Microeconomic Level Research Articles

Was Allyn Young a Marshallian?

AbstractThis paper argues that although Allyn Young was influenced by Alfred Marshall, he was an original economic thinker in his own right. The objective of this paper is to bring out their similarities as well as differences. This theoretical comparison will throw light on questions such as whether increasing returns are microeconomic or macroeconomic or whether they arise due to economies of scale at the firm level or are due to other factors. Marshall and Young had many similarities like both had an evolutionary perspective towards society, both had a process view of competition, both had almost common views on the method of economics and both saw economics as useful in solving practical problems. However, while Marshall emphasised statics (by assuming ceteris paribus) and analysed change mostly at the microeconomic level, Young emphasised disequilibrium and had a generalised conception of increasing returns.

A review of blockchain and cryptocurrency applications in Romania

Abstract Recent technological developments have led to economic changes that have an impact on the macroeconomic and microeconomic levels in developing countries, as well as in developed ones. The introduction of cryptocurrencies (Bitcoin is the first cryptocurrency, made public in 2009) into the economy through blockchain technology, generated a series of benefits, but also significant risks for citizens, companies and states. The main purpose of this article is to present the operating mechanism of the blockchain system and cryptocurrencies, their advantages and disadvantages and the attempts of the international authorities to regulate the crypto market. The authors will present also few case studies of tech start-ups that leveraged the versatility of blockchain principles into viable business propositions. Romania makes no exception in this field, so the authors will analyze and present the current status of this industry.

ČIMBENICI POTRAŽNJE ZA DOBROVOLJNIM ZDRAVSTVENIM OSIGURANJEM U EUROPSKIM ZEMLJAMA

During the pandemic, health care services have gained in importance. One of the ways used to finance these services is through voluntary private health insurance. Existing studies on the demand for voluntary private health insurance are based predominantly on the micro-economic level. Therefore, the aim of this paper is to analyse the factors of demand at the macro-economic level. The analysis covers economic and demographic factors, the quality of the public health care system, risk aversion and the status of the population’s health. The empirical research is based on the databases of 29 European countries in the period from 2013 to 2017 and on the dynamic panel model. The results of the empirical analysis revealed that income, price, urbanization, health care system quality, risk aversion/education and self-perceived health are important determinants of demand for voluntary private health insurance in European countries.

О НЕОБХОДИМОСТИ РЕАЛИЗАЦИИ ПРИНЦИПА "ФОРМИРОВАНИЯ ПРО-ГРАММЫ СТИМУЛИРОВАНИЯ ТРУДА" СИСТЕМЫ НАУЧНОГО УПРАВЛЕНИЯ Ф. ТЕЙЛОРА В СОВРЕМЕННЫХ УСЛОВИЯХ СОЦИАЛЬНО-ЭКОНОМИЧЕСКОГО РАЗ-ВИТИЯ

The article presents the results of a study of the processes of implementing the principle of "formation of a labor incentive program" of the F. Taylor scientific management system, formed to manage enterprises as socio-economic systems of the microeconomic level, in relation to the modern macroeco-nomic system of socio-economic develop-ment at the state (national economy) level. The features of the implementation of the principle of the "labor incentive program" in the implementation of the processes of managing the socio-economic development of Russia both in conditions of nominal eco-nomic stability and in objectively crisis condi-tions of management are demonstrated. The problems of implementation of the principle of "formation of the labor incentive program" in the management of the national socio-economic system in modern conditions are analyzed, and proposals are formulated to ensure its implementation.

The role of productive and technological capabilities in export dynamics in developing countries

Productive and technological capabilities are major engines of export. But how they affect export behaviour at the microeconomic level is less clear and many questions remain. This paper empirically investigates their role in export dynamics in 40 developing countries. The analysis shows that, within sectors, countries with greater productive capacities have more exporters, and the exporters are larger and charge higher prices for their products. The results also confirm a positive relationship between technological capabilities and diversification: within sectors, exporters in countries with stronger capabilities tend to export a higher number of products and to more destination markets. Lastly, technological capabilities also play a specific role in the diversification of products and market destinations of high-technology sectors. Thus, even comparing exporters’ behaviour only among developing countries, productive and technological capabilities are found to be strongly related to the extensive and intensive margins of exports, and to diversification and product quality.

