Globalization and Business

11-15

Authors: Oksana Zhylinska, Oleksandr Chernyak, Olena Bazhenova

The paper explores the impact of innovations on the cross-country income differences among advanced economies based on the economic and mathematical models construction. As indicator that defines level of innovations production in the country, we have used number of researchers in R&D sector (per million people). Therefore, it has been constructed panel data model to estimate the effect of number of researchers in R&D sector on GDP per capita in advanced economies. Results of estimation have shown the significant impact of researchers in R&D sector on GDP per capita for the group of advanced economies testifying that innovation really matters in driving economic growth.

24-31

Authors: Giorgi Gaganidze

In this article, the author tries to prove the advantages of exporting the export price. It is proposed to evaluate export growth based on the common formula of regulation. The chronic shortage of balance of trade in commodity products of Georgia was always the subject of concerns of Georgian authorities. Under the independence of Georgia all governments have set a goal of foreign trade openness. At different stages, different ways of solving this problem, namely opening new markets, increasing re-export, re-orientation in traditional markets, etc. This issue was also a subject of research for scientists and researchers, and many interesting researches were conducted in this direction. See Bibliography. All these directions are distinguished in this study and are considered to be the most serious problems that impede export growth, at the same time it is expedient to identify new directions and establish new opportunities for export growth.

39-48

Authors: Nugzar Todua

At current stage business development cannot be imagined without social networks. The customers spend more and more time in social networks and get most part of the information from them. Therefore, for the companies, the social media is a powerful tool for attraction of clients and for competition. Usingthe social media marketing is particularly popular in tourism industry. Technological changes in mass media allow immediate distribution of information in the sphere of tourism. Reasonable using of social networks in tourism requires creative marketing approaches ensuring coverage of the target audience to maximal possible extent. Sites of social media became the primary source of information for the destination management organizations. Usually the tourists trust online information and before commencement of travel they visit the forums and online reviews, as well as specialized blogs. Hence, there is a close relationship between involvement of tourists’ social network sites and change in their behavior. Technological development and globalization of media creates new opportunities providing sharing the information between tourist consumers through blogs, web sites or destination sites. The destinations need creative and powerful social media marketing strategies to attract potential visitors. Social media helps the destinations to communicate with the visitors at relatively low costs and higher effectiveness than traditional communication methods. Social media, as an instrument for stimulation is used for the purposes of interactive marketing. Though, it is notable that there is a growing number of visitors, who use social media applications, creating new challenges in entire tourism industry. As social media plays a significant role in the activities of travel agencies, we found reasonable to find out the level of satisfaction of the foreign tourists with the activities of Georgian tourist companies in social media. Market research showed that of social media platforms, among the foreign tourists the most widespread is Facebook. 85.1% of the respondents use it. It is followed by YouTube (54.7%), Instagram (32.4%), Google+ (31.1%), Linkedin (29.9%), Twitter (27.2%) and MySpace (15.5%). 14% of the respondents use the other social networks (Pinterest, Tumblr, Flickr, Reddit, Ask.fin, Vkontakte, Odnoklassniki). Study demonstrated interest of the respondents to the information provided by the sites related to tourism, their trust and satisfaction. Analysis shows that the respondents are satisfied with the social media marketing offered by Georgian travel agencies to certain extent. As a result of our market study we can conclude that Georgia is an attractive destination for the foreign tourists. Therefore, the number of repeated visits to Georgia increases from year to year. In making choice of Georgian travel agencies, the foreign tourists basically rely on the information in social networks and word-of-mouth marketing. Though, interest, trust and satisfaction of the foreign customers to social media marketing offered by Georgian travel companies are at the average level. Therefore, foreign tourists evaluate media marketing activities conducted by Georgian tourist companies as average and this underlines insufficient activity of Georgian tourist companies in social networks. With the help of marketing research obtained levels of interest, reliability and satisfaction of foreign tourists in relationto social media marketing provided by Georgian destinations.On the basis of analysis of the research results statistically significant values were obtained that show influence of the activity, interest and reliability regarding to social media marketing provided by Georgian destinations on the foreign tourists’ satisfaction.In the work statistically significant value is also received reflecting the influence of the social media activity provided by Georgian destinations on buying behavior of foreign tourists’.

