Eurasian Economic Perspectives

In the traditional two-sector growth model, we show that the real wage rate and the rate of profit converge to positive values when the “constant returns to scale” is assumed. When the “decreasing returns to scale” is assumed, however, the real wage rate converges to zero. Thus, we examine how the trajectories are modified by the creation of a third sector, under the “decreasing returns to scale”. First, we examine the downstream innovation: i.e. the third sector produces a new luxury. This innovation is temporarily effective since it raises the average rate of profit, while the rate converges to the same positive value as in the basic model. Next, we introduce the third sector which produces a new energy: the upstream innovation. This innovation is temporarily effective in raising the real wage rate and the rate of profit so long as it takes place in the early stage. These rates, however, converge to zero. Although the effect on the rate of profit in the downstream innovation is greater than the upstream innovation, it is because the total investment in the latter is greater than the former. Thus, we conclude that the upstream innovation has stronger economic impact.

The main objective of this paper is to define whether sustainable performance (environmental and social) integration in business activity and consequently supply chains of fast fashion industry has a positive impact on financial performance. Sustainability must comprise and balance all three elements: environmental, social and economic. Sustainability is strongest when it is broad, not substitutable and relative. The main sustainability integration drivers are of three categories: internal drivers, market drivers and law related drivers. The main ways for the integration of sustainability into fast fashion supply chains are: integrating sustainability into the values and strategy of the company, investing in long-term relationships with the main partners, collaboration, certification and standards. Consensus definition of sustainable fast fashion supply chain does not exist, but it may be defined as a supply chain incorporated by environmental, social and economic dimensions. The correlation analysis of fast fashion companies data which form the largest part of fast fashion industry, demonstrated that there exist positive link between sustainability and profitability of companies.

Public–Private Partnership (PPP) is one of the innovative economic instruments allowing for the acceleration of development and investment, especially during economic downturn. Literature studies show a paucity of items related to the issues of improving the innovativeness with the use of PPP. While recognizing this gap the article attempts to build a model to assess the innovativeness of public entities obliged to initiate and implement PPP projects. Network thinking methodology has been used to build the model. As a result, after the identification of factors affecting the innovativeness of PPP projects, a network of links has been established between them and examined in terms of type and intensity of exposure. Building a model according to the methodology involved using the opinions of experts along with long-term suggestions and opinions conducted in the course of participation in all kinds of conferences and trainings. The model was also subjected to validation by two selected entities. Results obtained from the use of the model are confirmed by low innovativeness of public entities obliged to carry out PPP projects. The model itself can promote entities that contribute to the formation of innovativeness and results in their fairer assessment.

The purpose of this study is to examine the impact of managers’ innovation perceptions on innovation activities and innovation strategies in hotel business. The research also examined the relationship between innovation types applied in hotel businesses and innovation strategies. Quantitative method was used in the research. The universe of the research constitutes hotel businesses operating in the Western Black Sea Region. Survey data were obtained using questionnaire technique. As a result of the analysis, it is determined that the innovation perceptions of the managers of the hotel businesses has an effect on the types of innovations applied in the businesses. Nevertheless, it has been determined that business managers’ perceptions of innovation have no meaningful effect on innovation strategies applied to the business. In other words, it has been reached that the innovation strategies of the businesses are determined by the variables other than the innovation perceptions of the managers. The research also find that there is a relationship between innovation types applied in hotel businesses and innovation strategies.

The article is directed to evaluation of the export specialization in the Baltic States and revelation of the main differences by the aspect of technological intensity in commodity groups with revealed comparative advantage. The approach of revealed comparative advantage was employed to identify the commodity groups that are capable of successfully competing in the global market. The purpose of this research is to determine whether exports of the Baltic States are capable of achieving comparative advantage in the commodity groups that occupy major shares in the overall export structure and to find out how the exports are distributed by technological intensity of produced goods. The results of the empirical study have disclosed that the Baltic States have quite similar export specialization with large shares of raw material-intensive and labour-intensive goods in their total exports. The category of difficult-to-imitate research-intensive goods also occupies a visible share, but the states do not have any comparative advantage in production of these goods. Similarities in the export structure disclose that a more sustained way to compete in global markets can be achieved by increasing diversity of the exports of the Baltic States and by enlarging the shares of difficult-to-imitate research-intensive, capital-intensive and easy-to-imitate research-intensive goods.

