Traditional Production Factors Research Articles

ІСТОРИЧНІ ТРЕНДИ ТА СУЧАСНІ ТЕНДЕНЦІЇ МІЖНАРОДНОГО РУХУ КАПІТАЛУ В УМОВАХ НЕВИЗНАЧЕНОСТІ

The article defines the phenomenon of international capital movement, examines its trends and current state in the conditions of incomplete recovery from the pandemic and after the start of the war in Ukraine. The authors describe the reasons that encourage countries to export capital, describe its main characteristics and influencing factors. It was concluded that the most profitable way of financing is financing with the help of direct foreign investments. It is also stated that the international movement of capital is characterized by periodic volatility, various periodic trends and structural changes. The historical prerequisites of the current state of the international movement of capital are also investigated. In particular, the historical periods in the 20th century, when there were changes in the direction of capital movement on a global scale, are highlighted and the reasons for such changes are substantiated. It was found that immediately after the war, investments were made mainly in the countries of Western Europe, and starting from the mid-80s, these countries themselves became large exporters of capital. The article emphasizes the difference in capital flows of the second half of the 20th and the beginning of the 21st centuries, when information was added to the traditional factors of production and new types of highly mobile capital appeared, moving only at a higher rate of profit. It is also stated that the movement of capital today is affected by the transition of the economy of developed countries to the post-industrial stage of economic development, which leads to the restructuring of the international division of labor and the expansion of scientific and technical cooperation. The authors also assessed the trends towards the recovery of direct foreign investment in the world after the pandemic and the prospects of an economic recession as a result of the war in Ukraine. It is noted that in 2021 the investment sector has fully recovered after the pandemic (especially in developed countries), but it is expected to slow down due to military actions in Ukraine, because the first signs of a threatening recession are already visible, which will most likely accelerate the decline in investment.

The Impact of Entrepreneurship on Economic Growth within a City

Entrepreneurship usually takes place in innovative systems, mostly in cities. Cities, with unique features, may alter the impact of entrepreneurship. This paper employs multiple regression models to assess the impact of entrepreneurship on economic growth, considering the moderation effect of the city context. We use Gross Domestic Product (GDP) as the dependent variable and government spending, labor, fixed and financial capital and entrepreneurship as the independent variables. The data are from the 2003–2017 yearbooks of Zhaoqing, Shantou and Meizhou (three cities with distinct cultural and geographic features in Guangdong, China). We conclude that (1) the three cities’ GDPs highly rely on traditional factors of production (i.e., government spending, labor and fixed and financial capital) rather than entrepreneurship and (2) the city context of Meizhou is relatively unsupportive of its entrepreneurship contributing to the GDP, in comparison with that of Zhaoqing and Shantou. This study adds to the literature by empirically assessing and comparing three cities’ entrepreneurship development in China; it also informs scholars and practitioners of the moderation effect of the city context.

Special Economic Zones in International Economic Law: Towards Unilateral Economic Law

ABSTRACT The international economic regime has entered a new phase of reassertion of sovereignty by States. While States continue to show respect for the values of international (economic) law, the institutionalization of these values has devolved from the international (to the regional) to the domestic level of governance. A new form of ‘unilateral economic law’ is thus gaining importance in the development of international and domestic laws and institutions. However, it remains largely understudied. This article discusses the development and proliferation as well as the importance of special economic zones as a new form of unilateral economic law in the overall system of international economic law. This article identifies four types of economic unilateralism: classical unilateralism, embedded unilateralism, sustainability unilateralism, and national security unilateralism. The new special economic zone unilateralism represents a middle ground between the two extremes of unilateral liberalization and aggressive unilateralism. Accordingly, special economic zone unilateralism introduces a new layer in the overall system of international economic law. First, special economic zones embody a new compromise between the State and the market. The State-controlled promotion of trade and investment taking place through special economic zones represents a complex compromise between the liberalization and protection of economic sovereignty. Second, the spatiality of trade and investment promotion through special economic zones is different from that of international economic law. The liberalization of trade and investment does not take place for the whole country but for an isolated jurisdiction within the broader national jurisdiction, while the focus is on the supply side rather than the traditional input factors of production. Overall, the new special economic zone unilateralism provides insights into the future of international economic law as envisaged by States. Special economic zones have been employed by States both as an alternative and as a complement to trade and investment promotion through the instruments of international economic law.

