Bulgarian Enterprises Research Articles

Organizational Culture and Continuing Education and Training

In today’s economies, lifelong learning has emerged as a crucial driver of economic and social development and growth. However, Bulgaria lags behind other European nations in terms of participation in lifelong learning initiatives. This article delves into the factors that influence continuing education. A field study, involving over one hundred Bulgarian enterprises, revealed that organizational culture plays a pivotal role in shaping corporate investment decisions. Companies that prioritize human capital accumulation through strategic human resource development strategies and practices, and view learning as an essential asset tend to exhibit higher levels of both participation and intensity in lifelong learning programs. These findings align with institutional theory according to which organizational culture significantly impacts investments in lifelong learning. Thus, the paper has significant practical implications for policies related to continuing education and training.

Some Aspects in Trade Recеivables Assessment

Abstract One of the most important aspects of operational financial management is related to the management of the working capital of enterprises. A significant portion of this capital is invested in trade receivables, which are obtained from deferred sales. On the one hand, nowadays trade credit has a stimulating effect on customer purchases, but on the other hand, incorrect assessment of the creditworthiness of customers and the risk of non-payment (default risk) can negatively affect the financial condition of the enterprise and lead to chain bankruptcies. In the specialized literature on company finance management, the problems of working capital management and risk management of trade receivables are considered in detail. However, the question of the complex assessment of the creditworthiness of customers and the decision on the optimal credit limit remains to some extent insufficiently developed. Summarizing the following key components considered in the literature – 1) overall economic situation, ownership, management and strategy of the company; 2) its revenue and profitability; 3) liquidity and financial leverage; 4) cash flow and turnover, this article focuses on developing and demonstrating the application of an approach to assess the financial condition of customers, to make an adequate decision on credit limit and to avoid the risk of non-payment of commercial loans. The article also presents the results of a descriptive statistical analysis regarding some key financial indicators of Bulgarian enterprises, the credit limits requested by them and the results of applying the presented model.

STATISTICAL DEPENDENCIES BETWEEN NON-FINANCIAL DISCLOSURES AND EX-POST FINANCIAL PERFORMANCE IN THE BULGARIAN ROAD FREIGHT TRANSPORTATION INDUSTRY

In the Republic of Bulgaria, as a member of the EU, possessing a strategic geographical position through which five of the 10 Pan-European transport corridors pass, road freight transport occupies a leading place. It has a significant role in contributing to the country’s GDP, but at the same time, it has a strong negative impact on society and the environment, given its serious climatic footprint. In the specialized literature, data on research conducted looking for the presence or rejection of dependence between non-financial disclosures and ex-post financial performance in the road freight transportation industry are highly limited or almost absent. The lack of a legal obligation for non-financial disclosure by enterprises in Bulgaria creates the necessity to research and confirm the relationship between non-financial disclosure and the ex-post financial performance of the companies in the short-term or medium-term future. In the course of the analysis carried out in this article, the two largest Bulgarian enterprises from the road freight transportation industry by default and a major environmental polluter are examined. By applying key environmental and social disclosure indicators in accordance with the Global Reporting Initiative standards calculated on the basis of real empirical data, a statistical analysis is performed. A multiple regression model is built based on a value analytical approach, which is focused on the economic value added of the enterprise, and the economic value added indicator is used as an efficiency measurement of the enterprises’ activity. The results of the analysis establish a certain dependence between non-financial disclosure and financial performance.

SOME THOUGHTS ON THE BUSINESS EFFICIENCY AND THE METHODS FOR ITS ANALYSIS

The issue of enterprises’ business is relevant at all phases and stages of their development. The survival of enterprises and the continuation of their business in the context of the complex and contradictory economic reality require them to be financially stable, properly oriented and positioned on the competitive market that is characterized with certain level of entropy. The achievement and maintaining of market and financial stability require the enterprises to implement measures for the continuous increase of their business efficiency. The importance and relevance of this issue are even higher today due to the effect of a system of internal and external factors, and as a result of the existing crises some of which are still experienced. For example, the enterprises’ business is subject to the influence of the Covid-19 pandemic consequences and the health crisis, supply chain disturbance, closing and restriction of many business and activities in the country, etc., it has caused. The business of the Bulgarian enterprises is also influenced by the wars led in the vicinity of the territory of Bulgaria, the occurred gas crisis, the unstable political situation, the high inflation rate, the increase of energy and other resource prices and a number of other factors.The author’s interest to the issues of enterprises’ business efficiency and the methods for its analysis is a long-term interest. Observations show that the specialized literature in the country does not offer theoretically substantiated general methodology for efficiency analysis, which is feasible and useful for the business practice. Only individual methodologies for analysis of different aspects of the efficiency are offered, such as methodology for analysis of the efficient use of workforce (analysis of the labour efficiency indicator). Thus, the objectively existing dialectic relations between the resultative indicators that characterise the various aspects of efficiency and the factor indicators that affect the improvement or worsening of the business in general and its specific aspects, cannot be covered. This publication reviews the methodology for analysis of enterprises’ business efficiency. The concept of efficiency is consistently highlighted, the sources of the information necessary for its analysis are described, and the system of indicators for business efficiency analysis is justified. The author’s objective is to suggest an improved general methodology for analysis of business efficiency, which integrates the individual private methods for analysis of its different aspects in the course of the enterprises’ business.

