Economies

The supply and demand of various fresh chili types correspond to one another simultaneously because they can be complementary or substitute products. This study aimed to simultaneously examine the supply and demand model of red chili and cayenne peppers to support innovative chili enterprise system development. The methodology is the simultaneous equation system panel data using the years 2010–2020 time-series and provincial cross-sectional data combined with data mining techniques. The two-stage least square method was used for the estimation and simulation of the models. The results of the models comprise three identities and ten structural equations. The resulting models are all statistically fit with some drawbacks owing to the micro-level data availabilities. The simulations on the labor wages, prices, demand, and production for red chili and cayenne peppers affected the other variables within the model. In conclusion, the chili supply and demand models could support the development of the innovative chili enterprise system; however, this requires proactive collaboration and participation from all the relevant institutions and actors. Moreover, this research model is potentially applicable to other horticultural commodities. Full article

This paper aims to examine the determinants of financial stability in Jordanian commercial banks based on annual data for the period from 2011 to 2018. Based on the pooled effect model, this study shows that SME loans and capital adequacy positively and statistically affect the stability of Jordanian commercial banks, while financial inclusion, liquidity risk and credit risk negatively and statistically affect the stability of Jordanian commercial banks. The study recommends increasing the directing of bank loans towards small and medium enterprises, and the necessity for bank managers to commit to capital adequacy requirements because of their positive impact on banks’ stability. This study recommends that banks experiencing financial stability accelerate the increase in the rate of financial inclusion because financial inclusion ratios are very low in most of these stable banks. On the other hand, Jordanian commercial banks that have relatively high rates of financial inclusion should reduce the operating expenses resulting from financial inclusion. Bank managers also have to maintain sufficient liquidity in their banks and enhance credit standards by increasing collateral requirement from customers. Full article

The present analysis assessed the effect of Aid-for-Trade (AfT) flows on the shadow economy using an unbalanced panel dataset of 106 countries over the period of 2002 to 2015. The empirical results obtained by means of the two-step system generalized method of moments showed that higher AfT flows were associated with a decrease in the size of the shadow economy, with less developed countries experiencing a greater negative effect of AfT flows on the shadow economy than relatively advanced countries among recipient countries of AfT flows. AfT interventions reduced the size of the shadow economy in countries that faced high trade costs as well as in those that experienced a depreciation in the real exchange rate. Finally, AfT interventions reduced the size of the shadow economy in countries that improved economic sophistication. Full article

With the digital transformation of businesses, digital marketing has been a prominent feature of organizations in the 21st century. Changing consumer behavior has also created a need for versatile hard and soft skills for marketing professionals. Inspired by the ongoing disruption to businesses across the world, this research focuses on employability skills in the field of e-commerce. A systematic review of the managerial research literature on digital marketing and e-commerce competencies has revealed a research gap regarding the investigation of the perceived importance of employability skills. The aim of this paper is to find out how important these skills are for future and current employees. The novelty of this study is the comparison between perceptions related to nonworking versus working young employees based on five key skill categories across 30 soft and hard skills. The study is quantitative in nature: a self-administered computer-assisted personal interviewing (CAPI) method is used for data collection. The findings reveal that the examined skills are perceived as important from the employee point of view. In addition to exploring the perceived relevance of the employability skills categories, the study identifies differences among the skills that young workers consider important in terms of their work experience. The research results reveal significant differences by work segments in relation to soft skills, such as teamwork, stress resilience, planning, organization and time management, precision, and attention to detail. Full article

The theory of planned behavior is broadly used to study the buying behavior of green products. However, the theory has been criticized for ignoring moral considerations in the purchase decision and not sufficiently explaining the influence of personal factors such as consumers’ product attributes evaluation. This study aims to build a structural model to explain the causality of factors influencing consumer intention to buy organic coffee in Indonesia. Organic coffee has a bright business prospect, but there was only limited evidence of academic studies on organic coffee from a consumer’s perspective. Thus, this study is one of the attempts to explain organic coffee purchase intention from the perspective of rational and moral consideration. The sample of 500 coffee consumers aged 18 years and more who live or do activities (work/study) in Jakarta were recruited using the purposive sampling technique. Structural equation modeling was utilized for data analysis. The results demonstrated that attitude, subjective norms, perceived behavioral control, and values orientation affected purchase intention. The study successfully explains the role of moral considerations in organic coffee purchase intention. These findings suggest managerial implications, including marketing communication and distribution strategy. Future research suggestions were also discussed. Full article