Disadvantaged Employees in the Trap of Defined Contribution Pension Plans

Purpose: The Defined Contribution (DC) saving method, which is implemented in most Organization for Economic Cooperation and Development (OECD) countries, is generally detrimental to disadvantaged employees. This paper proposes to improve the situation of disadvantaged employees by increasing government regulatory intervention, through an aggregation model. Design/Methodology/Approach: The study is conducted based on Israeli data and examines the impact of the aggregation model suggested in it, at the microeconomic level. Findings: Disadvantaged employees usually fail to accumulate sufficient pension savings and pay the highest management fees. Therefore, after retirement, their substitution ratio is low, and they suffer from poverty. Several population groups, such as immigrants, can be generally considered disadvantaged. The measures taken by governments to mitigate the problem do not succeed in bringing about a significant change. Practical Implications: The aggregation model presented in this paper offers a way to significantly improve the pension savings of disadvantaged employees. The model enables the implementation of compulsory pension law, thereby creates pension savings among all disadvantaged employees. In addition to that, the model enables to reduce the management fees paid by disadvantaged employees, and thus raise their future pension. Originality/Value: Given the similarity between Israel and other OECD countries in the context of pension savings, other countries may benefit from the research findings presented in this paper as well.

Impact of macroeconomic and microeconomic variables on firm investment: Mexican service sector, 2000-2016

A large and positive relationship is found to exist in the long-run between Public Investment Expenditures and Firm Investment which shows that public investment crowds in private investment using ARDL model at macroeconomic level on the Mexican service sector over the period 2000-2016. I also use the system-GMM PVAR to analyse the impact of microeconomic variables on firm investment. Exports have a strong and positive impact while Imports have a large and negative impact on firm investment. At the microeconomic level, taxes payments slightly obstruct firm investment. Using impulse response functions, I find that long-run macroeconomic policies are more important than short-run macroeconomic policies and that macroeconomic policies are more important than microeconomic policies for firm’s investment decisions.

Innovation processes in Kazakhstan: development factors

The paper analyzes and assesses the main issues and development factors of innovation processes in Kazakhstan. It is known that in modern conditions of dynamically developing competitive processes and scientific and technological progress, innovations serve as the basis of the national economy and a key factor in ensuring the competitiveness of enterprises. Moreover, today, the economy of the country can successfully compete in the market on the basis of the continuous improvement of goods and services produced as well as the development of new directions. It is also obvious that the development of new products, implementation of innovations and new measures are key performance indicators at both the macro and microeconomic levels. In this sense, an innovative way of socio-economic development of the country is becoming an urgent problem for Kazakhstan. An analysis of the situation shows that in the real sector of the economy, the possibilities of increasing production at the expense of extensive factors are largely exhausted. It is necessary to ensure the modernization of the economy through the introduction of modern technologies and the maximum use of the country’s intellectual potential. The realization of the economic strategy determines the implementation of the main directions of social policy in line with the innovative development of Kazakh society as a whole.

Strategic Management as a Basis of Sustainable Development in Agricultural Production

Aim. The presented study aims to substantiate a structural model for developing a sustainable development strategy in agricultural production, making allowance for changes in the level of impact of environmental factors.Tasks. The authors determine the reasons why the Russian agro-industrial complex (AIC) is lagging; identify the specific aspects of forming a strategy for the sustainable development of regional AICs; formulate urgent problems of sustainable development for the agri-food sector of the Russian economy at the federal, regional, and enterprise levels.Methods. This study uses a reasonable and objective approach to the problem of applying strategic management as a foundation for the sustainable development of agricultural production based on the knowledge of the laws of development of socio-ecological and economic systems and a study of multidirectional factors of the external and internal environment. The methodological basis for the sustainable development of agricultural production includes the concept of sustainable development as a priority at the macroeconomic level; strategy as a planning tool based on consistency with programs implemented at the federal, regional and municipal levels of public administration; methods and tools of strategic management at AIC enterprises.Results. The key aspects of the institutional-synergetic approach to the sustainable development of the AIC include the need to coordinate all factors by forming coherent goals not only among economic and financial institutions, but also for technopolises that combine scientific, industrial, financial, and entrepreneurial capital into one system cluster structure. The authors formulate the stages of implementing a strategy for the sustainable development of regional AICs, making it possible to come up with measures aimed at reorganizing the structure of the agricultural sector and to overcome the negative manifestations of crises in the Russian economy, thus minimizing their consequences.Conclusions. During the development of a strategy for the sustainable development of regional AICs, a multiplicative effect arises, making it possible to activate innovation policy and boost the development of other sectors of the economy, improving the population’s quality of life. When developing a strategy at the microeconomic level, it is necessary to make allowance for the specifics of the industry and the mission of a modern agro-industrial enterprise and to focus on solving problems formulated based on the trinity of goals of social, environmental, and economic long-term sustainable development.

