Central Eastern European Countries Research Articles

Impact of national culture on insurers’ risk-taking: evidence from selected CEE countries

Impact of national culture on insurers’ risk-taking: evidence from selected CEE countries

Impact of national culture on insurers' risk-taking: evidence from selected CEE countries

Impact of national culture on insurers' risk-taking: evidence from selected CEE countries

Supply Chain Interconnectedness in Times of Crises: A Gravity Model with DiD Analysis of COVID-19 Effects on Central and Eastern European Trade

This paper explores the impact of COVID-19-induced disruptions on supply chains, specifically focusing on the interconnectedness of supply chains and the transmission effects they cause. The gravity model framework, together with difference-in-differences analysis, is employed to analyze monthly trade patterns among Central and Eastern European (CEE) countries, Western European countries, and other trading partner countries. The model presented accounts for the country’s roles in global value chains (GVCs) by incorporating data related to exports, imports of intermediate and capital goods, and imports of final consumption goods. CEE countries have demonstrated a certain resilience during the COVID-19 pandemic. Yet, they were not immune to adverse consequences due to disrupted supply chains, primarily in the imports of intermediate and capital goods. We find that the countries that suffered from the COVID-19 pandemic the least demonstrated remarkable resilience against disrupted GVCs. The findings of our study enrich the literature on the effects of the COVID-19 pandemic, specifically for the CEE region, by providing a framework for understanding the pandemic’s impact on international trade. The results show that supply shock might be greater than demand shocks on production and trade dynamics. Furthermore, our results suggest that policymakers seek adaptability to changing supply and demand patterns, while enterprises should consider broader diversification both within the region and locally.

Export Complexity and Economic Growth: Empirical Analysis for Selected CEE Countries

Export Complexity and Economic Growth: Empirical Analysis for Selected CEE Countries

Effects of Psycho-Cultural Factors on Adopting Changes in Defense

There is a constant need for the defense/military institutions to undergo continuous development in order to adjust to modern standards and requirements, often necessitating systemic changes. As part of this development, since the end of the Cold War, defense organizations in many Central and Eastern European (CEE) countries have endeavored to adopt advanced strategic management practices from their Western counterparts in terms of integration process into NATO and the EU.
 However, these efforts have not always been successful. The attempt of the Central and Eastern European (CEE) countries to adopt changes within their defense organizations, particularly in strategic defense planning area through institutionalizing Planning, Programming and Budgeting System (PPBS) serves as such a case. Scholars often highlight factors altering this failure, focusing on the issues like centralized decision making, lack of understanding, resistance to change etc.
 This paper analyzes other influencing factors, namely the importance of considering psycho-cultural factors while introducing changes within defense organizations and explains the main reasons for failure in successfully adopting PPBS. The study was conducted using qualitative methodology, primarily case study, to comprehensively analyze the topic.
 Based on the findings, the authors conclude that in CEE countries psycho-cultural apsects significantly influence the implementation of changes in the defense sector in parallel with the factors mentioned above. In the case of CEE countries, these psycho-cultural factors are reinforced by the post-socialist legacy, which is characterized by a lack of creativity, collaboration, coordination, and consensus building, leading to reluctance and resistance to changes when it comes to adopting modern practices.
 Overall, the findings validate the hypothesis proposed in the paper - disregarding psycho-cultural factors in the process of change implementation contribute to the failure.
 The study also demonstrates the effectiveness of supporting the change implementation process through the utilization of Organizational Change Management (OCM) which is actively employed by Western organizations in the defense sector.

The Impact of Informal Institutions on the Tax System Policy Responses due to Covid-19: Evidence from CEECs

Informal institutions matter in the context of the tax systems of Central and Eastern European countries (CEECs), especially during the Covid-19 crisis. The purpose of this paper was to investigate the impact of the informal institutions on the stability of tax system policy responses due to Covid-19. The research is based on informal institutions of CEECs such as different values and norms, customs, or traditions. The research methodology focuses on secondary statistical data from 18,785 surveys from the European Social Survey Round 9 (2018) edition 2.0 and from 211 tax system policy responses due to Covid-19 of the OECD for 11 CEECs. The findings show that informal institutions such as trust in others or trust in legal system have a positive impact on the stability of the tax system of CEECs policy responses due to Covid-19.

Responsive Judicial Review “Light” in Central and Eastern Europe – A New Sheriff in Town?

