Central European Economic Journal Feed

Revisiting the Corporate Governance-ESG Performance Nexus: Insights from the CEE Companies

Fri, 06 Mar 2026 00:00:00 GMT

This study examines how board characteristics shape environmental, social and governance (ESG) performance in Central and Eastern European (CEE) listed companies. Using a panel of 50 firms from four CEE countries over 2017–2023 (323 firm-years), the analysis assesses board size, gender diversity, tenure, CEO duality and independence using generalized least squares panel regressions with firm-clustered robust standard errors, complemented by robustness checks with lagged and alternative specifications. Larger boards are associated with lower ESG performance, while board independence is positively related to ESG performance. There is weak evidence that longer board tenure leads to higher ESG performance, but this association is not robust to lagged specifications. Gender diversity and CEO duality show no systematic effects. The study provides unique contributions. First, it offers context-specific evidence for the CEE region, an underexplored setting where post-transition governance, concentrated ownership and evolving EU enforcement may condition board effectiveness, hence clarifying the validity of findings largely derived from mature markets. Second, it advances theory by specifying mechanisms consistent with a stakeholder-governance perspective. The negative size effect highlights coordination-capacity limits, while the independence underscore the role of oversight.

Pricing Efficiency of Exchange-Traded Funds Listed on the Warsaw Stock Exchange

Tue, 24 Feb 2026 00:00:00 GMT

The article examines the pricing efficiency of exchange-traded funds (ETFs) listed on the Warsaw Stock Exchange (WSE) over the period 2010–2025. We analyse deviations of ETF market prices from their net asset values (NAVs) and introduce a novel perspective by comparing equal-, asset-, and turnover-weighted average absolute premiums and discounts. The results show that WSE-listed ETFs are generally priced efficiently, in line with evidence from other emerging markets. The largest mispricings, often in the form of premiums, occur in leveraged and foreign equity funds, particularly during episodes of market turbulence, while the smallest deviations are observed in ETFs tracking Polish sovereign bond indices. Most funds trade at a premium to NAV, with the exception of two domestic equity funds that frequently exhibit no significant discrepancies. Asset- and turnover-weighted deviations are slightly lower than equal-weighted ones, suggesting that the actual costs borne by investors are smaller than implied by unweighted measures. This study is the first comprehensive analysis of ETF pricing efficiency in Central and Eastern Europe, covering all instruments listed on the WSE and their full trading history.

Empirical Analysis of Digital Marketing Implementation in Service Sector: Perceptions, Social Media Impact Western Balkans

Mon, 16 Feb 2026 00:00:00 GMT

This study empirically examines the impact of digital marketing, particularly social media use, on customer growth within Kosovo's service sector. It explores how businesses perceive the effectiveness of digital marketing relative to traditional methods, and how social media use influences measurable marketing outcomes. A quantitative research design was employed, using a structured questionnaire distributed to 101 service-sector businesses in Kosovo. The collected data were analysed using SPSS software and subjected to reliability testing (Cronbach's Alpha = 0.855), correlation matrix analysis, One-Way ANOVA, and Pearson's Chi-Square tests. The results indicate a generally positive perception of digital marketing across businesses, regardless of professional position or experience. A statistically significant relationship (p < 0.05) was found between the frequency of social media usage and the perceived effectiveness of digital marketing in driving customer growth. This study provides one of the first empirical investigations of perceptions of digital marketing in Kosovo's service sector. It contributes to the limited local literature by offering data-driven insights and practical implications for businesses aiming to enhance their digital outreach strategies through social media integration.

Designing an LSTM-Based Model for Financial Asset Forecasting Using Machine Learning

Fri, 30 Jan 2026 00:00:00 GMT

This study examines the predictive performance of Long Short-Term Memory (LSTM) neural networks in forecasting stock prices, focusing on Apple Inc. (2010–2025) and comparing results with traditional models. The novelty lies in (1) dynamic training optimization using EarlyStopping and ReduceLROnPlateau, (2) a fully documented LSTM workflow with UML modeling for reproducibility, and (3), a 60-day forward iterative simulation. To assess generalizability, the same model was applied to Microsoft (MSFT) via transfer learning, confirming robust cross-asset performance. Sensitivity analyses and stress tests during events such as COVID-19, highlight both the strengths and limitations. Using SHAP (SHapley Additive exPlanations), the study enhances interpretability by identifying key historical patterns that influence forecasts. Results show high predictive accuracy (RMSE = 3.17, MAE = 2.61, R2 = 0.9537, MAPE = 3.03%, SMAPE = 3.10%) and superior performance to ARIMA and SVR. Financial indicators, including hit ratio and Sharpe ratio above unity, confirm strong directional and risk-adjusted outcomes. The study underscores the growing relevance of AI-based forecasting compared with traditional econometric models (e.g., ARIMA, GARCH) in volatile markets and recommends incorporating sentiment or macroeconomic variables to enhance robustness. All code and workflows are publicly available on GitHub: https://github.com/najlae195/LSTM-Model.git.

