Globalization and Business

20 - 26

Authors: Rezo Manvelidze, Ia Meskhidze, Lasha Manvelidze

All countries need assessment of entrepreneur potential as it is essential aspect of improvement of social and other fields in every country’s economy. One of the main mechanisms for achieving this is the ideal assessment of the enterprises those are unfortunately characterized by many flaws or in many cases are ignored at all in our country. In different countries according to the different circumstances, especially based on purposes of appraisal, they use individual approaches of valuation. These approaches are, for example: income, expenditure and market approaches and each of them use relevant methodologies. Not all the methodologies and approaches are used in the same way. They have their advantages and disadvantages. The problem of classical methods of business valuation in developing countries is also discussed in article, also for Georgia, where there still exist specific obstacles, which, in our opinion, are the obstructions in this field. In our opinion, there are a number of trends that cause unforeseen change of national farming indicators, is mainly caused by characteristic flaws of production forces and Disproportionate transformation process in almost all areas of real economy. On the first place, the process of business valuation in prioritized fields has a small scale or is completely ignored. International experience reveals that those processes are successfully used in prognosis, purchasing-selling, reorganization, insuring, investing and other stages.

35-41

Authors: Salome Kobakhidze

Inclusive and well-functioning labor markets are a prerequisite for the economic strength of a country. This includes ensuring enough jobs and social justice protection. Having a job is an important factor for material well-being, security, equality and personal human development, but in Georgia the status of an employee is not associated with normal living conditions. Due to high level of poverty in the country, the population agrees to work for an inadequate fee. The part of the informal sector in the labor market is quite high, this is mainly associated with low pay, unbearable conditions and the absence of safety standards. In such conditions, the main task of the government is to protect the social rights of workers, reduce the informal sector of the labor market, and implement effective and non-discriminatory labor market and employment policies.

53-56

Authors: Tea Lazarashvili

Environmental pollution, exhausting natural resources and effects of climate change are causing economic stresses and therefore require significant financial expenses. Environmentally sustainable growth funding requires a significant amount of investment. First of all, we are talking about «green» financing of global projects. The main factor in the development of green economy is the green financing that can prevent social, economic and ecological changes caused by the sharp expansion of the global population and the catastrophic exhaustion of natural resources and their negative consequences. The financial sector, with active support of the state, can provide global sustainable development and qualitative changes in such conditions. In the format of the United Nations Conference in 2012, most of the global agreements on the «green» economy were taken at the global level. It is noteworthy that the uniform definition of «green» economics has not yet been established. Mainly under the green economy, economic activity is meant, which improves human wells, ensures social justice and significantly reduces the risks to the environment and nature.

70-76

Authors: Lela Jamagidze

The present paper discusses several new trends in the global trade such as digitalization of trade, regional trade agreements and the emergence of new global players. Based on theoretical research and the study of the available secondary statistical data it analyzes how trade policy can address these changes under the existing world trading system. Trade rules underlying the traditional trading system are still applicable under increasing digital trade and enhanced bilateral and regional trade integration. However, WTO Agreement has nothing to do with those barriers of trade that go beyond traditional trade measures and are very acute for the developing countries. They involve access to the Internet and other telecommunication infrastructure, weak formal institutions and legal protection, lack of awareness about the potential benefits and opportunities in digital trade and lack of IT literacy. In order to overcome these barriers developing countries should incorporate trade policy as a component of deep economic reforms. The pace of development of the multilateral trading rules is slower than required by increasingly flexible business models. Therefore, countries try to find solutions at the bilateral and plurilateral levels. For instance, the EU develops regulations under Digital Single Market as well as within its bilateral trade agreements with non-member states. Georgia is implementing digital economy regulations in accordance to its DCFTA with the EU. Access to information and communication technologies is essential to be engaged in digital trade. For developing countries investments in digital infrastructure is an important policy issue, while developed countries are more focused on balanced trade rules, which ensure the development of digital trade, on the one hand and security and data protection, on the other. Contemporary trade policy goes beyond regulation based on classical trade instruments. It encompasses regulation within regional trade and investment agreements, technical standards and other behind-the-border measures, regulation of services and intellectual property markets and support for sustainable development goals, etc. A large part of the contemporary regional trade agreements covers all these areas. The development of bilateral and regional cooperation by encouraging deep integration can be discussed as an effort to overcome inflexibilities of themultilateral system. Regional integration enables countries to develop selective approach towards their trade partners and maintain certain degree of autonomy by applying different trade rules towards different partners. Elimination of behind the border barriers and enhanced regulatory harmonization leads to reduced trade costs, but it also leads to race to the bottom in regulatory facilitation what might be detrimental to the national policy goals. The effects of deep economic integration cannot be assessed based on the traditional approach of trade creation and trade diversion, because integration as an institutional process affects not only trade flows but also economic and institutional development levels of the countries. Deep regional integration reduces institutional differences within regions and increases them across regions. Besides it, the increasing role of BRICs countries in international trade leads to greater diversity of actors in the world market. New global players ask for greater voice in the process of reforming trade rules. Therefore, global trade rules should reflect the diversity that comes from changes in the patterns as well as the main players of the world market.