59-62

Authors: Fitim Deari, Izet Zeqiri, Sadri Aliji

In this study, we try to demonstrate mainly from the methodological and pedagogical perspective how investment weights and the correlation between securities are manifested in the portfolio risk and return. Empirical data are examined from 2010 to 2018 and for the experimental purpose two companies are randomly selected. Totally five simulations are performed using Excel. The fifth simulation presents the case of optimal proportions for an investor that efforts to minimize the portfolio risk.

73-78

Authors: Varnalii Zakharii, Demydenko Liudmyla, Nkonechno Yuliia, Miedviekova Nataliia

In order to build an effective model of management of budget funds, it is important to ensure the constant and systematic disclosure of information on the accumulation of financial resources of the state and local budgets and the directions for their use. The first results of the process of fiscal decentralization in Ukraine are considered, which is accompanied by changes in the budget and tax legislation. Specifics of the formation of tax revenues of budgets of joint territorial communities are outlined. The state of disclosure of budget documents by the amalgamated territorial communities is highlighted and the need for coordination of the authorities in this area is indicated. Understanding citizens› spending processes in the public sector can significantly increase confidence in state institutions, and provide conditions for the implementation of necessary reforms in all-important areas of the country. In the context of the fiscal decentralization reform launched in 2015, the issue of transparency of financial information at the local level in Ukraine is raised, as significant amounts of financial resources are transferred to local budgets. Strengthening the focus on local government action on effective management of budget funds should be a priority for public organizations and political parties. The implementation of the state policy aimed at increasing transparency and openness in the management of financial resources in the public sector will ensure tangible results in the social and economic spheres that will be obtained by the citizens of the communities.

87-95

Authors: David Aslanishvili

This research will explore other possible financial vehicles that go beyond traditional sources of private capital offered by commercial banks. It will look at international experience and the opportunities to use public support, green bonds to raise green finance as well as the work of energy service companies (ESCOs) to finance green investments. We have offered our view of what should be done in fact (not in paper in Georgia as it has been in the past 15 years) to change the situation and end the negative and harmful monopoly of the commercial banks and the National Bank of Georgia and to have in place the two independent sources to attract and invest resources in Georgia. This will increase the capitalization of the country and is a proven way to eradicate the country›s lagging and accelerate economic growth. Why should we focus on this issue? According to WHO›s latest data, over 7 million people die each year because of breathing air with solid particles, and one of its main pollutants is vehicles. (Cereceda Rafael, Cuddy Alice. 2018.....) Georgia’s Capital - Tbilisi - is occupying the 3rd place in the light of air pollution, Due to the critical situation, the public demand to live in a clean ecological environment, day by day increases. In our research the following Questions are discussed and overviewed: Is it important to act on the issues of Georgia›s position on the global scale? What unique components can be used to prolong the average life of people? What investors do the country need for building eco-projects and their realization? What type of ecofriendly technologies can be developed for potential customers in Georgia? In that field we have studied the following: The links between economic growth, green growth (e.g. clean energy), high living standards and capital markets; Why the Commercial Banks are the main and the only source of finance for green (and not only) investments in Georgia; Situation on capital markets of Georgia (stock and bond markets) - as an indicator of economic growth and an alternative source of financing; Possible benefits of non-bank financing, including for clean energy projects and the SME sector (e.g. small hydro, energy efficiency); The role of government in supporting capital market development; The role of international community (donors, IFIs, international organization) to support Georgia’s efforts to develop capital markets.

