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About this book

This book gathers selected papers from the 29th Eurasia Business and Economics Society (EBES) Conference, held in Lisbon, Portugal. While the theoretical and empirical papers presented cover diverse areas of economics and finance in various geographic regions, the main focus is on the latest research concerning accounting/audits, banking, the economics of innovation, and empirical studies on emerging economies and international trade. Studies on labor economics and public economics, as well as regional studies, round out the coverage.

Table of Contents

Frontmatter

Accounting/Audit

Frontmatter

Insights from Lobbying Research on the Accounting Standard-Setting Process Through Comment Letter Submissions

Abstract
The purpose of this paper is to provide an overview of lobbying research through comment letter submissions in the accounting standard-setting process. First, we review the theoretical framework that supports lobby behavior in accounting standard-setting process. Second, we examine the participation in lobby process and constituents’ incentives to participate worldwide. Third, we analyze the studies that focus on the content of comment letters to understand the position and argument of participants, and finally, we examine the effectiveness of a lobbying strategy through the relationship between the inputs (comment letters) and output (final standard). This paper identifies fundamental questions that remain unanswered and offers avenues for future research.
Lucía Mellado, Laura Parte

The Bulgarian Life Insurance Sector: Review and Analysis of Investments

Abstract
The aim of the study is to review and analyze the investment portfolios of life insurance companies in Bulgaria in view of the new regulatory requirements, actual business model trends, and current financial market environment. Investments are an integral part of the life insurance business model. In the study, Bulgarian life insurance sector is examined—regulations on investments, investment policy, and type of investments. Along with this, the accounting approach, accounting treatment, applicable accounting standards, and specific characteristics of all the financial instruments included in the portfolios of Bulgarian life insurance are examined. Last but not least, the paper also investigates whether asset allocation trends for Bulgarian life insurance companies are similar to the trends for European insurance sector.
Data for life insurance companies’ investments are obtained from publicly available sources and include five-year period 2014–2018. Respective literature related to life insurance, financial instruments, investments, and accounting standards is reviewed. It is worth mentioning that life insurers are among the largest institutional investors in Bulgaria. Findings show that there have been new specific trends for Bulgarian life insurance companies, in terms of their investment portfolios, list of involved financial instruments throughout recent years. General conclusion is that investments of life insurance companies are changing and rebalancing is experienced with major factors strict regulatory investment limits, low yield environment, change of business model, and conservative risk management approach.
A. Filipova-Slancheva

Measures to Assess the Payment Behavior of the Portuguese Subnational Governments

Abstract
This study aims to assess the outcomes of the Late Payments Directive (LPD), in the Portuguese subnational governments, which is essential for the sustainability of their commercial debt. It proposes that the control measure of the payment behavior is permeable to creative accounting practices. The investigation is based on a quantitative study of the 308 Portuguese subnational governments, from 2011 to 2017. The data were obtained from the official releases of the Directorate-General of Local Authorities (DGAL). The paper provides empirical insights about the actual outcomes of LPD. It suggests that the official data reported by Portuguese subnational governments is not reliable and does not enable the accurate evaluation of the LPD outcomes, not setting a common methodology for measuring the payment behavior of public authorities neither in Portugal, nor when compared with other Member States. Although all the data was obtained from DGAL, its lack of reliability is highlighted. Researchers are encouraged to study the control measures of the payment’s behavior adopted by other Member States.
The paper contributes to the knowledge of the Portuguese actual outcomes of LPD implementation at subnational governments and proposes new control measures.
Paula Gomes dos Santos, Carla Martinho

Banking

Frontmatter

Interactions Between Effectiveness and Consolidation of Commercial Banks in the Polish Banking Sector

Abstract
Bank consolidation is a process that has been observed in the world economy since the early 1980s. Until the global financial crisis formation of bank capital groups and financial conglomerates was considered as banks’ response to the globalization of financial system. After the global financial crisis, a “consolidation window” opened up in the global economy, which did not bypass the Polish banking sector. At the same time, it coincided with the support of the Polish government interested in its repolonization, which in a consequence resulted in an increase of the concentration level of bank capital. The main aim of the paper is the analysis of consolidation processes after the global financial crisis, as well as interactions between concentration of commercial banks in Poland (as a quantitative approach to the consolidation process) and their operational efficiency. The research indicates that concentration of the Polish banking sector affects effectiveness of the sector and individual commercial banks. However, scale and strength of these dependencies varies between the analyzed cases.
Irena Pyka, Aleksandra Nocoń, Anna Pyka