86-90

Authors: Keso Sumbadze

If we consider unemployment level in Georgia and Europe, multitude of problems, that is visible in this regard, won’t be hard to be detected. Finding a job is a vitally important issue for a person. However, by looking at current job openings in labor market, requirements complexity and unreality will be noticed in fact. Besides, there are several problems that studying and elimination are essential for both job-seekers and employed people. Exited severe social-economic background, high level of unemployment and unfavorable employment conditions in Georgia, promote workforce migration. The closest job market for our country’s citizens is European countries, where they have to deal with too complicated situations. The purpose to this article is to draw attention for Georgia and European countries’ topical issues such as: Unemployment, jobs search and difficulties arisen it that process, workforce emigration caused by high level of unemployment, in Europe and came across employment problems. Problems, revealed as research results, and developed recommendation to solve them will be suggested in detail.

96-103

Authors: Ramin Tsinaridze, Lasha Beridze

Research on financial sector activity is especially important for developing countries, including Georgia, as this sector is the main driving force of the country›s economy. Any economic reforms undertaken in the country have a significant impact on the general economic policy and economic growth. Under the new regulation from January 1, 2019 the lending procedure from the financial sector has been tightened. At present time, they operate by the principle of responsible lending, which means, that a potential customer of a bank product should not be subject to a financial obligation that he or she will not be able to pay without financial difficulties. The purpose of this study is to analyze the positive and negative effects of already existing responsible lending regulations, which is directing against indebtedness and to predict the expected future results. At the same time, the task of the research is to identify challenges, risks, results that accompany the reform based on the practices of developed and developing countries. The study uses a combination of quantitative and qualitative methods. Also, in the research are used methods of system analysis, analogy, forecasting, synthesis, processing of statistical data and other methods. The methodological of the research is the fundamental articles of economic science. The paper widely used scientific and popular works by local and foreign authors, scientific studies, methodological publications and articles. In the modern world any banking reform in developing and developed countries is linked to economic and political (often painful) changes, but this reform implementation is inevitable in all states, regardless of their level of development. The main reason for this is the reduction of indebtedness in the public and economic sectors, but this requires the introduction of a proper lending system that should not limit the development of the financial sector and, on the other hand, be an optimal source of replenishment of financial deficits. Interest rate cuts are likely to have a short-term effect, which will not only help tighten lending policy by itself, and will require other macro-prudential decisions, especially when the NBG has raised its refinancing rate from 6.5% to 7%, due to inflation targeting. It implements the monetary policy transmission mechanism and negatively impacts on the interest rate on loans issued by the banking sector and on aggregate demand itself, so economic growth is likely to be adjusted again.

113-119

Authors: Arian Matin

This study aims to analyse the impact of the level of synergy in a multi-channel retailer and its end results on customer purchasing behaviour. A deductive approach was adopted by reviewing the past studies on implementation and goals of synergy. It led to a quantitative research model for evaluating the effects of inter-departmental synergy in the market. In order to measure the effect of this strategy on the Georgian customers, a questionnaire was distributed among 412 retail customers. The outcome indicated that the level of synergy positively relates to the frequency and monetary value spent by customers and negatively impacts the threat of pure online retailers as substitutes. The theoretical and managerial implications of the relationship are discussed.

129-134

Authors: Nino Melitauri

How are transactions conducted on Georgian consumption market and the European Union internal market? During exportation of some agro products from Georgia to the EU it was found out that relevant trade habits in making a deal varies greatly for the ‘two Economies’ and the difference is significant. Apparently, this makes an issue for present-day commerce and, presumably, the disparities, which have just been noted, risk to pose a serious threat to trade relationships between the two economic Units. Therefore, this Article aims at looking around the differences. I will attempt to explain the flexibility of the contemporary ‘simplified-type transactions’ conducted in the EU, characterized by disappearance of traditional formal stages of contracting (negotiations, contractsigning, etc.). In this Article, I will also show out that these relationship-building (stemming from the ‘brand-new transactions’) is more consecutive, logical and dynamic, leaving less room for the breach of a contract or principle of good faith.

151-155

Authors: Vano Tsertsvadze, Lali Khurtsia

In 2018, 13 Georgian Universities have implemented Plagiarism Detection and Prevention Program (PDPP) within the framework of the EU-supported project. This process establishes favorable conditions for the study of students’ behavior, incentives and the use of plagiarism in pre- PDPP era and after its implementation. To prove the significance impact of the PDPP on academic honesty and to assess the system for effectiveness we use statistical tests. The experience observed in western universities confirms that the existence of PDPP is correlated with the reduction of plagiarism. Though, the effective application of PDPP entirely depends on the efforts of Georgian universities to pursue anti-plagiary policy. Along with the policy analysis, plagiarism perceptions and attitudes have been studied in accordance with historical and cultural environment. The research also analyses the study in the paradigm of risk and benefit from students point of a view as a decision-making process (weighing probability of detection and penalty size and positive mark).