ОЦЕНКА НА ИНОВАЦИИТЕ В ПРЕДПРИЯТИЯТА НА ПРИМЕРА НА БЪЛГАРИЯ

The article is devoted to the problem of the evaluation of innovations in enterprises in Bulgaria and its comparability with that of other European countries. In this connection, the conceptual-categorical apparatus, the used databases and the methodology of their collection and interpretation are discussed. Quantitative analyzes and assessments were carried out in compliance with the requirements of the methodological guidelines of the OECD and Eurostat of the "Frascati" family. Difficulties have been identified in more precisely comparing the evaluations of innovations in Bulgarian enterprises with those in other countries of the European Union, and the reasons for these difficulties have been established. Innovations in Bulgarian enterprises are characterized by different signs. For this purpose, a structural analysis and an analysis of the context were carried out. The obtained results give reason to determine important gaps in the formation of the national innovation policy. Among them is the failure to take into account globalization in the formation of a national environment for the market functioning of the economy, which is expressed in decreasing external and internal demand for new products produced in the country, imbalances in the financing of R&D, etc., which lead to a decrease in innovations in the Bulgarian enterprises. Finally, conclusions and recommendations are defined from the point of view of the formation of an innovation policy adequate to the new realities.

Determinants of Firm Competitiveness: Econometric Evidence from the Bulgarian Industry

The factor effects of profitability at company and sectoral levels have earned a special status in research literature as a general measure of competitiveness. The Covid-19 crisis resulted in restrictions in consumption, rising levels of company debt, and increased concerns about company liquidity, which has led to revenue risks for industrial production firms. This study attempts to examine several factor effects that have impacted the financial performance, respectively the competitiveness of Bulgarian enterprises.

ACCOUNTING PRESENTATION OF THE EFFECTS OF THE FLUCTUATION OF EXCHANGE RATES IN INTERNATIONAL COMMERCIAL BUSINESS

The problems related to the accounting presentation of the effects of the fluctuation of exchange rates are of extreme importance for enterprises specialized in conducting international commercial business. These effects have a significant impact on the financial results of the realized international activities and on key indicators for business analysis, among which profitability, efficiency based on costs, efficiency based on revenues, etc. This determines the need to provide sufficiently detailed accounting information to analyze the effects of changes in exchange rates when conducting international commercial transactions and the influence of the exchange rate differences on the financial results of these transactions.In the study of the issues in the article the normative and systemic approaches are applied. The legal requirements currently in force in the Republic of Bulgaria regarding the accounting of cash, receivables and liabilities in foreign currency, the recognition and reflection of exchange rate differences in the implementation of international commercial transactions are discussed.The possibilities for making improvements in the processes of creating and using accounting information for the effects of the fluctuation of exchange rates in the international commercial business of Bulgarian enterprises are investigated. Guidelines for improving the organization of the system for synthetic and analytical accounting of the costs and revenues of foreign exchange operations and their influence on the financial results of the international commercial transactions realized by the enterprises are proposed. An approach to applying alternative combinations of exchange rates is presented, which can be used for management purposes in comparing actual international commercial transactions with those previously planned.The proposed approaches for providing detailed accounting information for the effects of the fluctuation of exchange rates can be applied in the practice of enterprises developing international commercial business. The practical applicability of these approaches is shown on the basis of factual numerical data for a real international commercial transaction.The conducted research gives reason to summarize that an effectively organized system for synthetic and analytical accounting of the effects of the fluctuation of exchange rates is of key importance as an information source in the decision-making processes in the management of the international commercial business of Bulgarian enterprises in the conditions of the modern global economic environment.