Two sides, but not of the same coin: digitalization, productivity and unemployment

PurposeThis paper aims to examine how input from the digital restructuring of the workplace and productivity affects the risk of job loss and unemployment.Design/methodology/approachRelying on the concepts of technological unemployment and the productivity paradox as well as the theory of skills-biased technological change, the analysis incorporated micro-level individual determinants of job loss, macro-level economic determinants of input and the contribution from traditional (machinery and equipment) vs innovative (ICT) factors of production. The model has been also controlled for “traditional” indicators of “outsiderness” in the labour market. The Quality of Work Life Survey, which is a broad-based national interview survey produced by Statistics Finland, for 2018, the latest year available (N = 4,110) has been used in the analysis. Binomial logistic regression has been applied in order to estimate the effects of individual- and macro-level factors on the risk of job loss.FindingsThe results support arguments for the divergence between effects from labour- vs total-factor productivity on the risks of job loss, as well as the divergence between effects for temporary (layoff) vs permanent job loss (dismissal or unemployment). While the contribution from “traditional” factors of production to labour productivity potentially decreases the risk of permanent job loss, input from “innovative” factors of production on total-factor productivity potentially causes adverse effects (e.g. growing risks of permanent job loss).Originality/valueThe paper contributes to the theoretical discussion about technological unemployment and productivity by means of including two different concepts into a single econometric model, thus enabling examination of the research problem in an innovative way.

Creative Economy in the Republic of Sakha (Yakutia)

The article is devoted to the analysis of the concept of a new creative economy. Creative economy is a special sector of the economy, combining activities related to intellectual work, creativity. The creative economy is based on intellectual work, generating income not only from the final product created, but also from trading in its results and intellectual property rights as opposed to traditional factors of production. In the creative economy, the kreatosphere is formed. The kreatosphere is a type of activity in the creative economy. Features of the products of the creative economy are the high added values created by intellectual effort. On the example of the Republic of Sakha (Yakutia), accelerators of the development of the kreatosphere are highlighted: the development of educational programs, the preparation of creative, creative-minded specialists; support of innovation centers and investments in creative industries; development of creative projects.
 Keywords: new economy, creative economy, digital economy, kreatosphere, creative class, creativity

Improving potential economic growing rate of china in the new normal based on artificial intelligence with fuzzy integration

As we know, AI is deeply integrated with all walks of life. While upgrading traditional products and transforming traditional industries, a large number of new products, new industries and new formats have emerged in large numbers, and new industrial space has been further expanded. The potential for steady economic growth remains huge. However, the influence of merelygrowing capital asset and labor force dimension in terms of boosting economic progress has been waning globally. Considering the China’s data panel data outlying areas during 1978–2017 as the research sample, possible economic growing rate of Chinahas been calculated in detail according to the labor-intensive structural time-varying elastic model. It shows a U-shaped development track during 2018–2027, with an average growth rate between 5.00%and 6.00%. There are also great variances in the probable economy growing rates in different regions in China. It shows that relying solely on traditional factors of production to drive potential economic growth, China has been unable to maintain the prosperity of stable development over the past few decades. Based on the experience of typical representative countries, this paper also puts forward some relevant countermeasures and suggestions including focusing on a new round of technological revolutions such as big data, new generation AI, 5 G, IOT, cloud computing, robotics, and blockchain to progress economical growing rate of China in the future.