104-116

Authors: Irakli Danelia

Depending on geographical location, the development of Georgian economy was directly related to the efficient use of transit function. For Georgia, as a transit function, the importance of transportation infrastructure is important in the formation of its geo-economic positioning strategy. The acquisition, realization and development of Georgia›s transport potential began in the 90s of the 20th century. Nevertheless, complex research and analysis on the possibilities of development of transit function of the country in Georgian economic literature is not practically investigated yet. Morover, there are not identified determinants on the development of the sector, and their impact on the economic development of the country is not defined either. The study aims to analyze capabilities of Georgia›s transit potential and to determine its influence on economic development of the country in the process of integration of modern world economy. The following objectives are derived: Identification of significant stimulant determination of development of transport / logistics field and its effectiveness; Establishment of transit / logistics potential for economic development of the country. The objective of the research is the transport and logistics sector in the Member States of the Organization for Economic Cooperation and Development, the Caucasus and Central Asian countries as an important instrument of economic development of the country. The research is subject to comparative analysis of the targeted and consequential indicators of transport and logistics sector in the member states of the Organization for Economic Cooperation and Development, in the Caucasus and Central Asia. The theoretical foundation of the research is the works of various Georgian and foreign researchers about the study. The survey was based on the World Bank, the Organization for Economic Development and Cooperation, Eurostat, National Statistics Office of Georgia, Georgian and Foreign Professionals, Georgian and Foreign Marine Ports, Railway and Motor Operators, as well as the laws of Georgia. The work is based on analysis and synthesis, quantitative, qualitative, groupings, and medium-size, graphic expression, indexing, comparison, regression and correlation methods. The scientific innovation of the research is the attempt to conduct a complex examination of transit capabilities in Georgia, as a result of which: Using the Panel Data Analysis Method is reasonable as the development of the transport/logistics sector is a very positive role in the socio-economic development of the country, the main determinant of which is the infrastructural investment. Panel examinations and econometric calculations for member and partner countries of the Organization for Economic Co-operation and Development (OECD) with transit function and sea exit confirmed that investments in the transport/logistics infrastructure of these countries are the most efficient. The paper can be used to overcome the challenges of successful transit systems in Georgia and its successful integration into the world economy. Consequently, the findings and recommendations of the research topic are appropriate for the Ministry of Economy and Sustainable Development, the Ministry of Regional Development and Infrastructure, the Parliament of Georgia and other sectoral authorities, non-governmental organizations, scientific organizations and other stakeholders. In the process of teaching geo-economics, «international economy», «world economy» and their neighboring disciplines.

123-129

Authors: Amirani Maglakelidze

Formation of a strong middle class in Georgia requires a development of small and medium entrepreneurship. As a result of implementation of a rational economic policy and realization of the knowledge and technology based approach in this field, increasing the number of employment, improvement of the national enterprise possibilities, enhancing the competitiveness of the production and growth of the overall level of prosperity of population could be achieved. Small and medium enterprises have been growing during the recent years, however, the growth rate is not sufficient. Share of the population belonging to the middle class is still low in Georgia. According to the studies conducted by the World Bank, in 2014 only 7% of the population of Georgia belonged to the middle class. According to the economic-statistical study conducted in Georgia in 2018, share of the population belonging to the middle class in 2016 was 16%. The same study, with exclusion of the employment factor, shows the growth of the above-mentioned share to 24,6%. Ignoring the employment – very important determinant of the middle class – naturally puts the last figure far from reality. Current income inequality and high level of poverty negatively impact formation of the middle class in the country. In order to achieve the growth of the small and medium entrepreneurship, and respectively, growth of the middle class share, the following actions should be taken by the Government of Georgia: Increase of the scale of small and medium entrepreneurship programs, maximally inclusion of the regions; Support of the start-ups, formation of innovative economy; Promotion of the entrepreneurial education, formation of the corresponding environmental system for the export oriented industries; Maintaining political and economic stability.

