Modern Economy Research Articles

Non-financial reporting—A key element in assessing sustainable corporation performance

In the modern economy, non-financial reporting has become an essential tool for evaluating the social performance of companies. This article explores the importance of non-financial reporting as a central element in assessing sustainable performance, focusing on analyzing sustainability reports published by 20 companies listed on the Bucharest Stock Exchange (BVB). The study examines how these companies approach environmental, social, and governance (ESG) aspects in their reports and what is the relationship between these aspects and financial reporting indicators. Through the statistical analysis of the non-financial reports published by companies participating in the study with the help of the Pearson coefficient and the regression equations, the correlation between the financial and non-financial indicators is determined in order to validate the research hypotheses. The results indicate increased attention to transparency and social responsibility, highlighting the correlation between sound reporting practices and cooperative performance by combining social and environmental aspects with financial information. The research also highlights the challenges encountered in the reporting process and the level of compliance with international sustainability standards.

АУДИТ ВПРОВАДЖЕННЯ РИНКОВОЇ ІНФРАСТРУКТУРИ В УПРАВЛІННІ КЛАСТЕРАМИ

The article discusses the issue of the audit of the implementation of market infrastructure in the management of clusters, which is a key factor for increasing the efficiency and competitiveness of modern economic systems. Special attention is paid to the analysis of the role of market infrastructure in the development of cluster formations, which contributes to the synergistic effect, the unification of enterprises, scientific institutions and other business entities to achieve common economic goals. The purpose of the study is to carry out a comprehensive analysis of the implementation of market infrastructure in the management of clusters and determine its impact on the effectiveness of the functioning of cluster formations in Kyrgyzstan. The main attention is paid to the assessment of infrastructural components, such as logistics, financial services, information technology and institutional support, which ensure the competitiveness and sustainable development of clusters in the conditions of the modern economy. The object of the study is auditing methods and approaches used to assess the effectiveness and risks of innovative processes of introducing market infrastructure during cluster management. Research methods: logical and meaningful method, methods of comparison, systematization, induction and deduction, analysis and synthesis, coefficient method. The main hypothesis of the follow-up. Effective implementation of market infrastructure in the management of clusters has a positive effect on their competitiveness and ability to adapt to changes in the economic environment. The lack of proper infrastructure or its shortcomings can significantly limit the potential of clusters in achieving a synergistic effect and ensuring economic growth. Present of the main material. The authors highlight methodological approaches to the audit of market infrastructure, including the analysis of key indicators such as logistics and information networks, financial and credit institutions, as well as government support mechanisms. The importance of conducting an audit to identify problematic aspects that prevent the efficient functioning of clusters and to develop recommendations for their elimination is substantiated. Originality and practical significance. The study also presents the results of the analysis of the impact of the introduction of market infrastructure on the competitiveness of clusters and their ability to adapt to changes in the global economic environment. The issue of integration of cluster strategies with regional and national economic plans was separately considered. On the basis of empirical data, conclusions are drawn regarding the effectiveness of infrastructure changes and practical recommendations for improving cluster management are offered. Conclusions and prospects for further research. The results of the audit show that the market infrastructure is a key element that contributes to the development of clusters, ensuring effective interaction between the participants of the cluster association, improving their productivity and competitive advantages. Implementation of infrastructure components, such as modern information and communication technologies, financial institutions and logistics networks, is crucial for improving the efficiency of cluster management.