Abstract This article engages with Ros Dixon’s theory of “Responsive Judicial Review” (oup, 2023). It argues that Central and Eastern European jurisdictions with specialized constitutional courts face two major obstacles to engage fully in responsive judicial review – legal formalism and the very fact that constitutional review is centralized into one institution, which discourages pluralistic debates about the constitution and limits the room for dialogue between the constitutional court and other actors. Even the Czech Constitutional Court that meets all three Dixon’s preconditions for courts’ ability to engage in responsive judicial review (judicial independence, political support, and remedial power) and is probably the most Elyan constitutional court in cee faces several obstacles to responsive judging. As a result, its responsiveness has been selective. Nevertheless, although full-fledged responsive judicial review is difficult to achieve in cee countries in the short term, their constitutional courts can, as the Czech Constitutional Court shows, exercise responsive judicial review “light”. We argue that such “light version” of responsive judicial review would still be a great improvement and we provide several proposals how to increase the likelihood that it happens.

The reflexive relationship between financial and social exclusion for the selected Central-Eastern European countries

This study primarily examines how the risk factors that lead individuals to social exclusion, disadvantage, and deprivation contribute to financial exclusion and vice versa. This causal relationship for financial and social exclusion is formulated using the simultaneous equations model. Along with the causal relationship, this study identifies the leading personal and environmental determinants for both the probabilities of being unbanked and socially excluded. I use demographic, socioeconomic, and geographic information from the Life in Transition Survey III, conducted in 2016. The study found a reflexive causal relationship between financial and social exclusion in the selected Central-Eastern European countries. Namely, people at risk of social exclusion are more likely to be excluded from access to financial services. On the other hand, those at risk of financial exclusion are more likely to be socially excluded.

Funding gap in the Hungarian venture capital market

Our study investigates the size of the so-called financing gap in the Hungarian venture capital market, i.e. the amount that can potentially be lent out, which is currently not covered by the Hungarian financial intermediary system on a market basis. The relevant literature will be reviewed to assess the performance and characteristics of the Hungarian market. The Hungarian financial intermediation system, traditionally based on banking, underperforms in all segments of capital market financing, even by Central and Eastern European standards. In our research, we sought to find out whether the available sources of venture capital could meet market needs. Both the number and volume of transactions in the domestic venture capital and private equity markets are low by international standards, and the role of the state is below the average for CEE countries. The novelty of our analysis lies in the fact that there is no similar literature available in Hungary. Our estimation based on linear regression revealed a strong relationship between venture capital investment and current GDP. The difference between the estimated potential risk capital stock and the annual averages zrealized clearly shows the market gap. In addition to the public programmes already implemented, the annual amount of risk capital missing from the domestic market is in the order of EUR 12.5-31.6 million, i.e. roughly HUF 5.1-13.3 billion per year at the euro exchange rate at the time of analysis. If this resource were available, domestic startups would have greater growth opportunities. Our analysis suggests that not only a state presence but even an increase in it, seems justifiable (or at least worth exploring). The research was supported by the National Research, Development and Innovation Office (FK-142492).

Measuring economic resilience for the CEE and Black Sea countries in the framework of comprehensive defense

The main research objective of this paper is to identify key factors influencing economic resilience from the perspective of comprehensive defence. This involves developing a composite economic resilience index (Ericda) that outlines the relative economic resilience of countries in Central and Eastern Europe and the Black Sea regions, within the comprehensive defence framework. The paper employs qualitative research methods, focusing on an analysis of specialist literature pertaining to economic resilience. Quantitative methods are also used for developing the Economic Resilience Index from the Comprehensive Approach to Defence (Ericda) perspective. This includes using data on selected resilience indicators in Central and the Eastern European and Black Sea region countries to generate rankings. The results of the study reveal strong positive correlations between the economic resilience index and various factors, such as logistics and infrastructure, economic complexity, foreign trade vulnerabilities and dependence, economic stability and development, governance effectiveness, military, and human capital. Additionally, a negative correlation was observed with the resilience index. The research findings suggest that to ensure effective comprehensive defence, isolated measures targeting individual pillars are inadequate. Economic resilience requires a collaborative approach, extending beyond the purview of the finance ministry and involving a broader range of stakeholders.

Achieving Democracy through Interest Representation?