An Empirical Study of Blockchain Technology, Innovation, Service Quality and Firm Performance in the Banking Industry

Abstract
Despite the potential promises that blockchain technology (BT) offers to the financial services sector, its large-scale implementations are still in a nascent stage. There is no consensus on what benefits BT may bring, and there is always a possibility of difference between expected benefits and experienced real-world impact. Since the actual impact can be assessed only after large-scale implementations by financial institutions, there is little empirical evidence available in the literature. In this context, this research seeks to explore the potential impact of BT by developing and empirically testing a model. For this purpose, we have identified four dimensions of BT, namely, Decentralization, Transparency, Trustlessness, and Security. The impact of BT on innovation, service quality, and firm performance is assessed based on the extent to which these dimensions are present in the organization. The linkages of the latent constructs are estimated by analyzing the primary data collected from senior managers of various banks in India. The findings of this study provide several important considerations regarding the implementation of BT.
A. G. Rekha, A. G. Resmi

New Solutions in the European Financial Market and their Impact on the Polish Market

Abstract
The aim of the study is to analyze the impact of new European regulations, which include: Capital Requirements Package IV Directive, Capital Requirements Regulation, banking union and capital union on the market in Poland. Special attention was paid to the impact of the new regulations on the banking sector in Poland and the small- and medium-sized enterprises. Poland, as an EU member state, is obliged to implement the guidelines presented in the Capital Requirements Package IV Directive, Capital Requirements Regulation, while as far as banking union is concerned, it has the possibility to join it on the basis of close cooperation. The capital union has not been established so far; therefore, it is not possible to talk about its real impact on the market in Poland; however, it is possible to predict the potential effects of its establishment. The article consists of five main parts covering the following issues: characteristics of the European financial market, introduction of new European regulations concerning financial market, analysis of the impact of new regulations on the banking sector in Poland and analysis of the impact of new regulations on the sector of small- and medium-sized enterprises in Poland. The author argues that the new European regulations increase the stability of the banking sector in Poland and access of small- and medium-sized enterprises to capital.
Małgorzata Mikita

Economics of Innovation

Frontmatter

Implementation of Productivity Apps to Increase Financial Inclusion in Peer-To-Peer Lending Platform

Abstract
Peer-to-peer lending (P2P lending) is growing rapidly in Indonesia in line with the advanced of digital technology. This new platform is expected to support the Indonesian government strategy in increasing financial inclusion. Although the new platform is easily accessible using the mobile phone, some Indonesians are still reluctant to use the apps by themselves. There is an urgent need of human touch to educate and give appropriate information about the system. The role of direct sales agents of the P2P lending platform is key to gaining the trust of the prospective borrower. The P2P lending platform must be able to develop and implement apps to monitor activities and increase productivity of its direct sales agent. The purpose of this research is to analyze the implementation of sales management activity apps to increase the productivity of the direct sales agent, simplify the application procedure, shorten the approval time, and finally increase the financial inclusion in Indonesia. The object of the research is MODALKU, one of the largest P2P lending platforms in South East Asia. The target user of the apps is all the direct sales agents who are approaching prospective borrowers from the ultra-micro segment market. The result of the research showed that the direct sales agents play an important role in educating the prospective borrower in using the technology and explaining the benefit of the loan application in supporting their businesses.
Florentina Kurniasari

Measuring the Importance of Churn Predictors in Romanian Telecommunication Industry

Abstract
Telecommunication sector is a saturated market, and each client’s action affects the company profit. The most valuable asset of the telecommunication company represents its clients’ database. The Telecom industry pays special attention to the migrant clients because from an economic perspective, the cost invested by the company in the acquisition of a new customer is higher than the cost of keeping an existing client. This paper aims to determine the most important factors that influence the decision of a client to migrate from a telecom provider to another through a graphical method. We apply the churn prediction model on a dataset from Romania that has not yet been studied before. We choose to use the Balanced Random Forest technique to build the churn prediction model and the AUC coefficient to evaluate it. Permutation importance makes a classification of the most important features in the model and measures their impact through a metric called the importance score. The result proves that the most significant three factors in the churn phenomenon (client migration) are the number of months since the last change in the account, the number of minutes off the network and the invoice cost, a significant difference in score, the first the indicator being ten times more important than the next one. Therefore, we can state that we can resolve the main action by resolving the churn problem on the current dataset solved by monitoring and evaluating these variables.
Andreea Dumitrache, Stelian Stancu, Madalina Stefanet