Income Distribution and the Elasticity of Substitution in the Works of Joan Robinson

ABSTRACT Independently devised by John Hicks and Joan Robinson, the elasticity of substitution (σ) plays an important role in mainstream theories of inequality. This paper examines the role of σ in Robinson's writings, charting the differing ways in which she used it to examine questions of distribution. Robinson initially applied the concept to examine distribution in a Keynesian framework, proceeding to downplay its importance later on in spite of having played a central role in its formulation. Her criticisms of the nature of neoclassical production functions led her to dismiss mainstream theories of distribution as tautological, while seeing σ as an expression of the potential for rising profit shares under full employment. The use of a single parameter such as the substitution elasticity in mainstream frameworks neglected the important role played by investment and institutions, drawing focus away from an understanding of the ‘rules of the game’ that determined distributive shares in capitalist economies. Given the primacy of σ in discussions today — in textbooks and in the works of economists such as Thomas Piketty — her writings offer an important critique of established frameworks, while also advancing alternatives that stress the role of institutions and class conflict in modern economies.

Long-run Relationship between Power Consumption and Manufacturing Sector Output in Nigeria

Power remains the engine of growth of every economy while the manufacturing sector remains the key driver of a transformed modern economy. Despite several power sector reforms, Nigeria’s manufacturing sector continued to underperform. This study focused on examining the long-run relationship between power consumption and manufacturing sector output in Nigeria. We estimated an ARDL model based on the bounds-testing approach to cointegration. Our results indicate that manufacturing sector output and electricity consumption are cointegrated and that short-run deviations from equilibrium are corrected up to 83 per cent annually. The result showed that power consumption is positively related to manufacturing sector output. This implies that improved power sector will stimulate manufacturing sector growth. Our result also showed that capital formation, labour force and private sector credit are positively related to the manufacturing sector while the monetary policy rate is negatively related to the manufacturing sector. Given our findings, we recommend that the government should implement a sustainable power sector reform that prioritizes the manufacturing sector. This will stimulate growth, reduce the cost of energy and indirectly reduce price of manufactured products. We equally recommend creating a conducive environment for investment in the manufacturing sector through favourable monetary policy rates to allow manufacturers access to credit.

Медиаменеджмент как перспективный инструмент цифрового управления

The issues of studying the concept of media management from the point of view of its use as a tool for managing the digital transformation of business processes and the economy as a whole are considered. Approaches to the definition and content of the term “media management” are analyzed, the specifics and conditions for digitalization of the media market are explored. The key factors determining the further active development of media management and the media environment are identified, and the content of the digital transformation of the media market is revealed. The most relevant models of modern media management in digital management have been identified. The attention is paid to the study of such issues as key factors in the development of media management; media management as an integrated management tool; media as a tool for managing the digital economy; trends in digital transformation and development of media tools. Scientific works devoted to this problem have been studied. The characteristic features of media management as a modern methodology for managing business development and list promising ways to organize the management process, types and tools for using media in digital management are highlighted. An analysis of the current state of the media market is carried out, as well as a forecast for its further development within the framework of the domestic digital economy. The most promising areas of media management are proposed and key trends in media management are listed. Media management at its core is a direction of the digital economy, the transition to which has received significant attention as part of the development of the domestic system of expanded reproduction. Media management as a modern management tool is a rather multifaceted concept that largely determines the trends in the further development of the domestic media market and the digitalization of the modern economy. The growth of the media market contributes to an even more active digital reorientation of basic economic and business processes.

Electricity security in Uganda: Measurement and policy priorities

Reliable, accessible, affordable, and sustainable electricity systems are fundamental to modern and progressive economies. For developing societies, particularly those with fragile power generation capabilities and electricity networks, the electricity security metrics are incomparable and remain untested. A Multi-Criteria Decision-Making (MCDM) method that follows an entropy-based weighting system is employed to quantitatively evaluate and construct an Electricity Security Index (ESI) for Uganda. Results reveal that Uganda is “moderately” electricity secure. Out of the maximum possible score of 100, a year-on-year analysis indicates that the ESI score was highest in 2007 (56) and the lowest was registered in 2015 (39). Based on the VIKOR technique, it is observed that electricity reliability contributes the most to the ESI, while electricity access contributes the least. Although expansion of electricity generation capacity is necessary, energy policies should, in equal measure, prioritize adequate investments in robust and modern transmission and distribution infrastructure. A riveting policy implication is that governance quality enhances a country's electricity system by reinforcing the other dimensions of electricity security.