ЕВОЛЮЦІЯ НАУКОВО-ТЕОРЕТИЧНИХ ПОГЛЯДІВ НА ПОНЯТТЯ ТА РОЛЬ ЛІДЕРСТВА В УПРАВЛІННІ СУЧАСНИМ ПІДПРИЄМСТВОМ

The actuality of the research is determined by the fact that in the conditions of increasing competition, intellectualization of economic relations and a certain weakening in this regard of the importance of traditional factors of production to ensure economic development and improve the efficiency of enterprises, the task of strengthening the role and using the capabilities of economic management methods is increasingly actualized, there is a need to think strategically and manage using the best management methods from domestic experience and adapt the progressive achievements of foreign achievements. Effective management of the organization's personnel, and due to this, obtaining high socio-economic results of management in the unstable economic situation in the country and the world as a whole, is a key aspect of their success today. Many domestic and foreign scientists have been studying the phenomenon of leadership from the middle of the 20th century to the present, but still have not come to a single definition of this concept. The role of a leader in the management process cannot be overemphasized. After all, a leader is not just a manager who manages the organization and gives instructions to employees, he is a person who is able to lead employees, be an example for subordinates and gain his followers. We have studied the main properties of leadership, namely: making collective decisions, constantly striving for change, focusing on the qualitative indicators of the team's activities, working on the principle of equality in the team. The views of scientists on the phenomenon of leadership are systematized in accordance with the interpretation of this concept. Leadership functions and their purpose are defined. We also studied the functions of leadership, namely: representative, administrative, planning, motivational, regulatory, etc. It is proposed to define leadership as a constant process of interaction between the leader and team members, which focuses on the psycho-emotional climate in the team and focuses on the spiritual interaction of the leader and team members, the objects of which are thoughts and emotions of each team member, reserving the right to make the final decision after leader.

The Alienated Innovation of ‘Digital Resources’under the Modern Economic Conditions

The source of economic growth in the D-T era is still the micro factors. The difference is that the ways of economic growth and factor allocation have been mutated due to the alienation of ‘digital resources’. The most typical feature is the process of digitization of factors. Digital resources under modern economic conditions are no longer the digital reorganization of paper-based coding. It is the stripping, remodeling and innovation of the traditional factors of production by the Internet and information technology through digital methods. With the help of open innovation theory, this paper makes an in-depth analysis of the innovation attributes, innovation space, industrial regulation and the process of alienation of digital resources. Combining dissipative structure theory, digital dissipative structure and digital entropy are proposed to realize the analysis of the mechanism of innovation and alienation of digital resources. The article emphasizes that in the process of integration of digital resource alienation and innovation, each element has always changed due to the dynamic change of element flow. When the movement and integration of data flowis linked to market demand and segmentation, the value of the alienated innovation quality of digital resources will be reflected. New technologies and new models will bring new demands. Market competition rules and related institutional rules will be forced to be revised and new industries and markets will be created, that is, disruptive innovation.

Artificial Intelligence in Developing Countries

Al applications are tackling economic and social challenges facing developing countries. Economically speaking, Al possesses unique mechanisms that allow it to have significant impacts on economic productivity. While developing countries may experience a decline in outsourcing jobs from developed countries, the potential negative impact of such decline can be minimized by appropriate policy to deploy Al solutions. The true potential of Al comes from the ability to complement as well as enhance traditional factors of production.

Impact of the Russian Stock Market on Economic Growth

The article considers the impact of the stock market on the economic growth. The aim of the study is to determine the degree of impact of the Russian stock market on gross domestic product, as well as to analyze the significance of various financial instruments in this process. The study suggests three hypotheses: 1) the dynamics of changes in the stock market as a whole has an impact on GDP growth; 2) the growth of the stock market has a positive impact on the change in GDP; 3) the stock market affects the GDP growth more, than that of corporate bonds. To test these hypotheses, the work employs methods of economic and mathematical modeling and building a vector autoregressive (VAR) model. The authors used the data from the International Monetary Fund (IMF), Moscow Exchange (MOEX) and Finam Investment Holding for the period from January 2000 to July 2019. As a result , they proved that not only traditional macroeconomic and production factors affect the country’s GDP growth, but also the positive dynamics of the stock market. The paper revealed that the impact of the growth of stock indices and corporate bonds on the change in gross domestic product would be different. At the same time, a different degree of impact of the stock market on gross domestic product over time. The authors concluded that ensuring the growth of stock indices is a condition to achieve stable growth in Russia’s GDP. Most of all, the GDP growth depends on the growth of the largest liquid companies trading in the Russian stock market.

