Investment Opportunities in Central and Eastern European Equity Markets

East-West mortality gap and environment

Aim. The work aimed to assess the impact of industrial production in the countries of Central and Eastern Europe (CEE) on the dynamics of trade in mechanical engineering products between these countries and the Russian Federation (RF) in the context of the latest geopolitical conditions.Objectives. The work seeks to analyze statistical data on the dynamics of trade relations between Russia and the countries of Central and Eastern Europe in the field of mechanical engineering at the current stage; to construct econometric models for regression analysis of the impact of industrial production on the dynamics of trade in mechanical engineering products; to determine the main trends in trade interaction between Russia and the countries of Central and Eastern Europe in the mechanical engineering sector in 2022–2024.Methods. The study employed research methods, namely statistical and econometric analysis, syntax, description, graphical modeling.Results. The econometric analysis provided reliable coefficients of regression models; however their values were small. This indicates that the impact of industrial production in the countries of Central and Eastern Europe on the key indicators of trade in engineering products between these countries and Russia was ambiguous and unclear.Conclusions. Current geopolitical realities have determined unfavorable medium-term trends in the trade interaction between Russia and the countries of Central and Eastern Europe in the engineering sector. The regression models coefficients obtained as a result of econometric analysis showed a small correlation between industrial production in the countries of Central and Eastern Europe and the export of engineering products to Russia. It implies that the decline in industrial production in the countries of Central and Eastern Europe had little effect on the volume of engineering products exported by them to Russia.

The presented study analyzes the specific features of economic cooperation of Russia and China with the countries of Central and Eastern Europe (CEE). In recent years, China has begun to actively cooperate with the former socialist republics of Central and Eastern Europe, offering them new institutional projects, such as the Belt and Road and 16+1 initiatives. At the same time, the CEE region has been distancing itself from Russia — it's once main economic partner — for a number of political reasons. Russia needs to maintain its standing in the region of its traditional external interests. This makes the analysis of the specific features of China and Russia's strategies for cooperation with the CEE countries relevant and practical. Aim . The study aims to analyze the specific features of economic cooperation of the People's Republic of China (PRC) and Russia with the countries of Central and Eastern Europe, assess the efficiency of their cooperation, and examine the existing problems. Tasks . The authors determine historical and strategic prerequisites for the development of Russia and China's cooperation with the countries of Central and Eastern Europe; examine the institutional framework of interaction between the countries under study; assess the dynamics of changes in the volume and structure of Russia and China's trade with the CEE countries; analyze the dynamics, priority sectors, and regional structure of direct Chinese investment in the countries of Central and Eastern Europe; assess the problems in Russia and China's cooperation with the CEE countries and prospects for further development of their interaction. Methods . This study uses such research methods as verbal and statistical analysis, observation, synthesis, generalization, description, graphical modeling, and data classification. Results . Central and Eastern Europe currently occupies one of the leading positions in China's foreign policy. After a long period of stagnating economic cooperation, relations between China and the CEE countries have entered a new stage within the framework of established institutional formats. The 16+1 strategy has been proposed, and the CEE countries have been included in China's Belt and Road Initiative. The pattern of economic interaction between Russia and the countries of Central and Eastern Europe in 2005-2018 is cyclical. Political factors have a significant impact on Russia's cooperation with the CEE. Conclusions . The lack of diverse tools for economic cooperation between Russia and Central and Eastern Europe, combined with Russia's low investment opportunities, prevents this cooperation from fulfilling its potential. Russia needs new institutional formats of interaction with the countries in this region, similar to those introduced by China.

