ECONOMICS - INNOVATIVE AND ECONOMICS RESEARCH JOURNAL <p>We are proud to present the magazine <strong>"ECONOMICS”</strong> Innovative and Economic Research Journal Oikos Institute in Bijeljina that comes out, continuously, twice a year. Oikos Institute is dedicated to the constant development of the journal.</p> <p>Based on the decision of the Ministry of Education and Culture of the Republic of Serbian, number 07.030-053-50-11 / 13 of 06.03.2013. year, approved the registration of "Oikos Institute" doo Bijeljina in the register of publishers, numbered 383 rd.</p> <p>Starting from the fact that most of the economic progress is based on innovation, ECONOMICS - Innovative and Economic Research Journal has focused primarily on knowledge economy and innovation. Only unpublished papers, that represent original scientific research, which contribute to the knowledge economy and innovation, are published in the journal.</p> <p>The reason is very simple: nothing happens in the world economy without being fundamentally connected with technological changes. Innovation is a key driving force that accelerates all kinds of social changes. Innovations and changes within the fourth industrial revolution are the most famous in the world of new technologies that shape the global economic and technological structure, international and local markets, as well as the entire socio-cultural system.</p> <p>The editorial board is edited by eminent professors and associates, as well as renowned scientific and research workers from the country and abroad.</p> <p>All published scientific papers subject to mandatory review by two independent reviewers. Accepted papers are published in English.</p> Oikos Institute - Research Centre en-US ECONOMICS - INNOVATIVE AND ECONOMICS RESEARCH JOURNAL 2303-5005 IMPACT OF TRADE OPENNESS, HUMAN CAPITAL THROUGH INNOVATIONS ON ECONOMIC GROWTH: CASE OF THE BALKAN COUNTRIES <p>The importance of trade openness and human capital for the economic growth of countries is the subject of many studies today. The role of innovations and the innovativeness of economies in modern economic development is extremely important. With greater accumulation of human capital, knowledge, skills and innovation are accumulated. All these variables are crucial for achieving higher economic growth. Special attention in the studies of relevant authors is directed towards researching this relationship on the example of small open economies, as well as developing countries. The purpose of this paper is to examine the relationship between trade openness and human capital as explanatory variables and GDP as a dependent variable in a sample of eight Balkan countries. The goal of the research is to quantify the relationship between two independent variables and GDP as a dependent variable. The period in which we observe this relationship covers the period from 2000 to 2019. Achieving the research objective is done on the basis of a panel model with fixed and random effects. The results of the panel research testify to the existence of a positive relationship between trade openness and human capital as independent variables and GDP as a dependent variable. Calculated coefficients with independent variables were obtained with a high level of statistical significance. The conclusion of the research implies that there is a positive impact of trade openness and human capital on GDP.</p> Siniša Kurteš Srđan Amidžić Drago Kurušić Copyright (c) 2023 ECONOMICS - INNOVATIVE AND ECONOMICS RESEARCH JOURNAL 2023-07-01 2023-07-01 11 2 10.2478/eoik-2023-0047 DEVELOPMENT OF CIRCULAR ECONOMY IN MODERN CONDITIONS <p>The concept of a circular economy in the world arose in response to growing consumption and, as a result, to the accumulation of a mass of waste that cannot be quickly processed in the natural environment and has a harmful effect on the environment. The introduction of a circular economy along with the modernization of production will provide Ukrainian society with double benefits. First, the reuse of already consumed resources allows you to obtain significant benefits both in terms of savings in their purchase and in reducing the costs of waste disposal. Secondly, the burden on the environment is reduced and the problems of waste disposal are solved, which positively affects the country's ecosystem. The essence and types of decoupling as a strategic basis for the development of the green economy are analyzed. The actualization of the use of decoupling for Ukraine in the context of highlighting issues of its environmental and economic security is shown. Calculations of the integral decoupling factor for Ukraine were carried out. Based on the results of the calculations, conclusions were made regarding the effectiveness of the system of nature management and management of the socio-economic development of the state, directions for solving problems and prospects for further research were determined. The conducted analysis made it possible to draw conclusions that at this stage of economic development there is an urgent need to transition to an inclusive and circular economy. The results of the conducted research can be used in the development of the strategy of green economy and sustainable development of countries.