Peer-to-Peer Lending Development in Latvia, Risks and Opportunities

Abstract
Investment opportunities have become limited due to low interest rates; therefore, investors are searching for alternative investment sources. Peer-to-peer (P2P) platforms act as mediators between investors and borrowers and provide an opportunity for mutually beneficial interaction. The aim of the research is to study the P2P lending process and to identify risks and opportunities related to this area. The research is focused on the investors’ side due to the specifics of Latvian P2P lending platforms, i.e., they do not grant loans directly but use loan originators. Mixed research methods were performed as follows: a field experiment (trial investments through P2P lending platforms), a survey, structured interviews, and a focus group discussion. The study shows that rapid development of P2P lending in Latvia is driven by providing relatively lower risks to investors. The main investors’ risk mitigation tools are critical originator selection, when a due diligence procedure is executed for each prospective loan originator, buyback guarantees, and payment guarantees, when marketplaces compensate the invested principal and earned interest if the borrower is late with the repayment. Most Latvian marketplaces offer to diversify investors’ risk by investing in fractions of loans across different borrowers, originators, loan types, and geographies. Some marketplaces offer loan ratings based on the internal evaluation of the risks. Secondary loan market provides liquidity to investors. However, some specific risks still exist such as the P2P lending operating model’s sensitivity to adverse economic development scenarios.
Irina Petersone, Ilmars Kreituss

Health Spending and Medical Innovation: A Theoretical Analysis

Abstract
The aim of this paper is to explain an empirical fact by economic models. The fact is that there is a tendency for the share of health spending in GDP to rise. This paper asserts that the fact is partly due to medical innovation. The novelty of models is the explicit incorporation of hospital and doctors who treat patients, with the rise in the parameter of the illness treatment function defined as the medical innovation. Under the monopolistic case, the share always rises, while under the competitive case, it declines for the advanced medical society with a high parameter value; it rises for the basic medical society depending on the ratio between healthy and sick workers, and it rises for the backward medical society with a low parameter value. The theoretical ambiguity of assertion is partly removed by the empirical fact of the monopolistic tendency in the US medical sector. As by-products of this formulation, the emergence of moral hazard and adverse selection is discussed theoretically, where medical insurance—discount of sick workers’ medical fee—is procured as a subsidy from healthy workers to them. Moral hazard and adverse selection emerge depending on the parameters of the models.
Toshitaka Fukiharu

Empirical Studies on Emerging Economies

Frontmatter

Asymmetric Impacts of the Geopolitical Risk on the Oil Price Fluctuations

Abstract
In this study, the vector autoregression (VAR) model framework is enhanced by the incorporation of nonlinear effects. More specifically, this study employs a nonlinear VAR model for the post-global financial crisis (GFC) period, and thus, the impacts of the geopolitical risk on oil futures and volatility are discussed for Israel, Russia, Saudi Arabia, and Turkey. It is found that an increase in geopolitical risk will lead to an increase in oil futures, whereas the geopolitical risk changes in Israel, Saudi Arabia, and Turkey measured by 1, 2, 4, and 10 standard deviation shocks have higher impacts than that of Russia. In the case of Israel, it is revealed that the rise in geopolitical risk may lead to a steady upward trend in oil futures by reducing oil price volatility. Our study highlights the role of Israel, Saudi Arabia, and Turkey in oil prices, and it is suggested that the geopolitical risks of all countries may have symmetrical effects on oil futures. The impact of country-specific geopolitical risk shocks on oil price volatility can be considered asymmetric, and the responses are size-dependent. In this respect, we also show that the global geopolitical risk benchmark index may have an asymmetric impact on oil price volatility.
Oguzhan Ozcelebi, Kaya Tokmakcioglu

Influence of Selected Internal Factors on the Outputs of the Financial-Sector Companies Traded on the Warsaw Stock Exchange