The ongoing globalization processes and related solutions implemented internationally are gaining momentum. Solutions concerning sources of energy are among the fundamental areas of the contemporary political economy. The present paper, written on the basis of statistical data and inference, comprises an analysis of the current state of the market of energy resources and attempts to outline development perspectives for the global energy market by 2030 with particular emphasis on the situation in European countries. The aim of the article is a statistical analysis of the situation on the global energy commodity market in terms of their use. This analysis is important for current and future problems of political economy in the energy sector of European countries and allows for the development of recommendations in this area.

The wind sector is one of the sectors of the economy whose development influences environmental protection. It follows that wind, as a source of renewable energy, is one of the factors influencing growth in consumption of green energy when compared to the use of conventional energy. The generation of energy from renewable sources is one of the most important trends emerging in international environmental protection policy. At the European level, of importance are the postulates contained in the Europe 2020 Strategy, implemented by European Union Member States. This paper pointed out regulations of Polish law concerning the rules of building a wind power plant and pointed out specific rules concerning the sale of wind energy by the municipalities.

The development of economic globalization is commonly linked to the activities of multinational companies (MNCs) that are the main participants of the process of globalization. Activities of MNCs are very prominent in the manufacturing industry. MNCs that operate in manufacturing transfer their production to foreign countries that are closer to raw materials, labor resources or consumers in order to reduce production costs or find new sales markets. In this way, manufacturing MNCs “push” the process of globalization and have a significant impact on the development of manufacturing in host countries. Considering the expansion of international production and trade, manufacturing MNCs can be treated as the key channel for the transmission of globalization. This paper analyzes the role of MNCs in the process of manufacturing globalization applying the concept of cause and effect. After the analysis of the nature of MNCs’ activities, two groups of indicators have been selected and systematized following the cause and effect attitude: (1) the indicators that reflect the input of MNCs in the process of manufacturing industry globalization; (2) the indicators of manufacturing development that reflect the impact of globalization transmitted through the channel of MNCs. On the basis of indicators selected, the empirical research is conducted on an example of a small open economy.

The aim of the article is to analyze of the future of the world trading system from the perspective of the interests of the European Union under the conditions of the growing position of emerging economies in international trade and the role of the United States in Eurasia. The article uses the analysis of statistical data and recent political and economic subjects relating to the world trading system. The study presents a diagnosis of membership benefits of China and other emerging economies in the WTO, the WTO membership enabled to become the main actor in international trade. The article analyzes of statistical data, the causes of the failure of the Doha Round negotiations, studies the negotiating positions of WTO members in the context of the possibility of the resumption of multilateral negotiations of the Doha Round. Trade liberalization in a multilateral context (WTO) and in bilateral trade agreements associated with incurring high social and economic costs in the European Union. The failure of the Doha Round was due to the weak benefits achievable through multilateral trade liberalization and the reluctance of developing countries to implement the liberalization of international trade including the Singapore issues.

The paper concerns the functioning of the juridical instruments of public procurement control in Poland. Their proper operation can help to minimize the risk of irregularities in the public procurement. The shortcomings of their functioning will be addressed. Attention will be also paid to improper regulations that should be changed by the Polish legislature and regulations of the European Union in this matter. Among others, administrative preventive measures in the field of public contracts will be presented, falling clearly within the legal forms of public administration’s functioning, understood as a certain type of specific activities used by the government to deal with specific issue. The conclusions and proposals presented in the paper may contribute to the effective functioning of the public procurement market in Poland.

The basic purpose hereof is to characterise the structure of the aggravated types of the offence of money laundering in Poland and France. For this purpose, the concept of the aggravated type of offence will be explained. Moreover, the aggravation circumstances entailing aggravated liability of the culprit of money laundering in the Polish Penal Code (commitment of the attributes of the offence by the culprit in agreement with other persons or obtaining of a significant property benefit as a consequence of realisation of its attributes) and in the French Penal Code (realisation of the attributes of money laundering in a usual way or by entities that due to the performed professional activity use the occasion to commit it or commitment of the offence in an organised criminal group) will be discussed and compared. In the further part of the article, the statistical data relating to the number of convictions for the characterised phenomenon will be compiled and the trends in the field of the frequency of its realisation will be determined.