</p> Oksana Podlevska Andrii Podlevskyi Copyright (c) 2023 ECONOMICS - INNOVATIVE AND ECONOMICS RESEARCH JOURNAL 2023-07-01 2023-07-01 11 2 10.2478/eoik-2023-0025 FACTORS AND DETERMINANTS OF THE DEVELOPMENT OF HUMAN CAPITAL IN RURAL AREAS IN THE CONDITIONS OF GLOBAL CHALLENGES <p>The development of rural areas is a complex and dynamic phenomenon, the effectiveness of which depends on food security and the economic activity of the population. The urgency of these issues is exacerbated by unprecedented challenges for Ukraine and the transformation of the legal field under martial law. The study aims to determine the factors and determinants of the development of human capital in rural areas in Ukraine, considering the experience of the EU countries in the conditions of global challenges. It is substantiated that the policy adopted in the state to ensure the development of rural areas based on the principles of inclusiveness should be based on balanced instruments, methods, and levers capable of minimizing external and internal threats to agribusiness. Essentially, people's opportunities and abilities for economic and social activities, as well as for their own development, are critical. It has been proven that the determining factor in this process should be human capital. The motivation for economic activity in the village is singled out from personal factors. In its absence, all prerequisites for urbanization are formed. In this context, the upward dynamics of the indicator of the share of the urban population in the EU countries, which can become an obstacle to the development of business in rural areas, was analyzed and revealed. Attention is paid to the prospects of small businesses in rural areas. The relationship between the urbanization indicator and the human development index in Ukraine and the EU countries was studied.</p> Oleksandr Demchenko Nataliya Basiurkina Nazariy Popadynets Sofiia Minenko Kateryna Sokoliuk Copyright (c) 2023 ECONOMICS - INNOVATIVE AND ECONOMICS RESEARCH JOURNAL 2023-07-03 2023-07-03 11 2 10.2478/eoik-2023-0026 ENHANCING ECONOMIC MANAGEMENT WITH INFORMATION TECHNOLOGY: INSIGHTS FROM COVID-19 IN BOSNIA AND HERZEGOVINA <p>This paper explores the role of information technology in enhancing the efficiency of economic management during the COVID-19 pandemic. The research aim was to investigate how the integration of information technology, data usage, and analytics, digital transformation of the financial sector, ensuring digital inclusion and cyber security can contribute to improving economic management in times of crisis. The research methodology involved data collection through a questionnaire that asked participants a series of questions about their attitudes and perceptions regarding the integration of information technology and its impact on the efficiency of economic management during the pandemic. The data were analyzed using the chi-square statistical method to determine the existence of significant relationships between variables. The results indicate that information technology is a key factor in strengthening economic management during the COVID-19 pandemic. The integration of information technology, data usage, and analytics, digital transformation of the financial sector, and ensuring digital inclusion and cyber security can enhance efficiency, transparency, and stability during crisis times. The research emphasizes the need for investment in information technology, the development of implementation strategies, strengthening cyber security, and ensuring digital inclusion as key steps towards building a more resilient economic environment during the pandemic. Further research and implementation of these technologies in practice are recommended to achieve sustainable economic development and successful crisis management.</p> Hadžib Salkić Aldijana Omerović Almira Salkić Marija Kvasina Copyright (c) 2023 ECONOMICS - INNOVATIVE AND ECONOMICS RESEARCH JOURNAL 2023-07-07 2023-07-07 11 2 10.2478/eoik-2023-0048 STUDY OF BEST PRACTICES OF GREEN ENERGY DEVELOPMENT IN THE EU COUNTRIES BASED ON CORRELATION AND BAGATOFACTOR AUTOREGRESSIVE FORECASTING <p>Russia's military aggression against Ukraine has undermined the global energy system, leading to high energy prices and increased concerns about the EU's energy security EU leaders have adopted a number of laws and developed the REPowerEU plan to reduce dependence on Russian energy imports by accelerating the transition to clean energy and creating a more sustainable energy system in Europe. The plan includes measures to save energy, diversify supplies and rapidly replace fossil fuels with clean energy sources, as well as prioritizes equity and solidarity, taking into account the energy balances of each EU member state. It builds on the Fit for 55 proposals and supports the ambitious goal of achieving at least -55% net greenhouse gas emissions by 2030 and climate neutrality by 2050.The aim of the article is to study the use of renewable energy in the European Union, the application of autoregressive models to predict the development of renewable energy.The results and conclusions. As a result of the study, based on the methodology of transients, a model of change in the volume of investment in wind energy was developed in the form of a differential equation. It was proved that the transition process is stable, even with time constraints or reduction of investment in the development of wind energy over time it will return to a stable growing trend (which was obtained by means of bagatofactor autoregressive models).