Baltic Journal of Economic Studies

EXPLORING THE FACTORS AFFECTING CONSUMER BEHAVIOUR IN USING DIGITAL BANKING SERVICES (EMPIRICAL EVIDENCE FROM GEORGIA)

Nugzar Todua, Nino Gogitidze — Mon, 26 Jan 2026 00:00:00 +0000

The article demonstrates that the rapid growth of digital banking services has significantly altered consumer behaviour, making empirical research into the factors influencing digital banking adoption essential. Digital banking technologies are also developing rapidly in Georgia. Therefore, studying the behaviour of Georgian consumers in relation to digital banking services is highly relevant. This research aims to investigate Georgian consumers' attitudes towards using digital technologies. The focus of the research is the Georgian banking sector. The theoretical basis of this paper is the theory of consumer behaviour, which describes the influence of cognitive and emotional factors of digital banking users on their satisfaction. Following a thorough analysis of extant literature on the subject, the following variables were selected for inclusion in the research study: awareness of digital banking, social media marketing activities provided by banking institutions, consumer trust, consumer intention, use of digital banking services by consumers, and consumer satisfaction. The present study employs the online survey method. Primary data were collected through the administration of a structured questionnaire, which was completed by 433 respondents selected at random. The data were analysed using regression analyses. The findings substantiated the model's reliability and validity. This study found a positive relationship between consumer intention to use digital banking and awareness (β = 0.367, p < 0.01), social media marketing activities (β = 0.384, p < 0.01), and trust (β = 0.432, p < 0.01). Furthermore, a positive attitude has also been established between consumer intention and use of digital banking (β = 0.621, p < 0.01); also, use of digital banking services and consumer satisfaction (β = 0.609, p < 0.01). This original study makes a significant contribution to the extant literature in the field of banking marketing. The present study offers practical insights, thus supporting the design of targeted marketing strategies to promote digital banking adoption in the Georgian banking sector.

ECONOMIC AND LEGAL PRINCIPLES FOR ENSURING THE FINANCIAL SUSTAINABILITY OF LOCAL SELF-GOVERNMENT BODIES IN UKRAINE: CHALLENGES AND PROSPECTS

Denys Moskal — Mon, 26 Jan 2026 00:00:00 +0000

This article examines the economic and legal principles that ensure the financial sustainability of local self-government bodies in Ukraine, particularly in the context of decentralisation reforms and mounting budgetary challenges. Financial sustainability is defined as a multifaceted concept reflecting a municipality's capacity to generate stable revenues, balance expenditure, manage debt responsibly, and provide essential public services amid macroeconomic instability and limited resources. The study aims to analyse the theoretical and regulatory approaches to the financial sustainability of local self-government, identify the main issues in its legal and economic framework, and set out ways to strengthen institutional capacity. The legislative framework governing local finance, intergovernmental transfers and budget decentralisation is given particular attention, as is the role of administrative and financial mechanisms in fostering the development of territorial communities (hromadas). It is emphasised that constrained fiscal autonomy, excessive reliance on central government transfers, and circumscribed opportunities for municipal borrowing compromise the financial sustainability of local authorities. Concurrently, evidence from EU countries demonstrates that transparent budget rules, diversification of income sources, and prudent debt management considerably enhance municipal financial resilience. The research findings reveal that the current Ukrainian model demonstrates structural weaknesses, including an undeveloped local tax base, limited investment capacity, inconsistent legal regulation of municipal borrowing, and insufficient coherence between economic and legal instruments of financial management. The study shows that addressing these issues requires comprehensive reforms to expand the fiscal autonomy of hromadas, make intergovernmental transfers more predictable, strengthen budget discipline and reinforce the rule of law in financial decision-making. The practical significance of the research lies in establishing a methodological basis for creating a balanced system of economic instruments and legal provisions to ensure the financial stability of municipalities. The findings emphasise that the financial sustainability of local self-government bodies should be considered not only in economic terms, but also as a legal guarantee of effective self-governance and democratic development.

