Eurasian Economic Perspectives

Table of Contents

1. Economics of Innovation

   1. Frontmatter

   2. Innovation Theory: Where Is It Going?

      Elżbieta Szymańska

      Abstract

      The aim of this study was to describe the innovation processes in the theory of management sciences and to find the main direction of their development. Methods of critical and comparative analyses were used. The research diagnosed a large number (9) of innovation models that had been created since the beginning of innovation theory. The theory started with simple models and later developed the most complicated ideas. The models can be divided into two main groups: linear and nonlinear ones. The conjugated innovation concept showed that the innovation process could be more complicated than a simple cause-and-effect relationship. The new concept started discussions on a new open innovation model. The ideas of user-driven innovation (UDI) and diffusion of innovations were the consequences of this proposal. A description and classification of the innovation models is a novelty in the theory of the management sciences. Another result is the idea of combining some innovation process models. The expected results will have an effect on the development of economic sciences, especially the management sciences. The present research shows that innovation processes are more and more complicated. One can see the increasing role of clients (customers) and wider cooperation in the modern models of innovation processes.

   3. Regional Aspects of Digital Economic Development

      Nataliya Kravchenko, Svetlana Kuznetsova, Anastasia Ivanova, Arkady Shemyakin

      Abstract

      Development of digital economy has become a strategic priority in the majority of developed and developing countries. Today, the creation and dissemination of digital technologies are becoming a key factor for competitive success of the countries and regions, which changes national and regional socioeconomic environment. This chapter’s goal is to reveal and assess the factors contributing to the development of information and communication technologies in the regions of the Russian Federation. The study uses regression analysis to estimate the dependence between several indicators of dissemination and use of digital technologies in the main sectors of economy—business sector, households, public services—and the characteristics of regional development. It is demonstrated that in Russia digital divide between the regions remains rather high, with more than a quarter of the employed population and nearly a half of information and communication technology spending being concentrated in metropolitan centers. The richer and more educated regions have distinct long-term advantages in digital economic development. If these trends are confirmed, the accelerated development of digital technologies will be concentrated mainly in the largest regions; high differentiation in the level of digital economic development will persist or even be amplified.

2. Risk Management

   1. Frontmatter

   2. What Do We Know About Data Breaches? Empirical Evidence from the United States

      Grzegorz Strupczewski

      Abstract

      The aim of the chapter is to assess data breach risk. In particular, severity of the risk is quantified and factors determining its severity are identified. We take a number of records compromised in one data breach incident as a proxy for severity of the data breach risk. This chapter helps to learn from the experience of almost 15 years of data protection and data breach notification regulations in the United States. It offers an interesting insight into the state of cybersecurity that can be indicated by a number of data breaches. Based on the Privacy Rights Clearinghouse database, we examine the statistical properties of data on data breaches disclosed in the United States from 2005 to 2016. The size of our dataset is 5102. The Kruskal–Wallis test is applied to verify our hypotheses. The severity of data breach is modeled by the Pareto distribution. The chapter concludes with several interesting results. Negligent data breaches appear twice more frequently than malicious ones. The dominant causes of data breaches vary by organization type. It suggests that cyber risk management strategies should be tailored to the individual profile of an entity. Surprisingly, implementation of the data breach notification state laws in the United States has not affected the number of breach incidents reported in particular states. Cause of data breach, type of organization, and geographical region are statistically significant factors that diversify the population of affected organizations in terms of severity of the loss.

   3. Human Risk in Agriculture: Problems and Perspectives

      Laura Girdžiūtė

      Abstract

      Agriculture is an economic sector facing large risk, mainly from natural factors and despite of relatively low price responsiveness to supply and demand causes output volatility in general. It is a risky business, and risk assessment and management tools have become increasingly important in recent years. Risk assessment and management is a complex process, since the risk arises from different sources. Typically, literature analyzes financial, business, credit, or currency risk. There is lack of research of human risk, especially in agriculture sector. It is important to identify knowledge, attitudes, behaviors, and priorities among farmers regarding safety, health, and risk management. This research focuses on identifying main human risk factors, identifying vulnerable populations in agriculture, including immigrants, migrants, refugees, young and older persons, women, persons with disabilities, and minority workers. The research explores human risk assessment and management problems in agriculture. Only then is it possible to increase safety and health for agriculture workers and decrease human risk manifestation in agriculture and to make the agriculture sector socially beneficial for its nation.

