Eastern European Market Research Articles

Prioritization of the IT Sector in the CEE Stock Markets: Investment Policies, Trends and Hidden Gems

Objective: The main purpose of the research is to show that the Central and Eastern European (CEE) market is an essential component of the global stock market. It displays similar patterns to developed countries, and there is a special emphasis on information technology. Research Design & Methods: The study is supported by various machine learning methods and economic analysis, in addition to using Python and R packages. In order to gain a more comprehensive insight into the developments in CEE-region trends, the paper considers a comparative portfolio that focuses on German business, and there is a simulation of the incorporation of the Ukrainian IT sector. Constructing a business strategy in accordance with the Fama–French approach is boosted by incorporating neural networks. Findings: An examination of the performance of Czech, Polish, and Hungarian firms on the stock exchanges suggests that the investment policy oriented towards software is a reasonable choice. The results yielded by the IT companies unmistakably reveal the substantial benefits of their stock market ventures, as well as indicating the ongoing trend of investor reliance. The problem of IT business valuation is highlighted as one of the pitfalls of investing. Implications & Recommendations: The research proposes that maintaining a priority focus on IT, even in challenging circumstances, ensures steady regional advancement. Contribution & Value added: This research brings a unique emphasis to the status and outlook of the IT sector, contributing to the existing toolkit, even in the face of repeated crises.

Estimation of an efficient benchmark portfolio for the Eastern European market

Purpose: This paper explores the mean-variance inefficiency of cap-weighted indices based on the CECE index as a benchmark. Methodology: For the period from March 2014 to September 2021, several proxies of efficient portfo-lios were estimated: the Global Minimum Variance (GMV) portfolio, the Maximum Sharpe Ratio (MSR) portfolio and the portfolio with equal weights of constituents (EW). Diversification of strategies was also considered by analyzing the performance of a portfolio consisting of GMV and MSR that were weighted equally. Based on monthly data, 90 out-of-sample estimations were made for each strategy in order to com-pare their risk-return characteristics. Furthermore, to confirm the differences in the riskiness and returns of the estimated portfolios, the F-test and the Welch test were performed, respectively. Results: The results show that all analyzed portfolios achieved superior performance compared to the CECE index with the GMV portfolio leading the way. Conclusion: Research findings highlight the importance of market development and liquidity when pursu-ing popular scientific diversification methods.

Adoption factors in digital lending services offered by FinTech lenders

Research background: Traditional financial institutions are facing new competitors ? FinTech lenders. The development of these entities and their services depends on many factors, including the level of their acceptance and use by potential and/or current customers. This acceptance determines the ability to create desired financial results and defines the set of FinTech lenders? activities and also their environment aimed at shaping the offer which meets their consumers? expectations. The limited number of studies addressing the identification and assessment of the impact exerted by the adoption factors of lending services offered by FinTech lenders and the lack of such analyzes relating to these decisions made by consumers from Central and Eastern Europe argue for the need to conduct such research. Purpose of the article: Identify factors driving consumers? adoption of digital lending services offered by FinTech lenders in Poland. Methods: Critical analysis of the source literature, descriptive and comparative analysis, diagnostic survey, econometric methods (PCA, SEM used in the TAM). Empirical data come from the surveys carried out in May 2022 using the CAWI method and covering a representative sample of 1,000 Poles. Findings & value added: The study identified factors driving consumers? adoption of digital lending services, including perceived trust, risk, usefulness and financial health. It has been proven that the perceived ease of use and innovation do not represent the statistically significant constructs influencing the accepted adoption attitudes. The adopted research model shows a considerable power to explain the intention of using digital loans. The article is the first scientific study of this type discussing the identification of adoption factors for loan services offered by FinTech lenders operating on the Central and Eastern European market. The presented example of Poland being the leader in this dynamically developing market provides the background for conducting international comparative studies in the future.