THE ORGANIZATION OF EVENTS: A POSSIBILITY OF TOURISM REVIVAL AFTER COVID? THE CASE OF SIBIU

The MICE (Meetings, Incentives, Congresses, Exhibitions) market has recently experienced a rapid growth, as actors at both acroeconomic and microeconomic levels recognized the great potential of this kind of tourism income generator. The events have also become elements that helped shape a tourism destination image or brand, through organized systems such as the portfolio model. However, the Covid pandemic, with its subsequent limitations and economic crisis, has severely impacted the events industry. No events, at any scale, were allowed to be organized, thus resulting in losses of billions of euros worldwide. With the economies slowly reopening, due to the partial lifting of Covid-related limitations, there seems to be room for the revival of tourism destinations. The analysis of previous studies has revealed a scientific gap, related to the possibility of reviving an urban destination through a large scale event. Therefore, the aim of the present scientific paper is to fill this gap, by looking into the perception of potential tourism demand on this subject. It also investigated the specifics of such an event, with a focus on the Romanian city of Sibiu. To this end a survey was conducted in the beginning of the year 2021, and its main results are presented in this article.

Energy poverty: consequences for respiratory health and labour force participation in Cameroon

ABSTRACT Insufficient access to modern forms of energy is an important issue for development. This has made the concept of energy poverty to be widely discussed. There is a consensus on the fact that energy poverty has serious effects on health, education, and other socio-economic aspects of individuals. However, the measurement of energy poverty and its effects on labour force participation is generally absent or inaccurate especially at the micro-economic level in developing countries. The objective of this study is therefore to analyse the relationship between energy poverty, respiratory health and participation in the labour market. The data comes from the fourth Cameroon household survey carried out in 2014. The trivariate recursive probit model shows that energy poverty increases the risk of respiratory illnesses and that these illnesses have a negative effect on the labour force participation, especially for women.

Критична інфраструктура в системі виробничих і фінансово-економічних взаємозв’язків “витрати-випуск”

The production process in the system of economic cycle of the national economy, as well as the relevant tools for the study of production processes, is considered. The production infrastructure of the national economy is studied as an important part of critical infrastructure, reproduction processes. Production is considered in the context of the formation of added value by large groups of types of economic activity, at the institutional and regional levels, in the context of making management decisions at the macro- and microeconomic levels. The inter-industry balance sheet tools are defined as the basic one for assessing production processes and their criticality. To this end, aggregated three-sector input-output tables in producer’s prices for a number of countries have been prepared. Within their framework, the sectoral structure of the economy is considered, direct costs and full costs (Leontief matrix) are determined, indicators of criticality of the production infrastructure are determined. It is proposed to assess the criticality of production infrastructure using such parameters as the share of gross added value in output, the cost of sectors and the economy as a whole, the coefficients of impact and recall, the classification of industries into key, with direct and inverse impact, etc. Comparative studies of criticality indicators for a number of countries were carried out, in particular, direct costs and derivative indicators of criticality of the production system (Frobenius number, Frobenius vector, etc.) were determined. The proposed approaches to improving the parameters of criticality of the production infrastructure of the Ukrainian economy were worked out.

Inequality and incentives with societal other-regarding preferences

The article is concerned with understanding the impact of social preferences and wealth inequality on aggregate economic outcomes. We investigate how different manifestations of societal other-regarding preferences affect labor relationships and incentive contracts at the microeconomic level and how these in turn translate into macroeconomic outcomes. Increasing the workers’ sensitivity to inequality raises effort and reduces wage costs for poor but not necessarily for rich workers. A parameterized version of the model roughly mimicking relevant key features of the industrialized world shows that, at the general equilibrium, increased initial wealth differences raise aggregate profit and output but entail distributional utility losses and increased inequality.