Challenges and Opportunities of Digital Transformations in the Economy

The article gives accounts of change taking place in the economy under the impact of digital transformations. The article’s objective is to highlight opportunities and threats in the operation of economic entities at various levels, caused by the development of digital economy, with outlining potential ways of effective management of this change.
 It is argued that digitalization is capable to radically transform the economy. Core characteristics of the digital economy are analyzed, and the most significant economic effects from digitalization are highlighted: the increasing labor productivity and employment, the increasing effectiveness of markets, the increasing quality of existing goods and services and the growing output of newly created ones. The essential principles to be met by government offices in order to maximize domestic benefits from the digital revolution are determined.
 Digitalization effects are analyzed at industry level, with outlining the categories of industries more and less exposed to digital transformations. At company level, opportunities and threats for individual companies, essential problems related with their adaptation to new conditions, and main features of leader companies are determined. Changes in the activities of individuals, triggered by digitalization, are described.
 It is concluded that while the digital economy decreases the significance of traditional production factors, qualities like flexibility, adaptability, creativity, innovativeness, orientation on knowledge and learning lifelong become crucially important.

FOUR-SECTOR MODEL ECONOMY

The article studies the theory of three-sector economy developed by American Economists A. Fisher and K. Clark. This theory was formulated on the basis of their works published in the mid 20th century. Later it was used as a foundation for the theory of public-economic structures. The present article puts forward a concept of the economic system of the future, i. e. economy of knowledge or economy of information society. The new economic system is being developed now but its certain components can be seen and work today. Production factor of new economy is knowledge, while traditional factors of production are labour and capital as necessary conditions of production. Economy of knowledge can be characterized by processes of economic development but not processes of growth. The forth sector of national economy (quadrum-sector) includes such types of activity as education and science, i. e. those types of activity, which form new knowledge, transform it and proliferate. On the basis of economicmathematic model of general balance by Arrow-Debre the author developed a mathematic model of economy of knowledge, which is presented as space of goods production and consumption.

What Managers Need to Know About Data Exchanges

The idea that many businesses rely heavily on data to produce or market goods and services is not new. Indeed, even in 2018, four of the six top companies in market valuation—Amazon, Alphabet, Facebook, and Alibaba — based their business models on the use of data to optimize advertising. However, data differs greatly from traditional factors of production, such as capital and labor. For instance, to achieve scale, companies need data about large numbers of customers—especially when algorithms are used in advertising and other revenue-generating models. Given that scale, data interacts with personal privacy—even national security—in ways that other factors of production do not. These special attributes of data hinder its efficient and transparent trade in data markets, keep it in closed silos despite its digital nature, and often stop organizations from maximizing its value. But this is going to radically change. We are embarking in a transition from the era of big data to the era of shared data, in which the insights that emerge from data are starting to move freely and transparently in the market, thanks to the implementation of data exchanges. This is going to profoundly change the way in which companies produce, and it is going to open the horizon for the next level of data-based value generation. Business managers need to understand which characteristics make data so special as a production factor, reflect on how data exchanges are going to change the way in which companies produce and interact (both in a B2B and in a B2C context), anticipate the creation of data unions, as well as prevent the threats and maximize the opportunities that data exchanges are going to generate.