IMPACT OF THE DEVELOPMENT OF MEDICAL TOURISM FOR THE EUROPEAN HEALTH TOURISM DESTINATIONS. GERMANY – GOOD PRACTICE

Siyka Katsarova, Šarūnas Banevičius — Mon, 26 Jan 2026 00:00:00 +0000

This article builds on existing knowledge of the European medical tourism industry and its impact on European health tourism destinations. It explores how medical tourism can be developed for customers and the European tourism industry. Firstly, the authors aim to present the important role of medical tourism for Europe as a continent with a tradition of longevity. Secondly, they aim to showcase Germany as a leading world-renowned tourism destination with an excellent international reputation in the field of medical tourism. Germany is renowned for its high healthcare standards, specialised medical professionals, and cutting-edge medical technology. Thirdly, the rising trend of patients travelling to Central and Eastern Europe, as well as the Baltic countries, for affordable treatments and procedures is further propelling the market, coupled with increased accessibility due to improved transport links and visa policies. Countries such as Hungary, the Czech Republic, Slovakia and Lithuania are emerging as popular destinations thanks to their specialisation in various medical procedures and competitive pricing. The authors' suggestions will enable countries looking to develop medical tourism or seeking new opportunities to offer year-round tourism to develop as sustainable health tourism destinations, such as Bulgaria. These countries will be able to receive know-how from the best European practices. Developing medical tourism enables destinations to retain medical specialists without changing the industry. The aforementioned tourist product is designed to promote the destination, with the intention of showcasing the quality of the medicine, the clinical and hospital infrastructure, and the medical competence of the doctors and medical specialists who provide care to patients. The phenomenon of medical tourism has been shown to exert a multifaceted influence on both social and economic domains, in addition to its impact on the image of the nation.

WHAT FACTORS DRIVE THE SUCCESS IN LITHUANIAN REAL ESTATE CROWDFUNDING?

Gintarė Leckė, Asta Gaigalienė, Domantė Jakučionytė — Mon, 26 Jan 2026 00:00:00 +0000

The volatility of financial markets, the tightening of financing conditions during the global financial crisis, and the rapid growth of fintech technologies have led to the emergence of a new and innovative financial instrument: real estate crowdfunding. The rapid global spread and growing popularity of real estate crowdfunding among investors and project owners have generated interest in research in this area, especially regarding the success factors of such projects. However, to the best of the authors' knowledge, no previous studies have analysed the factors determining the success of real estate crowdfunding projects in Lithuania, thereby emphasising the relevance of this research. The objective of this research endeavour is twofold: firstly, to identify the factors that may influence the success of real estate crowdfunding projects, and secondly, to empirically investigate the effects of these factors in the context of Lithuania's real estate crowdfunding market. To achieve this objective, data from 812 real estate crowdfunding projects on Lithuania's largest real estate crowdfunding platform were utilised. The success of real estate projects was assessed using two variables: the time from project funding in days and the number of investors per project. In addition to these two variables, five project-related factors that may influence the success of such projects were considered. The OLS regression was employed to investigate these effects, and it was revealed that for both indicators of project success, the amount raised, LTV ratio, and project duration had statistically significant effects. It was found that the annual interest rate was a statistically insignificant determinant of real estate project success for both project success indicators. The findings of this research are of paramount importance for project owners seeking to expeditiously and efficaciously raise funding, as well as for crowdfunding platforms in the selection of prospective projects for lucrative financing and the attraction of additional investors.