Electronic commerce as a tool for implementation of the constitutional right to business activity

The scientific article examines the essence and development of e-commerce as a key element of the modern economy, which significantly changes traditional business models and creates new opportunities for entrepreneurs and consumers. The impact of information and communication technologies on economic development is analyzed and their decisive role in the implementation of electronic commerce is indicated. Several key innovations that have fueled the rapid growth of e-commerce are explored, namely: AI-powered personalization, omni-channel commerce across platforms, and the integration of secure electronic payments using emerging technologies such as blockchain. In addition to technological aspects, social and economic factors that contributed to the development of e-commerce are considered, including the COVID-19 pandemic, changing consumer habits and the growth of logistics companies. The article also covers the issue of legal regulation of electronic commerce, analyzing international legal acts. It is concluded that e-commerce is a complex phenomenon that includes not only trade transactions but also related business processes such as marketing, data processing and supply chain management. The need for further development of the legal framework for its effective functioning in Ukraine and the world is indicated. E-commerce is proposed to be understood as the process of buying, selling or exchanging goods, services and information using electronic means, mainly through Internet platforms, covering a variety of business processes, such as: online trade, electronic payments, digital marketing, supply chain management, etc. . It was established that the relationship between the right to entrepreneurial activity and e-commerce is that e-commerce is one of the forms of entrepreneurial activity that is adapted to the modern conditions of the digital economy and the development of information technologies, in particular, this relationship is embodied through the prism the following legal relations: the right to entrepreneurial activity as a basis. The constitutional right to entrepreneurial activity provides an opportunity to freely choose and carry out economic activity for the purpose of obtaining profit. This right covers the freedom to choose the form of doing business, dispose of profits and protect one’s interests in the process of carrying out economic activities; digitalization as a form of entrepreneurship. Electronic commerce (e-commerce) expands the traditional possibilities of conducting business, offering new ways for entrepreneurs through the Internet. It covers not only the purchase and sale of goods and services, but also various business processes related to the exchange of digital information, conducting financial transactions and managing logistics; digital capabilities. Thanks to electronic commerce, the right to do business is expanded by accessing global markets and simplifying interaction with customers, which allows doing business regardless of geographical boundaries and time. Entrepreneurs can quickly implement new technologies, automate business processes and provide an individual approach to consumers through digital platforms; protection, security and settlement. Thus, the state, realizing the constitutional right to entrepreneurial activity, must ensure legal regulation of electronic commerce. This includes the protection of consumer rights, control over the quality of services, regulation of digital signatures, protection of personal data and support for the security of online payments; innovation and competition. E-commerce stimulates the development of entrepreneurship, increasing competition through opportunities for innovation. Entrepreneurs working in e-commerce gain competitive advantages due to the efficiency of digital technologies and global opportunities.

Discretionary Accrual in the Knowledge-Based Economy

The modern economy transit from manufacturing to knowledge-based industries that are dependent on investments in R&D, advertising, and employee talents. These investments and much of the value that they generate cannot be capitalized as assets. As these intangible assets are off-balance-sheet, a firm’s book value might be low. When book value fails to present a firm’s true value, we stipulate that management has incentive to manage its earnings to convey information that is not reflected in the balance sheet. We find that firms with negative book value and in the New Economy use more discretionary accruals.

ADAM SMITH ON THE PROCESS OF CIVILIZATION AND THE ROLE OF COUNTERFACTUAL REASONING

This paper examines Adam Smith’s use of counterfactual reasoning in his analysis of the “process of civilization” and its implications for modern economics. Smith, influenced by Isaac Newton, Robert Simson, Francis Hutcheson, and David Hume, employed counterfactual reasoning to critique the Mercantile System by comparing actual economic developments with the “natural course of events.” His physiocratic bias limited his engagement with emerging industrial advancements, yet his methodological contributions remain significant. Smith’s focus on “what if?” questions in policy discussions continues to shape modern economic thought, despite some limitations in fully realizing his theoretical framework.

