Ekonomika https://www.journals.vu.lt/ekonomika <p>Founded in 1960.&nbsp;Dedicated to publishing articles analysing the current economy, sectoral situation and development of business strategies for local and foreign markets, which contributes directly to Central and Eastern European economic development.</p> Vilnius University Press en-US Ekonomika 1392-1258 <p>Please read the Copyright Notice in&nbsp;<a href="http://www.zurnalai.vu.lt/ekonomika/journalpolicy">Journal Policy</a>.&nbsp;</p> Universal Model of Lost Profits Calculation https://www.journals.vu.lt/ekonomika/article/view/15544 <p>Consequential (or indirect) losses in the form of lost profits are usually suffered and claimed in civil cases of breaches of supply or service contracts, unfair competition, bankruptcy cases, and other instances where a defendant’s wrongful actions cause lost profits to the plaintiff’s performance.<br>In litigation practice, we see a quite different approach, when the lost profits are calculated as gross margin less income tax, and in others – by multiplying the lost revenues by the company’s net profit ratio.<br>Methods of indirect loss calculation applied do not consider the cost structure of the plaintiff and the impact of the variation of variable and fixed costs to the lost profit calculation before and after the wrongful action of the defendant. In case lost revenues would have been received, fixed costs would remain the same, while variable (incremental) costs, which were avoided, would be generated to receive lost revenues.<br>Based on the international experience and practices, this article provides for a Universal Model of lost profits calculation as well as a mathematical formula of the method.</p> Rimas Butkevičius Copyright (c) 2020 Authors http://creativecommons.org/licenses/by/4.0 2020-01-10 2020-01-10 98 2 97 111 10.15388/Ekon.2019.2.7 The Impact of External and Internal Factors on Strategic Management of Innovation Processes at Company Level https://www.journals.vu.lt/ekonomika/article/view/14734 <p>The impact of external and internal factors on organization of operation at company level is studied. The necessity for implementing strategic management of innovation processes at company level is substantiated. The structural interactions of external and internal factors on the organization of company operation are determined; a classification of factors of external and internal environment in the context of strategic management of innovation processes at company level is constructed.&nbsp;&nbsp;</p> Oksana Shatilo Copyright (c) 2020 Authors http://creativecommons.org/licenses/by/4.0 2020-01-10 2020-01-10 98 2 85 96 10.15388/Ekon.2019.2.6 The Role of Marketing and Business Approach on SME Development https://www.journals.vu.lt/ekonomika/article/view/12708 <p>Almost two decades after the war, Kosovo is an import-based consumption economy. Its weak export does not get any closer to imports, and this makes the country dependent on foreign assistance and remittances. The structure of the economy, with trade as a dominating undertaking, a sustenance-based agricultur,e and very limited production facilities, is a very fragile ground for economic development. Incentives to attract FDI were not competitive with neighboring countries and the country development is still lagging behind. In this respect, the lack of a proper marketing and business approach is present too. Theory and practice from developed countries show that firms that want to increase sales produce what is needed or/and wanted from costumers. In most of the market economy countries, when one wants to engage in business, the first step to start is market research; this rarely happens in Kosovo, people go in business almost ad hoc. Evidence shows that firms do neglect marketing by being mainly sales-oriented; they do produce what they think is good for the costumers and then use lots of resources to convince them that this is what they need. In general, this paper analyses the dynamics of economic development in Kosovo in post-conflict time, the government efforts to change the economic structure, its constraints with emphasis on perception of marketing and the role of consumers for SMEs in the country. In particular, the paper tries to explain why companies need to change their way of doing business; hence, it recommends the change of their business approach. The research, done with 200 small and medium enterprises (SMEs) in Kosovo, shows there are rather few firms that understand marketing and through it fight competition and strive to establish long-term relationships with their customers.