Economic Analysis

Quality of Government as an Attracting Factor of FDI - Evidence from Chosen Southeastern Europe Countries

Miloš Jovanović — 2023-10-04

This paper aims to examine the indicators of the quality of government of selected countries in South-Eastern Europe, which significantly influence the attractiveness of foreign direct investment. With the aim of quantifying the influence of certain factors on FDI, Montenegro, Serbia, Bosnia and Herzegovina, Romania, Bulgaria, Croatia, Albania and Northern Macedonia are included as the selected countries of the region, with the period of analysis limited to the period from 2007 to 2021. The results of the empirical analysis of the influence of the factors have shown that the factors referred to as the Rule of Law Index, Government Efficiency Index, Public Administration Efficiency Index and Political Stability Index have a significant and positive influence on the attractiveness of the country for foreign investors, while some other factors such as the cost of starting a new business have a negative influence on the country's attractiveness.

Determining the Influence of Internal Factors on Indebtedness

Miloš Pjanić — 2023-10-10

Indebtedness and its level are one of the most important indicators of the healthy operation of every company. In this study, the authors deal with the analysis of the influence of certain selected internal factors on the level of indebtedness of agricultural enterprises in Serbia. Only large agricultural enterprises were taken as a sample, and the sample itself includes 5702 observations and 87 companies. The subject of the analysis is the annual panel data of large agricultural companies, and the analysis period covers from 2015 to 2021. In the analysis, the authors used the debt-to-asset indicator as a representative of the company's indebtedness, and it represents the only dependent variable. As independent variables, the authors used indicators of general liquidity, return on capital, return on assets, EBIT level, and equity level. The authors used several diagnostic tests to establish the validity of the regression model. To obtain the results, the authors used the POLS model, the fixed effects model, and the random effects model to determine the influence of independent variables on indebtedness. The results indicated the statistical significance and negative impact of indicators of general liquidity, return on capital, and the level of own capital on the level of indebtedness. The contribution of this paper is that it provides an insight into the relationship of certain internal factors to indebtedness, as well as helps in determining the best level of the relationship between the use of debt and own funds in the financing of the company.

Remote Work Opportunities for the Persons with Disabilities

Marcelle de la Roche — 2023-10-13

This research represents one of the first literature reviews of remote work opportunities for persons with disabilities. Given the fact that persons with disabilities represent almost 15% of the total world population and that this category of people is facing huge challenges in terms of employment inclusion and risk of poverty, it is obvious that remote work arrangements provide excellent employment opportunities for persons with disabilities. This argument in combination with enormous growth of the remote work platforms and digital entrepreneurship, represents a key reason for the rising interest of the research community in this topic. The aim of this research was to identify the current state of the academic literature in the area of remote work opportunities and persons with disabilities and to identify gaps in our current understanding of this field, as a basis for some future research recommendations. Insight, critique and transformative redefinition of the current academic literature on remote work and persons with disabilities was applied to analyze and synthesize the literature. In total, around 80 articles were analyzed by theoretical focus, methodology, time, and geography. Google Scholar search was conducted during December 2022 using a comprehensive search strategy built around the following major topics: 1. persons with disabilities in the labor market, 2. remote work and the persons with disabilities, and 3. remote work capacity of the persons with disabilities. The results of this research show that the research on remote work capacity of the persons with disabilities is fragmented and that more studies, covering different aspects of remote work opportunities for persons with disabilities are needed, especially those which will be quantitative in their nature and more integrative. This research has contributed towards better understanding of the literature gaps in regards to remote work opportunities for the persons with disabilities and pointing to some future research directions such as skills and competences of the persons with disabilities for remote work, the challenges of remote work for persons with disabilities, and the requirements of the remote work platforms and other remote work opportunities.

Organizational Structure and Organizational Culture

Marija Lazarević — 2023-10-31

The innovative capacity of an organisation is determined by numerous factors which operate in the external and internal environment. Without diminishing the role and importance of external environment factors, the focus of this paper is the analysis of the impact of the organisational structure and culture, which are the elements of the internal environment, on the innovative behaviour of organisations. The paper starts from the assumption that business innovation is under a strong influence of the abovementioned elements, bearing in mind that the influence can be both positive and negative depending on the dimensions of the organisational structure and the values promoted by the organisational culture. The findings in the paper can contribute to the existing literature to interpret the nature of the relationship between the organisational structure and culture and the innovative ability of a company; as well as to find the way how to improve the existing business innovation practice based on the creation of the organisational design that encourages workplace creativity and innovation.

