigorous microfoudation that is the key to explaining market behaviour and general equilibrium mechanism. From this microfoundation, home margin and foreign markup are formulated upon demand and cost structures between the home country and the foreign country. The trade gain rules are then developed for the comparative advantage analysis in international trade. The zero trade gains rules occur in countries with no international trade. The non-zero trade gain rule implies that both the home and foreign countries benefit from international trade. The necessary condition for a home country to export is a relatively high home margin over other exporting countries. However, the sufficient condition for a home country to be accepted import by a foreign country is that the home country has a relatively high foreign markup over other exporting countries. These trade gain rules also provide implications for domestic trade with product differentiation and cost efficiency at the industry and firm levels. Since the demand structure is connected with the cost structure between the home and foreign markets, trade flows and gains can be analysed at the country, industry, and firm levels. The paper contributes to the international trade theory that provides the theoretical foundation for empirical research on international trade and trade policy.

11. Eurasian Economic Perspectives: Tourism

    1. Frontmatter

    2. COVID-19: How Do Companies in the Tourism Sector React? The Case of Riccione

       Stefania Vignini

       Abstract

       The COVID-19 crisis is a new challenge for companies and the issue of business continuity plays a central role in the process of drafting financial statements, as the assessments of the presence of business continuity conditions are strong critical issues in light of the uncertainties of the timing as well as the methods of exit from the current health emergency. The pandemic crisis has been reflected in a deterioration of employment conditions and in a contraction of the turnover of the tourism sector more marked than the other sectors. This contribution analyzes companies that seem to be most affected by the pandemic crisis, operating in the Riccione area. The methodology followed is eminently qualitative-exploratory based on the administration of 95 questionnaires, aimed at knowing which strategies have been implemented by the hotels to adapt to the crisis. Our findings highlight how hotels adapt their facilities to environmental change within a short period of time and what they expect in terms of reduction of the operating result. The work presents elements of novelty, as the first empirical study in managing the impact of COVID-19 (after one year from the beginning of the pandemic) on businesses belonging to the Italian tourism sector.

    3. Analysis of Social Capital in Aragon’s Tourism Cluster: A Social Network Resources Perspective on Twitter

       Natalia Sánchez-Arrieta, Ferran Sabate, Antonio Cañabate, Umair Tehami

       Abstract

       This paper explores social capital in the sustainable tourism cluster of Aragon in Spain, based on the interactions that its member companies have made on Twitter. Social capital was determined from the resource approach calculating the structural, cognitive and relational capital present in the network. To do this, on the one hand, information was collected on the interactions, represented by mentions in the period between May-2020 and May-2021. On the other hand, the characteristics of the network structure were identified by adopting the framework of social network analysis from a static perspective. According to the criteria of the analysis, the results indicate at the node level, the existence of network members with roles associated with the resource approach to social capital. At the global level, it is observed that, even if their members have a certain level of communication, there are a large number of them who are not connected to all the others through a short path length. Their low density and moderate accessibility denote that the minimum number of ties is used to connect with other members. This reveals a network structure of mentions that is not fully interconnected. Likewise, we observe a network that has a coherent structure of subgroups, with links within them that are not very dense. These general characteristics of the network are particularly useful for understanding how mention interactions can influence the fostering of participation, prestige and other resources that generate social capital.

    4. The Economic Value of Recreational Assets During the COVID-19 Pandemic on the Example of Bóbr Valley Railway “Bobertalbahn”

       Paweł Piepiora, Justyna Bagińska, Zbigniew Piepiora

       Abstract

       The purpose of this paper is to answer a research question: has the economic value of recreational assets of Bóbr Valley Railway during the Covid-19 pandemic increased? A motivation to conduct the analysis was the information concerning the possibility of the restoration of the examined line. We carried out a survey and estimated the economic value of recreational assets of the railway using the contingent valuation method. Due to the Covid-19 pandemic, we collected the questionnaires fully online. We conducted the research in Poland in the second half of 2020. The economic value of recreational assets of Bóbr Valley Railway amounted almost PLN 5.2 million (EUR 1.1 million) in 2019 and PLN 222.8 million (EUR 47.6 million) in 2020. The research question was positively confirmed. The reason was a 3-fold increase in the intensity of tourist traffic from the year 2019 to 2020—in spite of ongoing Covid-19 pandemic and a 15-fold reduction in the reference rate by the National Bank of Poland at the beginning of 2020.