TOWARDS STRONGER ACCOUNTABILITY: GOVERNANCE DIMENSIONS IN WESTERN BALKAN NGOS

Shqipdona Hashani Siqani, Arbana Sahiti Ramushi — Mon, 26 Jan 2026 00:00:00 +0000

This study explores how the key governance dimensions of transparency, legitimacy and effectiveness influence the level and quality of accountability within non-governmental organisations (NGOs) operating across the Western Balkans. The research focuses on the internal governance mechanisms that determine how NGOs maintain ethical conduct, operational credibility and public trust in a region characterised by institutional transitions and donor dependency. By examining how these dimensions interact, the study aims to provide a deeper understanding of the governance structures that strengthen accountability and contribute to more responsible organisational performance. This study aims to identify the governance factor with the greatest impact on accountability and to explain the interrelationships among the three factors. To this end, a structured analytical framework combining quantitative and qualitative methods was employed. A variety of statistical techniques were employed in the analysis, including descriptive statistics, correlation, ANOVA, linear and logistic regression, mediation and cluster analyses. This comprehensive methodological approach enabled an in-depth examination of the direct and indirect effects between governance dimensions and accountability, ensuring empirical robustness and analytical clarity. The results confirm that legitimacy and effectiveness are the most influential determinants of accountability, while transparency has a significant, albeit mostly indirect, impact. Regression analyses indicate that higher levels of organisational effectiveness and legitimacy are strongly associated with greater accountability. Transparency enhances these dimensions and indirectly reinforces accountability. Further mediation analysis demonstrates that transparency influences accountability positively through its impact on legitimacy and effectiveness. Cluster analysis revealed different patterns of governance maturity, showing that NGOs with stronger internal governance systems consistently achieve higher accountability outcomes. In conclusion, accountability in NGOs is a multidimensional and dynamic concept influenced by interconnected governance mechanisms. Strengthening legitimacy through ethical practices, improving effectiveness through measurable results and embedding transparency as an integral management principle are all key to sustaining credibility and public trust. These findings provide valuable insights for NGO leaders, policymakers and donors who wish to improve the quality of governance and ensure that non-profit organisations in the Western Balkans are more transparent, legitimate and effective.

ASSESSING THE ROLE OF HONORARY CONSULS IN PROMOTING ECONOMIC DIPLOMACY

Cătălina Bratosin Vasilache — Mon, 26 Jan 2026 00:00:00 +0000

Despite the ongoing debate within the scientific community and the absence of consensus on their role and status, the proliferation of honorary consulates remains unabated. In fact, there has been a consistent and gradual increase in the establishment of these consulates over the past several decades. The institution of honorary consulate has been consistently regarded as a valuable asset within the architecture of foreign relations, despite not receiving the same degree of institutional recognition as the career consulate. To the present day, certain states continue to exhibit reluctance towards the establishment of this type of consulates, citing concerns related to, for instance, the loyalty to the country that appointed the honorary consuls. Moreover, although certain scientific articles emphasise their role and significance, quantitative research employing statistical and econometric methods to evaluate the impact of economic diplomacy on trade or investments frequently excludes honorary consulates from their models. Such research focuses on actors such as diplomatic missions. It is evident that there is a correlation between honorary consulates and economic and commercial activities; however, the question remains as to what extent this correlation is indeed a cause of tangible impact. The present article thus examines the evolving role of honorary consuls, with particular attention to their contribution to trade facilitation, the attraction of investments, and the promotion of national companies. These activities are encompassed within the spectrum of economic diplomacy. The present study adopts a literature review as its methodological approach, reviewing the extant literature on the topic of honorary consulates. The primary objective is to undertake a thorough examination of the extant literature pertinent to the subject, with a view to elucidating the contribution of these actors to the practice of economic diplomacy. The findings indicate that the establishment of honorary consulates is of particular benefit to small states, as it facilitates the enhancement of bilateral relations. Despite ongoing debates and reluctance to establish honorary consulates, this paper argues that the institution remains a relevant instrument of diplomacy, particularly for states with limited resources. Given the limited academic engagement with this topic, this review maps the existing research and provides a foundation for further empirical and theoretical studies into the evolving role of honorary consulates in contemporary international economic relations.