The Risks of Payment Systems of Banking Institutions of Ukraine

Risks of payment system of banking institutions of Ukraine are considered in this study. Risk events clearly correlate to the effectiveness of network interaction of banking institutions to adapt information technology of payment systems in the payment portfolio of banks when changing operating environment, so mechanism for minimizing their probability has been developed. Economic elements of the mechanism of minimizing the risks of payment systems are identified, which allow forming the planned level of profitability, risk and liquidity of institutions (organizations) within the relevant principles, methods, levers, cash flows in order to respond and adapt to changes in the environment. A methodical approach to assessing the effectiveness of risk management of payment systems of banking institutions, which is from the standpoint of multivariate structuring and a list of their indicators of the microeconomic level, forms an optimal set of tools to minimize the set of risks. Indicators of payment systems of Ukraine are determined, according to the net level of credit risk, liquidity risk, business risk, investment risk, legal risk, operational risk, systemic risk, technological and information security risk. The impulse index of functioning of payment systems of Ukraine is calculated. A neuro-fuzzy model for assessing the individual credit risk of participants – legal entities (users-borrowers) of card payment scoring of a banking institution is developed. The basic criteria for assessing the individual credit risk of a participant-legal entity (user-borrower) by card payment scoring are determined.

Evaluations of an entrepreneurship development program: A systematic literature review

The contribution of entrepreneurship at both the microeconomic and macroeconomic levels is remarkable. There are many entrepreneurship development programs (EDP) initiatives proposed by policymakers around the world to ensure the growth of entrepreneurs. While EDP is necessary to improve entrepreneur capabilities, however studies on EDP evaluation literacy remain limited. This study aims to fill the gap by investigating EDP evaluation literacy by using a systematic literature review (SLR). This study carried out a bibliometric analysis on a Scopus database in the last three decades, from 1989 to 2021 with all the manuscripts were written in English. The results show that most of the literature on EDP evaluation-related themes is mainly focused on program evaluation, characteristics, challenges, stakeholders, and context, with program evaluation and characteristics are considered as the most significant issues of EDP evaluation. Interestingly, this study also reveals that few manuscripts review the process of EDP as the success criterion of EDP implementation.

Macro-level efficiency of health expenditure: Estimates for 15 major economies

The coronavirus disease 2019 (COVID-19) pandemic highlights the importance of strong and resilient health systems. Yet how much a society should spend on healthcare is difficult to determine because additional health expenditures imply lower expenditures on other types of consumption. Furthermore, the welfare-maximizing (“efficient”) aggregate amount and composition of health expenditures depend on efficiency concepts at three levels that often get blurred in the debate. While the understanding of efficiency is good at the micro- and meso-levels—that is, relating to minimal spending for a given bundle of treatments and to the optimal mix of different treatments, respectively—this understanding rarely links to the efficiency of aggregate health expenditure at the macroeconomic level. While micro- and meso-efficiency are necessary for macro-efficiency, they are not sufficient. We propose a novel framework of a macro-efficiency score to assess welfare-maximizing aggregate health expenditure. This allows us to assess the extent to which selected major economies underspend or overspend on health relative to their gross domestic products per capita. We find that all economies under consideration underspend on healthcare with the exception of the United States. Underspending is particularly severe in China, India, and the Russian Federation. Our study emphasizes that the major and urgent issue in many countries is underspending on health at the macroeconomic level, rather than containing costs at the microeconomic level.

Financial threat profiles of industrial enterprises in Poland

Research background: The nature of bankruptcy has been the subject of interest for economic theories, both positive?identifying relationships between bankruptcy and other economic categories ? and normative, shaping the rules for the proper regulation of bankruptcy. In turn, the functioning of an enterprise in conditions of risk, financial threat, and finally a crisis that could lead to bankruptcy, are of interest to management. The interpenetration of these two dimensions provided the motivation for this study, which assumes a bottom-up approach: from individual results to summarised multi-sectional comparisons.
 Purpose of the article: The purpose of the research was to evaluate the level, directions of change, and structure of the degree of financial threat in industrial enterprises. The period under analysis was 2007?2018 and the whole population of industrial enterprises in Poland (15,999 entities) was examined. The enterprises were small and medium-sized enterprises (SMEs) as well as large enterprises (LEs). The financial analysis covered macro-, meso-, and microeconomic levels.
 Methods: The analysis was conducted using a comparative approach and financial threat predictions obtained from the original multivariable logit model. Heat maps were used to evaluate the intensity of changes in financial threat. The displacement of objects in structures was studied, ordered, and classified. Four normative standards of threat scenarios were defined and then used to evaluate similarities in the profiles of the structures examined, using the similarity measure. The ranking and its variability were analysed in the assessment of profiles.
 Findings & value added: As the result of the research, properties were described and profiles were determined for the structures in terms of the degree of threat and its correlation with rate of bankruptcy and creating added value. The originality of the research comes from the use of novel dynamic logit models. The added value is a unique study on the entire population of industrial enterprises in the national economy and a methodology for identifying financial threat profiles and their similarity at subsequent aggregation levels (the micro-, meso-, and macro-levels). This made it possible to derive patterns and regularities for economic policy and guidelines for business management.

