The South East European Journal of Economics and Business

EXPLORING DIVERSE FRONTIERS IN ECONOMICS AND BUSINESS – EDITORIAL

Adnan S. Efendić — 2024-06-22

LABOUR MARKET TIGHTNESS AND MATCHING EFFICIENCY IN DIFFERENT LABOUR MARKET SEGMENTS – DO DIFFERENCES IN EDUCATION MATTER?

Alka Obadić — 2024-02-15

This paper analyses the existing educational structures of selected EU member countries and their alignment with the labour market (LM) needs. This study aims to identify potential structural mismatches between the skills taught in schools and universities and the skills and knowledge required in the workplace. To evaluate this educational mismatch, the paper explores the matching needs of employers and unemployed job seekers by using disaggregated national employment office data. The paper examines the selected group of EU countries (AT, HR, EE, SI, ES) from 2010 to 2022, using the Beveridge curves and estimating LM tightness and matching efficiency for different education groups. The results show that differences in education levels result in relatively small deviations from aggregate trends in the LM. Aggregate LM trends strongly impact all education groups in the labour market.

DOMESTIC COMPETITION, TRADE OPENNESS AND ENTREPRENEURIAL CULTURE: CANONICAL CORRELATION ANALYSIS

Milan Kostić — 2024-02-15

The paper analyses canonical correlations between domestic competition, trade openness and entrepreneurial culture. The research covered 141 countries ranked by World Competitiveness Index in 2019. Canonical correlation analysis is applied to find relationship between two canonical variables. The first canonical variable includes sub-indexes from Domestic competition and Trade openness pillars. The second variable contains sub-indexes from Entrepreneurial culture pillar. The results of the analysis showed there is a strong, positive, statistically significant canonical correlation between these canonical variables with a Pearson coefficient of 0.86. The linear regression analysis is also applied. The regression analysis shows that the variable Distortive effects of taxes and subsidies on competition is the most important for all dependent variables. The extent of market dominance, Competition in services and Border clearance efficiency are important, but not as much as taxes and subsidies. It confirms that regulation of domestic competition and trade openness are supreme for entrepreneurial culture.

LEADERSHIP PROFILE OF CROATIAN PROJECT MANAGERS - INVESTIGATING THE EFFECTS OF STRESS AND FOLLOWERS’ EXPERTISE IN ACHIEVING PROJECT SUCCESS

Ivan Matić — 2024-03-15

The purpose of this paper is to investigate the role of stress in demonstrating adequate project leadership and ultimately achieving project success, while also respecting followers’ expertise as the most important context factor. During 2021, the empirical research was conducted on 71 project managers in the Republic of Croatia. Results obtained via SPSS Statistics 23.0 and PROCESS macro v4.0 for SPSS indicate that demonstrated project leadership and followers’ expertise positively affect the project’s success. According to the results, stress, due to its inverted U-shaped nature of effect, does not affect project success, whereas it has a negative moderation effect on demonstrated project leadership by reducing its positive effects on project success. In addition to these results, this paper offers other interesting insights into the relationships between demonstrated project leadership, project manager’s stress, and project success, further filling the identified gap in research. A relatively small sample of project managers and its cross-sectional nature stand out as the main limitations of the empirical research presented in the paper.

THE EFFECTS OF MACROECONOMIC AND FINANCIAL DEVELOPMENT ON INCOME INEQUALITY: EVIDENCE FROM THE WESTERN BALKANS

Jurdal Cakal-Velagic — 2024-04-06

Using data from 1996 to 2019 covering five Western Balkan countries and applying the linear panel data estimation method, this paper examines the effect of macroeconomic indicators and financial market development on income inequality. Regression results with Driscoll-Kraay standard errors demonstrate that income per capita increases income disparities. Theoretically, there are grounds for both a positive and negative relationship between economic growth and income inequality. In addition, contrary to prevailing literature, our analysis finds no significant impact of financial market development on income inequality, while the rule of law is found to have no effect on income inequalities in these countries. We depart from previous literature by bringing new evidence on the relationship between income inequality and economic growth in the specific context of Western Balkan countries. We study this relationship in an integrated framework and rely on a larger time span, both of which are seemingly important for comprehending the income inequality-economic growth nexus. Certainly, the obtained results bear important policy implications as discussed in this paper.

THE ROLE OF MONITORING AND EVALUATION AND PROJECT IMPLEMENTATION MANAGEMENT SYSTEM FOR NON-PROFIT PROJECT PERFORMANCE IN DEVELOPING COUNTRIES

Adnan Ovcina — 2024-05-06

This study examines the relationship between monitoring and evaluation (M&E), project implementation management system (PIMS) for financial monitoring, and project performance within the framework of the resource-based view (RBV), dynamic capabilities, and knowledge management theory. It focuses on non- profit projects in a developing context, particularly in countries such as Bosnia and Herzegovina (BiH). Developmental assistance and non-profit projects have an important role to play in the economic performance of developing countries. The research highlights the significance of understanding factors influencing project performance in non-profit projects in developing countries such as BiH. The findings indicate that both M&E and PIMS for financial monitoring significantly influence three key knowledge management processes - knowledge internalization, knowledge accumulation, and knowledge transfer and integration, which in turn positively influence project performance. The study underscores the importance of synergy between M&E, PIMS, and knowledge management for enhancing project performance, offering valuable insights for policymakers, donors, the international community, and academia.