Global practice of innovation policies of the recent decade has demonstrated the wide use of cluster concept for economic development promotion. The results of the research on the impact of clusters upon socioeconomic features of territories within developed countries have already proved there exists a positive correlation between them. Also, widely acknowledged is the fact that successful functioning of clusters depends greatly on their interaction with power bodies, manufacturing enterprises and research institutes. At the same time, the analysis of clusters’ functioning in a range of developing countries proved that cluster creation as such does not necessarily lead to the desired economic effects. The aim of this study is to assess the importance and the role of clusters’ members’ interaction for regional development of Russian Federation. Common database was formed taking into consideration with indicators of 79 Russian Federation regions for 2015. The obtained results confirm the high level of functional dependence of territorial development from the efficient interaction of manufacturing enterprises, public bodies and science community.

The most widely spread form of spatial organization in many countries is clustering. In Russia, cluster policy belongs to the key priorities of the country’s innovative development. This is why special importance get the issues of regional specialization and clusters’ localization. The aim of this research is to present the authors’ typology method for the regions of Russia which is based on such feature of regions as cluster structures’ maturity. The initial theoretical precondition for this research is the statement that successful functioning of a cluster would be possible in a region with high cluster potential as such. At this, under successful functioning of a cluster the authors understand constant improvement of cluster’s performance indicators, regardless state support and participation (or lack of). The offered here typology of territories can be used to define the development strategies for the regions with average and low cluster potentials.

ASEAN region, embracing ten member states, namely, Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam, has become an economic community in the end of 2015, aimed at establishment of single market and production base. Rapidly growing economies inhabited by nearly 600 million of people with rising middle class have become an attractive destination for international business, however, intra-regional connectivity continues to be a challenge and the bottleneck of the region. The main objective of the paper is to indicate the role of the Official Development Assistance (ODA) of Japan in years 2001–2016 in terms of improving physical connectivity within ASEAN for the purposes of deepening integration, increasing stability and prosperity of the region, with special regard to projects financed by the Japan International Cooperation Agency (JICA).

The experiences of many EU Member States have demonstrated that the proper functioning of pharmacies is impossible in conditions of total liberalization of regulations governing their establishment. For this reason, in many Member States existing anti-concentration regulations related to the pharmacy market are being continually expanded. The aim of the present paper is to demonstrate, based on conclusions from judgements and rulings issued by the Court of Justice of the European Union, that anti-concentration regulations concerning the pharmacies market are designed to protect effective competition by being functional instruments for achieving the ultimate goals such as: lowered prices of pharmaceuticals and medical products; enhanced availability and diversity of such products in the form of alternatives and substitutes; forcing greater effort to care for the good of consumers in pharmacies, and encouraging activities to boost quality and innovation; reducing the market strength of large enterprises operating in the framework of consortiums (including international capital groups), which frequently apply exclusionary policies detrimental not only to the interests of smaller enterprises, but also of consumers of pharmacies. The analyses will also demonstrate that the introduction of anti-concentration regulations is compatible with the Treaty on the Functioning of the European Union in respect of freedom of enterprise and provision of services. Indeed, the above-mentioned limitations can infringe the right to free trans-border commercial activity and provision of trans-border services contained in Art. 49 and Art. 56 TFEU, but at the same time they are enacted for realization of the so-called imperative requirements in the general interest, for protection of human health and life, and for the safety of patients; additionally, they must meet the test of proportionality in respect to those values.

The aim of the paper is to identify factors that affect the financing structure of Polish companies listed on the Warsaw Stock Exchange in the period 1998–2012. In the first part of the paper the modern theories of capital structure are reviewed and main determinants of this structure are identified. The second part provides empirical verification of the relationship between debt and found factors using panel models. The capital structure of studied enterprises measured by the total debt ratio is most adequately explained by the pecking order theory. The increase in the share of fixed assets in total assets, profitability, liquidity and company size influences the reduction of its debt. The non-debt tax shield affected the debt level differently from the pecking order theory. The positive relationship between non-debt tax shield and debt corresponds to the agency theory. While a large number of studies conducted in other countries confirm the significance of the impact regarding the above factors on the long-term debt ratio, in Poland a similar relationship is not noticeable. Long-term debt is determined only by the share of fixed assets in total assets. It indicates the importance of short-term debt in the financing of Polish enterprises.

When analyzing the financial situation of an enterprise, it is worth looking at the sales profitability ratios. When managers know their result, they receive information whether the sales is profitable, and to what extent the realized margin covers fixed and variable costs. The company managers looking for solutions that will help increase sales, sales revenues, and reduce costs. One of the popular methods to achieve such results is a joint action within a group purchasing organization. The aim of this article was to present an impact of branch group purchasing organizations on the financial results and the profitability of sales of enterprises operating in them. In the study the functioning of the groups, and the benefits that units operating in them in the area of cost and revenue management gain, were discussed.