ІНСТРУМЕНТАРІЙ СТРАТЕГІЧНОГО АНАЛІЗУ В ОЦІНЮВАННІ ІНВЕСТИЦІЙНОЇ ПРИВАБЛИВОСТІ ПІДПРИЄМСТВА

Background. The key criterion for choosing an investment object is the level of its investment attractiveness. In the presence of various methods of assessing the level of investment attractiveness, there is a risk of subjective assessment, which can lead to financial losses. The analysis of the enterprise using the methods of strategic and financial analysis provides the result, which helps to fully assess the prospect of investment in a selected object, industry, or territory. The purpose of the study is to determine the level of investment attractiveness of the enterprise in the field of television and to consider possible directions for its increase to ensure competitiveness in the domestic market. The object of the study is the process of determining the investment attractiveness of a media company. Methods. Methods of analysis and synthesis (analysis of the media market and identification of key players on it), strategic analysis for positioning the research object through the construction of a competitiveness polygon and a matrix of strategic orientations for the media market company, financial analysis methods for calculation were used to reveal the purpose and objectives of the research. integral indicator of the investment attractiveness of the company. Results. Approaches to the assessment of the investment attractiveness of the enterprise and the peculiarities of the application of the integral indicator in this process have been studied. The advantages and disadvantages of this method are highlighted. An integral indicator of the assessment of the investment attractiveness of the enterprise in the field of television is applied. The state of the media market was analyzed and the competitiveness of its main participants was assessed according to such factors as: personnel potential, resource potential, production capabilities, investment potential, recognition and adaptability to new conditions. Conclusions. The competitive advantages of the enterprise were determined and a matrix of strategies was developed to increase its investment attractiveness by identifying the main problems in the enterprise's activities in the following areas: human capital, innovation capital, production and technical capabilities. The work on eliminating the identified gaps in the company's activities will contribute to the promotion of the manufactured product on the domestic market and the promising Eastern European market, in accordance with the company's strategic plans.

Sustainable Growth Rate Analysis in Eastern European Companies

As a prerequisite for long-term strategic and financial planning, sustainable growth is a future-oriented concept that was based on the company’s long-term survival with value creation. The primary aim of this paper is to determine the indicators that have an influence on sustainable company growth rate during the five-year period of 2016 to 2020. Panel regression analysis was used in order to thoroughly analyze the sustainable growth variables. Our analysis was based on a sample of 675 observations of companies operating in the Eastern European market. The obtained results showed that liquidity and leverage have a negative impact on sustainable growth, while profitability has a positive impact on sustainable growth. The impact of these variables was statistically significant. The obtained results may serve as an effective company tool to improve the target sustainable growth rate. They provide support for the company’s management to improve its business and ensure healthy growth without major financial difficulties, as well as to promote a sustainable business that will increase the market value of the company. Moreover, all internal and external stakeholders will be provided with insight into the reality of growth plans and opportunities for future sustainable growth, which creates a basis for measuring a company’s business prosperity and predicting its long-term performance.

Socialism and the Market: Returning to the East European Debate

ABSTRACT This study reassesses a body of research that has been somewhat neglected: Eastern European market socialism of the 1960s-1980s. It does so with the objective of recovering key issues and also identifying problems that need to be addressed. Thus, the study begins with an overview of the practices of market socialism, which was pursued to varying degrees from the 1960s. While some (USSR, East Germany and Czechoslovakia) turned back to centrally planned economies in the 1970s, others (especially Yugoslavia and Hungary) pursued further reforms. This material provides the basis for analysis of three theoretical points and their attendant problems: the market as a neutral ‘economic mechanism’, as an effort to detach a market economy from its assumed integral connection with a capitalist socio-economic system; the tensions between planning and market; and the ownership of the means of production, which risked ignoring the liberation of productive forces. The conclusion discusses potential assessments of the market socialist experiments.

Neuro-fuzzy network based analysis between the “Introduction of foreign-invested shares”, the “belt and road initiative” and the “international competitiveness of Chinese local state-owned enterprises”

Stimulated by the “Belt and Road” Initiative (BRI), Chinese enterprises are participating in the markets of Central and Eastern European Countries (CEECs). With the Chinese local SOEs from 2007 to 2017 as samples, this paper empirically verified the impact of the introduction of foreign-invested shares (foreign shares for short) on the international competitiveness of these enterprises, as well as the mediation effect of the BRI strategy. In this paper, we propose neuro -fuzzy network based correlation analysis and empirical analysis found that there’s a significant positive correlation between the introduction of foreign shares and the international competitiveness of Chinese local SOEs, that is, compared with local SOEs without foreign shares, those with foreign shares enjoy stronger international competitiveness when participating in the Central and Eastern European market; after the mediation effect of BRI has been taken into consideration, the introduction of foreign shares further strengthened the positive impact on the international competitiveness of these enterprises. This is because the BRI has significantly promoted the participation of Chinese SOEs in the Central and Eastern European market.