Affect Indicators for Stock Market Forecasting

Mon, 29 Dec 2025 00:00:00 GMT

In behavioural economics, Big Social Data plays a crucial role in predicting stock market trends. This study aims to compare the effectiveness of the VAR model and the LSTM neural network in forecasting the relationship between social media and stock markets. Two hypotheses guide this work: first, verifying a statistically significant link between Twitter (X) activity and stock market metrics, and second, assessing the relative accuracy of the methods. Sentiment analysis, using both lexicon-based (VADER, NRC) and supervised learning (Naïve Bayes), was applied to construct affective indicators from textual data. Findings suggest that Twitter activity holds predictive value for trading volume and closing prices, though effects vary across timeframes and methods. Both VAR and LSTM yield stable insights over shorter periods. This analysis, focused on Apple and Amazon during 2016–2017, contributes to methodological advancements in exploring social media's impact on financial markets.

Psychological Well-Being and Social Media During the Pandemic: Evidence, Research Gaps, and Future Research Directions

Sun, 21 Dec 2025 00:00:00 GMT

The pandemic transformed global dynamics, intensifying social media use and resulting in diverse psychological consequences. Unlike general studies, this paper focuses on how these platforms specifically shape mental health, both worsening and easing distress. Although numerous studies report conflicting results, a comprehensive synthesis remains absent. This review addresses that gap by systematically analysing empirical research from 2020 to 2024 across four major databases. It explores how social media—not the pandemic itself—affected mental health during COVID-19, influencing emotions such as anxiety, stress, and loneliness. The synthesis demonstrates that digital platforms impact mental health through both negative (e.g., anxiety, stress) and positive (e.g., support, engagement) pathways. We examine the psychological effects of social media use during the pandemic, presenting an evidence-based synthesis that identifies six adverse outcomes—stress, anxiety, depression, loneliness, violence, and eating disorders—and six positive ones: engagement, fellowship, support, assurance, advice, and creativity. These dual outcomes underscore social media’s complex influence on mental health in crises. The paper identifies research gaps and suggests directions, including teletherapy, digital support, and countering misinformation. Based on the evidence presented, the paper also proposes economic and public policy implications aimed at mitigating digital psychological risks.

Efficiency of Polish Museums‘ Activities in Terms of Attracting Visitors and Event Participants

Wed, 26 Nov 2025 00:00:00 GMT

The article, based on data from 2023, measures the efficiency of 174 Polish, public museums in two selected and related areas of their statutory activities. The study used a two-stage analysis. In the first stage the non-radial slacks-based measure network model belonging to the Data Envelopment Analysis method, was used to estimate the efficiency of museums. In the second stage, a tobit regression was applied, to find the environmental factors that significantly affect this efficiency. The results of the study indicate that museums are characterized by a low overall average efficiency (0.205). On the one hand, this is mainly due to the poor efficiency of museums‘ activities in increasing the number of visitors and participants in events (0.175). On the other hand, the efficiency of the implementation of these activities is on average satisfactory (0.458). Over 58% of the surveyed museums are characterized by lower-than-average efficiency in both analysed areas. The overall efficiency of both areas is significantly positively influenced by the possibility of purchasing a ticket online. It has also been shown that ethnographic and anthropological museums are significantly less efficient compared to interdisciplinary museums. In addition, museums run by the Ministry of Culture and National Heritage are significantly more efficient than museums run by various types of local governments.

Takeover Bid Rules and M&A Premiums: Who Pays the Price for Investor Protection?

Mon, 24 Nov 2025 00:00:00 GMT

The mandatory bid rule (MBR) requires an acquirer in an M&A transaction to make a fair offer to the remaining shareholders when exceeding specific thresholds. This severe encroachment on contractual freedom, which is supposed to protect minority shareholders, should show an impact on the takeover premium. We analyze the influence of national MBR thresholds of 49 countries, including all OECD, G20, and Financial Stability Board members. We can show that exceeding specific MBR thresholds significantly negatively impacts the takeover premium. The results show that an MBR as investor protection is not associated with a price premium but with a discount at the expense of the remaining shareholders. We control for the influence of the acquirer's successive share acquisition and deal-, target- and acquirer-specific variables. We contribute evidence from a large-scale multinational empirical study on the impact of MBR on the takeover premium paid and its consequences for the remaining shareholders.