While it cannot be questioned that we live in an era of unprecedented, often conflicting and turbulent changes, which, alongside their outcomes, are commonly referred to as ?globalisation?, some processes of economic globalisation still remain largely under-researched both in sectoral and geographical terms. Conducted from the perspective of economic geography, this thesis addresses two significant research lacunae in economic geography ? one sectoral (the hotel industry) and one geographical (Central and Eastern Europe). The paucity of research on services in general and tourism and the hotel sector in particular (the sectoral gap) is especially pronounced with regard to the CEE region (the geographical gap). Meanwhile, the globalisation of the service sector which, further to the collapse of the communist system in 1989, has also embraced CEE is seen to have a growing impact on the (re)integration of the CEE countries into the global economy. Concurrently, the importance of the CEE market in the globalisation of services is also constantly increasing. Thus, as the first systematic study of the international hotel sector in the CEE region, the thesis makes an important contribution to the understanding of the globalisation of the hotel industry (and the globalisation of the service sector) both in theoretical and empirical terms.The thesis focuses on the spatial expansion of international hotel groups into Central and Eastern Europe (CEE) after 1989 and its main objective is to describe and explain the interactions between different forms of corporate development of international hotel groups and the processes of regional growth in different institutional contexts in CEE. The thesis is mainly qualitative. It is based on two intersecting comparative case studies ? one organisational (all hotel groups from the world?s Top 50 that are present in CEE, i.e. 23 groups) and one territorial (three CEE countries ? Poland, Estonia and Bulgaria). Grounded in the global production networks (GPN) perspective (Henderson et al 2002), the thesis investigates what can be called two ?dimensions? of globalisation of the hotel industry (Coe and Ward 2007). Thus, apart from exploring the geographical expansion of international hotel groups into CEE (the horizontal dimension) the thesis also focuses upon the embeddedness of hotel groups in the variety of socio-political and institutional contexts currently emerging in CEE in place of state socialism (the vertical dimension). With regard to the horizontal dimension, the thesis argues that the spatial distribution of international hotels in CEE is shaped by two sets of factors ? hotel groups? strategies of expansion and the varying opportunities for the hotel sector development that different markets in CEE can offer. With regard to the vertical dimension, in turn, it is contended that the degree to which each economic, political or social characteristic of a given post-communist context influences the expansion of hotel groups hinges upon the business model preferred by the hotel group. By the same token, the degree to which the group can foster regional growth in a given territory hinges upon the level of embeddedness of the group in that territory which, in turn, is reflective of the business model employed by the hotel group with regard to a given hotel.- Coe, N., Ward, K. (2007) The Globalization of the Temporary Staffing Industry, ESRC End of Award Report Form, ESRC Ref. No. RES-000-23-616- Henderson, J., Dicken, P., Hess, M., Coe, N., Yeung, H. (2002) Global production networks and the analysis of economic development, Review of International Political Economy, 9, pp. 436-464

The problems and directions of ensuring effective international digital information security in Central and Eastern Europe (CEE) are considered, which are based on the analysis of the current state, key trends and challenges of information security in this region, using current reporting materials of international companies specializing in information security issues and development of appropriate complex tools for its provision. The subject of research in the article is the issue of ensuring international digital information security in the CEE. The goal is to study the current state, current problems and trends of international digital information security on the example of the region of Central and Eastern Europe in order to find ways to improve its effectiveness. Task: to process and analyze current reporting related to the current state of international digital information security in the CEE region; to explore the key trends, challenges, problems and industry specificities of digital information security in CEE; analyze approaches to assessing the current state of information security of international organizations in the CEE region and directions for its improvement. The general scientific method of system analysis is used - to determine the current state, key trends and challenges of digital information security, as well as to research promising directions for improving its effectiveness. The following results were obtained: based on the processing of reports concerning the current state of international digital information security in Central and Eastern Europe, key trends, challenges and problems of digital information security in the CEE region were investigated. The sectoral features of digital information security in the spheres of financial services, production and retail trade of this region have been determined. Effective approaches to assessing the current state of information security of international organizations in the CEE have been analyzed. Possible directions for its improvement and prospects for further scientific research on this topic are determined. Conclusions: the obtained results made it possible to understand the current landscape of cyber security in Central and Eastern Europe in general. Positive impulses have been identified in the focus of companies in the region on strengthening cyber security, which requires them to have a clear orientation in the information risk management system. The biggest current problems of CEE cyber security are highlighted. It has been established that the existing concern and actual behavior regarding information security in CEE contradict each other: most international companies have a significant dissonance between the fears of information threats and the actions of their management. It was determined that one of the biggest problems of CEE organizations in ensuring information security is the low level of involvement of their managers in this process, as well as the neglect of the awareness of the employees of the organizations about security and cyber protection. Establishing a secure remote work environment remains a top priority, along with the ongoing fight against malicious malware attacks. It was determined that the use of cloud technologies remains particularly relevant for international companies and CEE institutions. The need for cooperation between organizations and external suppliers of relevant solutions in ensuring the information security of the region was revealed. It has been established that there are some unique points regarding information security issues in the industry comparison; financial services, manufacturing and retail trade stand out among such CEE special industries. An effective list of control questions regarding an adequate assessment of the current state of the organization's information security to determine potential directions for its improvement is proposed. Plans for improving the effectiveness of digital information security of organizations in the CEE region are outlined.