3. Inequality

   1. Frontmatter

   2. The Impact of Income Inequality on Economic Growth Through Channels in the European Union

      Zita Tamasauskiene, Aidas Dilius

      Abstract

      There is contradictory evidence about the impact of rising income inequality on economic growth through different transmission channels. Inequality can positively influence growth by raising savings and investments, providing incentives for innovation, investment in research and development, as rich people save a higher part of their income, especially in less developed countries. However, inequality may be harmful to growth because it leads to higher levels of social and economic instability, which reduces investment. Investment may also be discouraged by less demand from lower income households in countries where the level of inequality is high. The aim of this research is to assess the impact of income inequality on economic growth through the savings channel and sociopolitical unrest channel in the European Union’s 28 countries grouped according to the level of income inequality and country’s level of development. We use the ordinary least square regression method for panel data of 28 EU countries, divided into groups, over the period 1995–2014. Econometric results show that rising inequality has a negative impact on growth through savings channels in all groups of countries. However, it was also found that rising inequality had a negative impact on growth through the sociopolitical unrest transmission channel in the groups of the countries defined by the lower income inequality level at different stages of country development and a positive impact in the groups of the countries defined by the higher income inequality level.

   3. Analyzing Opportunities for Eliminating Inequality in Female Digital Entrepreneurship in Spain

      Cristina Mora-Rodríguez, Antonio Jose Verdú-Jover, Jose M. Gómez-Gras

      Abstract

      This paper analyses several aspects of female digital entrepreneurship with the aim of determining if digital businesses help reduce inequality between female and male entrepreneurships. It is divided in five main points: women’s motivations, barriers, digital business, requirements for entrepreneurs, and their future perspectives. This qualitative study used an in-depth survey of a group of Spanish women entrepreneurs in digital business. The research identified a number of situations that affect women’s decisions to become digital entrepreneurs. Their particular characteristics, such as, their various ages, different motivations for entrepreneurship, the same business model and barriers, do not reinforce the conclusion that the majority of research considers female entrepreneurship to be influenced by the same factors as in traditional business models. The findings show that all women agree on the same aspect, independently of each case, and that is the need to focus on basic children’s education in order to eliminate inequality. This cultural aspect, linked to the other findings, continues to be a gender effect that remains an obstacle to entrepreneurship in general, but less so in digital entrepreneurship.

4. Tourism

   1. Frontmatter

   2. Tourist Clusters as Instruments of Implementation of Smart Regional Specializations in Tourism on the Example of Poland

      Małgorzata Borkowska-Niszczota

      Abstract

      The mail goal of this chapter is showing, which Polish voivodeships have tourism as their regional smart specialization and what is the level of development of tourism clustering in individual regions, especially those focused on tourism development and selecting tourism as the economic branch strategic to their development. Additionally, the chapter presents theoretical issues connected with smart specializations and the roles of clusters in their development. As the method of research, the desk research and analysis of subject literature was used. Tourism clustering is developing in voivodeships which have tourism as their regional specialization as well as in voivodeships which are turning toward other specializations. All regions with a specialization connected with tourism have a chance for development due to the existence of tourism clusters in their areas. The voivodeships which focus on health tourism and which have well prospering clusters connected to medicine and health have especially good predispositions for development.

   3. Quantitative and Qualitative Aspects of Non-financial Reporting in Hotel Enterprises in Croatia

      Nidžara Osmanagić Bedenik, Ivan Strugar, Darko Prebežac, Vedran Kojić

      Abstract

      Dynamic business environment requires publishing accurate and reliable information about company business performance. In this context company financial reporting becomes standard, obligatory and important company communication channel. Publishing company performance information is not for the interest of investors only, but it is because of the interest for customers as well. In present business environment, growing interest for environmental protection and sustainable development, the financial reporting framework becomes insufficient. Information related with social and environmental aspects of business grows in importance not only for employees and local community but for investors and customers as well. Tourism industry highly prioritises environmental protection issues and sustainable development as factors of highest importance for sustainable destination management. In this context non-financial reporting was voluntary for many years, but now non-financial reporting becomes not only important market issue but becomes obligatory, and standards for non-financial reporting are still developing. The primary objective of this study was to identify the level of existing experience and readiness of hotel companies in Croatia to report on sustainable reporting and sustainable business.

   4. Determinants of SME Innovativeness in Poland on the Example of the Market of Aesthetic Medicine Tourism

      Eugenia Panfiluk

      Abstract

      Innovativeness is a trait attributed to business entities. It reflects the ability of enterprises to undertake innovative activities. Innovativeness is a complex process. It depends on both external and internal factors. Owing to the small staffing and financial potential of the situation, there are SMEs. They have lower human and financial resources. Their innovation cannot be measured by the ratio of R&D expenditure. Therefore, it is important to consider what factors influence the innovation of this group of companies. The aim of the chapter is to examine the innovativeness determinant of SMEs and to determine the determinants influencing their innovativeness process. The study was conducted on the example of companies operating on the health tourism market, the subsector of aesthetic medicine tourism. The research was conducted on a representative group of Polish companies using a Delphi method and diagnostic survey method. As a result of the research, more than 80% of the companies are implementing innovation, dominating product innovations that are new to the region or to the organization. The innovativeness actions taken depend on the company. Factors related to systematic market analysis and market information gathering as well as human capital of the company (high medical staff and tendency to improve qualifications) were considered as the most important factors.