Abstract
Financial-sector companies differ significantly from other enterprises in terms of the business activity carried out, which mainly consists in provision of financial services and consultancy with regard to financial products. Financial institutions, similarly to other companies, issue shares that are traded on the stock exchange in order to obtain additional capital. The purpose of the paper is to indicate which financial ratios significantly affect the rates of return of the shares issued by the financial institutions analyzed. The empirical analysis involves financial institutions operating on the Warsaw Stock Exchange in the years 2000–2018. The source data adopted for the analysis result from financial statements that are compliant with the applicable regulations regarding financial reporting, in particular with the International Financial Reporting Standards. Financial reports constitute the basis for analyses and evaluations of the activity of a given financial institution as well as are the source of relevant information that is used by depositors and investors in decision-making processes. The results of the unbalanced panel estimation, carried out using appropriate diagnostic tests, indicated a financial ratio, such as return on assets, that proved to be significant. Moreover, effects were indicated that are specific for particular sectors. The banking sector should be analyzed separately from other financial-sector companies.
Ewa Majerowska, Ewa Spigarska

The Influences of Birth and the Child—Raising on Household Finances: An Analysis of Lost Income

Abstract
In personal finance, child rearing involves a stream of costs, incurred expenses, and lost profits. The second category includes the partial loss of earnings due to the breaks in parents’ (mainly mothers’) career paths resulting from pregnancy, maternity leave, and slowdowns. This article’s purpose is to propose a method of estimating a mother’s financial gap over the course of her whole career as a result of raising children. The article is the next stage of the authors’ research, in which the cases of 1–3 children and a wage growth rate consistent with data published by the Central Statistical Office (higher at the beginning of career) are analyzed. The considerations are universal and applicable to the realities of other markets, but the numerical illustration is based on Poland’s reality. The results obtained can be useful for determining compensation claims related to accidents that result in the death of a child. This analysis also contributes to the discussion of social programs being considered in Poland, such as an additional state pension for women with more children.
Anna Jędrzychowska, Ewa Poprawska

Debt Financing and Financial Performance: Empirical Evidence of Indian SMEs Listed in BSE-SME Platform

Abstract
The main emphasis of this research is to empirically study the impact of debt financing on the firm performance of SMEs in India. Panel data analysis is applied to study the association among debt and SMEs firm performance using three financial measures: return on assets (ROA), return on equity (ROE), and gross profit margin (GPM). The sample includes 164 non-financial Indian small and medium enterprises listed in the Bombay stock exchange—Small and medium enterprises (BSE-SME) platform from 2014 to 2018. The results of the study demonstrate that capital structure, especially short-term and long-term debt, has an adverse effect on the efficiency of small and medium enterprises. The study reveals that decisions on capital structures have little impact on SMEs’ financial results. The analysis also proves that the pecking order theory relates to small- and medium-sized enterprises in India. This is the primary research that explores the connection between debt financing and the financial results of Indian SMEs listed on the BSE-SME platform.
K. Rajamani

International Trade

Frontmatter

Trade of the EU and China with South America After the 2008 Financial Crisis

Abstract
The paper discusses Sino-European trade competition in South America over the period from 2008 to 2017. The aim of the paper is to show the scale of and trends in merchandise trade of the European Union and China with South American countries after the global financial crisis. During the analyzed period, the average annual growth rate of China’s exports to South America was nearly 7% while the growth rate of EU’s exports was less than 1%. The Chinese exports of goods to South America surpassed the European exports to the region in 2017 as a result. Besides, South American countries, except Brazil, Surinam, and Trinidad and Tobago, imported more goods from China than from the European Union. The decomposition of growth rates of the EU’s exports shows that they heavily depend on the growth rates of exports of Germany, Italy, and Spain. Since 2013, China has been importing more goods from South America than the European Union. In the years 2015–2017, China’s bilateral trade with the region was bigger than the EU’s one.
Wioletta Nowak

Panel Estimation of High-technology Export Determinants: Evidence from Fast-Growing Countries