The Impact of Renewable Energy on GDP

Besides traditional production factors, such as labor and capital, one of the inputs used in the production process is energy. Although the use of fossil fuels is more common in many production processes renewable energy sources are increasingly important in ensuring sustainable development. In many countries in the world, the share of renewable energy is the total energy consumption is very high, including in European Union (EU) countries. The purpose of this study is the investigate the output elasticity coefficients of capital and renewable energy in 12 EU countries by using the Cobb–Douglas production function approach. In this study, the Gross domestic Product these countries from 2000 to 2017, was examined using a generalized method of moments estimation, which used labor, capital, and renewable energy data. As a result of the study, the output elasticity coefficient in the Cobb–Douglas production function was found to be 1.147. This indicates that a 1% increase in labor, capital, and renewable energy increased GDP by 0.598%, 0.446%, and 0.093%, respectively. Among the findings, the relationship between GDP and explanatory variables is statistically significant and economically significant. It is understood that there is a positive relationship between the variables.

The Resource Dependency of Data: A Prospective on Data Sharing in Supply Chains

In addition to traditional production factors, such as capital and labor, data can also be considered a similar resource. Furthermore, data cannot be created and handled without the involvement of other resources. In contemporary supply chain structures, companies rarely produce all the resources required by the final product internally. Instead, they partially rely on external inputs from other supply chain participants. This proportion is reflected by the added value captured by each supply chain participant. This study examines the extent of sharing of data by companies to their supply chain participants. The study explores how these data sharing percentages would look if data was shared in the same proportion as the value added is captured by the supply chain participants. While the theoretical figures on data sharing based on the assumption of similar proportions of data sharing and value added are high, in practice no correlation can be seen between the value added contribution and data sharing within the supply chain. Acknowledgements: This report has been drafted as a part of the Industry and Data research project by The Finnish Innovation Fund Sitra and by Digital Disruption of the Industry (DDI) research projects funded by Academy of Finland. Sitra’s IHAN project builds the foundation for a fair, human-driven data economy. In the new model, data is shared through the individual’s or data source’s consent, leading to transparency and trust in the use of data, as well as perceived value among all network members from individuals to companies and society at large. Special thanks to Mika Pajarinen for his data prosessing work.

Evolution of Perceptions about the Essence of Capital as a Scientific Category and a Factor of the Socio-Economic Development

The article’s objective is to investigate the logic of evolution in the essence and forms of capital under the impact of the changing sources and factors of socio-economic development and social wealth. 
 The visions of capital prevailing from the middle of the eighteenth till the middle of the nineteenth century are analyzed, to demonstrate that although the classical tradition did not deny the impact of out-of-economic factors on the economy as a whole and the human behavior in particular, the analysis focused on the purely economic factors of growth and distribution of the social wealth.
 The paradigm of the classical school was changed in the end of nineteenth century by the emerging institutional theory: factor theories of economic growth were replaced by substantiations of multidimensional sources of socio-economic development. The twentieth century was marked by the two achievements: (i) the understanding that the social wealth could not be confined to the material wealth; (ii) a new vision of a mix of factors behind the socio-economic development: natural, technical and technological, and institutional, with research focus gradually shifting from material factors to information and institutional ones. 
 The following significant move in the vision of capital was the line drawn between the notions of “economic growth” and “economic development”: emphasis on economic growth as the fundament of development made the economic theory inapplicable in studies of broader development perspectives. 
 A new phase in the economics started in 70s of the twentieth century, with rise of the neo-institutional theory assuming that the material welfare of a nation could not be gained by means of traditional production factors and capital accumulation without a highly developed institutional structure of the society. 
 The philosophical and economic rediscovery of capital was made by the neo-classical school: by treating capital as a way of value utilization rather than a tangible form, it denied a criterion of capital commonly adopted in the political economy of earlier times, i. e. its alienability, together with the materialistic approach to interpretation of capital. The set of capital parameters was expanded by including in it skills and qualifications (human capital), social relations and networks (social capital), political and economic institutes (institutional capital), and, eventually, intellectual objects of intangible nature. It shows that the forms of capital were transforming from tangible (material) to human and intellectual (intangible) ones. This phase is marked by rise of the theory of human capital, reflecting the cardinal change in the role of the human factor and its impact on science and technology development, production processes and labor productivity. The notion of “social capital” was introduced in economics by abandoning out-dated visions of capital as a purely materialistic phenomenon associated with the material production processes and adopting to broader concept related with social development, with emphasis changing from links of humans and wealth to relations between humans in a broader humanistic sense.