   5. Challenges and Problems of Sustainable Development of Tourism in Protected Areas: Example of National Parks in Poland

      Halina Kiryluk

      Abstract

      One of the most important global trends in nature conservation today is the desire to reconcile the interests of nature conservation with the various spheres of economic and social activity of man. Society is moving away from passive and conservative nature conservation to seeking active forms of protection that will ensure the integration of the function of ecological protected areas and their socioeconomic development. Tourism is attributed a particular role in the process. The chapter presents contemporary challenges and problems of sustainable development of tourism in protected areas, both in theoretical and practical terms (on the example of national parks in Poland). In particular, the chapter analyses the theoretical aspects of the nature and principles of sustainable tourism development in protected areas, shows the system of protected areas in Poland, including the tourist potential of national parks to create competitive tourism products on the European market, identifies the main barriers to sustainable tourism development in national parks. The work uses the case study and the desk research method.

   6. The Role of State Regulation and Policy in Tourism Development: The Case of Georgia

      Nana Katsitadze, Ia Natsvlishvili

      Abstract

      Countries with different levels of development show great interest in tourism, which is caused by high economic performance of the tourism industry. The chapter shows the importance of state policy, which supports tourism development in the countries with rich natural and cultural tourism resources but have weakly developed tourism industry, weak economy, and imperfect mechanisms of state regulation. After transition to market economy and losing traditional markets, Georgia quickly recognized the importance of tourism and immediately started to implement various types of activities in this direction. In 2012 Georgia declared tourism as a priority sector. This was followed by legislative changes and boom of foreign investments in hotel constructions. High-class hotels provided the opportunity for the development of new tourism directions, which are less dependent on seasonality. The government has been promoting tourism among the skeptical local population. Georgia faces problems related to improper application of tourism regulatory instruments. Tourism consumes products and services that are not directly part of the tourism sector, but have a significant impact on its development. Therefore, development of tourism industry requires implementation of the united state policy. The state policy needs to be based on the principles of sustainable development so that all the interested parties in tourism—tourists, business, state, local communities—get benefit.

5. International Trade

   1. Frontmatter

   2. Relationship Between Foreign Trade and Tourism: An Empirical Study on Mediterranean Countries

      Sevgi Sezer

      Abstract

      In the present study, relationships between tourism and foreign trade in France, Greece, Italy, Spain, and Turkey were investigated by using new generation panel data analysis methods for the 1995–2015 period. The presence of cross-section dependency was tested by LM, LMS, CD, and LMBC tests and cross-section dependency was determined. The stationarity of the series was examined by CADF and it was found that the series were I(1). The existence of co-integration relationship between the series in the models was investigated by Durbin-H test, and it was found that the series were co-integrated. Co-integration coefficients were estimated by the CCE method and when the number of tourists who visit the country increased by 1%, Turkish exports increased by 0.25%. In France, imports increased by 0.18% on average, when the number of tourists going abroad rose by 1%. Exports increased by 0.43% in France, 0.63% in Greece, 0.60% in Spain, and 0.93% in Turkey when exports increased by 1%. It was determined that the increase in imports increased the number of tourists going abroad in France and Spain, and decreased the same figure in Greece. In the causality test, no strong causal relationship between foreign trade and tourism was determined.

   3. The Impact of Wage Share on Exports of the European Union Countries

      Janina Seputiene

      Abstract

      Many studies have found that shrinking wage share can affect aggregate demand both positively and negatively. There is more evidence in the literature that the impact on domestic demand (consumption expenditures) is negative whereas the influence on foreign demand (exports) is positive. In the case of overall positive impact, the aggregate demand regime is profit-led; otherwise, it is wage-led. The nature of demand regime depends on the relative shares of the domestic and foreign demand in total demand. The consumption, investment, and exports sensitivity to the wage share changes is another crucial factor shaping demand regime. We can assume that changes in wage share make a more significant impact on the exports of those countries where foreign demand’s share in GDP is relatively large. Decreasing wage share is related to the lower labor costs which in turn stimulates export competitiveness. If foreign markets are less important for countries’ economy and exports’ share in GDP is relatively small, this might weaken the relationship between wage share changes and export competitiveness. This study aims to assess whether the effect of a decrease in wage share on exports (foreign demand) depends on countries’ share of exports in GDP. Using a panel of 28 EU countries over a 20-year period (1995–2015), I found that in countries where exports’ share in GDP is relatively large, exports’ sensitivity to the wage share changes is higher.

   4. Research on Factors Affecting the Imported Online Games in China

      Meijuan Li, Biying Ma

      Abstract

      In recent years, although China’s domestic online games have occupied a significant market share, foreign online games still play an essential role in China’s online game market today. On the one hand, this chapter is based on the analysis of the current situation of China’s online game importation; on the other hand, this chapter uses the econometric model to analyze the influencing factors of China’s online game importation. The results show that the size of China’s online game market is positively related to three factors which are the nominal GDP, the per capita disposable income of urban residents, and the market size of the Internet third-party payment. As we can see, with the development of China’s economic base and the increasing popularity of the Internet as well as the improvement of online game related laws, China’s online game import scale is expanding.