Abstract
This study is including fast-growing emerging countries (Brazil, Russia, India, China, South Africa, and Turkey) and using the panel data analysis methods for high-technology exports of determinants 1996–2017 period. We chased some variables for our analyses, they are as follows: high-technology export is dependent variable, and economic growth, foreign direct investment, gross capital formation, patent, and trade openness were used as independent variables. After the stability of the variables was tested with first-generation unit root tests, cointegration tests were used to investigate the long-term relationship between the variables. As a result of the study, long-term relationship was determined between the variables discussed. After determining the cointegration relationship, the coefficients were estimated with the FMOLS (Full Modified Ordinary Least Square) estimator. The effects of economic growth, foreign direct investments, patents, and trade deficit on high-technology exports were found to be significant. As a result, product exports should be increased with the support of high technological product exports.
Sevilay Konya, Mücahide Küçüksucu, Zeynep Karaçor

Labor Economics

Frontmatter

Non-standard Employment and Wages Across Sectors in Croatia

Abstract
Recent trends of rapid globalization and digitalization have influenced national labor markets, changing the nature of work and increasing non-standard forms of employment. Non-standard forms of employment, such as temporary, part-time, or casual work, are seen as a precarious and may influence earnings. Croatia is no exception from these trends. In the last fifteen years, the service sector due to the high increase of activities in tourism has been growing intensively, becoming the main diver of the Croatian economy. However, large servitization implies the growth of temporary employment, with pronounced seasonality during the peak of tourist season. The aim of this paper is to analyze the trends of non-standard employment and wages across sectors in Croatia for the period from 2008 to 2018. The main research question is whether changes in the structure of job types (from standard to non-standard) influenced wage growth in different sectors, listed by NACE2. Two datasets are used in order to perform panel model. The results suggest the existence of a rapid increase in temporary employment and precarious employment in all sectors of economy accompanied by the stagnation of wages or low increase in wages. However, the situation was slightly improved in 2018 since the majority of industries experienced an increase in wages. Furthermore, empirical results suggest that there is a statistically significant and positive relationship between temporary, especially, precarious employment and wage growth. Accordingly, an increase in the share of temporary and precarious employment has an impact on the monthly wages growth across sectors in Croatia.
Marija Bečić, Perica Vojinić

Role of Personality Traits in Work-Life Balance and Life Satisfaction

Abstract
In this study, we examine the role of personality traits in ensuring work-life balance and life satisfaction. For this purpose, 434 people working in service sector in Kocaeli/Turkey are interviewed through face-to-face. Five-Factor Personality scale is used to measure personality traits, and scales that have international validity and reliability are used to measure work-life balance and life satisfaction. Hayes Process analysis is used to determine whether personality traits have a role in ensuring work-life balance and life satisfaction. According to the results of the analysis, it has been determined that personality has a role in ensuring work-life balance and life satisfaction. When detailed analysis of the sub-dimensions of personality is conducted, it is seen that extroversion, conscientiousness, openness to experience, and emotional balance have a role in terms of work-life balance and life satisfaction, but no relationship is found in the dimension of agreeableness.
Sevda Köse, Beril Baykal, Semra Köse, Seyran Gürsoy Çuhadar, Feyza Turgay, Irep Kıroglu Bayat

Factors for the Future of Work and Their Impact on the European Economy and Labor Market

Abstract
The aim of the present paper is to gain a deeper understanding of the essence of the “Future of work” by exploring simultaneously its major drivers and their impact on the job market and employment on European level in the long run. The data used are based on the research of numerous international organizations, European Union institutions, and bodies, as well as on analytical data and expertise of reputable business consulting companies. The methodology includes qualitative research, including data analysis, comparative analysis, inductive and deductive approach, and others. This type of research helps to explore how and why the phenomenon “Future of work” occurred, what it represents and what the prospects for its development are. The main drivers of this phenomenon are analyzed as follows: globalization, digitalization, and demographic change. The paper explores and summarizes the expected economic and social effects of these three factors on the labor market in the EU. The main findings conclude that the “Future of work” is an interdisciplinary phenomenon covering the current and expected trends on the world labor market, provoked by the dynamic technological development and penetration of artificial intelligence technologies in the economic and business practice, including job automation (job loss and job creation), rising skills and qualification requirements, a big change in employment occupations, and rising diversity in working arrangements. Legislative, business-oriented, and educational actions on all levels are urgently required to face these new challenges successfully.
Monika Moraliyska