A legislative process is currently ongoing in the European Union to supplement the 2018 General Data Protection Regulation regarding ePrivacy regulation. The supplement is intended to complete the European data protection policy in significant areas. One addition would be for service providers on the Internet, who currently obtain the consent of their users via an opt-out provision, to always provide a paid alternative without disclosing data. This procedure is essentially aimed at overcoming “cookie consent fatigue”, which can be observed in many cases. A simple economic exchange model shows that users, as data subjects, are basically faced with the choice of paying a monetary price for a service that will also preserve their privacy or using Internet services “for free” while negating data privacy preferences. The individual demand for data privacy coincides with the socially optimal demand only if there is effective competition in the markets for data and Internet services and if users are sufficiently informed. In an online laboratory experiment with students of the Leuphana University of Lueneburg, a between-subjects design was applied in which the control group only had the option to either “pay” for the use of the artificial intelligence DeepL via cookies by surrendering data or to abstain from the service altogether, with the two treatment groups additionally given the option to use DeepL in exchange for a monetary fee so that privacy was not violated. To be tested was whether the “monetary price for privacy” option better reflected users’ privacy preferences than the current cookie opt-out solution. The results show that it was much less common for DeepL to be remunerated with the disclosure of data and less common for DeepL to be waived entirely. Full article

The major goal of this study is to examine the impact of agricultural cooperative membership on the net return on production cost (ROC). The data used for the study were gathered from 233 rice farmers in the central Mekong River Delta’s province of Hau Giang, Vietnam. Propensity score matching and two-step Heckman selection models were employed to account for possible selection bias stemming from systematically different observable and unobservable attributes between cooperative members and non-members. The findings reveal that cooperative membership has a positive and statistically significant impact on rice farmers’ ROC, suggesting that agricultural cooperatives could help increase the profitability of rice farms. Full article

The inseparability of the production and consumption of services without quality control makes it difficult to fully meet the diverse needs of customers. Despite a company’s continuous efforts to satisfy customers with perceived quality aimed at service success, if the customers’ expectations are not met, the customers will not be satisfied. This study empirically analyzed the effects of customer tolerance and relationship commitment as psychological variables on the relationship between customer participation and repurchase intentions. According to the results of the analysis, relationship benefits, which are a motivation factor for customer participation, had significant effects on customer participation. In addition, customer participation showed significant effects on customer tolerance and relationship commitment. Furthermore, both customer participation and tolerance had significant effects on repurchase intentions; however, relationship commitment was found to have no significant effect on repurchase intentions. The results of this study indicate that customer tolerance formed through customer participation behavior improves customers’ satisfaction with perceived service quality thanks to the shared sense of responsibility that makes customers tolerate a failure of the final service after the service encounter process, thereby increasing repurchase intentions, which prevents the consumptive expenses invested into to recovering services after the company’s service failure. As such, the results of this study provide meaningful implications for sustainable management. Full article

The assessment of consumer behavior regarding the choice of financial instruments may be extremely important in the near future, since the fight between cash and electronic money has reached a turning point, and electronic payments are slowly defeating cash. On one hand, in the long term, this possible separation threatens sustainable development goals, and on the other hand, financial awareness can affect the number of purchases and savings. In a survey of 499 people, we examined the reasons behind their decisions, with a particular focus on financial awareness. The result shows that the vast majority of Hungarian consumers are not yet ready to fully accept electronic payments. It can be stated that financial awareness is not present at all in one-fifth of respondents, and one-third are influenced by habituation in everyday shopping situations, which indicates a lack of financial awareness. Based on our results, we have concluded that our consumers still find it difficult to abandon cash payments. Financial awareness needs to be improved in parallel with the Hungarian government’s strategy to reduce the use of cash. Full article