Driving Factors of Efficiency of CEE Capital Markets (Part II)

* At the centre of the interface between the developmental needs of national industry and evolutionary processes in the MNEs' subsidiaries are knowledge-seeking and knowledge-generation processes. * Based on new survey evidence, we examine the strategies of MNE in Central and Eastern Europe (CEE). In particular, we investigate the knowledge characteristics of MNE subsidiaries in CEE by analysing the roles of subsidiaries, market orientation and sources of technology over time. Key Results * Initially market-seeking operations dominated in CEE, with little integration of CEE subsidiaries into global MNE networks. The relative scarcity of export-oriented efficiency-seeking operations in CEE can be explained by persistent high-levels of uncertainty in CEECs and resistance from MNEs' longer-established Western European manufacturing subsidiaries. * European MNEs pursue the most country-centred strategies while the Asian MNEs have the highest export-orientation. Also it is found that CEE subsidiaries in motor vehicle and mechanical engineering have the highest export-orientation to European Union markets. However we suggest that product differentiation using CEE creative capabilities (i.e. technology and engineering expertise) rather than cost-competitiveness, may ultimately secure a more sustainable and embedded entry into MNEs' wider European (or global) networks. * Host governments may consider targeted and coherent policies that reduce business uncertainties and, thus, may sway MNEs to locate higher value-added activities in their country. Introduction MNEs pursue a variety of strategic objectives when investing in Central and Eastern Europe (CEE), thus establishing different types of operations (Estrin/Hughes/Todd 1997, Mutinelli/Piscitello 1997), and interacting in different ways with the host economy. This paper examines which alternative strategies are being pursued by multinational enterprises (MNEs) in CEE and their implications for the processes of industrial transformation and economic development in CEE. The contributions to the host economy would greatly vary with the heterogeneity of MNEs' operations and evolutionary processes that emerge at subsidiary level. Our analysis thus aims to provide a fuller understanding of how MNEs contribute to sustainable economic development. At the centre of the interface between the developmental needs of the host-country economy and evolutionary processes in the MNEs' subsidiaries are knowledge-seeking and knowledge-generation processes. A major research concern is thus how MNEs contribute to knowledge accumulation by providing a creative component in the transformation of transition economies (Dunning 1994, Manea 2002, Meyer 2004). This study addresses these issues by analysing the characteristics of subsidiaries that may influence the nature and value of MNEs' contribution to economic development. Recent research has analysed MNE operations in CEE economies in terms of motivations for foreign investment and types of subsidiaries (Lankes/Venables 1996, Mutinelli/Piscitello 1997, Meyer 1998, Rojec 1994, Rojec/Svetlicic 1993, Estrin et al. 1997, Donges/Wieners 1994). We go beyond this literature by considering the contribution of foreign enterprises to transition economies as being caseor role-specific. Subsidiaries have different strategic roles in their MNE group and vary in many attributes and their business activities. In consequence, they differ in their interactions with the local environment and their contribution to economic development (Meyer 2004). The needs of transition economies have evolved in two distinct phases: 1) the fundamental restructuring of the industrial sector and 2) the post-transition phase with more steady changes. The second phase involves different challenges as firms and countries have to sustain international competitiveness by developing and exploiting dynamic sources of comparative advantage. …

There is a steady decline in cancer mortality in Western Europe (WE), but this trend is not so obvious in Central and Eastern Europe (CEE). One of the largest discrepancies between WE and CEE is the level of investment in cancer care. The objective of our analysis was to examine the correlation between mortality-to-incidence (M/I) ratio and expenditures on oncology drugs in CEE and WE. This cross-sectional analysis was done on publicly available data. Data on expenditures for oncology drugs were obtained from QuintilesIMS, and data on M/I ratio from Globocan. The main outcome was mortality-to-incidence ratio, and the primary analysis was performed by Spearman's rank correlation. There is a large discrepancy in expenditure on oncology drugs per cancer case between WE and CEE, and within CEE. Average expenditure on oncology drugs per capita as well as per new cancer case was 2.5 times higher in WE than in CEE. Availability of oncology drugs was highest in Germany (100%), relatively similar in WE (average of 91%), but in CEE it ranged from 37% to 86%, with an average of 70%. Annual expenditures on all oncology drugs per new cancer case was significantly negatively correlated with the M/I ratio (Spearman's ρ = -0.90, p < .001). There is a financial threshold for oncology drugs per cancer case needed to increase survival. Based on significantly lower expenditures for oncology drugs in CEE in comparison with WE, more investment for drugs as well as better, more organized, value- oriented consumption is needed. Cancer is not treated equally successfully in Western Europe (WE) and in Central and Eastern Europe (CEE). This study showed that success in treatment of cancer is associated with the amount of money invested in oncology drugs. CEE countries spend on average 2.5 times less than WE countries for oncology drugs per new cancer case. These findings should be used by health care providers and oncologists struggling for more resources and better, more organized, evidence-based allocation of these resources as well as better oncology outcomes.