</p> Oksana Yelisieieva Yuliya Lyzhnyk Iryna Stolietova Natalia Kutova Copyright (c) 2023 ECONOMICS - INNOVATIVE AND ECONOMICS RESEARCH JOURNAL 2023-07-12 2023-07-12 11 2 10.2478/eoik-2023-0029 CAPABILITY OF HIGHER EDUCATION IN OVERCOMING DIGITAL INEQUALITY IN THE CONDITIONS OF THE CRISIS IN UKRAINE <p>The purpose of the article is to assess the gap between people's readiness for effective activity in the digital economy and to identify the functional capabilities of universities to reduce this gap. The research used methods of generalizations, logical, systematic, and comparative analysis, and statistical-economic, sociological, and economic-mathematical methods and techniques. The results of the study showed that the digitalization of the economy, the state, and society, which is taking place in Ukraine, requires a significant increase in the level of society's readiness for digital changes. For effective integration into the digital environment, in particular in the field of education, it is necessary to create a digital infrastructure that meets EU standards. The authors conducted a study of the development of the digital inclusive component of the regions of Ukraine.Proposed ways of digital development of society. In particular, it has been proven that promoting the development of the provision of educational services improves the digital literacy of the population for daily tasks and for employers to minimize the gaps between the digital environment and people's skills. It is substantiated that the acquisition of new digital skills and competencies of employees requires the development of training networks and the improvement of foreign language knowledge, both for young people and for other generations.</p> Tetiana Stepura Olena Kuzmak Copyright (c) 2023 ECONOMICS - INNOVATIVE AND ECONOMICS RESEARCH JOURNAL 2023-07-13 2023-07-13 11 2 10.2478/eoik-2023-0028 FORMATION OF THE MODEL OF SUSTAINABLE ECONOMIC DEVELOPMENT OF RENEWABLE ENERGY <p>The article considers the use of sustainable energy as a potentially effective alternative energy source capable of replacing traditional natural fuels. The aim of the research is to develop a complex model of sustainable economic development able to promote introducing and expanding sustainable power engineering as potential alternative energy source, providing sustainable economic development, energy efficiency and reducing damages to the environment. The hypothesis lies in introduction of a model for sustainable economic development due to expansion of renewable energy which will result in economic growth, rise in energy efficacy and reducing hazards to the environment. A comparative analysis of costs and revenues of various types for using energy sources was carried out to estimate the economic efficiency and feasibility of renewable energy. The data analysis toolkit uses MS Power BI software, in which the data model was created. The conducted regression analysis provided valuable nu-merical and practical results on formation of the model of sustainable economic development of renewable power engineering. The research is based on the analysis of the impact “share of energy” on the level of electric energy import and CO₂ emissions. It is recommended to intensify efforts to develop renewable energy as a key direction for sustainable economic development to ensure energy security, reduce negative environmental impact and achieve global sustainable development goals.</p> Oleksandr Dluhopolskyi Serhii Kozlovskyi Yurii Popovskyi Svitlana Lutkovska Vira Butenko Taras Popovskyi Hennadii Mazur Andrii Kozlovskyi Copyright (c) 2023 ECONOMICS - INNOVATIVE AND ECONOMICS RESEARCH JOURNAL 2023-09-17 2023-09-17 11 2 10.2478/eoik-2023-0050 DOES FINANCIAL INCLUSION IMPROVE INCOME EQUALITY? THE CASE OF TÜRKİYE <p>Income inequality has become an important economic and humanitarian problem for both advanced and emerging economies, especially with the increase in financialization trends. The equitable distribution of income has garnered attention in both developed and developing nations, given the rise in global trade and production. However, limited research has explored the impact of financial inclusion on income inequality. To address this gap, this study investigated the effect of financial<br>inclusion on income inequality in Türkiye, contributing to the very limited literature. In this study, the financial inclusion variable is measured using a six-dimensional index encompassing financial institutions and financial markets with depth, access, and availability sub-dimensions. During the time frame spanning from 1980 to 2021, estimations of parameters are conducted employing cointegration regression techniques, including FMOLS, DOLS, and CCR. The analysis revealed that inflation, per capita income, urbanization, and financial inclusion have a negative impact on income equality, whereas education has a positive impact. A 1% rise in financial inclusion is associated with a proportional rise in income inequality of approximately 0.012%. Contrary to the findings of previous empirical studies in general, the increase in financial inclusion in Türkiye has a distorting effect on income equality. The findings of this study offer important implications for Türkiye. While the relationship between the financial inclusion indicator and income inequality is not negative, increasing the income of low-income groups across all financial sectors is likely to improve income equality.