This international scientific journal analyzes key economic, financial, and technological challenges facing contemporary Europe, from macroeconomic stability to digital and green transformation.
In the latest issue you will find:
Do Exchange-Rate Fluctuations Have Asymmetric Impacts on Visegrad–German Sectoral Trade?
Izabela Pruchnicka-Grabias, Scott W. Hegerty
Understanding the determinants of trade flows between countries is of particular interest to policymakers, central bankers, business owners and investors. The study examines the long-run impact of the real exchange rate, exchange-rate volatility, and output on the trade balances of 10 SITC (Standard International Trade Classification) sectors between three Visegrad countries and Germany. Because the linear Autoregressive Distributed Lag (ARDL) approach shows little effect across countries and sectors, we decompose the impacts into positive and negative changes via the Nonlinear ARDL approach. The paper adds value in the following respects. The first is that while the overall macroeconomic determinants have a relatively weak connection to these trade balances, the strongest connections are in the primary-product-producing sectors. The second finding is that while most of these trade flows often depend on the country, the sector analyzed, and the method used, there are interesting, stylized results, including the region’s chemical sector and manufacturing in Hungary, for example. The third finding is that nonlinear models show cointegration between the real exchange rate and the trade balance in Visegrad-Germany trade for a higher number of industries, even though the long-run coefficients continue to be insignificant in many cases.
Energy Security and Sustainable Development of the Energy Sector: Comparative Analysis of the Visegrad Group Countries
Adam Sadowski, Magdalena Kowalska, Anna Misztal, Agata Gniadkowska-Szymańska, Agnieszka Piotrowska-Piątek, Dorota Starzyńska, Per Engelseth
A sustainable energy sector is crucial for a country’s stable and environmentally friendly socioeconomic development. Economic security (ES), the basis for the functioning of the state, is one of the major factors affecting the development. The objective of this article is to examine how ES influenced the sustainable development of the energy sector in the Visegrad Group countries, i.e., Poland, Slovakia, Hungary, and Czechia, over the period spanning from 2008 to 2020. To evaluate a meaningful relationship between the indicators (p < 0.05), we used correlation coefficients, the ordinary least squares method, and the seemingly unrelated regression model. The findings indicate that ES impacts the sustainable development of the energy sector, where positive results can be achieved by implementing coordinated macroeconomic policies. Green energy sources and renewable energy are crucial in this process.
Digital Transformation Success in the UAE: The Impact of Leadership, Organizational Flexibility, and Strategic Planning Based on Structural Equation Modeling
Fadi Sakka
This study explores the relationship between leadership, organizational flexibility, and strategic planning, and the power of these elements to promote successful digital transformation in the context of the United Arab Emirates. This quantitative study involves the use of surveys and questionnaires that were distributed to 1000 mid-to-senior-level managers. Data on 600 valid answers (representing a response rate of 60%) were analyzed with Structural Equation Modelling (SEM) using AMOS software. The research examines three primary concepts: Leadership, Organizational Flexibility, and Strategic Planning, and how they influence the achievement of Successful Digital Transformation. The findings reveal that 82% of participants said that visionary leadership is essential for digital transformation, 78% stressed the need to effectively communicate goals, and 81% emphasized motivating employees. Furthermore, 75% of the participants said that their businesses had the capacity to adjust to changes, while 73% acknowledged the presence of flexible work practices, and 80% emphasized the need for cross-functional cooperation. Of the 77% of respondents who stated that their firms have a clearly defined digital strategy, 79% had aligned their digital strategy with their company goals, and 74% had included quantifiable targets and key performance indicators (KPIs). These results emphasize the significance of integrating artificial intelligence and data analytics with effective human leadership and strategic planning. It is suggested that organizations enhance their leadership capabilities, foster a flexible culture, and develop comprehensive digital strategies to reap the benefits of digital transformation to the maximum.
Cryptoassets as a Threat to State Sovereignty in the Field of Enforcement and Insolvency
Martin Cahlík, Simona Kurtinová, Michal Kozieł, Michael Kohajda
Cryptoassets, as a novel manifestation of financial technology, pose a challenge to traditional legal frameworks, especially in their decentralised nature and the unique way they are held and transferred. Their emergence requires a re-examination of regulatory principles and mechanisms of rights protection in an environment where decentralisation signifies the absence of centralised control. This article examines cryptoassets as a potential threat to state sovereignty within the domains of foreclosure, enforcement, and insolvency. It analyses the legislative challenges arising from the increasing prevalence of cryptoassets and evaluates the applicability of traditional enforcement law instruments to these new technological contexts. This article also integrates empirical findings from the Czech legal environment into the broader theoretical discourse on financial crime and the erosion of state authority caused by decentralised financial systems operating across national jurisdictions Particular attention is devoted to the technical characteristics of cryptoassets, their legal classification, and the practical obstacles encountered in enforcement and insolvency proceedings, especially in situations where debtors refuse or are unable to provide access to their digital assets. The analysis also incorporates available statistics on enforcement proceedings and evaluates the Czech legal framework governing cryptoassets, focusing on its implications for the effectiveness of enforcement and insolvency processes. The research employs both primary and secondary methods, including legal and technical analysis, modelling of real scenarios, and an examination of the relevant legislative instruments.