163-170

Authors: Giuli Giguashvili, Tamar Makasarashvili

In 2018, 13 Georgian Universities have implemented Plagiarism Detection and Prevention Program (PDPP) within the framework of the EU-supported project. This process establishes favorable conditions for the study of students’ behavior, incentives and the use of plagiarism in pre- PDPP era and after its implementation. To prove the significance impact of the PDPP on academic honesty and to assess the system for effectiveness we use statistical tests. The experience observed in western universities confirms that the existence of PDPP is correlated with the reduction of plagiarism. Though, the effective application of PDPP entirely depends on the efforts of Georgian universities to pursue anti-plagiary policy. Along with the policy analysis, plagiarism perceptions and attitudes have been studied in accordance with historical and cultural environment. The research also analyses the study in the paradigm of risk and benefit from students point of a view as a decision-making process (weighing probability of detection and penalty size and positive mark).

179-186

Authors: Tamar Dolidze

In modern society human existence depends largely on scientific knowledge. Moreover, the world of our surroundings, events and the things we need are partly the result of scientific knowledge. Science is a multifaceted social phenomenon. It is important to list some of the key science facets: vision function; Economic function of science; Science is also an element of culture. In postindustrial society the fact that science and technology are intertwined is of particular importance since the development of technology without scientific knowledge is difficult to imagine. It should also be noted that science is at the core of everything in general: technology development, education, knowledge-based economics and human capital, published researches, published scientific articles, number of triad patents, innovations. In view of the foregoing, the issue is of very urgent and pragmatic importance. It is therefore advisable to discuss Holden and Russell›s views on science. Using the comparative analysis method, we will generalize three basic theories about science: The theory of evolutionary development of scientific knowledge (cumulative theory); The theory of revolutionary development of scientific knowledge; Conciliatory concept. Using the comparative analysis method, we will identify one optimal theory and discuss it in the context of economic policy. The context of the relationship between science and economic policy implies many problems. In this article, we will discuss the main problems of science field and find ways to solve them using economic policy. We will analyze which economic policy approaches will be most optimal for solving problems in science (positive economics; normative economics; political economics;). In our opinion, it is important to consider whether it is appropriate to include education and science in the third sector of the economy. In the example of different countries of America we will analyze the statistics for 2010-2016. Specifically, what percentages of gross domestic product from the state budget are used to finance science and technology? Using the method of comparative analysis, we determine the trend formed in the given time series.

197-202

Authors: David Narmania, Demur Chomakhidze

The article analyzes the electricity balance of Georgia during the 30 years of independence (1989-2019). It is said to be in deficit throughout this period except 2010. The deficit was caused by the fact that during the analysis period all the components of the balance deteriorated, primarily electricity production. The latter was at a record low in 2005, when the annual deficit exceeded 1.2 billion kWh. The excess of electricity in the balance was conditioned by the record output in the HPPs as well. It is noteworthy that in recent years, electricity consumption is growing much faster than production. Due to this, in 2019 the maximum amount of deficit was almost 1.4 billion kWh. The paper sets out ideas for improving the situation.

207-217

Authors: Simon Tavartkiladze

The first international treaty of the Democratic Republic of Georgia was concluded two days after Georgia›s declaration of independence on May 28, 1918. Under this agreement, Georgia received a kind of «guarantee of favor» from the German Empire that it would protect the international recognition of the newly established Democratic Republic of Georgia. Declaring independence for the country is an important but still not sufficient event. Given the difficult economic and social background, the government of the Democratic Republic of Georgia had to prove that the country could maintain and strengthen its independence. The “Poti agreement” was not the only first international treaty of the Democratic Republic of Georgia, but also the determination of the content of all further international actions. As far as Germany was presented as a party, it was significant for other countries as well, thus practically obligatory for the allied countries of Germany. The existence of the treaty of Georgia was crucial and the establishment of independence, de facto and de jure recognition of the country was considerable for other countries. It is also quite clear that Germany was driven not only by political but also by economic interests in Georgia. But according to overall perception, these interests did not infringe Georgia›s sovereignty and were not inconsistent with its national aspirations; Germany considered Georgia not as a satellite but as a partner with whom the cooperation was based on principles acceptable for both countries. However, given the substance of the treaty, German stated obvious attraction and strong support towards small and weak country Georgia. Especially in problem solving and overcoming crisis in economic, industrial, trade, transport, mining, budget-finance, food provision, etc. Thus, supported definition and establishment of geo-political and geo-economic space of the country.