Knowledge economy changes in the perception of investment nature in agriculture

The specific nature of the so called knowledge economy, the innovation economy, determines a number of new trends that in a very recent past might have seemed fantastic. The article is devoted to the discussion of the nature of investment in the modern economy, including the agricultural sector, one of the main factors of production in which, along with traditional factors, is knowledge. Today it is common to face a situation where their use multiplies the end result of entrepreneurial activity much more efficiently than the use of such traditional factors of production as land, labor and capital. Among the most popular and promising trends in agriculture in the United States and Europe, experts recently point out the introduction of high-tech innovative technologies that require the active attraction of investments related to intellectual and human capital. The authors consider such investments as a special type, significantly different from their classical Keynesian interpretation, which is characteristic for describing investments in industrial economy.

A Model-Based Approach to Identify Barriers in Design Knowledge Reuse

AbstractToday, information and knowledge as competitive factors influence the success of companies as much as traditional production factors like human resources or physical capital. However, the reuse of design knowledge still represents a major challenge for engineering organizations. That is, because barriers exist hindering a successful knowledge reuse. On the basis of a literature review, the research depicted in this paper analyses the relation between single information conveying design knowledge and barriers hindering a successful knowledge reuse. Developing a model-based approach, we propose a micro logic containing three steps and underlying methods enabling practitioners to identify situation-specific barriers within their organization. We illustrate the industrial application of the approach in a case study at a mining machinery OEM.

EDUCATION SYSTEM IN XXI CENTURY – CHALLENGES AND PERSPECTIVES

The purpose of this study is to outline and analyze the main trends in the education system of Bulgaria in the context of contemporary social and economic development. Its subject-matter is the education system as a production process of key importance for the future economic development. The subject of study covers the challenges to the educational system of Bulgaria posed by the contemporary economic conditions.Social and economic reality in the beginning of 21st century can be treated as unique. This attitude is due to all phenomena and processes accompanying human civilization development nowadays. Fundamental factors predetermining relationships between economic entities in processes of production, barter and income distribution are liable to changes. New conditions show that land and assets equipment of production are not enough to guarantee growth of social wealth. Assets transformation from “property” into “function” presupposes knowledge and skills presence. That is why knowledge is considered in the paper as current production foundation. The orientation of economic development to the all-round penetration of knowledge in business processes can be defined as a challenge to the industrial society and its production principles. We think that the signs of change could be outlined in the following directions: annexation to the traditional industrial factors of production - land, labor and capital of knowledge; transition from mass industrial production to demascision of production, markets and society; transition from vertically positioned public and economic structures to horizontal networks; transformation of the production of products with a physical medium into products that can easily be digitized and multiplied technologically, causing structural changes in both the national and global economy. These changes do not exhaust the extensive series of transformations, but only identify the directions in which they could be reasonably devised. The family, political structures and the social culture are changing. Every new socio-economic system needs the appropriate cultural prerequisites to make its development possible.

Interrelation of Information and Knowledge in the Economy of the Post-Industrial Society

Relevance of the study is to consider that in the post-industrial society the role of information and knowledge is so increased that they begin to occupy a decisive place in the production development. The purpose of the work is investigated interrelation of information and knowledge in the process of intellectual activity, which is a component of the production activity of the post-industrial production. The study task is to examine the role of information and knowledge in the formation of the new economy replacing the industrial one. In this paper used abstract-logical method historical method systemic and dialectical methods of analysis and synthesis. As a result of the research were justified "information" and "knowledge" as independent and interrelated categories; identifying peculiarities of knowledge that distinguish it from traditional production factors; studying intellectual activity as a component of the production activity.