143-147

Authors: Nino Abesadze, Natalia Robitashvili, Otar Abesadze

Introduction and aim According to the policy towards gender equality, Georgia has become one of the most reformed countries in the Caucasus. Despite the fact that many steps have been taken in this regard, the problems are still in the society. The main objective of the study is to identify and analyze gender imbalances in the country on the background of gender stereotypes in the context of civil cognitive levels. Research methodology: In development of the article, generally accepted qualitative and quantitative data analysis methods of the economic science were employed, among them, statistical data processing, data grouping, inductive-deductive data analysis methods. The scientific study employs surveying, observation, as well as comparative, analytical, and graphical methods, which are used by the author to compare and analyze facts and assess solutions to specific issues. Results and implications: The paper considers the gender aspects of Discussion of inequality problems in Georgia. Besides, the trends of unemployment and their reasons are identified and the international instruments of protection of human rights regulating the equality between the men and the women in Georgia are considered. In addition, based on the statistical data, is given the analysis of employment and unemployment in a gender respect; a particular accent is made on the need of International practice of gender protection. Conclusion: Stereotypical views on gender roles still exist in Georgia: the function of women is the care and upbringing of children, doing homework, and man-taking care of family finances. The fact is that more men employed in Georgia than women. The level of inactivity in women is almost twice as high as in men with a similar indicator of 42.0% and 21.8% respectively. In 2017, unemployment rate for women Increased by 1.8 percentage points to 12.7 percent, and for men decreased by 1.6 percentage points and by 15 percent. Changes for to the same period are also indicators of activity level. The level of activity increased reased by 1.5 percentage points for women and decreased by 2.8 percentage points for men and 58.2 percent and 74.6 percent respectively. Interesting trends are shown by employment indicators according to age marks. The number of men employed by the 45-54 age group is significantly higher than the number of women employed for the whole nine years, indicating the employment rate of women, especially in the 15-24 age group where the number of men employed is twice as high as the number of women employed. It is also true that the average level of compensation for women is lower than men. Their rates of growth are also different.

157-162

Authors: Maia Azmaiparashvili

Tourism is based on deliberate and reasonable consumption of tourist resources. The object of research is Ecological Tourism, Protected Areas - Development Sustainability, Economic Benefit and Integration of Local Culture in Georgia. The understanding and recognition of significance of sustainable tourist achievements became the base of eco-tourism. In the world of tourism the notion sustainable tourism and eco-tourism are used in the same way. Besides this close relation each of them has slight, but important special features. Sustainable tourism means the duty of the society to provide the protection and maintenance of the environment for the future generations. These conditions are not only political and economic factors and needs strengthening with the help of making decisions. We should realize what does ecologically sustainable environment means for the development of tourism and what part in this case plays eco-tourism as one of the main parts of the development of the sustainable tourism. With its natural landscapes it is known that protected areas now play an important role in protecting Georgia›s biodiversity, natural heritage. In the work there is a significant place for visitors ‹statistics on the protected areas, survey of visitors› satisfaction, income from tourism and the sustainability of tourism sustainability. So as to provide sustainable economy for tourism, tourist sustainability is needed. During the sustainable development of tourism the resources should be used so as to satisfy economic, social and esthetic needs, but at the same time maintain the originality of the country.

168-175

Authors: Nugzar Paichadze, Natalia Kharadze, Nino Paresashvili, Dea Pirtskhalaishvili