CIVIL DISOBEDIENCE AND POLICE ACTIONS AGAINST PROTESTERS DURING THE PANDEMIC – THE CASE STUDY OF GREECE

Joanna Marszałek-Kawa, Marta Banasiak — Mon, 26 Jan 2026 00:00:00 +0000

The global spread of the SARS-CoV-2 virus was announced by the World Health Organization in 2020, leading to a radical change in reality. Previous forms of social participation were significantly curtailed, and the quotidian routine was no longer able to function in its previous form. The mounting fear for health and life, rising mortality rates, and social chaos became the catalyst for countries to introduce compulsory isolation measures. This action generated strong and often extreme reactions from the population, particularly as the restrictions began to infringe upon fundamental rights, such as the right to freedom of association. This paper primarily aims to examine the actions of law enforcement agencies against protesters in Greece during the pandemic. Media reports and internal Greek regulations relating to the COVID-19 pandemic will serve as the reference point. This article aims to answer the question of whether the police response to protests during the pandemic was proportionate to the actions of demonstrators. A qualitative content analysis methodology was employed to provide a comprehensive interpretation of existing sources and draw key conclusions. This approach was adopted to analyse communications and announcements regarding the behaviour of protesters and law enforcement agencies during the study period.

MACHINE LEARNING APPROACHES TO PREDICTIVE MODELING OF LIVESTOCK DEVELOPMENT

Marina Kravchenko, Ivan Fartushnyi, Anatolii Kulyk — Mon, 26 Jan 2026 00:00:00 +0000

The subject of this research is the forecasting of the population dynamics of sheep and goats in Ukraine under wartime, economic, and climatic challenges that directly affect livestock farming and national food security. The present study is of particular pertinence, given the pivotal role that small ruminants play in ensuring the supply of meat, dairy products and wool. A decline in animal numbers may result in shortages of livestock products, deterioration of the socio-economic situation in rural areas, and a reduction in Ukraine's export capacity. The purpose of the paper is twofold: firstly, to develop short- and medium-term forecasting models for sheep and goat populations by combining classical statistical techniques with modern machine learning approaches; and secondly, to identify the strengths and weaknesses of these models across different forecasting horizons. The methodological framework utilised is founded upon statistical data of an official nature, as recorded by the Main Department of Statistics in the Odesa region for the period 2007–2025. Four approaches were employed: the SARIMAX statistical model; the additive Prophet model; and LSTM neural networks, which were implemented using PyTorch and Keras. Forecast performance was evaluated using the RMSE, MAE, MAPE and MASE metrics, enabling a comprehensive comparison of the models. The results confirm that the sheep and goat population in Ukraine has been in persistent decline, with sharper falls observed since the start of the full-scale war. The Keras-based LSTM model proved to be the most accurate for short-term forecasts (12 months), while the PyTorch-based LSTM model demonstrated the greatest stability for medium-term predictions (24 months). The SARIMAX and Prophet models achieved moderate accuracy but struggled to reproduce peaks and troughs in the time series. The study's scientific novelty lies in its integration of statistical and neural network forecasting approaches, while explicitly accounting for wartime disruptions and crisis-related factors. This makes the research one of the first attempts to adapt hybrid forecasting models to the Ukrainian livestock sector in wartime. The practical value lies in the ability to use the developed models at both the micro and macro levels. Individual farms can use them to optimise production and resource planning, while policymakers can use the forecasts to design effective state support programmes, strengthen food security strategies and ensure the sustainable recovery of the agricultural sector.

FINANCING AND FACILITATING TERRORISM AS A CAUSE OF ECONOMIC, POLITICAL AND SOCIAL PROBLEMS IN THE STATE

Iulia Abakumova, Iuliana Kozachenko, Taisiia Oharenko — Mon, 26 Jan 2026 00:00:00 +0000