Employment Cyclicality in the EU Financial Sector from a Gender Perspective

Thu, 13 Nov 2025 00:00:00 GMT

The article analyses the procyclical nature of employment in the financial sector of EU countries (2008–2024), focusing on how economic fluctuations affect job stability among men and women. Extending existing research on cyclical sensitivity, it incorporates the concepts of labour market hysteresis and crisis scarring. Using hierarchical cluster analysis (HAC) and spectral time series analysis, the study identifies three groups of countries differing in employment stability and exposure to economic cycles. Results reveal notable gender asymmetries: men are more responsive to abrupt fluctuations, while women display slightly higher stability, though still subject to cyclical pressures. Cross-country differences in fluctuation patterns reflect institutional and technological factors, including regulatory intensity and historical legacies. The findings indicate that employment cycles vary not only in magnitude but also in persistence across genders and national contexts, highlighting structural vulnerabilities. These insights advance understanding of labour market resilience and support the formulation of gender-sensitive employment policies in times of economic turbulence.

Exploring the Landscape of Mobile Wallet Studies: A Bibliometric Analysis

Fri, 07 Nov 2025 00:00:00 GMT

This research aims to explore the evolving landscape of mobile wallet studies by conducting a bibliometric analysis of mobile wallet studies published from 2014 to 2024. It evaluates the performance of key contributors, including journals, authors, countries, and institutions, maps the intellectual structure of mobile wallet research through science mapping, and identifies emerging trends and opportunities for further studies. A bibliometric analysis technique was used to retrieve 605 publications from the Scopus database using relevant keywords. This study uses a three-step methodology to review existing studies on mobile wallets: search strategy, scholarly filtration, and bibliometric analysis. Quantitative performance analysis was conducted using Biblioshiny software, while science mapping was performed using VOSviewer. The analysis indicates a steady increase in mobile wallet research, with a substantial increase after 2018, and an increase in citations post-2020 due to the pandemic. India leads in research contribution and citations, followed by Malaysia and Spain. The University of Granada, UCSI University, and Multimedia University are the top institutions, while Liébana-Cabanillas F. is the most contributing author. Science mapping reflects major collaborations among India, Malaysia, and the USA. This study provides a comprehensive evaluation of mobile wallet research using the bibliometric analysis technique. The findings offer valuable insights into the growth of mobile wallet research and highlight gaps to guide future research. The study provides valuable insights to policymakers focusing on expanding mobile wallet usage in the digital economy.

The Role of Electronic Payment Methods in Enhancing Financial Inclusion

Fri, 07 Nov 2025 00:00:00 GMT

Iraq faces numerous challenges in implementing electronic payment methods due to its slow development of non-financial institutions; increased poverty rate, low rate of awareness about formal banking system, weak technical infrastructure, lack of economic stability and political instability. This study aims at determining the challenges encountered during the widespread implementation of electronic payment systems to achieve universal financial inclusion in Iraq and provide solutions to achieve the desirable outcomes. This cross-sectional quantitative study collected 958 responses from employees of different sectors who resided in Karbala Governorate, Iraq. The collected data was analyzed using PLS-SEM, and Cronbach’s alpha values were determined. The results confirmed the presence of a significant, positive relationship between the variables considered in the study. These results emphasized the role of electronic payments in expanding financial inclusion throughout the developing regions. Electronic payment methods have a positive and significant relationship with financial inclusion, and thus can help customers adopt formal banking systems, as well as earn their trust and confidence from transparency and security in financial transactions. It is the responsibility of the government to instill trust and confidentiality about the formal banking system to achieve financial inclusion and economic growth in the coming years.

The Benefits of the EU Single Market: Evidence from the Gravity Model

Sun, 02 Nov 2025 00:00:00 GMT

Empirical economic studies based on gravity models have generally portrayed European integration in a highly positive light. However, the success of Eurosceptic parties in the German regional elections and the Dutch legislative elections highlights growing resistance to further integration. This phenomenon may be explained by the fact that the benefits of integration are often not immediately visible; they tend to manifest indirectly through increased trade volumes between member states. Nevertheless, these political outcomes also cast doubt on the reliability of modelling results, Therefore, our goal is to quantify the impact of EU membership on sectoral trade flows using a gravity model of foreign trade for the period of 2006–2017. To achieve this, we conducted over 850 regressions. Our analysis indicates that exports between EU member states are, on average, 20%–30% higher throughout the business cycle compared to similar non-EU countries. Additionally, we assessed the distribution of membership benefits across individual member states. Our findings reveal that Hungary, Slovakia, and Czechia experienced the most significant increases in trade with other EU countries.