</p> Kemal Erkişi Semra Boğa Copyright (c) 2023 ECONOMICS - INNOVATIVE AND ECONOMICS RESEARCH JOURNAL 2023-09-19 2023-09-19 11 2 10.2478/eoik-2023-0049 IMPACT OF INTELLECTUAL CAPITAL AND RISK ATTITUDE THROUGH FINANCIAL LITERACY ON BUSINESS SUSTAINABILITY IN INDONESIA BATIK SMES <p>This study aims to create a theoretical model of business sustainability with financial literacy antecedents. The antecedents of financial literacy are intellectual capital and risk attitudes. The research location is in the province of East Java, Indonesia. Batik SMEs are only found in Indonesia because it is a cultural heritage belonging to Indonesia that does not exist in other countries. The sampling technique used was purposive sampling, with 222 respondents from the batik SMEs spread across six cities. The data was taken using a questionnaire on a Likert scale. Data analysis uses SEM (structural equation modeling) with the SmartPLS application. The study results show that risk attitudes toward financial literacy have a positive effect. The effect of financial literacy on the business sustainability of the batik industry has a positive influence. The impact of intellectual capital on the business sustainability of the batik industry has a positive effect. Risk attitudes have no significant positive impact on business sustainability. Financial literacy has yet to be able to mediate intellectual capital’s influence on the batik SME’s business sustainability. This needs to be explored further with further research. Furthermore, financial literacy can mediate risk attitudes<br>towards the business sustainability of batik SMEs.</p> Ahmad Idris Mamduh M. Hanafi Alni Rahmawati Arni Surwanti Copyright (c) 2023 ECONOMICS - INNOVATIVE AND ECONOMICS RESEARCH JOURNAL 2023-09-21 2023-09-21 11 2 10.2478/eoik-2023-0052 ASSESSMENT OF TOURISM-LED GROWTH RISKS IN RESOURCERICH COUNTRIES: EVIDENCE FROM AZERBAIJAN <p>The COVID-19 pandemic has provided important lessons in determining future development strategies for countries whose economies are largely dependent on natural resources. The following study was conducted to analyze the potential for tourism to contribute to economic growth and sustainability of economic development in countries rich in natural resources during the post-resource period. Using data from the Republic of Azerbaijan, a co-integrated regression model was used in the analyses. Findings showed that (1) tourism has a positive effect on economic growth and can play a role in ensuring its sustainability; (2) a decrease in revenues from tourism carries more risk for the economy than revenues from oil (coefficient of variation); (3) if an oil and gas country chooses a tourism-based development path in the post-oil and gas era, it may face very serious challenges (due to the fact that tourism sector is highly vulnerable to direct and indirect events); (4) dominance of the tourism sector in the economy carries more risk than dominance of the oil and gas sector. However, combining two different approaches showed that choosing tourism as one of the priority sectors in the post-oil and gas era can reduce risks and will contribute more to the diversification of the economy.</p> Arzu Huseyn Copyright (c) 2023 ECONOMICS - INNOVATIVE AND ECONOMICS RESEARCH JOURNAL 2023-09-24 2023-09-24 11 2 10.2478/eoik-2023-0053 THE GEOPOLITICAL "PUZZLE" OF THE CENTRAL BANK’S SWITCH TO GOLD <p>Gold holdings increased during recent time. Geopolitical factors could be responsible for such shift taking into account rising number of conflicts in the world since 2014. However, optimal share for gold in external assets is still disputable. The paper provides empirical tests to identify political economy factors of central bank’s gold holdings. The paper imply two empirical approaches: analysis of how gold reserves in tones and as a share of reserves distributed among the countries with different political regimes; logit regression to identify role of political economy factors that may push countries’ switch to gold. Results of empirical analysis shows that political regime itself is not obvious driving force of gold share. Excluding developed countries, it is possible to see that<br>autocracies do not outperform democracies in terms of mean and median share of gold systematically. Countries demonstrated shifts toward gold early then reference point of 2014 year despite political regime. Logit regression also helps to see that countries heavily have being exposing to gold are more likely hoarding large exchange reserves and politically stable. Proxies of geopolitical aggressiveness are valid with some covenants. While Global Peace Index is well proxy to identify geopolitical preconditions of countries’ switch to gold, military expenditures are not. This means that geopolitical motives of gold hoarding probably work directly and indirectly through exchange reserves accumulation and supportive political stability. Geopolitical aggressiveness that coincides<br>with only large military expenditures but not with reserves accumulation is likely to stand on weak economic ground.</p> <p>&nbsp;</p> Viktor Koziuk Copyright (c) 2023 2023-07-05 2023-07-05 11 2 10.2478/eoik-2023-0018