</p> Hykmete Bajrami Vjosa Fejza Copyright (c) 2020 Authors http://creativecommons.org/licenses/by/4.0 2020-01-10 2020-01-10 98 2 76 84 10.15388/10.15388/Ekon.2019.2.5 Some Problems of Food Safety in Georgia https://www.journals.vu.lt/ekonomika/article/view/13461 <p>The problem of production, export, import, and consumption of food was always topical for the long history of Georgia. At all stages of the society development, people need to take food and meet other of their elementary needs. Issues of food supply assurance of the Georgian population differ according to time periods. For example, in Shota Rustaveli’s poem <em>The Knight in the Panther’s Skin</em> it is described that the living standard in the 11<sup>th</sup>–13<sup>th</sup> centuries was quite high. At that period of time, Georgia was fed with its own grain. Along with wealth, Shota Rustaveli also characterizes poverty. Most of the state's income was spent on the poor people, so there was a large gap between the rich and poor population.</p> <p>In the 16<sup>th</sup> and 17<sup>th</sup> centuries, the problem of poverty and wealth of the population was highlighted by prominent public figures: Sulkhan – Saba Orbeliani and Vakhushti Bagrationi. Ilia Chavchavadze describes the problem of poverty in the country by the end of the 19<sup>th</sup> century. Poor living conditions of the population were noted during the initial phase of Georgia in Soviet Union and during World War II. Better conditions existed at the last stage of socialism.<br>Meeting the population’s demand for principal foodstuffs and providing near-rational norms of such foodstuffs has always been a major objective of the governments of all times.<br>The prolonged transformation process of the economy of Georgia with its social characteristics was particularly painful. A sharp decline in the standard of life started from the 1990s. Before the economic collapse, a monthly rated wage in Georgia with its foodstuff purchasing power parity almost equaled that of developed countries.</p> David Kbiladze Shorena Metreveli Medea Samsiani Copyright (c) 2020 Authors http://creativecommons.org/licenses/by/4.0 2020-01-10 2020-01-10 98 2 112 121 10.15388/Ekon.2019.2.8 To Work or not to Work: Factors Affecting Bridge Employment Beyond Retirement, Case of Lithuania https://www.journals.vu.lt/ekonomika/article/view/14333 <p>This paper investigates bridge employment beyond retirement, as nowadays it is one of solutions often mentioned to stabilize pension systems in the context of an aging population. The aim of this paper is to identify individual, financial, and other factors that influence retirees to work beyond retirement in Lithuania. This research was done using unique administrative Lithuanian data, allowing to analyze post-retirement employment in Lithuania for the first time. The sample consists of 26,000 new old-age pension recipients from 2015 to 2017. By applying binary models of the probability of being employed beyond retirement, it is found out that a greater acquired retirement record, a higher average wage before retirement, and living in a bigger city with a higher employment rate were positively associated with accepting bridge employment, while a higher sickness rate, higher old-age pension, and earlier receipt of an unemployment benefit were inversely related to accepting such employment. Moreover, being a professional or manager increases the likelihood of bridge employment in comparison to unskilled workers. This probability increases even more if a person works in the public sector. Finally, some social groups were excluded, finding that widows with disabilities or widowed women with worse health are not likely to work beyond retirement and are consequently under a bigger risk of poverty. To sum up, retirees who should stay in the labor market in their old age because of their bad financial situation are less likely to do it. This suggests that persons with bigger needs, lower-skilled workers, and women deserve particular attention in labor market reforms.