Does the Three-Year Action Plan for Winning the Blue Sky Defense Battle implementation enabling the high-quality development of regional energy? A quasi-natural experiment from China

Energy is the lifeline of modern economy and industrial development. Promoting the high-quality development of regional energy is an important step to achieve high-quality economic and social development. This paper takes the energy policy of the Three-Year Action Plan for Winning the Blue Sky Defense Battle (the Blue Sky Defense Battle) in China as a quasi-natural experiment, and builds a two-way fixed effects difference-in-differences (DID) model to explore the impact of this policy on the high-quality development of regional energy based on the panel data of China's 31 provinces from 2015 to 2021. The results show that the Blue Sky Defense Battle has a significant positive effect on regional energy high-quality development, and this conclusion is robust under a series of robustness tests. Heterogeneity analysis indicates that the Blue Sky Defense Battle has a more promote effect on the high-quality development of regional energy in the western and eastern region, as well as in the low and middle income provinces. Mechanism analysis reveals that the Blue Sky Defense Battle promotes the high-quality development of regional energy by improving the level of scientific and technological innovation. Nonlinear analysis verifies that there is a single threshold effect of the level of scientific and technological innovation, the influence of the Blue Sky Defense Battle on the regional energy high-quality development becomes stronger when the scientific and technological innovation level above the threshold. The study provides a reference for policy makers to support the implementation of energy policies such as the Blue Sky Defense Battle and enhance the high-quality development level of regional energy.

ADAM SMITH’S THEORY OF VALUE AND THE FALLING RATE OF PROFIT: UNCOMMON CONCEPTIONS AND COMMON MISCONCEPTIONS

Smith’s theory of value and distribution, which emphasizes labor time as the determinant of prices, has been widely misunderstood. Ricardo misinterpreted it as relevant only to primitive societies, while Marx inaccurately aligned it with his own labor theory of value. In reality, Smith’s perspective oscillates between a labor-based and a labor-commanded approach to relative prices, intended for modern economies. Neoclassical economists further distorted Smith’s views by incorporating utility theory. Moreover, while Smith is often linked to the theory of a falling rate of profit due to competition, he actually attributed it to rising capital intensity. Contrary to the belief that Smith was a staunch advocate of free markets, he supported reasonable government intervention.

Identifying power outage hotspots to support risk management planning.

Secure and reliable power systems are vital for modern societies and economies. While there is a focus in the literature on predicting power outages caused by severe weather events, relatively little literature exists on identifying hot spots, locations where outages occur repeatedly and at a higher rate than expected. Reliably identifying hotspots can provide critical input for risk management efforts by power utilities, helping them to focus scarce resources on the most problematic portions of their system. In this article, we show how existing work on Moran's I spatial statistic can be adapted to identify power outage hotspots based on the types and quantities of data available to utilities in practice. The local Moran's I statistic was calculated on a grid cell level and a set of criteria were used to filter out which grid cells are considered hotspots. The hotspot identification approach utilized in this article is an easy method for utilities to use in practice, and it provides the type of information needed to directly support utility decisions about prioritizing areas of a power system to inspect and potentially reinforce.