Crude palm oil (CPO) is a valuable commodity for Indonesia’s economy as the country has become the world’s biggest producer and exporter. Therefore, maintaining productivity in the CPO industry is crucial to ensure that the global demand is met. This study aims to examine Indonesian CPO productivity and its components using total factor productivity growth (TFPg) with stochastic frontier analysis. This study analyzes the variation in the TFPg across years, locations, and firm sizes. The first two analyses imply that, on average, the CPO industry’s productivity declines annually, with firms in 20 provinces experiencing negative TFPg. Regarding size, the analysis demonstrates that the technical efficiency change (TEC) and technical change (TC) have regressed the TFPg in all scale firms. However, medium firms saw a smaller decline in comparison to large firms. Conversely, large firms possess slightly better scale efficiency change (SEC) than medium firms, although both types attain a negative SEC. The findings also show that the main factor contributing to the gain or decline in productivity is TC, which suggests the urgency of innovative technology in the CPO industry. Full article

The objective of this paper is an ex-post evaluation of the European Union–Southern African Development Community Economic Partnership Agreement (EU–SADC EPA) stemming from changes in trade flows from the six members of the SADC (Botswana, Eswatini, Lesotho, Mozambique, Namibia, and South Africa) to the European Union (EU). The analysis uses detailed import and tariff data at the Harmonized System 6-digit level (HS-6) and provides estimates of the changes in the intensive and extensive margins of trade resulting from tariff reductions, as a consequence of the EU–SADC EPA initiative. The impact on the intensity of trade is estimated using a Difference-in-Differences (DID) estimation, controlling for both country and product-level trade flows. The impact on the trade of new goods (the extensive margin) before and after the agreement is evaluated through a probit analysis. The results show that the EU–SADC EPA has a positive impact on the EU’s imports from the six members of the SADC, even if significant differences emerge among sectors and countries. Full article

Today, the wine business can benefit significantly from the advantages of online sales and the use of social media. However, while the online wine business is growing and the number of online buyers is increasing in Hungary, the impact of online marketing and social media use on their profitability is understudied. The research aims to apply qualitative data collection techniques such as web-content analysis to capture the elements of online marketing as an engine of stimulating profitability. For this reason, the top 12 Hungarian online wine shops were analyzed. The results revealed that the Hungarian online wine business is highly concentrated, the five main players (Vinotrade, Törley, Grape-Vine, Borháló, and Bortársaság) attract most buyers and account for the highest profit rate. Using online marketing channels and social media, wine shops can positively influence their profitability. In addition to the classic online marketing tools of the Internet (blogs, newsletters), social networks (Facebook, Instagram, Twitter, and Pinterest) of wine shops become highly relevant to boost wine sales. However, offline platforms (wine tastings, dinners, picnics) are still used by Hungarian online wine business. Online shops with strong retail and wholesale connections were better off, and the retail pillar becomes more important. Full article

Italy joined the so-called ‘Industry 4.0’ European framework in 2016, which designed and approved a national plan to regulate this key issue for regional development. To better support such a framework, the present study attempts to quantify the contribution of the Italian regions to the output formation process. More specifically, a multi-sectoral Input–Output (IO) model that supports national policies was proposed to cumulatively consider 29 industries that partition the Italian economy into representative branches at the level of administrative regions. Elementary input data were derived from the inter-sectoral table of the economy released by the Italian National Institute of Statistics (ISTAT). The economic outcomes of the Italian regions were estimated using a non-survey procedure, based on Flegg Location Quotients, to determine the upstream and downstream positions of each industry at country and regional levels. Indices grounded on the Hypothetical Extraction Method (HEM) further delineated the role each industry plays in the regional economy. The empirical findings of this study demonstrate how non-survey IO regionalization and the resulting industry-based indices provide appropriate knowledge for regional development policies. Full article

Energy prices play a crucial role in combating geopolitical risks, especially for the major suppliers of energy resources. However, energy prices display a bilateral relationship with geopolitical risks in any economy. Any hike in the price of energy stimulates geopolitical risk factors and visa-versa. The consequences adversely impact economies and bring forth international tensions. This paper bridges a gap between the influence of geopolitical risks relating to energy and international tensions by analyzing micro-level operational measures. We deploy an empirical model to predict the energy sector and possible risk factors incorporating Eurostat data on twenty-seven states, from 2011 to 2020. This study collected a different energy variable to support the multiple regression model constructed by the “blocks” (hierarchical linear regression) method. The results suggest that geopolitical risks cause adverse effects on both the energy and other corporate sectors. The future direction of this research is to estimate how statistical model relationships may assist the corporate sector, and investors, in adopting mitigating measures to control upcoming geopolitical risks due to energy risks caused by geopolitical unrest. Full article