</p> Kristina Zitikytė Copyright (c) 2020 Authors http://creativecommons.org/licenses/by/4.0 2020-01-06 2020-01-06 98 2 33 54 10.15388/Ekon.2019.2.3 The impact of the Ease Doing Business Indicators on Foreign Direct Investment in the European transition economies https://www.journals.vu.lt/ekonomika/article/view/14566 <p>The objective (aim) of this paper is to explore the impact of the Ease of Doing Business Indicators on FDI on transition economies in Europe. Authors have used the dynamic panel methodology, by using three methods: Pooled Ordinary Least Square (POLS), Fixed Effect (FE), and Two Step-System Generalised Method of Moments (GMM) estimation techniques. By referring to the GMM technique, it can be seen that variables such as: Starting a Business, Registering property, Getting electricity and Resolving insolvency have a positive and significant impact in attracting FDI in 16 European transition countries, while variables as: Dealing with construction permits, Getting credit, Paying taxes, Protecting minority investors, have shown negative impact, whereas Trading Across Border and Enforcing contracts have not shown any impact on attracting FDIs in European transition countries. This paper contributes to the enrichment of existing literature in this field by using these three methods.</p> Bersan Haliti Safet Merovci Sanjib SHERPA Alban Hetemi Copyright (c) 2020 Authors http://creativecommons.org/licenses/by/4.0 2020-01-06 2020-01-06 98 2 19 32 10.15388/Ekon.2019.2.2 The Impact of Excise Tax Increases on Ethyl Alcohol Sales in Lithuania https://www.journals.vu.lt/ekonomika/article/view/15013 <p>This article provides empirical evidence that the demand for ethyl alcohol in Lithuania is price elastic and the root cause of this elasticity is the competition between Lithuanian and Polish sellers. The basis for the emergence of competition lies in the price differences between the countries, which arise as a direct consequence of the Lithuanian government’s policy in the alcohol sector, which is directed towards reckless increases in excise duties. The increase in Lithuanian excise duties leads to a wider price gap between countries and in the first months after the increase results increases in prices. In subsequent months, Lithuanian importers and manufacturers tend to revise the assortment and costs, replacing more expensive goods with cheaper ones or slightly alter the markups. These changes are the main reason why demand in the domestic market gradually recovers. The price elasticity of demand predetermines the gradual recovery of the ethyl alcohol market, but each increase in excise duty reduces the manufacturers’ markups and (or) leads to the changes in product range, where higher-costs products are displaced by lower-cost products.</p> Algirdas Bartkus Copyright (c) 2020 Authors http://creativecommons.org/licenses/by/4.0 2020-01-06 2020-01-06 98 2 55 75 10.15388/Ekon.2019.2.4 Editorial Board and Table of Contents https://www.journals.vu.lt/ekonomika/article/view/15753 <p>&nbsp;&nbsp;</p> Algirdas Miškinis Copyright (c) 2019 Authors http://creativecommons.org/licenses/by/4.0 2019-11-15 2019-11-15 98 2 1 5 The Financial Performance of European Companies: Explanatory Factors in the Context of Economic Crisis https://www.journals.vu.lt/ekonomika/article/view/14073 <p>Financial accounting information plays an important role in assessing and forecasting firms’ financial<br>performance. But besides that, there are other external factors affecting the performance of firms, such<br>as economic and financial crises, which cause imbalances over the economy and affects the business environment.<br>Thus, based on financial statements data, in this paper, the determinants of financial performance are<br>examined, and the impact of a financial crisis on these factors is analyzed, using the fixed and random effects<br>panel estimators. A sample of non-financial firms from European countries considering annual data for the<br>period of 2006 to 2015 was used for this research. The results achieved by panel data analysis show that a<br>crisis exerts a significant positive effect over financial performance as well as liquidity, assets turnover, and<br>labor productivity, meaning that firms tend to put in greater efforts to maintain financial performance in the<br>face of a crisis. Financial performance is significantly and negatively influenced by leverage independently of<br>the crisis effect, showing return on assets to be lower than the average interest rate.</p> Mara Madaleno Nicoleta Barbuta-Misu Copyright (c) 2019 Authors https://creativecommons.org/licenses/by/4.0 2019-10-28 2019-10-28 98 2 6 18 10.15388/Ekon.2019.2.1 Editorial Board and Table of Contents https://www.journals.vu.lt/ekonomika/article/view/12694 <p>[text in English]</p> Ekonomika Journal Copyright (c) 2019 Vilniaus universiteto leidykla / Vilnius University Press https://creativecommons.org/licenses/by/4.0 2019-04-17 2019-04-17 98 2 1 5 10.15388/Ekon.2019.98.12694