Financial and Tax Literacy: A Child’s Early Exposure to Financial Concepts during the Educational Process

Aims: The viability of states today is largely based on the collection of tax revenues, which are considered as necessary for them to carry out their specific functions. Thus, the aim of this text is to discuss the development of citizens' tax culture, not as an isolated economic phenomenon but, as a phenomenon directly linked to their general financial literacy. Because it is the writer's belief that simply complying with the mandate to fulfill the tax obligation is not enough for the citizen to understand his contribution to the finances of his country, or, better, to appreciate this contribution in the context of understanding the ways in which the world moves financially. Methodology: It is a big question on how financially educated the modern man is and to what extent this financial education, his literacy or financial literacy, includes the concept of tax in its content to a sufficient extent to awaken consciences. In this text, the focus is on the exact age / educational stage at which this path to financial and tax literacy can begin, so that it can be integrated in a systematic way into the formal educational process. In order to draw conclusions about the appropriate stage for initiating financial awareness, the trends in the global financial literacy landscape were explored. This analysis aims to determine when it is considered appropriate to teach children financial concepts and how financial literacy is linked to making appropriate financial decisions and tax awareness at different age stages. An effort was carried out to evaluate the current financial and tax knowledge and behavior of Greeks. The research was exclusively bibliographic, i.e., a meta-analysis based on previous qualitative and quantitative studies. Results: Concerning the introduction of systematic financial and tax education for adolescents in schools, the studies accessed suggest that the age range of 12-14 marks a significant milestone for young people to begin delving into the more intricate concepts of the modern economy. Tax awareness among adolescents could arguably be attainable from around age 11 or 12, as they start demonstrating financial comprehension comparable to that of adults. Discussion: The findings of this research showed that the level of financial literacy in Greece depends on demographics, such as the geographical location and the gender of young people. Other factors are also important, but removing geographical and gender restrictions, combined with the provision of training programs already in the upper grades of Primary School, can improve financial awareness and develop the tax culture of citizens. This development requires the implementation of subjects in the curriculum, the training of the teachers so that they are able to teach children even 11 or 12 years old, the distinction of the concept of ethics from tax ethics and its teaching at an earlier age stage, and the drawing from international educational practices, i.e. leveraging successful financial literacy programs worldwide in order to obtain valuable insights for designing effective youth training initiatives.

Фронтиры развития автопроизводства в РФ в условиях адаптации к новым вызовам

The automotive industry is one of the main industries in mechanical engineering. It accounts for a large share of capital investments. The conveyor assembly system, which was widely used in this industry at the time, radically changed the entire industry of the XX century. The multiplicative effect of car production makes the industry the "locomotive" of the economy. The automotive industry is today one of the frontiers in the development of our country's economy. The purpose of the study is to analyze the situation in the Russian car market and assess the prospects for the development of the Russian automotive industry in the context of the consequences of the COVID-19 pandemic and the strengthening of sanctions restrictions by unfriendly countries. In the process of working on the study, methods of analysis, synthesis, description, comparative, problematic, logistic and dynamic methods were used. According to the results of the study, the following conclusions were drawn: the automotive industry plays an essential role in the processes of globalization of the modern economy. However, the disruption of logistics chains had a negative impact on the situation in the domestic automotive industry and the consumer market, led to a reduction in production and an increase in unemployment in this industry. The way out of this situation is to reorient domestic car production to cooperate with companies from friendly countries, such as China, and establish logistics chains through intermediary countries, such as Kazakhstan, but adjusted for minimizing costs. An important role in solving this problem can be played by the development and implementation of an import substitution mechanism in the production of domestic cars, including electric cars. The novelty of the study lies in the fact that the proposed frontiers in the stabilization of Russian automotive production have been identified taking into account the impact of both external and internal factors in the current volatile economic situation caused by the reaction of unfriendly countries towards Russia.

Pengaruh Intellectual Capital dan Hedging Terhadap Nilai Perusahaan dengan Profitabilitas Sebagai Variabel Intervening

In a modern economy full of knowledge and technological developments, intellectual capital is seen as a source of value creation and sustainable competitive advantage. This research aims to analyze the influence of human capital, capital employed, structural capital and hedging on the value of banking companies in Indonesia with profitability as an intervening variable. This research uses secondary data obtained from company financial reports for 2014- 2021. The analysis technique used is multiple linear regression, path analysis and Sobel test with the help of the Eviews 12 program. The research results show that human capital, capital employed, structural capital have a positive effect on profitability but have no effect on company value. Other results show that hedging has no effect on profitability and company value. Research also shows that profitability is able to mediate the relationship between capital employed and structural capital on company value. However, profitability is not able to mediate the relationship between human capital and hedging on company value. A limitation in this research is that some companies do not include the notional value of derivatives as a hedging measurement in their financial reports.