The article discusses a link between interest representation and its importance for democracy. After looking at the pluralist, corporatist and neo-pluralist approaches, the article focuses on the role of interest groups in associational, deliberative, and participatory democracies. I debate whether or not interest representation is a necessary element of democracy and whether the theoretical background can help us grasp it across all political systems. I address this question in the context of young, post-Communist democracies in Central and Eastern Europe (CEE). I argue that in the CEE countries when studying interest groups’ populations and organizational behaviour, we have to take into consideration a number of internal and external factors that impact perceptions and actual activity of interest groups when it comes to countries’ democratization.

The Achilles Heel of Constitutional Jurisprudence: Conceptualization of Minority Rights by Constitutional Courts in Central and Eastern Europe

AbstractThe minority question has long been a hot topic in Central and Eastern Europe. Whereas most CEE countries guarantee the privileged position of the dominant nation, they also recognize the existence of national minorities and provide special rights for them. Hence there is an apparent contradiction between the values of the nation-states: unity and diversity. This article proposes that to resolve this contradiction, it is necessary to define the concept, scope and limitations of group-specific minority rights, as well as their relationship with other human rights and the nation-state. Constitutional courts are appropriate candidates for this task. However, based on our analysis of the relevant constitutional jurisprudence of five CEE countries – Croatia, Hungary, Romania, Serbia, and Slovenia – it seems that constitutional courts in the region have failed to properly conceptualize minority rights. Instead of developing appropriate tests for assessing the constitutionality of legal regulations, they have only superficially touched upon the conceptual issues of minority rights, using incidental, case-by-case arguments to justify the (un)constitutionality of the legal provisions. Therefore, this article also attempts to outline a constitutionality test that may be suitable for constitutional courts to consistently evaluate submissions that challenge the constitutionality of laws on minority rights.

Interdependencies between international innovation partnerships: the case of Central and Eastern Europe

PurposeCompetitively multipolar international system demands bilateral and multilateral partnerships. Joint innovation signals close partnerships. Regional proximity of Central and Eastern Europe (CEE) to the European Union (EU) defines its research and development objectives. These objectives are additionally subjected to the USA’s geopolitical strategy in this geographical area. Hence, CEE’s limited resources require limited resources make international innovation cooperation. This paper aims to analyse whether and how CEE countries make international innovation cooperation decisions.Design/methodology/approachThis paper used Organisation for Economic Co-operation and Development (OECD) database of total patent applications filed to the patent cooperation treaty (PCT) with co-applicants from abroad, where co-patents with at least one foreign inventor present a measure of international innovation partnership. A vector autoregression analysis and impulse response function were used to analyse international innovation partnership choices of eight CEE OECD countries for the period 1990–2018.FindingsInnovation with the EU is of collaborative nature, commonly displaying complementary properties with the rest of the examined innovation partners, while co-patenting with the Russia and China act as substitutes or complements. Co-patenting with Russia is the most versatile, displaying both properties of collaboration and competition. Some countries exhibit complementarity in co-patenting activities with multiple partners. The significance levels of these relationships vary, indicating varying degrees of impact. Overall, these findings highlight the complex dynamics of co-patenting activities and the influence of different partners on countries’ collaborative innovation strategies.Research limitations/implicationsIn addition to significant relationships, insignificant relationships as well as those that could bring about greater synergy are flagged in the paper. Those relationships portray possible direction into which national funds could be channelled to incite cooperation between different sectors and countries, especially as innovation partnerships are not always successful and require a long time period to materialise.Originality/valueBy examining bilateral innovation partnerships, this study provides an insight into the strategic political and economic spheres of influence in the CEE region.