The article analyzes the profitability of sales on the example of 31 commercial enterprises operating in branch group purchasing organizations and 19 operating independently in the market. The research period covered the years 2013–2015. The selected ratios of the ratio analysis and information from the preliminary analysis were used for the research. The analysis showed that functioning within branch group purchasing organizations allows enterprises to obtain a positive financial result. In the case of enterprises operating independently in the market, a large part of them suffered losses. Sales profitability in the studied groups is affected by the size of the enterprise, its location and the share of fixed costs. When analyzing the results, it can be stated that enterprises operating in the groups obtained higher results than independent entities. The best results are obtained by small units operating in groups, whose annual turnover reaches PLN 15–20 mln (USD 3.6–4.8 mln).

The two-way causality between housing market and banking sector has been widely documented in housing economics literature. On the one hand, the volume of housing loans, interest rates and other terms of lending are often highlighted as significant determinants of demand for housing and therefore housing prices. On the other hand, variations in housing prices change the value of assets in banks’ balance sheets. This might influence their loan potential. The aim of the paper is to investigate the mentioned bidirectional relationship in the case of Croatia. The interdependence between housing market and banking sector is examined within Vector Autoregressive (VAR) model. Housing market is represented by housing prices and construction variables and banking sector by volume of housing loans and corresponding interest rates. The empirical analysis shows that the causal relationship in Croatia mainly goes from the banking sector to housing market. On the other hand, there is a weak evidence of reverse causality which largely depends on chosen housing price index. These results suggest that housing market in Croatia does not follow typical patterns implied by widely accepted theoretical models.

The aim of the paper is to present and discuss the model for ecosystem economic (monetary) valuation for the territory socio-economic development planning in two Latvian administrative areas: Baltic Sea coastal Saulkrasti and Jaunkemeri pilot areas. Using ecosystem services economic valuation model three scenarios have been modelled: current situation, planned development and uncontrolled development, when in two pilot areas about 50% increase in construction and 50% decrease of the forest area is foreseen. After analyzing the ecosystem services’ monetary values, it is concluded that the greatest monetary value in both areas are provided by regulating services, so the maintenance and protection of ecosystems ensuring regulating services can be considered as a priority in both pilot areas. The second priority is cultural services, assuming, that the use of cultural services will not generate additional anthropogenic load. The lowest priority is given to provisioning services, taking into account the fact that the real possibilities to obtain the market values are limited, because tree felling is prohibited.

Coefficient of Salary to Revenue is one of the key performance indicators in football clubs. It contains information about money invested in the main resource of football club, i.e. in football player. Thus, the most important element of a football club is the football squad. The sports club could not participate in competitions without a suitable team. Consequently, the question arises about an effective level of salary in comparison to sports and business performances. A sports club is a specific enterprise. A significant number of football clubs have financial difficulties. Therefore, knowledge of the optimal allocation of financial resources is important. The main objective of the study is to identify an optimal level of salaries in relation to revenue coefficient so that effective sport results could be achieved. Depending on the chosen sample in the conducted research, results show different levels of the chosen coefficient. Yet, it is observed that clubs are characterised by some extreme results and tendencies. The paper presents a part of a wider research study about the key indicators of measuring sports clubs efficiency in Europe.

The objective of this paper is to introduce a new Realized Volatility (RV) Model. The model solves the problems of capturing long memory and heavy tales, which persist in current Heterogeneous Auto Regressive Realized Volatility Models (HAR-RV). First, an extensive empirical analysis of the classical RV model is provided by coupling Digital Signal Processing (DSP), Non Gaussian Time Series Analyses (NG-TSA) and volatility forecasting concepts. All models are built and tested on 30 min quotations of closing spot prices: USD/JPY, CHF/USD, JPY/EUR USD/GBP and GBP/EUR for the period from May 14, 2013 to July 31, 2015, taken from Bloomberg. The independence of the model’s innovations is tested by using the second, third and fourth cumulants, known as Higher Order Cumulants (HOC).Two tests are used, the Box-Ljung (B-Lj) test and Hinich test. The model is compared with the more natural Autoregressive Moving Average model (ARMA-RV). The empirical analysis shows that neither classic HAR-RV nor ARMA-RV models produce independent residuals. In addition, DSP recent findings are used to build a new HOC-ARMA-RV model. It was shown that only HOC-ARMA model fully captures fat tails and the long memory of FX returns.