How Covid-19 affected labor income in Serbia? An exploration of gender, education, the possibility to work from home, and the employment sector differences

Valentina Vukmirović — 2023-12-07

This paper investigates the impact of Covid-19 on labor income changes of employees in Serbia. The research was conducted on a representative sample of 3,044 individuals using the CATI method in Serbia. Employees' labor income was recorded by collecting data on wages before and nine months after the onset of the Covid-19 pandemic. To obtain the difference, we calculated the percentage change in labor income. There was no significant gender difference in the percentage change of income, while there was a difference regarding education level. Employees with primary education experienced an average percentage increase in salary of 7.6%. The analysis revealed a significant interaction between gender and education, indicating that men with primary education had an average increase of 12.8%. Our results showed that employees who could not perform their job from home had an average percentage increase of 2.9% in labor income. The employment sector also had an effect on percentage changes in salary. The construction and agriculture, forestry, and fishery sectors had an average percentage labor income increase of 12.6% and 11.5%, respectively, while employees in the sector of other service activities experienced an average percentage decrease of 7.9%. In conclusion, this study sheds light on the diverse effects of the Covid-19 pandemic on labor income, emphasizing the importance of considering gender, education, remote work possibilities, and the employment sector.

Systematic Literature Review of Sustainable Finance: Implications for Entrepreneurial Finance through Venture Capitals (VC)

Rosa Mehrabi — 2023-12-12

The idea of sustainable development as a whole gave rise to the concept of sustainable finance in recent decades. It illustrates how financial markets address the current and upcoming economic, social, and environmental issues. This study reviews the literature on sustainable finance and how it relates to venture capital and entrepreneurial finance research topics. As part of the research process, a Systematic and methodical assessment and analysis of the literature was carried out. The results present comprehensive summaries of the main themes and frameworks, as well as the opportunities, challenges, strengths, and weaknesses of the fields. It also highlights the interaction between sustainable finance and venture capital in supporting innovation and sustainability in entrepreneurship. The main paper's contribution is to identify sustainable finance as a process that operates at multiple levels. It indicates that a shift in the financial paradigm from profit maximization to sustainability facilitation is required to attain sustainable development at the level of private financial markets and sustainable entrepreneurship. According to the findings, venture capital funds are major participants in the private financial sector, supporting entrepreneurial startups and playing a key role in sustainable finance by promoting a culture of innovation, resource efficiency, and sustainability among entrepreneurial ventures. The paper cites critical review as the source of these arguments. Finally, through applying this comprehensive critical analysis, several gaps in the existing literature have been identified and discussed.

Moral Capital as an Element of Successful Transitions

Mrdjan Mladjan, PhD — 2023-12-18

Moral capital is of great importance for both the economic and non-economic well-being of a society. However, moral capital is likely to erode during transitions, especially economic ones. The aim of the work is to determine the mechanisms through which the economic and political transition contributes to the erosion of moral capital, but also which measures can affect the rebuilding of moral capital. Analyzing individual cases, especially in Serbia, we draw general conclusions about the impact of economic and political transition on the decline of moral capital in transition countries. In this paper, we argue that the processes put in motion during economic and political transitions that lead to loss of moral capital are likely to result in a new equilibrium state. This state is characterized by the migration of the bearers of moral capital both to the margins of society and out of society and is highly unlikely to be reversed without a focused intervention by the state and society. We further argue that economic theory could both offer a justification for such an intervention and inform on the most effective way to conduct it. This is because the loss of moral capital can be seen as an instance of market failure in transition, one in which parts of the transitional elite are imposing a negative externality on the rest of society. Internalizing this externality -by making the culprits responsible could make the transition more successful; it would benefit justice and prosperity not only in the current economic transition but also in the future restructuring of the national economy and society. We argue that measures to restore moral capital ought to combine monetary transfers, improvement of institutional framework, and immaterial incentives with the aim of initiating processes that could benefit the whole society. Legally required monetary transfers should repair direct damage caused by corrupt actions, but should not benefit any particular individual, while immaterial incentives should be initiated both by the state and the wider society. We found out that activities of transition elites contribute to negative externalities, such as deterioration of moral capital, which results in less social and economic well-being. Additionally, we propose measures which can contribute to the internalization of these externalities.