Innovations as a Means of Transition to a Circular Economy and Innovatively Active Enterprises in Bulgaria

Climate changes shortened life cycles of products and services, the consumption of a large part of non-renewable natural resources, the continuous increase in the population of the planet all lead to the need to find new ways and means to satisfy people’s needs. The matter of utilizing more efficient use of resources, development of such products that allow reuse through repair and recycling is crucial nowadays. A reorientation is needed from the well-known traditional linear system of using raw materials and creating large amounts of waste to a new system that allows circularity. This is the basis of the circular economy, the implementation of which implies the creation of new products, that allow their subsequent recycling and reuse of the resources invested in them. The aim of this article is to analyze the features of the circular economy, its interrelationship with innovation and the degree of innovation orientation of the Bulgarian enterprises.

Warehouse Order Picking Differences in Bulgarian Enterprises

Warehousing is an important logistics activity related to the management of material flows in the supply chain. To ensure this movement in the warehouses, it is necessary to perform a number of integrated warehouse processes. The order picking process is particularly the most significant, reflecting the whole logistics system. The purpose of the study is to analyze warehousing practices in this field and to define main conclusions. The work presents the results of a survey conducted among Bulgarian trade and manufacturing enterprises, and some of the order picking practices are studied. Based on the data, a number of conclusions are drawn about the practices, especially regarding the application of information systems and technologies. The main focus of the work is the differences between the trade and manufacturing enterprises, as well as their sizes. The main conclusions are related to the correct understanding of the importance of order picking processes and, at the same time, to the insufficient utilization of their potential.

Factors and obstacles determining the investments in continuing education and training of managers: the case of Bulgarian enterprises

PurposeThis study aims to examine internal and external factors as well as main obstacles to managers’/owners’ participation in education and training.Design/methodology/approachThe sample comprises managers of 151 Bulgarian predominantly micro- and small-size enterprises. The data was gathered in 2020 through direct standardized interviews at the respondent’s workplace. This study uses quantitative estimation methods including binominal and multinominal logistic regression as well as nonparametric testing.FindingsRegarding the findings in the relevant studies, the results confirm that the larger firm's size, the existence of human resource management strategy and practices as well as learning-oriented culture stimulate employer-financed management training. The lack of trainers with relevant need-specific expertise appears to be a major barrier. Additionally, the outputs highlight the role of other important determinants not being extensively discussed so far such as the level of development of the region in which the company operates, involvement in R&D and innovation activity as well as the issue of trust in trainer.Practical implicationsThis study provides insights into (under)investments in continuing vocational training which might lead to practical implications for businesses, education and government policy in lifelong learning. Moreover, this study focuses on a country with one of the lowest participation rates in adult education across Europe which allows for a better understanding of similar examples.Originality/valueTo the best of the author’s knowledge, this is the first paper examining determinants of management training in Bulgaria and one of the few in the European context. It gives support to the existing literature but adds new findings as well.

The Unified Patent System – Expectation and Prospects for a United Europe

The present study brings to the reader’s attention an extremely important fact for the European patent system – the beginning of the work of the Unified Patent Court. On January 19, 2022, the Protocol for the Preliminary Implementation of the Agreement on the Unified Patent Court entered into force, and it is expected to start functioning by the end of 2022 and the beginning of the following year. The article examines in historical order the creation and development of the European patent system, as well as the adopted legal acts outlining the new patent system of the European Union. The structure, competence and way of functioning of the Unified Patent Court have been clarified. Emphasis is placed on the advantages resulting from the introduction of the unified patent system, and above all on the role of the Unified Patent Court in unifying judicial practice in various patent disputes. The aim is to establish greater legal certainty in protecting the rights of patent holders. The opportunities and some of the problems that arise for Bulgarian enterprises since the introduction of the new patent system are indicated.