How Does Transportation Infrastructure Improve Corporate Social Responsibility? Evidence from High-Speed Railway Openings in China

The socioeconomic impacts of infrastructure investment are worth examining in both academic and practical areas. Regarding Chinese high-speed railway construction, the existing literature mainly focuses on the macro-economic level consequences of high-speed railway openings, leaving the micro-economic level impacts commonly untested. Using archival data of Chinese listed companies from 2009 to 2018 and the difference-in-difference (DID) approach, this paper examines the influential effect of Chinese high-speed railway openings on corporate social responsibility (CSR) performance. Empirical results show that high-speed railway openings can significantly improve Chinese listed companies’ CSR performance, and this positive effect is more salient when companies are experiencing lower information transparency. Mediating effect tests illustrate that the increased investor site visits caused by high-speed railway openings are one internal mechanism behind the main connection. Overall, from a micro-level perspective, this article provides additional evidence on the socioeconomic impact of transportation infrastructure investments.

METHODS FOR ESTIMATING THE SHADOW ECONOMY AND INSTRUMENTS FOR DE-SHADOWING THE FISCAL SECTOR

The subject of research is a set of theoretical and methodological provisions and applied aspects of assessing the level of the shadow economy and de-shadowing of this process. The study is based on the definition of existing methods for assessing the level of the shadow economy; clarifying the tools used in the process of assessing the shadow economy, identifying ways to de-shadow the fiscal sector and identifying tasks for the implementation of leveling this process. It is established that there are four most effective methods of estimating the size of the shadow economy: the method of "population expenditure - retail trade"; financial method; monetary method; electric method. The results of the study made it possible to propose tools for de-shadowing the fiscal market, which are to increase the level of financial literacy of the population; formation of electronic databases of violators (subjects of the shadow economy); improving the methodology for assessing the scale of the shadow economy; introduction of a tax on international speculative transactions; reforming the state's anti-corruption policy; ensuring the principle of tax justice (equality) for taxpayers; provide an effective fiscal management of residents who use offshore jurisdictions; raising the level of legal culture of the population; legalization of shadow activity (subject to its legality); improvement of the "ProZorro" system; counteraction to financial crimes, "laundering funds"; introduction of tax amnesty and capital amnesty, etc. The purpose of the article is to substantiate the existing methods of assessing the shadow economy and to develop practical recommendations on ways and tools to de-shadow the fiscal sector. Different methods of estimating the level of the shadow economy are used at the macro- and microeconomic levels. It was found that the assessment of the shadow economy by existing methods in Ukrainian practice is not accurate, as its reliability is influenced by factors: unreliability, concealing or providing false information, the complexity of tracking "traces" of economic crimes, the scale of shadow economic activities and more. Identifying ways and measures to de-shadow the fiscal sector will reduce shadow phenomena in the domestic economy and in the fiscal sector, in particular.

Comparative Analysis of Direct Taxation Rules from Different European Union Countries

The involvement of our country in the process of European integration is based on removing the inconsistencies and failures of previous reforms, as well as reconciling the objectives of efficiency, effectiveness and equity that lay the foundation for an optimal tax system. Carrying out a comparative analysis of local taxation in the Member States of the European Union could help to remove these inconsistencies, providing an overview and the conclusions drawn can be considered for improving our tax system. The countries we have chosen to carry out the comparative analysis on are part of both groups of developed economies and emerging economies, so the analysis could be relevant based on almost similar contexts, being part of the European Union. The group of developed countries under observation is made up of Italy, France and Germany, all three of them being founding members of the European Community, while the group of developing countries we chose is made up of Bulgaria, Romania and Poland, all of which are the latest members that adhered to the European Union. This paper analyses the fiscal pressure borne by taxpayers, at the European Union level, from direct taxes. The correlation between fiscal pressure and direct taxes, in an empirical analysis conducted at microeconomic level, as well as the challenges that the Member State face in their attempt to harmonize direct taxes are also highlighted in this study. Following this comparison, we will be able to assess the impact of direct taxes and to which extent these influence a country’s economic development as well as what challenges the governments are currently facing in increasing their amounts of revenues.