INSIDE THE SMEs DIGITALIZATION. A PERSPECTIVE OF THE MARKETING DECISION-MAKERS

"Digitalization generally speaking and marketing digitalization in particular are significant new topics on the Central and Eastern European market, also well embraced by ever more Romanian companies. The aim of this research is to determine opinions and attitudes of the Romanian hightech small and medium enterprises’ (SMEs) marketing managers in respect to the various marketing digitalization topics. The research reveals and analyses answers obtained from nine interviews, combining several analyses including content horizontal analysis and graphical analysis. The outcome can be used by academic researchers as the main starting point for more complex qualitative studies on the researched topic. "

Multifractal Detrended Fluctuation Analysis (MF-DFA) of Stock Market Indexes. Empirical Evidence from Seven Central and Eastern European Markets

In this paper, we present a comparative investigation of the multifractal properties of seven Central and Eastern European (CEE) stock markets using recent financial data up to August 2018 by employing seasonal and trend decompositions before applying multifractal detrended fluctuation analysis. We find that stock indices returns exhibit long-range correlations, supporting the idea that the stock markets in question are not efficient markets and have not reached a mature stage of market development. The results of the paper are of interest to investors looking for opportunities in these stock exchanges and also to policy makers in their endeavour of realizing institutional reforms in order to increase stock market efficiency and to support the sustainable growth of the financial markets.

Computerization of cartographic publishing activity – an outline of the problem exemplified by the former monopolist in Poland

Abstract The post-1989 transition from a centrally planned economy to a free-market economy generated new investment opportunities in Poland, heavily impacted by computerization. The article analyses the genesis, course and effects of implementation of computerization in a cartographic publishing house which spent several decades operating on a typical Central and Eastern European market. It also highlights the multi-dimensional nature of this process, presenting it in the context of political and socio-economic changes. The author indicates that the factors hindering efficient implementation of computerization were the very qualities which in the past determined the enterprise’s market potential: a great reserve of source and technical materials for publishing maps, efficient technological facilities, experienced employees and the management who sought modernization, but underestimated the potential of computerization and had to deal with its own psychological barriers related to the issue.

What can institutional analysis say about capitalism in Central and Eastern Europe? Results and limitations

Abstract A growing literature examines institutional arrangements in Central and Eastern European (CEE) market economies. Some sources claim that there is a distinct model of capitalism in this region. This paper overviews and analyzes the results of these studies in connection with crucial methodological issues showing the limitations of institutional analysis. Despite all methodological difficulties, with a combination of different methods, institutional comparison is able to provide essential insights into the position and future prospects of CEE member states. One of the most important insights is that the maintenance of economic convergence to Western European countries requires substantial institutional changes. This paper also suggests that a broader historical context can help to evaluate opportunities and the risk of path dependency. It seems fruitful if the current development is fit into the conceptual framework which conceives of CEE as the region of “in-betweenness,” where the legacy of incomplete modernization attempts hinders the optimal institutional arrangement.

Identification of management strategies and generation factors for spent lead acid battery recovery plant wastes in Turkey.

The recovery of spent or waste lead acid batteries is important both for the management of lead input to the environment and to meet the lead demand of the market in a more energy and cost effective manner than primary production. As an important producer of lead acid batteries for the Middle Eastern and Eastern European market, Turkey seems to meet 22%-52% of its total lead demand by waste lead acid battery recovery. In this study, the wastes from Turkish waste lead acid battery recovery plants are identified and management strategies that are both technically sufficient and economically feasible for each of these wastes are complied. Furthermore, ranges of the amount of each waste generated per mass of final lead produced in these plants are estimated. Some of the most significantly generated wastes are lead containing dusts, wash water treatment sludges and slags from smelting furnaces with generation rates between 5-250, 1-150 and 5-100 kg t-1 of product lead, respectively. Many of these can be fed back to the recovery process inside the plants except a subset of slags that are called 'final slag' and have low (5%-6%) lead content. Final slags can either be recovered for the production of cement, road-filling materials or abrasives proven that they are in a non-leachable, stable state or should be stored at hazardous waste landfills. For improved environmental performance, newly emerging techniques that eliminate the generation of such slags are also discussed and suggested.

DO REGIONAL AIRLINES IN EASTERN EUROPE HAVE THE RIGHT TO SURVIVE IN THE EUROPEAN SINGLE SKY ENVIRONMENT?

The European aviation market can be characterised by extreme growth and turbulence ever since the markets were deregulated and low cost carriers emerged on the continent. Initially the biggest toll was paid by main legacy carriers when low costs emerged on trunk routes, which lead to the bankruptcy of Sabena, Swiss airlines and Spanair. However, once big legacy carriers started merging and creating more alliances, sustainability was once again reached. Despite this, as low cost carriers entered the Eastern-European market and looked to stimulate even smaller regional routes, smaller carriers started to suffer. This article is assessing the status quo of the current European regional aviation, highlighting the recent trends and ultimately coming to a conclusion that regional airlines can be sustainable provided that certain key criteria have been met.