The development of inventor networks is characterized by the addition of a significant number of new inventors, while a considerable number of incumbent inventors discontinue. We estimated the persistence of knowledge in the inventor networks of nine German regions using alternative assumptions about knowledge transfer. Based on these estimates, we analyzed how the size and structure of a network may influence knowledge persistence over time. In a final step, we assessed how persistent knowledge as well as the knowledge of new inventors affect the performance of regional innovation systems (RIS). The results suggest that the knowledge of new inventors is much more important for RIS performance than old knowledge that persists. Full article

Assessment of the innovation climate in Russian regions is a priority. Given the uneven socio-economic development of the federation subjects, it is essential to determine their readiness for the transition to an innovative course. However, due to the high degree of differentiation in the socio-economic development of Russian regions, when using methods based solely on tracking indicators, there is a decrease in the objectivity of the assessment. This is caused by a significant spread in the values of the indicators, which provokes the distortion of the final calculations. To avoid the subjectivization of calculations, it is appropriate to supplement them with the construction of functional dependencies. In this regard, the purpose of the study was to substantiate hypotheses about the possibility of using the production function to assess regions’ innovation climate. The process of evaluating the innovative climate of meso-territories is implemented using the methods of statistical analysis: absolute and relative statistical values, indices, interquartile range, time series, and regression analysis. As a result of building production function models in volumetric and temporal records, arguments are formulated regarding its use to characterize innovative conditions. In the study, an additional character of the production function was established; it is possible to use it, but with several assumptions. The obstacles to innovative transformations in the Russian regions are formulated based on the calculations. The scientific contribution of the authors comes down to substantiating the expediency of combining heterogeneous methods of analysis in identifying innovative conditions in Russian regions; it is proposed to combine both a generally recognized tool for these purposes—indicative analysis and a less common one—a production function. Full article

Food price volatility broadly impacts the country’s food security. Rice price stabilization in Indonesia is carried out by BULOG, the food state-owned enterprise (SOE) that the WTO has identified as Indonesia’s state trading enterprise (STE). This study was conducted to evaluate the price stabilization program in Indonesia by reviewing the efforts that have been made and analyzing the factors that influence the price of rice at the consumer level using Autoregressive Distributed Lag (ARDL) analysis. The analysis showed that BULOG’s market share affected consumer-level rice prices with a negative coefficient sign, which means that the larger BULOG’s market share, the lower the price of rice will be. Other variables that affect the price of rice at the consumer level are the price of rice itself at the previous time lag, the producer-level paddy price, rice production, rice consumption, and BULOG’s operational rice stock. On the basis of the results of these studies, to realize the stabilization of rice prices in Indonesia, the government can complement stock management through a public policy approach with market-approach-based policies by optimizing the role of Food SOEs as market players in the rice industry. Full article

We estimate foreign direct investment elasticities of output, of unskilled and skilled labor, and of unskilled and skilled wages for Chile, both at an aggregate level and for eight economic sectors. We use regional data from official Chilean sources ranging from 2012 to 2019 and data from economic sectors in each region for the period 1996–2011. Estimates are based on a simultaneous equation approach, which considers the two-way relationships between FDI and output as well as the relationships between output, labor, and wages stressed by the duality theory of production in economics. The estimations confirm that FDI triggers growth and that FDI follows growth. Due to the positive effects on output, FDI boosts employment creation, particularly of skilled labor. The estimated effects on wages are not significant, either statistically or practically. The output and labor effects of FDI are positive and significant in all economic sectors, but point estimates suggest that they could be larger for the agriculture-forestry-fishing sector. The results indicate that realistic increases in FDI can have substantial output and employment effects in Chile. Full article

This study aims to evaluate the impact of major and minor changes in the Euro Zone and US interest rates on the EUR/USD exchange rate between 1 January 1999 and 31 December 2020. Therefore, twelve events are analyzed in this period, five related to changes in the US interest rate, six related to changes in the European interest rate, and finally, a single event in which both interest rates undergo an equal variation on the same date. The event study methodology was used, which, through the calculation of abnormal returns, makes it possible to evaluate whether there was a repercussion of the events on the value of the EUR/USD exchange rate. This methodology is used in several studies related to capital markets. The obtained results prove that there are abnormal returns with statistical significance on the event days, and, on the days that follow, changes in the interest rates have an impact on the EUR/USD exchange rate; however, there is no clear direction of the asset after the events occur. Full article