Impact of Different Economic Areas on Yield Rates in the V4’s Capitals’ Office Markets

Fri, 31 Oct 2025 00:00:00 GMT

The aim of the article is twofold. Its first goal is to identify the primary economic areas generating determinants that cause fluctuations of yield rates in the office markets in Bratislava, Budapest, Prague and Warsaw. To achieve this, four sets of potential determinants were predefined: the National, the Visegrád Group, the European Monetary Union, and the USA. The second goal of the study is to verify potential asymmetric dependencies that impact the yield rates. The study was conducted with a use of the autoregressive distributed lag model (ARDL) and its nonlinear equivalent (NARDL). The main conclusion of the study is that the four office markets do not follow a homogenous pattern when it comes to determinants of the yield rates. In accordance with this, variables of different economic areas best fit the ARDL model in each city — particularly inflation rates and interest rates on government bonds, which impacted the yield rates with the largest magnitude. Asymmetric relationships were also found between the yield rate and independent variables, especially the inflation rate, S&P stock index, and rent growth rate in Bratislava.

Perception of Financial Security in Assessing Business Continuity by SMEs in Poland

Wed, 15 Oct 2025 00:00:00 GMT

The aim of this study is to diagnose how small and medium-sized enterprises (SMEs) in Poland perceive financial security, and to examine whether there is a significant relationship between this perception and the companies’ market experience. The motivation for undertaking this topic is the limited number of studies on how SMEs, which form the foundation of the economy and are highly exposed to financial risks, define and operationalize financial security in practice. This study was based on a CAWI survey conducted among 500 SMEs from the manufacturing, trade and services sectors, and the data was analyzed using the chi-square test, Fisher‘s exact test and a Monte Carlo simulation. The results indicate that financial security is primarily associated with a stable customer base, available funds in bank accounts, and maintaining financial liquidity, with older companies attaching greater importance to these indicators. The study also reveals that most SMEs rely on trust and informal methods when verifying their contractors, rarely using financial statements. The contribution of this article is threefold: it enriches the theoretical debate on SME financial security by linking it to the going-concern principle; it provides empirical evidence from Poland that fills an identified research gap; and it offers practical implications for SME managers, auditors and policy makers.

Determinants of External Audit Fees: Empirical Evidence from the Audit Market in Kosovo

Thu, 02 Oct 2025 00:00:00 GMT

This study examines the determinants of external audit fees in Kosovo's evolving audit market, investigating how various client and audit firm characteristics affect pricing in a transitional economy. Drawing on data collected from the Kosovo Council for Financial Reporting (KCFR) and licensed statutory audit firms covering 2019 to 2022, the research applies multiple regression models to explore the relationship between audit fees and key independent variables. The findings demonstrate that larger clients and those with higher complexity incur greater audit fees, underscoring the additional effort and resources required to perform thorough audits. Additionally, the size of the audit firm significantly affects fee levels, with larger firms typically charging more for their services. In contrast, within Kosovo's current regulatory and economic context, client risk and corporate governance show little influence on audit fees. These results suggest that audit firms could benefit from adopting transparent pricing models that reflect client size and complexity, ensuring fairness in fee determination. This study is the first economy-wide study to integrate institutional-void theory with audit-pricing models in a transitional micro-economy, isolating the Law 06/L-032 shock and examining its moderating effect on brand premia. It extends post-2020 debates on digitalisation, inflation, and market concentration to a nascent audit market.

The Effect of Climate Risk on China‘s Agri-food Trade

Mon, 22 Sep 2025 00:00:00 GMT

This paper investigates the effect of climate risks on China‘s agricultural and food trade. The motivation is to analyse the linking between various climate risks and agri-food sectoral trade using climate-agriculture-trade for China and provide more specific policies to mitigate the negative damage. We employ the Poisson Pseudo Maximum Likelihood with the High-Dimensional Fixed Effects model for empirical analysis. We construct an empirical model with features of climate risks and agricultural production. To be more climate specific, we extend climate risks into different types to better explain climate and agricultural trade. The panel data covers 31 Chinese provinces and five agri-food sectors from 2015 to 2019. The study finds that climate risks have significant effects on China‘s agricultural trade. Among them, droughts and floods suppress agri-food trade at the provincial level in China. However, different climate risks have various effects on different agri-food trade. The varying effects primarily play roles through the agricultural water usage of different provinces in China. After being affected by droughts, the import of agricultural products in the northern regions increases. However, the duration of sunshine in the northern regions is beneficial to agri-food trade, while the opposite occurs for the southern regions. Droughts have a clear negative effect on China‘s agricultural trade with non-high-income countries.