PurposeThe purpose of this paper is to examine the issues faced by institutional investors looking to invest in the Central and Eastern European (CEE) region. In particular, the paper seeks to ascertain the views of practitioners on the reasons for undertaking CEE investment, the structures of their investment processes for the CEE region, the barriers to CEE investment, and the future of the CEE region.Design/methodology/approachA series of semi‐structured interviews was conducted with institutional investors who had substantial knowledge and experience of investing in the CEE region.FindingsThe findings indicated that funds followed a bottom‐up approach whereby they researched company fundamentals and then applied a macroeconomic overview in their decision. The risks considered were not those frequently discussed in the current literature. For example, while currency risk and political risk were not seen as problematic, interviewees were concerned with liquidity problems and corporate governance issues. Finally, investors thought that the economic growth of the CEE region, together with its convergence with the EU, would create a more attractive investment environment than that available in other emerging market regions.Originality/valueThe paper addresses the more qualitative aspects of CEE investment decisions, such as perceptions about the risks of acquiring shares in CEE firms, by analysing practitioner perspectives on equity investment in the region. This qualitative approach facilitates an investigation of issues which cannot be captured in quantitative analyses.

Crises existed not only in the last decades. In each country fluctuations such as upswings or downturns can be observed in the economy. The serious economic crisis can take place when the extending long-lasting decline continues. In the situation when the crisis ap­pears in the economy it is significant to have a stable financial system. The last financial crisis showed weakness of the contemporary model of social-economic development functioning in the global world, also in Central and Eastern Europe (CEE). The paper presents the situa­tion of Central and Eastern Europe during the financial crisis. The goal is to analyze the most important kinds of macroeconomic indicators of CEE countries, present development differ­entiation in the regions at NUTS2 level and systematize causes of the crisis and anti-crisis activities in Central and Eastern Europe. In this paper theoretical aspects of the financial crisis and financial crises’ types are shown as a basis for further analysis. The theoretical study, the observation method and the statistical data analysis were used to present the global financial crisis influence on the CEE economy. Finally, the method of coefficient of variation was im­plemented to confirm regional development differentiation in Central and Eastern Europe re­gions and to answer the question if the CEE regions can still narrow the development gap between them and other regions of the European Union.

516 – Why (not) go east? comparison of FDA inspections from cee, we and us investigational site inspections

Stock market comovements between developed (represented in the article by markets of Austria, France, Germany, and the UK) and developing stock markets (represented here by three Central and Eastern European (CEE) markets of Slovenia, the Czech Republic, and Hungary) are of great importance for the financial decisions of international investors. From the point of view of portfolio diversification, short-term investors are more interested in the comovements of stock returns at higher frequencies (short-term movements), while long-term investors focus on lower frequencies comovements. As such, one has to resort to a time-frequency domain analysis to obtain insight about comovements at the particular time-frequency (scale) level. The empirical literature on the CEE and developed stock markets interdependence predominantly apply simple (Pearsons) correlation analysis, Granger causality tests, cointegration analysis, and GARCH modeling. None of the existent empirical studies examine time-scale comovements between CEE and developed stock market returns. By applying a maximal overlap discrete wavelet transform correlation estimator and a running correlation technique, we investigated the dynamics of stock market return comovements between individual Central and Eastern European countries and developed European stock markets in the period from 1997-2010. By analyzing the time-varying dynamics of stock market comovements on a scale-by-scale basis, we also examined how major events (financial crises in the investigated time period and entrance to the European Union) affected the comovement of CEE stock markets with developed European stock markets. The results of the unconditional correlation analysis show that the developed European stock markets of France, the UK, Germany and Austria were more interdependent in the observed period than the CEEs stock markets. The later group of countries exhibited a lower degree of comovement between themselves as well as with the developed European stock markets during all the observed time period. The Slovenian stock market was the least correlated with other stock markets. By using the rolling wavelet correlation technique, we wanted to answer the question as to how the correlation between CEE and developed stock markets changed over the observed period. In particular, we wanted to examine whether major economic (financial) and political events in the world and European economies (the Russian financial crisis, the dot-com financial crisis, the attack on the WTC, the CEE countries joining the European union, and the recent global financial crisis) have influenced the dynamics of CEE stock market comovements with developed European stock markets. The results show that stock market return comovements between CEE and developed European stock markets varied over time scales and time. At all scales and during the entire observed time period the Hungarian and Czech stock markets were more interconnected to developed European stock markets than the Slovenian stock market was. The highest comovement between the investigated CEE and developed European stock market returns was normally observed at the highest scales (scale 5, corresponding to stock market return dynamics over 32-64 days, and scale 6, corresponding to stock market return dynamics over 32-64 and 64-128 days). At all scales the Hungarian and Czech stock markets were more connected to developed European stock markets than the Slovenian stock market. We found that European integration lead to increased comovement between CEE and developed stock markets, while the financial crises in the observed period led only to short-term increases in stock market return comovements.DOI: http://dx.doi.org/10.5755/j01.ee.23.1.1221