Research of the Influence of the Innovations of the Business Models on the Economic Results of the Enterprises

An expanding amount of research and a growing number of scientific publications are devoted to the problems of business model innovations, given their increased theoretical and practical significance. However, this concept is not well developed. There are very few publications in Bulgaria dedicated to the theory of business models and in particular to their innovation. A study of the processes of innovation of business models in Bulgarian enterprises, including their activity and the actual results achieved by their implementation, has not yet been made. In view of this, the purpose of this article is to briefly present the results of a study of the effects of business model innovation, conducted in a sample of Bulgarian enterprises, as well as to clarify their impact on the economic results of enterprises. The results of the empirical study demonstrate the impact of the innovation capacity of enterprises on the level of economic results achieved through these innovations. The main hypotheses of the study are: 1. Firms that innovate their business models achieve higher economic results than the average level of results for the respective industries. 2. The positive impact of business model innovations on the economic results of enterprises is stronger than the impact of individual innovations of another kind. 3. The economic results of the conducted innovations of the business models are higher in the industries with high innovation capacity than in the industries with low capacity. 4. The economic results of the conducted innovations of the business models are higher in the big enterprises than in the small and medium enterprises with lower innovation capacity. The authors hope that this article would provoke a discussion on these and other similar issues related to this topic. The results would assist future research as well as business leaders in making management decisions in developing strategies. The paper is organized as follows: Section 1 is a introduction and a overview of relevant literature, Section 2 explains the methodology, Section 3 presents the results of the empirical study and a discussion of the results and Section 4 contains the conclusion.

Liquidity of Non-financial Corporations: Evidence from Bulgaria

The financial and economic crisis years ago put the development of enterprises in Bulgaria and around the world in an uncontrollable environment that is difficult to predict, and led to significant problems with their financial condition. As a result of a rare CoVid-19 pandemic in 2020, the economic situation has become more complicated and portends déjà vu in terms of negative effects on the economy and businesses. The numerous closures of businesses and entire sectors will undoubtedly lead to serious financial consequences related to liquidity problems and excessive indebtedness of Bulgarian enterprises. The main problem that provokes this study is the lack of summarized information on the state of corporate liquidity and the solvency levels of non-financial corporations in Bulgaria. The main purpose of the article is to examine the liquidity status of non-financial corporations in Bulgaria. This analysis is needed to prevent liquidity crises and to bring out early indicators to warn and counter the risks posed by deteriorating solvency. It will be essential for the liquidity assessment to derive average industry values of the indicators to guide the companies from the sectors regarding the recommended liquidity levels to which they should strive.

IMPROVING COMMUNICATION THROUGH FINANCIAL STATEMENTS: SOME EFFECTS OF АPPLYING THE INTERNATIONAL ACCOUNTING STANDARDS BOARD INITIATIVE

The purpose of this paper is to analyze the effects of the IASB Initiative on Improving Communication through Financial Statements and the resulting changes to IAS 1, IAS 7 and IAS 27. The most debatable issues related to presentation, disclosure and over-disclosure are analyzed, as well as the search for reasonable solutions to optimize the volume and usefulness of the information disclosed in financial statements. Two samples of Bulgarian enterprises from different industries, listed on the large taxpayers and insurers list, were studied: the first covers 12 enterprises applying IAS/IFRS and the second - 6 companies which switched back to the National Accounting Standards (NAS) in the 2015-2018 period. Our results suggest that the problem of the complexity of IFRS, which is combined with increasing disclosure requirements, is one of the leading reasons for some Bulgarian companies to move back to the National Accounting Standards.

Holistic assessment of competitiveness of Bulgarian farming enterprises

The problem of determining the level of competitiveness of various economic organizations is among the most topical academic and practical issues. However, there is no widely accepted and comprehensive framework for understanding and assessing the competitiveness of farming enterprises in different market, economic, institutional and natural environments. This presentation suggests and applies a holistic approach for assessing the competitiveness of Bulgarian farms as a whole and different specializations. This novel framework includes appropriate criteria, indicators and reference values for the four pillars of farm competitiveness – Economics efficiency, Financial endowment, Adaptability and Sustainability. The multi-criteria assessment of farm competitiveness in Bulgaria has found that the level of competitiveness of farms is at a good level, with low adaptive potential and economic efficiency, to the greatest extent contributing to lower competitiveness. More than a third of all farms in the country has a low level of competitiveness. The most competitive are the farms in the beekeeping, followed by field crops, mixed livestock and crop productions, and the lowest in grazing livestock. The proposed approach should be improved and applied more widely and periodically, increasing accuracy and representativeness.