Public Economics

Frontmatter

Current Developments on the Economics of Happiness: Evidence from Turkey

Abstract
Happiness is a concept that changes according to individuals. However, in general terms, happiness can be expressed as an overall positive assessment of one’s quality of life. The branch of economics makes happiness measurements by looking at happiness from an economic point of view and examines their relations with economic factors. Happiness economy, on the other hand, examines which factors increase or decrease the quality of welfare and life and makes inferences about this issue. The aim of this study is to examine work done related to the happiness economy and the change in happiness in detail in Turkey and is to interpret in detail the current data on this subject. For data on Turkey published regularly since 2003, “TSI Life Satisfaction Survey” results were used. The study also mentions the happiness measurement techniques and contents made today and gives the latest happiness researches of all countries in the world. Countries happiness data are compiled from the last publication of the “World Happiness Index.” The study focuses on the relationship of happiness with variables such as income, employment, health, and social status, which are the determinants of happiness in the economy, and their effects on happiness.
Ayşe Özge Artekin

Circular Economy: New Opportunities for Growth

Abstract
Circular economy’s approach attracts a lot of followers nowadays. It mobilizes not just public authorities, but the social responsible business as well. Although circular economy (CE) was established as strategy for clean environment, it overpassed the need of recycling and waste management mechanisms. It covers new business models that generate added value through optimizing the resource’s and energy’s inputs not by single company but by the whole added value chain. Transition to a circular economy is based on reducing not just the waste but the primary recourses as well as increasing of waste reuses. Circular economy actions are closely linked to key EU priorities, including jobs, growth, climate, and energy. The goal of the paper is to explore the opportunities from application of the circular economy principles for forcing up not just economic growth but improving quality of life. The used methods are as follows: descriptive, quantitative, and qualitative analysis of main indicators of circular economy, statistical analysis of the business model: production level—resources productivity—waste generation—circularity rate—investments in circular economy subsectors. As the analysis shows heterogeneity among EU countries in application of the circular economy approach, there is different speed of transferring economic growth from linear to circular subsectors. There is proved that some of the EU economies are fully linear and they delay real shift between linear and circular business models. Bulgaria needs as soon as possible to enforce the acceptance of newer CE strategy that covers the road from LE to CE. The main conclusion is to set new institutional measures for those EU economies that had to shift between linear and circular business models.
Nikolay Sterev, Vania Ivanova

Comparative Portfolio Analysis of Selected Sovereign Wealth Funds and Case of Turkey

Abstract
After World War II, the number of SWF increased due to higher number of countries with foreign trade surplus by precious mines and energy exports. The countries with goods and service exports and foreign trade surplus used SWF to spread these organizations. Turkey has started to parlay the financial assets of the state by establishing Turkey Wealth Fund Management in 2016, although there is no reasonable resource to establish the asset fund. Since there is no economic surplus, public institutions operating on the market have been transferred to the Turkish Asset Fund for financing. Turkey Wealth Fund’s financial sources consist of only noncommodity (public companies’ surplus—some of which have negative profit) assets. From this aspect, this paper aims to compare and analyze the funding and investment methods of selected sovereign wealth funds. To clarify the question, top 10 wealth funds in the world and Turkey Wealth Fund are compared in terms of asset size and transparency index. Also, Temasek of Singapore is used as specific example for Turkey Wealth Fund due to its resemblance. Conclusions are that in order to be successful wealth fund, Turkey Wealth Fund needs better transparency, credibility, and auditability. At current situation and structure, Turkey Wealth Fund does not meet the specific conditions like counterparts around the world.
Ayse Akdam Peker

Environmental Taxation in Portugal: A Contribution to Sustainability

Abstract
Environmental taxation represents a key tool in a country’s sustainable development strategy, being an important factor of conciliation between environmental protection and economic growth. As a result of high population growth, intense industrialization and fossil fuels’ overuse, the world deals with serious environmental problems, namely unacceptable values of greenhouse gas emissions and severe climate changes. Its mitigation and resolution depend on the adoption of a set of concrete measures and policies to combat pollution and promote deep changes in polluters’ behavior and, in this context, we highlight the key role of the environmental taxation policy. Some years after one of the most important reforms, this research proposes to analyze and interpret some of the main statistics on the environmental taxation in Portugal. The final aim is to provide policy makers with more information, allowing them to consolidate an efficient strategy regarding the promotion of a more sustainable development, through the application of an efficient environmental taxation.
Sara Sousa