Effectiveness of Green Bonds in Selected CEE Countries: Analysis of Similarities

Green bonds are an increasingly important area not only in the financing of investments important to the environment, but recently also as an object of investment. From the investors point of view, the key aspect still remains the efficiency of the investment and its profitability. The subject of this research is to evaluate changes in the efficiency of green bonds issued in the selected CEE countries (Poland, Slovakia, Czech Republic, and Hungary), in the short and long term. Poland is the largest issuer of green bonds in this group, followed by the Czech Republic, Hungary, and Slovakia. Individual green bonds in these group of countries are characterized by varying levels of green bond yields, duration of the investment, issue size and counterparty risk. These factors greatly hinder their comparability, especially in terms of investment efficiency. This manuscript fits into this area, as the main purpose of the manuscript is to show similarities in the yields of green bonds issued in Poland and green bonds issued in CEE countries. The hypothesis that will be tested is that changes in the effectiveness of green bonds issued in Poland are strongly correlated with changes in the effectiveness of green bonds issued in CEE countries. The results of the research positively verified the hypothesis, and the objectives of the research were achieved. It was shown that green bonds issued in the Czech Republic and Slovakia demonstrate a high similarity in terms of effectiveness to green bonds issued in Poland. At the same time, the results confirmed that of all the bonds analysed, the one bond issued by the Hungarian government is the least related to green bonds issued in Poland in terms of effectiveness for investors. The study used multiresolution analysis and Dynamic Time Warping. The Dynamic Time Warping algorithm measures the similarity between two sequences that can change over time. The analysis was carried out over a wide temporal cross-section, analysing the similarity between the effectiveness in both the short and long term.

Counterbalancing And Pragmatic Accommodation: CEE Countries Towards Russia’s Expansion, 2014-2021

The purpose of this article is to study the differentiation of CEE countries’ approaches towards Russia’s expansion, and then to identify explanatory variables. CEE policies fit to the balance of power categories, specifically: counterbalancing and accommodation. The method of assessing each CEE country’s policies towards Russia combines gathering information on 2014-2021 activities classified in three groups: bilateral relations with Russia; relations with other NATO countries framed as counterbalancing Russia; relations with Ukraine regarding counterbalancing Russia. The method of explanation for diverse CEE policies consists in assigning quantitative values and applying statistics in order to discover correlations. The result of the first step is placing each CEE country on the axis of relatively pro- (Hungary) and anti-Russian (Lithuania and Poland) policies. The quantitative version of the axis serves as dependent variable in the statistical research which reveals finals results: the strongest correlations are demonstrated by proximity and distance to Russia, which reflects Russia’s closest neighbors’ counterbalancing tendencies. Historical grievances and the size of Russian minorities are second-strongest. However, excluding Hungary, historical grievances become the strongest factor of anti-Russian policies.

Trends in income taxation: are taxes converging in Central and Eastern European countries?

Abstract The paper examines the convergence of tax systems in Central and Eastern European countries (CEECs) over the period 1995–2018. Due to the increasing impact of tax competition, we have focused on income taxes, in particular, corporate ones. We have identified the factors that influence the taxation system and trends in income taxation in the CEECs by adapting the hidden Markov model approach. We find that many CEECs have reduced income taxation in the analysis period, mainly by lowering tax rates. Corporate income taxes have also decreased in many CEECs in the same period; however, the reverse has been observed too. Both convergence and divergence have been identified among the CEECs over the period considered. The speed of these processes based on the used variables varied depending on both exogenous and endogenous factors. These factors have been diagnosed as being specific to the periods of tax reforms, i.e., before and after accession to the European Union (EU) and the global financial crisis.

Sustainable Consumption and Production in the European Union—An Attempt to Assess Changes and Convergence from the Perspective of Central and Eastern European Countries

The aim of this paper is to attempt to assess changes in terms of sustainable consumption and production (SCP) in the European Union (EU), with particular emphasis on the countries of central and eastern Europe (CEE). So far, relatively little attention has been paid to the analysis of SCP in countries at different levels of development in the literature in this subject area. Even less attention has been paid to the study of the similarity of economies in this respect and the signs of convergence. The basis for assessment is the analysis of dispersion measures, cluster analysis, variance analysis and the construction of a synthetic index. The authors conclude that CEE countries are characterized by a relatively low level of development in terms of SCP compared to the rest of the EU. The signs of σ-convergence and β-convergence can only be identified in terms of “Average CO2 emissions per km from new passenger cars”. It is also the only indicator that significantly differentiates both analyzed clusters. In CEE countries, changes in other SCP indicators were mainly negative (increased adverse environmental impact), and the distance to other EU countries increased. The pandemic was conducive to σ-convergence in terms of “Generation of waste” and β-convergence in terms of “Circular material use rate”, but in 2021, the conditions of gradual easing of pandemic restrictions favored divergence in SCP indicators. The lack of convergence (while reducing the environmental impact) may be a serious problem in achieving the Sustainable Development Goals (SDGs) at the EU level. The above results were supplemented with a discussion on the causes of the observed situation and recommendations.