Business career enables human resources to increase qualification opportunities and become recognizable at the same time. In the course of the research, we got interested what kind of attitude towards career issues was in different age groups. What the manner was by which the career of different generation respondents was managed, what the respondents’ attitude is to the career, how they perceive the career management policies implemented by the executives of the organization. The research was conducted in the «Human Potential Management» laboratory at Ivane Javakhishvili Tbilisi State University. 560 respondents participated in the survey. The questionnaire included 32 questions and 125 options for an answer. SPSS statistical software package was used for statistical processing and data analysis. As a result of the research we have developed the hypotheses: Hypothesis 1: Age Q3 affects how people are accepted at work Q5. We used Pearson’s Correlation Analysis to determine the strength of the connection between the variables of this hypothesis. We got the correlation coefficient 0.415. By means of the correlation, it was shown that between these variables there is a moderate positive attitude. To test the reliability of hypothesis we used Chi-square test that indicates that the statistical significance level P (Sig.) does not exceed 0.001. Accordingly, the first hypothesis is reliable. According to both indicators, hypothesis 1: Age Q3 affects how people are accepted at work Q5 has been confirmed. Hypothesis 2: Age Q3 affects working experience Q4. We used Pearson’s Correlation Analysis to determine the strength of the connection between the variables of this hypothesis. We got the correlation coefficient 0,870 . By means of the correlation, it was shown that between these variables there is a strong positive attitude received as a result of single factor dispersion analysis, it is shown that F=200.3, P= 0.000; P<0.01, i. e. between the groups a statistically significant link is noticed on 0.01 level. Consequently, the hypothesis 2: Age Q3 affects working experience Q4 has been confirmed. Hypothesis 3: Age Q3 affects when was the last time you got a promotion Q6. We used Pearson’s Correlation Analysis to determine the strength of the connection between the variables of this hypothesis. We got the correlation coefficient 0.641. By means of the correlation, it was shown that between these variables there is a moderate positive attitude. The results of Levene’s statistics, the difference of averages (the same T value) equals to 11.085, the statistical significance level P (Sig.) does not exceed 0.001, i.e. between the vertical and horizontal career growth and career movement of the employed people inside and outside the organization there is a statistically high level of connection on 0.01level. Consequently, the hypothesis 3: Age Q3 affects when was the last time you got a promotion Q6 has been confirmed. Hypothesis 4: Age Q3 affects whether you were promoted in a career over the last 5 years? Q12. We used Pearson’s Correlation Analysis to determine the strength of the connection between the variables of this hypothesis. We got the correlation coefficient 0.122. By means of the correlation, it was shown that between these variables there is a weak positive attitude. To test the reliability of hypothesis we used Chi-square test that indicates that the statistical significance level P (Sig.) does not exceed 0.001. Accordingly, the first hypothesis is reliable. Consequently, the hypothesis 4 Age Q3 affects whether you were promoted in a career over the last 5 years has been confirmed Hypothesis 5: Age Q3 affects whether a person is searching for a job in a parallel mode Q34. We used Pearson’s Correlation Analysis to determine the strength of the connection between the variables of this hypothesis. We got the correlation coefficient 0.131. By means of the correlation, it was shown that between these variables there is a weak positive attitude. To test the reliability of hypothesis we used Chi-square test that indicates that the statistical significance level P (Sig.) equal to 0.082. Which means that hypothesis 5 is not reliable. Consequently, the hypothesis 5 Q3 Age affects whether a person is searching for a job in a parallel mode Q34 has not been confirmed. Some recommendations were worked out based on the research.

182-186

Authors: Kristine Odishvili, Maia Nikvashvili

It is known that the creation of a perfect product / service is directly connected to the qualification of the employees. Competition between companies has led to any organization that needs to constantly improve its product / service. The company can offer the novelty only through the employees. In addition, the process of establishing the novelty must be permanent.Thus it makes clear the need of management for the process. Obviously this is not easy because it is associated with the management of living people, with the development of creative skills, which is unpredictable.Witch is the responsibility of human resources management. The survey examines the problems and challenges that the Human resourse management must overcome for employee career development. In the article the discussion is about human resource management approaches to strategic management, development, motivation and corporate culture of employees. The structure of the article: introduction, researches review of the relevant direction, career development-research findings, main challenges and recommendations. The study showed an interesting picture in terms of career development. We hope that the findings of this study will provide Human resources management specialists with a clear understanding of the challenges and will pay more attention to the career development of the employees.