The purpose of the paper is to examine the financing and other facilitation of terrorism as a cause of economic, political and social problems in the state and the problems of countering them. Results. The research is based on an analysis of the regulatory framework for defining terrorism and liability for financing terrorism and other forms of facilitating such socially dangerous illegal activities in Ukraine and in accordance with the provisions of international law. The concept and characteristics of terrorism and its financing are described. The problems of countering terrorist financing and the peculiarities of defining the concept of 'terrorism' are examined, as are the signs of terrorist financing. In particular, one of the main objective signs of this criminal offence, the subject matter, is analysed in detail. The argument is put forward that the subject matter of the offence in question should be material assets, including both movable and immovable property (such as cash, cryptocurrency and property rights), while actions of a property nature should be considered to constitute an accessory to the relevant terrorist offence. The problems of financial monitoring as one of the areas of countering terrorist financing are being studied. Value/Originality. Financing terrorism is one of the terrorist offences for which liability is provided for by Ukrainian law. A detailed description of the characteristics of this illegal activity can help to increase the effectiveness of countering it and terrorism in general. The article proves that awareness and accurate identification of the subject of terrorist financing are key prerequisites for effectively countering this threat. Law enforcement agencies and financial institutions can only create effective mechanisms for detecting, monitoring and blocking suspicious flows if they have clear information about the specific resources used to support terrorist networks.

THE ROLE OF INSTITUTIONS IN DETERMINING MILITARY EXPENDITURE: EVIDENCE FROM EASTERN EUROPE

Andrii Zavazhenko, Olga Demydiuk, Viktoriia Kulish — Mon, 26 Jan 2026 00:00:00 +0000

The purpose of the present paper is to analyse the impact of institutional factors on the level of military expenditure of post-socialist countries of Eastern Europe. The dramatic shift in the European security architecture has compelled these nations to substantially increase their defence budgets. Whilst the extant academic literature thoroughly covers traditional determinants such as external threats and economic development, the specific role of the institutional environment is often addressed in simplistic terms. The present study aims to investigate the causal relationship between institutional determinants and the share of national income allocated to defence, thus filling a significant gap in the existing literature. Methodology. The analysis is based on a quantitative assessment of a panel dataset covering 19 post-socialist countries from 2002 to 2023. To account for unobserved country-specific characteristics and common time shocks, a two-way fixed effects model was employed. To ensure valid and robust statistical inference, the estimations utilise Driscoll–Kraay standard errors. The results of the study showed that different aspects of the institutional environment have opposing effects on defence spending. The study demonstrated a statistically significant positive correlation between controlling corruption and military expenditure. This finding lends weight to the hypothesis that less corrupt states have stronger fiscal capabilities, enabling them to mobilise resources effectively and fund core state functions, including national security. Conversely, the study identified a statistically significant negative correlation between the strength of the rule of law and defence spending. This finding supports the hypothesis that robust legal institutions with inherent checks and balances, as well as greater public oversight, act as a restraint on executive power. This limits the growth of defence budgets in favour of other public priorities. Furthermore, the model confirmed that countries with larger populations tend to allocate a smaller proportion of their GDP to defence. Practical implications. The findings suggest that, since different institutional changes produce opposing outcomes, policymakers should adopt a more considered approach. For example, policies aimed at reducing corruption may increase a state’s fiscal capacity to fund defence, whereas strengthening the rule of law may introduce accountability mechanisms that limit such spending. Value / Originality. The research aims to provide a detailed analysis of the institutional determinants of defence expenditure, offering robust empirical evidence of the dual and contradictory roles played by different institutions in this area.

DIRECTIONS OF TRANSFORMATION OF THE MANAGEMENT SYSTEM OF ECONOMIC SECURITY OF THE AGRICULTURAL SECTOR IN THE SYSTEM OF SUSTAINABLE DEVELOPMENT