Globally Emergent Behavioral Patterns, as a Result of Local Interactions in Strongly Interrelated Individuals

Abstract
In this paper, we study how local interactions in suitably structured social networks give rise to globally emergent states and observable patterns. An example of such states and patterns is the emergence of Panopticon-like structures that possess global surveillance properties. Our methodology is based on elements of game theory and innovation diffusion graph processes modeling social network local interactions. We provide an example of a simple social network structure in which collective actions induce the emergence of specific behaviors due to the effects of the local dynamics inherent in strongly interconnected individuals. Our work provides a framework for studying and explaining how specific social interaction patterns produce already observable global social patterns.
Christos Manolopoulos, Yannis C. Stamatiou, Rozina Eustathiadou

Regional Studies

Frontmatter

Problematic Issues of Youth Unemployment in Central and Eastern European Countries

Abstract
Although most European economies show fragile signs of recovery after the financial crisis of the twenty-first century, youth unemployment remains not only one of the biggest concerns for European countries but also one of the most serious challenges. This fact leads to another problem called social exclusion. The novelty of this research manifests in the complexed standpoint to the youth unemployment situation analysis as well as a systemization of programs, which are used to help young people integrate into the labor market in selected EEC countries. The aim of this research is to highlight the main problematic issues of youth unemployment in the CEE countries. Main findings of the scientific and empirical research: the indicators for the context analysis of youth unemployment situation were suggested; youth employment policy specificity in the EU was highlighted, and the challenges of youth employment policy in CEE countries were systemized. Methods of this research are documents’ content analysis, qualitative analysis of states’ cases, comparative analysis, statistical data interpretation, and prognostic method.
Rasa Daugėlienė, Algis Junevičius

Insular Region Policy in Greece

Abstract
Due to the large number of islands that are located in its territory, Greece strongly encountered the phenomenon of insularity. The main aim of this article is to propose the strategic objectives that need to be carried out to achieve the necessary modification of the pursued policy. In this way, the insular regions will be led to their development. The purpose of this article is to highlight the problems that insular regions in Greece face and present their development strategy. In order to conclude the above proposals, the presentation of the characteristics of each Greek insular region was required and the current policies that shaped the regional development of the islands are mentioned. So as to achieve the best study of the current situation and the prospects for further development of the insular areas, it was deemed necessary to analyze their internal and external environment, in relation to the peculiarities of the Greek insular area. The research method on which this paper is based is mainly bibliographic research, and the data gathered from the literature are based on primary and secondary data. The secondary data were drawn from books, articles, as well as material from public authorities that fill the need for study and scientific approach and documentation of issues concerning the Local Government, such as the Hellenic Statistical Authority and the Institute of Local Administration. The primary data were derived by the Institute of Local Administration, in the context of the implementation of the study “Technical Assistance in the Financial and Administrative Management of small Island and Mountain Municipalities”. This is why it was deemed necessary to carry out a SWOT analysis, which will reflect the common points of the strategic planning of the Greek regions.
Vasiliki Delitheou, Eleftherios Podimatas, Evanthia Michalaki

Informatization Construction and Urban Total Factor Productivity: Empirical Analysis Based on China’s Smart City Pilot Policy

Abstract
In theory, informatization construction can optimize resource allocation and improve total factor productivity through changing urban organizational structure and production mode. Based on the quasinatural experiment of smart city pilot policy, this paper employs kernel propensity score matching and difference-in-difference (KPSM-DID) method to test whether it improves the urban total factor productivity with data of China’s 171 cities during 2006–2016 period. The results show that: (1) On average, the smart city pilot policy plays a significant role in promoting the city’s technical change (TC), and the impact on efficiency change (EC) is positive but not significant. Their coupling effect promotes the growth of urban total factor productivity. (2) Government financial expenditure has significant negative influence on total factor productivity, while industrial structure and infrastructure have significant positive effects on total factor productivity. (3) Heterogeneity research shows that the smart city pilot policy is more conducive to promoting the growth of total factor productivity in eastern cities and high-innovation cities, but it is difficult to improve the level of total factor productivity in western cities and low-innovation cities. (4) From the various forms of robustness tests, it can be seen that the smart city pilot policy has significantly promoted the growth of urban total factor productivity in both statistical and economic sense.
Qian Yuan, Lihua Wu, Ping Zhang
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