Workers’ Earnings Losses Due to the Low-Carbon Transition. Theory and Application in a CGE Model

Tue, 05 Aug 2025 00:00:00 GMT

Designing a just transition that leaves no one behind necessitates an understanding of the potential economic costs of this transition for particularly vulnerable individuals. In this article, we analyse the costs of transitioning from high-carbon to less-carbon-intensive sectors for workers. First, we discuss potential reasons for such costs. Second, we employ a microeconomic model to demonstrate that information on the magnitude of these costs can be derived from the empirically observed sectoral labour supply curves. We then illustrate how the system of supply curves can be integrated into a standard Computable General Equilibrium framework. We calculate the potential earnings losses incurred by workers during the transition and compare them to the size of the Just Transition Fund by the European Commission. Finally, we employ the model to estimate the transition costs for Poland. In 2040, the loss for workers due to climate policy is approximately $1 billion, equivalent to 0.5% of total labour compensation. The state could use a Just Transition Fund or allocate a portion of its carbon tax revenue to compensate for these losses, thus reducing the resistance of the most affected workers to more ambitious climate policies.

Empirical Analysis of the Logistics Sustainable Development in Poland: The Role of Macroeconomic Stability, Financial Security, and Social Development

Sat, 26 Jul 2025 00:00:00 GMT

The paper discusses the sustainable development of Polish logistics companies from 2008 to 2022. The study is motivated by the growing relevance of reconciling macroeconomic, financial, and social aspects of green transformation processes. The main objective is to evaluate the impact of macroeconomic stability, financial security, and social development on economic, social, and environmental performance. The method uses Ordinary Least Squares (OLS) and Seemingly Unrelated Regression (SUR). It utilises synthetic indicators of sustainable development and its most significant drivers: the Macroeconomic Stabilisation Index (MSP), Financial Security Index (FS), and Human Development Index (HDI). The findings confirm the positive dynamics of sustainability and indicate that HDI has the strongest and most significant impact on sustainable development, with a one-year lag specifically. Economic security supports financial growth, while environmental progress is catalysed by monetary expansion. The study contributes a new analytical model with macroeconomic and social determinants, with implications for researchers and policymakers.

Factors that Influence the Liquidity–Profitability Relationship in Companies Listed on the WSE

Thu, 19 Jun 2025 00:00:00 GMT

This article examines the relationship between financial liquidity and profitability among non-financial companies listed on the Warsaw Stock Exchange (WSE), exploring the factors that influence this dependence, such as net working capital strategy, sales volume, and asset levels. To achieve this, companies were categorised into portfolios based on their working capital strategy, sales volume, and asset levels. Correlation and regression analyses were then conducted within each portfolio to identify variations in the liquidity-profitability relationship across these categories. The research reveals that the relationship between financial liquidity and profitability is not uniform, demonstrating that it varies significantly depending on a company's net working capital strategy, sales volume, and asset level. These observed differences across portfolios highlight the specific factors that shape this relationship. The findings support the applicability of theoretical assumptions regarding the liquidity-profitability relationship to the specific context of the surveyed non-financial companies listed on the WSE. However, the study's focus on publicly listed companies on the WSE excludes private companies, which may exhibit a different liquidity-profitability relationship.

Do Emerging VC Markets Mirror Established Ones? A Comparison of CEE, the USA and Israel

Tue, 22 Apr 2025 00:00:00 GMT

The venture capital market in Central and Eastern European (CEE) countries—particularly Poland, Hungary, and the Czech Republic—has experienced rapid growth in recent years, prompting a closer examination of the factors driving this expansion and the long-term trajectories of these emerging ecosystems. This study aims to compare their development stages with those of the USA and Israel, highlighting key similarities and differences in investment patterns, government interventions, and market maturity. By identifying the current phases across these CEE markets and projecting potential future stages, the research seeks to contribute to a deeper understanding of venture capital (VC) dynamics in transition economies. Using a multiple case study methodology, the analysis examines the evolutionary phases of VC markets in the USA, Israel, and the three CEE countries—Poland in more depth. The findings reveal that Poland and Hungary share parallels with the USA and Israel—particularly with Israel, where government programs have spurred growth—while the Czech Republic has relied more on private-sector initiatives. The analysis concludes that Poland and Hungary remain in the emergence phase of VC development, with further phases likely to follow. This research contributes to the literature on VC evolution by offering insights into the comparative growth trajectories of emerging ecosystems and providing a perspective on the opportunities and challenges that may lie ahead for these countries.