Olha Shulha — Mon, 26 Jan 2026 00:00:00 +0000

This article was prepared as part of the Verkhovna Rada of Ukraine's scholarship programme. It focuses on the study of the transformation of management systems for economic security in the agricultural sector in the context of sustainable development. The study is relevant due to modern challenges, particularly geopolitical threats and economic instability, as well as the need to integrate innovations and risk management in Ukrainian agriculture. It has been determined that sustainable development in the agricultural sector is only possible through the implementation of adaptive management systems that consider financial, technological, social and risk aspects of economic security. This study aims to develop and substantiate a conceptual model for transforming the management system for economic security in the agrarian sector. This model takes into account the principles of sustainable development and provides dynamic monitoring, effective risk management, financial stability, and the industry's innovative development. Such a model should focus on increasing the agrarian sector's flexibility, efficiency and stability in the face of internal and external challenges. This study employed a thorough methodological approach that included a theoretical analysis of scientific sources, the construction of a structural-logical model, the development of a system of indicators to assess management effectiveness, a comparative analysis of the best global practices and expert consultations, as well as a SWOT analysis. The study focuses on the theoretical, methodological and applied aspects of forming, developing and improving the economic security management system for the agricultural sector. This system includes the mechanisms, approaches, tools and methods that increase the efficiency of risk management and the financial stability and innovative activities of agricultural enterprises. The study's novelty lies in its comprehensive, integrated approach to transforming the economic security management system in the agricultural sector, taking into account the peculiarities of Ukraine's modern economic, geopolitical and social environment. For the first time, a two-level management model has been proposed which includes subsystems for identifying dangerous situations and implementing strategies to eliminate threats. This ensures a systematic and targeted response to various challenges. A more comprehensive and accurate assessment of the state of economic security and the effectiveness of its management is now possible thanks to an expanded system of complex indicators. For the first time, the integration of innovative technologies and human resources into the security management system is recognised as a key factor in increasing the competitiveness of the agricultural sector. Furthermore, the features of the market and geopolitical environment, which are inherently unstable, have been taken into account. This necessitates the need for flexible adaptive mechanisms for risk management and financial stability. The proposed model incorporates not only the stability of financial indicators, but also the assessment of the effectiveness of technological innovations and social factors. This provides a more comprehensive and adaptive approach to risk management. The implementation of a monitoring system and flexible strategic management enables the agricultural sector to respond in a timely manner to internal and external challenges, increase competitiveness and ensure the country's food security.

THE ECONOMIC FUNCTION OF CIVIL JUSTICE: THE RELATIONSHIP BETWEEN CIVIL LAW, CIVIL PROCESS, AND MARKET EFFICIENCY

Nelli Golubeva, Iryna Davydova, Volodymyr Zubar — Mon, 26 Jan 2026 00:00:00 +0000

The efficacy of civil justice is predicated on its role as the cornerstone of a market economy, yet it must be noted that it does not proffer a tangible mechanism for the protection of violated rights. Furthermore, it fosters the stability of economic circulation and establishes the prerequisites for predictable entrepreneurial activity. The accessibility and effectiveness of justice have been demonstrated to have a significant impact on the ability of businesses and citizens to realise their economic interests, attract capital, conclude contracts and develop innovations. Conversely, the inefficiency of the judicial system, the delay in proceedings, the inconsistency of decisions, and high procedural costs generate economic risks, market costs and increased economic growth, which leads to a decrease in investment attractiveness, an increase in conditions for entrepreneurship and an increase in the level of shadow economy. In contemporary conditions, especially for countries undergoing structural reforms or in the process of recovery, enhancing the efficiency of civil justice has become a strategic component of economic policy. This comprehensive study of the economic function of civil justice is necessary for the decision-making process aimed at modernising the judicial system, strengthening public trust and ensuring sustainable market development. The research methodology under scrutiny comprises a range of methods, including the comparative law method, the method of economic and legal analysis, the method of analysis, the empirical method and the inductive-deductive method. The article is devoted to the study of the economic function of civil justice and the analysis of the relationship between civil law, civil process and the efficiency of the market economy. The importance of a high-quality system for resolving private law disputes as an institutional basis for the development of entrepreneurship, the attraction of investments, the stability of the financial sector and the reduction of transaction costs is demonstrated. The findings of this study substantiate the hypothesis that predictability and solvency of court decisions, proper protection of property rights and effective fulfilment of obligations ensure the formation of confidence in economic growth. In this paper, it is proposed that civil justice should be considered a key element of market infrastructure, insofar as it determines the balance between private autonomy and state regulation.