Mental Health Provider Training to Improve LGBTQ Competence and Reduce Implicit and Explicit Bias: A Randomized Controlled Trial of Online and In-Person Delivery.

Lesbian, gay, bisexual, transgender, and queer (LGBTQ) individuals in most countries face strong stigma and often rely on affirmative mental health care to foster coping and resilience. We tested an LGBTQ-affirmative mental health training for psychologists and psychiatrists by comparing in-person versus online modalities and the added benefit of supervision. Participants were randomized to a two-day training either in-person (n = 58) or via live-stream online broadcast (n = 55). Outcomes were assessed at baseline and 5, 10, and 15 months posttraining. Optional monthly online supervision was offered (n = 47) from months 5 to 15. Given the substantial need for LGBTQ-affirmative expertise in high-stigma contexts, the training took place in Romania, a Central-Eastern European country with some of the highest LGBTQ stigma in Europe. Participants (M age = 35.1) were mostly cisgender female (88%) and heterosexual (85%). Trainees, regardless of whether in-person or online, reported significant decreases from baseline to 15-month follow-up in implicit and explicit bias and significant increases in LGBTQ-affirmative clinical skills, beliefs, and behaviors. LGBTQ-affirmative practice intentions and number of LGBTQ clients did not change. Participants who attended at least one supervision session demonstrated greater reductions in explicit bias and increases in LGBTQ-affirmative behaviors from baseline to 15-month follow-up than participants who did not attend supervision. LGBTQ-affirmative mental health training can efficiently and sustainably improve LGBTQ competence and reduce provider bias in high-stigma contexts. Future research can identify additional ways to encourage mental health providers' outreach to LGBTQ clients in need of affirmative care.

Polish-American cooperation to support Ukraine after Russian aggression in 2022

The article analyses and evaluates Polish-American cooperation in support of Ukraine after Russia’s full-scale aggression in 2022. It answers the question regarding the importance of Polish-American cooperation in supporting the Ukrainian state and society. It assumes that Polish-American cooperation plays a key role in the areas of military and non-military assistance for Ukraine and Ukrainians. Both countries are among the main donors of military equipment to Ukraine, which is delivered via the territory of Poland. In addition, they put great pressure on European countries to increase military support to Ukraine. Polish-American cooperation in non-military areas is also of great importance. Poland’s aid for Ukrainian refugees is crucial, and the US is involved in its delivery and financing. The US, in turn, is of paramount importance in imposing sanctions on Russia to force it to stop its aggression and in providing economic assistance to Ukraine. Poland participates in the sanctions system and strives to make them as severe as possible. Another area of Polish-American cooperation is LNG trade, which allows Poland, and potentially also other CEE countries, including Ukraine, to secure natural gas supplies after abandoning imports from Russia. During the research, interviews with American scientists and experts were conducted, and the method of analysing the content of text sources was used.

Economic Performance Paths of CEE Countries and the EU-27 in 2000–2022

Abstract Research background An analysis of the similarity of countries’ economic developments can provide an important premise for both the assessment of current international economic relations and the long-term prediction of their economic development potential. Purpose The paper presents research results on the paths of economic performance of the countries of Central and Eastern Europe in 2000–2022. As a reference object the EU-27 aggregate has been considered. A supplementary analysis of the impact of the last crises on the economic situation of the CEE countries was provided. Research methodology The analysis is carried out based on the authors’ method of multivariate analysis, where two positioning criteria are applied: an object’s distance from the optimal point and an object’s heterogeneity. A comparative analysis of economic performance paths dependency is provided using a first-order correlation coefficient for time series. Results It has been found that there has been a significant improvement in the macroeconomic situation of the CEE countries over the last two decades. Changes of economic performance in these countries were very similar, while the heterogeneity of their macroeconomic indicators was diminishing, due to nominal, real and institutional convergence. The CEE countries reacted in a similar way both to the worldwide economic crisis in 2009 and to the economic downturn caused by the COVID-19 coronavirus in 2020. It has been confirmed that the first of these crises had a greater negative impact on the economic situation of these countries. Novelty The originality of the study carried out lies, on the one hand, in the use of the author’s research method and, on the other hand, in the presentation of the impact of economic crises on the economic situation of a selected group of countries in the long term. The added value of the study is an analysis of the correlations of paths describing the economic situation of individual countries.