Retraction Note: Greening the bottom line: Navigating legal and financial dimensions of energy digital transition in the modern economy

Retraction Note: Greening the bottom line: Navigating legal and financial dimensions of energy digital transition in the modern economy

Characteristics of financial capital flow circulation and the risk transmission effect in China

Financial capital is an important force driving China's economic modernisation. Examining the characteristics of financial capital flow circulation across sectors and risk transmission laws is crucial in guiding financial market operations and deepening financial system reforms. This study establishes a 2011–2020 China matrix that includes capital fund flow statements for non-financial corporations, financial institutions, the general government, households, and foreign sources and examines changes in capital flow circulation by developing a financial flow multiplier system model to measure the direct and indirect transmission effects of capital flows between sectors from the perspective of liabilities. Results show that China's overall scale of financial capital flows has increased, but fluctuations have emerged in the last decade. The sectors' financing structure has changed significantly, with financial institutions remaining the primary capital inflow and outflow sectors of the financial market; however, the proportion of liability and investment in the household sector has increased, resulting in increased risk transmission. Moreover, the sectoral fund surpluses and shortages are highly volatile and uncertain, with non-financial enterprises serving as the primary drivers of real-economy investment. The capital flow from financial services to the real economy shows a fluctuating growth trend, primarily flowing to non-financial corporations; however, the proportion exhibits a downwards trend. Finally, we find that the flow transmission relationship between different sectors and financial transactions in the financial market is complex, with both direct and indirect risk transmission effects between sectors. Changes of financial institutions' liabilities significantly affect the liabilities and investments of other sectors.

THREAT MODEL FOR PAYMENT SYSTEMS

Payment systems are the backbone of modern economies, and their security is a critical aspect of maintaining user trust and safeguarding financial data. In this context, the development of threat models plays a central role in ensuring the protection of these systems from attacks. One of the most effective methodologies for threat modeling is STRIDE, which helps to structure and systematize the analysis of risks and threats. By utilizing the STRIDE model and incorporating a customized threat model for payment systems, the security of authentication processes and transaction handling can be significantly enhanced.

Critical thinking and misinformation vulnerability: experimental evidence from Colombia.

Misinformation represents a vital threat to the societal fabric of modern economies. While skills interventions to detect misinformation such as de-bunking and prebunking, media literacy, and manipulation resilience have begun to receive increased attention, evidence on de-biasing interventions and their link with misinformation vulnerability is scarce. We explore the demand for misinformation through the lens of augmenting critical thinking in an online framed field experiment during the 2022 Presidential election in Colombia. Data from roughly 2.000 individuals suggest that providing individuals with information about their own biases (obtained through a personality test) has no impact on skepticism towards news. But (additionally) showing participants a de-biasing video seems to enhance critical thinking, causing subjects to more carefully consider the truthfulness of potential misinformation.

Экологизация жизнедеятельности как системный элемент экологического управления

The greening of life is a modern stage of socio-economic and social development of society. The sustainable development of the economy, technology and technology have a negative impact on the environment and lead to the gradual depletion of natural resources. The development of environmental ideas among the population of the country, the restoration of natural objects, the preservation of the natural environment, the conduct of human economic activity taking into account respect for nature – all this is the greening of life, and environmental management is aimed at the ecological reorientation of business processes and social education of a person. The article presents the theoretical and practical aspects of the greening of life in the modern economy, a regional assessment of the environmental management sys-tem is carried out, practical recommendations are given within the framework of the development of a new national project "Environmental well-being".