The European Society for Paediatric Gasteroenterology, Hepatology and Nutrition (ESPGHAN) issued two sets of recommendations for the treatment of infants with acute gastroenteritis (1992, 1997). The purpose of this multicentre study performed in 29 European countries was to determine how closely current treatment compares with the ESPGHAN recommendations. The outline of the study was based on a questionnaire that addressed the management of a 6-month-old infant with acute gastroenteritis complicated by mild to moderate dehydration. National coordinators circulated the questionnaire to randomly selected primary care physicians and to hospital-based paediatricians. A total of 2997 questionnaires were returned, of which 1768 were from Western Europe (WE) and 1229 from Central and Eastern Europe (CEE). Eighty-four percent of responding physicians said they would follow the ESPGHAN recommendation to use oral rehydration solution (ORS) for rehydration, with 66% using an ORS containing 60 mmol/l sodium ORS. Only 16% (WE 15%, CEE 19%) would follow the guidelines and use rapid oral rehydration over 3 to 4 hours. Forty-five percent would rehydrate infants in a 3- to 6-hour period (WE 35%, CEE 60%), and 17% (WE 23%, CEE 9%) would extend the rehydration period to 12 to 24 hours. ESPGHAN recommendation of rapid reintroduction of normal feeding after 3 to 4 hours of oral rehydration would be followed by only 21% of responding physicians, and only 43% (WE 46%, CEE 38%) would start feeding with full-strength formula. However, the guideline about continuation of breast-feeding is widely followed (total 77%; WE 78%, CEE 75%). Thirty-six percent (WE 45%, CEE 23%) use a lactose-containing formula after successful oral rehydration. Contrary to the ESPGHAN guideline 35% (WE 30%, CEE 42%) would use a lactose-free formula and 19% (WE 12%, CEE 28%) a lactose and cow's milk protein-free formula. Only 37% (WE 30%, CEE 46%) of responding physicians would follow the recommendation to use ORS to replace ongoing losses from watery diarrhoea. The results of the survey suggest that with the exception of recommending ORS for rehydration and continuation of breast-feeding during diarrhoea, a minority of responding European physicians follow the ESPGHAN guidelines for optimal management of children with acute gastroenteritis.

Bank Privatisation in Central and Eastern Europe Through the View of the Western European Stock Markets

Following their EU accession, the new member countries from Central and Eastern Europe (CEE) must achieve sustainable price stability as one of the pre-conditions for joining the Economic and Monetary Union (EMU) and adopting the euro. This article examines the distribution dynamics of inflation rates in ten new EU members from CEE relative to the EMU accession benchmark inflation over the period 1990–2009. In contrast to previous studies, we use nonparametric methods to test for convergence in inflation rates between CEE and the EMU benchmark as well as within the CEE sample. Over the entire sample period, we detect a general shift in the CEE inflation distribution toward the EMU benchmark along with intradistributional convergence. However, this process is not uniform. In the early years, it was equally likely for CEE inflation rates to move toward or away from the benchmark. The resulting multimodal distribution gave way to a unimodal distribution in the years leading up to the EU accession, accompanied by a marked shift toward the EMU benchmark. In more recent years, emergence of a bimodal distribution signaled the stratification of relative inflation in CEE into two convergence clubs, which has intensified since the start of the global economic crisis.