Fiscal Support, QE and Income-smoothing in European Banks during the COVID-19 Crisis
Małgorzata Olszak, Gracjan R. Bachurewicz, Christophe Godlewski
This study examines how fiscal and monetary policy responses to the COVID-19 crisis influenced banks’ income smoothing through loan-loss provisions (LLPs) in the European Economic Area (EEA). Using a panel of 1,122 commercial banks from 29 countries between 2011 and 2020, we investigate whether the intensity of income smoothing varied with the scale of public support. Fiscal liquidity measures and the European Central Bank’s quantitative easing (QE) under the Pandemic Emergency Purchase Programme (PEPP) serve as proxies for government and monetary interventions. The results show that both fiscal and monetary support reduced average LLP levels but simultaneously strengthened the link between earnings and provisioning, indicating increased income-smoothing behavior during the pandemic. This pattern reflects two complementary mechanisms: the crisis-severity channel, where larger policy interventions corresponded to deeper economic stress, and the moral-hazard channel, where public backstops expanded managerial discretion in provisioning. Overall, the findings suggest that large-scale stabilization policies mitigated credit risk and preserved financial stability but also encouraged more discretionary accounting behavior, underscoring a potential trade-off between crisis management and the transparency of banks’ financial reporting.
How Financial Inclusion Affects Environmental Pollution: Using a Threshold and the DID Model
Nguyen Yen
This study investigates the nonlinear impact of financial inclusion on environmental pollution across 61 developing countries from 2005 to 2022. Using a threshold regression model, the findings reveal a critical threshold at which the impact of financial inclusion changes direction. Below this threshold, financial inclusion tends to increase carbon emissions; however, beyond this point, the relationship reverses, with financial inclusion contributing to pollution reduction. To gain deeper insights, the study further applies the Difference-in-Differences (DID) method. The DID results indicate that the effect of financial inclusion is heterogeneous and depends on the level of financial development, national income, and the timing of each country’s participation in the Paris Agreement on climate change. These findings underscore the multidimensional nature of the relationship between financial inclusion and the environment, which is significantly influenced by country-specific economic and policy factors. In addition, the study finds that national income and urbanization levels are associated with increased pollution, while credit to the private sector plays a mitigating role in reducing emissions. These results have important implications that policymakers should consider when designing strategies that promote financial inclusion while aligning with Sustainable Development Goals.
Determinants of Fintech Fundraising in Europe
Katarzyna Niewińska
The study examines how the sub-indices of the Global Innovation Index (GII) affect the total value of fintech (financial technology) start-up fundraising in thirty-five European countries, including an eleven-country subsample from Central and Eastern Europe (CEE). Using annual panel data for 2013–2022. Fixed-effects models were estimated for the full sample, while random-effects models were used for the CEE countries. In these models, total fintech fundraising is the dependent variable, and the five GII subindices are the independent variables. The coefficients for Knowledge Workers, Knowledge Impact, and Business Environment are negative and statistically significant, and their effect sizes are even larger in the CEE subsample. The results suggest that improvements in the analysed factors do not necessarily lead to increased market funding for start-ups. The findings indicate that strengthening these dimensions of innovation does not automatically boost market funding for fintech start-ups. The study enriches the fintech fundraising literature by showing that improvements in the analysed factors do not translate into greater market funding for start-ups. As the study is limited to European data from 2013 to 2022, future research could extend the geographic scope or incorporate additional variables.
Youth Unemployment in the Countries of Central and Eastern Europe. Is Okun’s Law Applicable?
Eugeniusz Kwiatkowski, Agnieszka Krzętowska
This article investigates the empirical validity of Okun’s law regarding youth unemployment in 11 Central and Eastern European countries between 2000 and 2023. Using panel data disaggregated by age cohorts and gender, the study employs robust linear regression models (RLM) with Huber loss functions and two-way fixed effects models (TWFE). Focusing primarily on the 15–24 age cohort, the results confirm a statistically significant, negative relationship between economic growth and youth unemployment, with considerable heterogeneity across countries and gender groups. While Okun’s law holds strongly in the Baltic states and Poland, the relationship is notably weaker in Hungary and Romania. The study also shows that higher shares of temporary employment and higher Employment Protection Legislation (EPL) indices for regular employment reduce the sensitivity of youth unemployment to changes in GDP, whereas higher youth enrolment rates and higher EPL indices for temporary employment increase this sensitivity.
The articles are available in English – the link to the issue is provided HERE.
The journal offers an important contribution to the debate on the economy, finance, and technology in 21st‑century Europe. Worth reading!