Earnings management under a global magnifier

Research background:Legal earnings manipulation is current hot topic, which is evidenced by a significant number of academic articles from the countries of developed markets. But this issue has been still the research gap for the emerging countries. Slovakia and Bulgaria are emerging counties with the similar economic and political history. The existence of the purposeful earnings management is confirmed in both countries. Therefore, the enterprises from these countries are selected to the common comparison.Purpose of the article:The main purpose and the set target of delivered examination is to disclose significant conformity or discrepancy in the dimension of the legal managers’ earnings modification in the Slovakian and Bulgarian enterprises.Methods:The provided financial modelling used 1,089 Slovak enterprises and 1,421 Bulgarian enterprises. Two parametric tests were computed for this study. Fisher’s F-test to detect the ratio between the variances of the populations, and t-test for two independent samples to test provided hypothesis of the article.Findings & Value added:The paper aimed at the earnings before interest, taxes (EBIT) in two emerging countries under a global magnifier. It was detected that the dimension of financial managers’ earnings manipulations in the Slovakian and Bulgarian enterprises is not significantly different. The similar nature of the approach of the management to the earnings manipulation was identified.

Innovation and innovation activities of Bulgarian small and medium-sized enterprises (SMEs)

Small and medium-sized enterprises are the key driving forces of economic growth and play a decisive role in determining the development of the country’s economic structure. They tend to respond swiftly and adapt quickly to the changes that occur in the economic environment by introducing such innovations and innovation activities that address and fulfill their customers’ requirements. The primary purpose of the proposed paper, therefore, will be to explore the innovation and innovation activities of SMEs in Bulgaria, and therefrom, to draw the appropriate conclusions and make the relevant scientific generalizations. To that effect, a survey was conducted among 68 SMEs from the food and beverage industry on the territory of Bulgaria, in view of which further guidelines were formulated as to the improved efficiency of their innovation activities.

Funding of Technology-Driven Entrepreneurship and Innovation in Bulgaria

Technological entrepreneurship and innovation are becoming one of the main driving forces for the economic and sustainable development of national economies. Thoroughly analyzed, therefore, in the present paper are the sources of funding for the Bulgarian enterprises driven by technology-based entrepreneurship and innovation. Their role is equally considered on the basis of indicators such as: performed innovations and obtained sources of funding for the technological enterprises, the country’s share of high technology exports, and others. Special focus is given on the barriers created to the enterprises associated with technological entrepreneurship and innovation in Bulgaria.

Web Practices for Sustainable Development of Logistics Systems in Bulgarian Enterprises

The internet era has revealed unlimited potential for innovation and sustainable development in the web space. In the field of logistics this means that the internet gives new opportunities for collaboration and building new logistics systems with suppliers and customers. Modern, webbased software solutions are very flexible to market needs and offer a variety of options for applying many supply chain management practices. Among these are website solutions that offer plenty of alternatives not only to represent company products and services but also to automate some of the business processes. Now the business organisations have unlimited alternatives to develop their new models covering their information, logistics and marketing needs. The article presents some of the web-based practices related to the general problems of logistics management in Bulgarian enterprises. The results are based on data collected by a survey and cover the main problems of communication with customers and suppliers in the supply chain, logistics service providers and integration of the internal supply chain processes by the website software solutions used in the organisation. The main findings of the article are based on the relatively low level of usage of the full potential of modern information systems.

OPPORTUNITIES FOR EUROPEAN AND NATIONAL FUNDING FOR BULGARIAN CULTURAL, CREATIVE AND RECREATIVE BUSINESS

The article is devoted to the exploring and analysis of the opportunities for European and National funding for Bulgarian cultural, creative and recreative business. In this article, the author explores different possibilities (both national and European) for project funding of culture and creative Bulgarian enterprises. The basic logic is that once an economic sector (or sectors) has been declared as strategic and priority, then special financial mechanism should be envisaged for its development. Culture and Creative Business (CCB) has become a priority for European Union, respectively – for European economy policy as one of the real opportunities which could act as an engine for the rest of the economic sectors. This understanding for Culture and Creative Business is entirely appropriate for small national economy such Bulgaria is. Legislative and institutional framework for Culture and Creative Industries (CCI) has been studied. Innovation Strategy for smart specialization of the Republic of Bulgaria (2014-202) as well as the National Development Programme: Bulgaria 2020 are highlighted. The article generalizes the opportunities for European funding of projects from CCI by two main points of view - business and culture. The author emphasizes that in general, Bulgarian small and medium-sized enterprises are eligible to present project proposals and suggests the special activities to promote entrepreneurship, which could be used to developed new idea. The study assumes that for Bulgarian organizations working in the CCI, the European programmes managed directly from Brussels are less interested than these programmes which are managed from Sofia. On the other hand, Bulgaria takes 7th place so far in Junker’s plan implementation which is could be consider as a step in right direction to explore all opportunities for funding.