Study of Indian Firms Managerial Perspectives for International Business Strategy Towards Central and Eastern European Market

Study of Indian Firms Managerial Perspectives for International Business Strategy Towards Central and Eastern European Market

International Rivalry in The Energy Sector: The Eastern European Market of Atomic Energy in Focus

International Rivalry in The Energy Sector: The Eastern European Market of Atomic Energy in Focus

International Rivalry in The Energy Sector: The Eastern European Market of Atomic Energy in Focus

In the post-bipolar world nuclear power has become one of the areas of competition and rivalry betweenRussiaand the West. The comprehensive analysis of theoretical publications allows us to consider international competition as an abstract, depoliticized contest of states and other international actors (including companies) for some limited (mainly economic) benefits. International rivalry is more a political process, necessarily involving some rival pairs of states (or groups of states) that compete with each other not only to get some benefits, but to expand their territory or power. The competition and rivalry betweenRussiaand the West in the sphere of nuclear power are especially apparent in the Eastern European region where the American, European and Japanese corporations, with the support of the Western foreign ministries and EU institutions, try to achieve two main goals. The first goal is to win the contracts to build new power units, especially in tenders where Rosatom participates. The second goal is to become suppliers of nuclear fuel for multiple Russian- or Soviet-made VVER-type reactors, which are functioning or will be run in a number of countries in the region (Slovakia,CzechRepublic,Hungary,Bulgaria, andUkraine). Such activities can involve high risks. The West’s efforts to curb the dominant position of "Rosatom" inEastern Europeare formally associated with the need to create a "competitive market" of nuclear services in the region and to ensure the European energy security. It is also noteworthy that the expansion of Rosatom (and its predecessors) to foreign markets, including Eastern Europe, is actively supported by the Russian state which in the second half of the 1990s – after a failed attempt of following in the footsteps of the West – joined in the rivalry, mostly imposed by the U.S. and their allies. As shown by the analysis,Russiaand the West, primarily theUnited States, are involved in the nuclear power sector to advance their economic interests, expressed in the success of their national corporations. However, they are also political rivals that consider the nuclear power industry generating billions of dollars and supplying energy to many countries as one of important geopolitical resources.

Proposals for the Korean nuclear industry to make inroad to the Eastern European market

Proposals for the Korean nuclear industry to make inroad to the Eastern European market

Are the Eastern European Markets Efficient? Evidence from Nonlinear Unit Root Tests

Are the Eastern European Markets Efficient? Evidence from Nonlinear Unit Root Tests

The Other Month Effect: Some Evidence from the Central and Eastern European Markets

January returns on stock markets can be used as a barometer for the subsequent 11-month holding period returns as documented by Cooper et al. (2006). We examine this apparent anomaly and analyze the effects of other holding periods of 1, 3, and 6 months in six Central and Eastern European transition economies from January 1991 through December 2013. Our results do not support the presence of the other January effect (OJE) in five of the six markets. Instead, the results reveal significant anomalies in non-January months and that such effects vary across markets. This latter evidence might reflect different characteristics in these economies, including diverse levels of market efficiency, local risk factors, and portfolio management among others. Furthermore, we construct a trading rule using the other month effect to illustrate the possibility of developing profitable investment strategies to earn abnormal returns.

Route churn: an analysis of low-cost carrier route continuity in Europe

Discontinuity of air routes is a subject that has been analysed in various ways. For example, the complex network approach focuses on network robustness and resilience due to route interruptions during a relatively short period. Also seasonal interruptions of air routes are a well-documented phenomenon in the context of demand variability. However, only recently discussions emerge on the more permanent cessation of air routes, the route churn. Today, European low-cost carriers frequently apply route churn in their networks. To enable early route churn detection in these networks, a regression model is developed in which route characteristics explain the churning likelihood of individual routes. The results of the econometric analysis show that churn rates are higher during an economic downturn, within the Eastern European market, between the Eastern and the Mediterranean market and between primary airports. In addition, we find that distance and the number of seats offered have a significant negative effect on the churn likelihood. The results also show significant effects of market share, seasonality and route age on the chance of cessation. To conclude, the paper demonstrates substantial differences in churn behaviour amongst specific low-cost carriers.