GENDER ENTREPRENEURIAL BEHAVIOUR: A SSLR (SEMI-SYSTEMATIC LITERATURE REVIEW) APPROACH

Leonita Mazrekaj — 2024-06-13

Gender-related entrepreneurship research remains essential for analyzing various socioeconomic, cultural, and socio-family abstractions of human capital that are distinct to gender. This study provides a comprehensive review of the literature about the theoretical foundations, results, assessment, and research that considers specifically composition of human capital as a moderator in the structure of gender entrepreneurial behavior. In this review study course, the SSLR (Semi-Systematic Research Review) approach is utilized to develop future research outlines. The key findings state that studies on female entrepreneurs that concentrate specifically on education and perceived abilities have a number of shortcomings. This includes failing to grasp the importance of simultaneously addressing individual and country-level indicators, as well as structural, historical, and cultural variables. The findings thus reinforce the importance of viewing the structure of female entrepreneurs as part of a holistic interdependent system, highlighting how the interaction of factors at various levels shapes identities, career choices, and perceptions of entrepreneurial opportunities and constraints. Finally, findings indicated that there is a need for a new approach to gender and economic inclusion methods, such as life histories, longitudinal empirical analysis, narrative analysis, approaches with in-depth interviews, or discourse analyses. At the end an agenda for future research is developed based on the review, with implications for entrepreneurship educational attainment and perceived abilities being highlighted.

INTERNATIONAL PORTFOLIO DIVERSIFICATION BENEFITS: AN EMPIRICAL INVESTIGATION OF THE 28 EUROPEAN STOCK MARKETS DURING THE PERIOD 2014–2024

Azra Zaimovic — 2024-06-22

This study investigates the benefits of international diversification in the stock markets of the 28 European countries (the EU and the UK) over two five-year periods: a stable period from 2014 to 2019 and a turbulent period from 2019 to 2024. The analysis draws on the Markowitz mean-variance, Sharpe reward-to-variability, and naive diversification models, based on which different investment strategies were developed and implemented. We find that actively managed portfolios perform significantly better than naively diversified portfolios. The analyzed markets exhibit positive short-term associations, with an average correlation coefficient of 0.29 in the first period and 0.46 in the second period. However, these markets do not show long-term cointegration. Recent crises have reduced diversification benefits, yet significant opportunities for diversification remain. Diversification benefits are almost halved in the second period: average single-market standard deviation can be reduced by 60.5% with investments in 20-indices portfolios in the stable period, and only by 33.7% with the same portfolio size in the turbulent period.

THE DETERMINANTS OF THE INCIDENCE OF EMPLOYER-PROVIDED TRAINING IN THE WESTERN BALKANS

Ardiana Gashi — 2024-06-22

If the standards of living in the Western Balkans are to converge on those in the EU then the current productivity gap needs eliminating. A significant portion of that gap would ideally be eliminated through the expansion of employer-provided training. However, survey data indicate that since 2016 training incidence has been rising in only two of the six countries of the Western Balkans. The main contribution of this paper is to investigate this disappointing performance. A model of the determinants of the incidence of employer-provided training is developed based on theory and investigations in other countries. It is found that in the Western Balkans firms with foreign owners, those who export and those who report that their employees are eager to access training are more likely to provide training, whilst micro and small firms are less likely to provide training. Sentiments regarding the firm’s and economy’s current performance and their prospects are also significant determinants. The policy implications of these findings are addressed in the concluding section.

THE IMPACT OF THE CRISIS INDUCED BY THE CONFLICT IN UKRAINE ON FIRMS: EVIDENCE FROM NORTH MACEDONIA

Marjan Petreski — 2024-06-22

This paper evaluates the impact of the Ukraine conflict-induced crisis on firms in North Macedonia using data from a survey conducted with 112 firms in April and May 2023. Through descriptive statistics and probit regression analysis, we find that small firms in low-wage sectors predominantly coped with the crisis by raising prices of final products and services, followed by cost-cutting measures. Larger firms tended to invest in self-electricity generation or energy-saving equipment. Our results show that firms with higher energy cost shares increased final prices more but experienced decreased competitiveness. Firms not addressing rising costs did not consistently pass these costs onto prices or maintain competitiveness, except for labor costs. Labor cost increases, such as from minimum wage hikes, may lead to cost-push inflation unless firms absorb these costs at the expense of profits.

THE ROLE OF SOCIAL FACTORS IN THE ACCEPTANCE OF ARTIFICIAL INTELLIGENCE-BASED SERVICES: THE EXAMPLE OF THE BANKING SECTOR OF BOSNIA AND HERZEGOVINA

Tamara Turnadžić — 2024-06-22

In times when AI’s development and research is moving at an unprecedented speed, this paper explores its role in retail banking. The results presented are part of a wider research of market readiness and AI acceptance, especially in developing economies. The research was conducted in Bosnia and Herzegovina (B&H). The quantitative portion consisted of a survey completed by 671 respondents. This paper focuses on the influence of social factors (perceived humanness, perceived social interactivity, and perceived social presence) on the attitudes towards – and subsequently acceptance of - AI-based services. Chatbots, specifically ChatGPT-4, were the technology the research focused on. The results indicate that perceived humanness and perceived social interactivity have a positive effect on attitudes – and acceptance – of AI-based services. This research could not prove that there is a positive relationship between social presence and attitudes towards AI-based services. The positive relationship between attitude and acceptance was proven as well.