Analele Universității din Oradea. Seria științe economice TOM XXXIII, 2nd Issue, December 2024 PDF Free Download

Name: Analele Universității din Oradea. Seria științe economice TOM XXXIII, 2nd Issue, December 2024 PDF
Author: anthonyy27

1 / 385

0 views•385 pages

Analele Universității din Oradea. Seria științe economice TOM XXXIII, 2nd Issue, December 2024 PDF Free Download

Analele Universității din Oradea. Seria științe economice TOM XXXIII, 2nd Issue, December 2024 PDF free Download. Think more deeply and widely.

ROMANIA

UNIVERSITY OF ORADEA

FACULTY OF ECONOMIC SCIENCES

Analele Universității din Oradea. Seria

științe economice

TOM XXXIII

2ND ISSUE, DECEMBER 2024

Oradea University Press

ISSN 1582 – 5450 (electronic)

ISSN 1222-569X (print)

This page intentionally left blank

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

The publication of the papers in the Journal " Analele Universității din Oradea.

Seria științe economice"- Tom XXXIII, 2024, ISSN 1582-5450 (in the electronic

format on CD-ROM), ISSN 1222-569X (in printed format), a journal listed CNCIS

category B+ and indexed in RePec, DOAJ, EBSCO, CABELLS Publishing Services,

and ERIH PLUS international data bases and respectively on the site of the journal

http://anale.steconomiceuoradea.ro/en/, in electronic format with free and open

access to full text. ANALELE UNIVERSITĂȚII DIN ORADEA. SERIA ȘTIINȚE

ECONOMICE is an open access and peer-reviewed journal. The Journal is

published in English, two issues per year, in July and December.

The papers published in this volume are exclusively engaging the authors.

Editor-in-Chief:

Claudia-Diana SABĂU-POPA, Ph.D.

Editors:

Diana-Claudia PERȚICAȘ, Ph.D.

Dorin-Cristian COITA, Ph.D.

Members:

Valeriu IOAN-FRANC, Ph.D., Correspondent

Member of the Romanian Academy,

Romania;

Ahmet AKTAS, University of Akdeniz, Ph.D.,

Alanya, Turkey;

Ismet ATES, Ph.D., Adnan Menderes

University, Turkey;

Mihaela BELU, Ph.D., The Bucharest

University of Economic Studies, Romania;

Luminita CHIVU, Ph.D., The Romanian

Academy, Romania;

Jose CIFUENTES, Ph.D., Honrubia,

University of Alicante, Spain;

Dezhi LIU, Ph.D., Shijiazhuang University of

Economics, China;

Anca-Otilia DODESCU, Ph.D., University of

Oradea, Romania;

Sergei F. FEOSTIKOV, Ph.D., Moscow

Academy of Business, Blagoveschensk

Branch, Russia;

Veronika FENYVES, Ph.D., University of

Debrecen, Hungary;

Xavier GALIEGUE, Ph.D., University of

Orleans, France;

Adriana GIURGIU, Ph.D, University of

Oradea, Romania

Dongheng HAO, Ph.D., Shijiazhuang

University of Economics, China;

Gheorghe HURDUZEU, Ph.D., The

Bucharest University of Economic Studies,

Romania;

Nicolae ISTUDOR, Ph.D., The Bucharest

University of Economic Studies, Romania;

Zoran IVANOVIC, Ph.D., University of Rijeka,

Croatia;

Goran KARANOVIC, Ph.D., University of

Rijeka, Croatia;

Eugeniusz KWIATKOWSKI, Ph.D., University

of Lodz, Poland;

Rajesh KUMAR, Ph.D., Osmania University,

India;

Eszter LANG, Ph.D., Hitelintézeti Szemle

(Financial and Economic Review), Central

Bank of Hungary, Hungary;

Nicola MATTOSCIO, Ph.D., “G. D’Annunzio”

University of Chieti – Pescara, Italy;

Piero MELLA, Ph.D., University of Pavia, Italy;

Guido MONTANI, Ph.D., University of Pavia,

Italy;

Andras NABRADI, Ph.D., University of

Debrecen, Hungary;

Carmen NĂSTASE, Ph.D., “Ștefan Cel Mare”

University of Suceava, Romania;

Ovidiu NICOLESCU, Ph.D., The Bucharest

University of Economic Studies, Romania;

Giuseppe PAOLONE, Ph.D., “G. D’Annunzio”

University of Chieti, Pescara, Italy;

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

Dorel Mihai PARASCHIV, Ph.D., The

Bucharest University of Economic Studies,

Romania;

Ryszard PIASECKI, Ph.D., University of Lodz,

Poland;

Marilen PIRTEA, Ph.D., West University of

Timisoara, Romania;

Nicolae Al. POP, Ph.D., The Bucharest

University of Economic Studies, Romania,

H.C of the University of Oradea;

Ion POPA, The Bucharest University of

Economic Studies, Romania;

Michael STOICA, Ph.D., Washburn

University, USA;

Gabriela TIGU, Ph.D., The Bucharest

University of Economic Studies, Romania;

Jean-Emmanuel TYVAERT, Ph.D., University

of Reims Champagne-Ardenne, France;

Valentina VASILE, Ph.D., The Romanian

Academy, Romania.

Scientific Committee:

Monica ACHIM, Ph.D., „Babes-Bolyai”

University, Cluj-Napoca, Romania;

Maria ALB, Ph.D., Dr. West University,

Timisoara, Romania;

Carmen BĂBĂIȚĂ, Ph.D., West University,

Timisoara, Romania;

Sorin Nicolae BORLEA, Ph.D., „Babes-

Bolyai” University, Cluj-Napoca, Romania;

Ioan BĂTRÂNCEA, Ph.D., „Babes–Bolyai”

University, Cluj-Napoca, Romania;

Liviu BEGU, Ph.D., The Bucharest University

of Economic Studies, Romania;

Nicolae BIBU, Ph.D., West University,

Timisoara, Romania;

Alexandru CHIȘ, Ph.D., University Babes-

Bolyai, Cluj Napoca, Romania;

Gheorghe CIOBANU, Ph.D., University

Babes-Bolyai, Cluj Napoca, Romania;

Smaranda Adina COSMA, Ph.D., University

Babes-Bolyai, Cluj Napoca, Romania;

Margit CSIPKÉS, Ph.D., University of

Debrecen, Hungary;

Emilian M. DOBRESCU, Ph.D., Romanian

Academy, Bucharest, Romania;

Cosmin DOBRIN, Ph.D., The Bucharest

University of Economic Studies, Romania;

Nicoleta FARCANE, Ph.D., West University,

Timisoara, Romania;

Liliana FELEAGA, Ph.D., The Bucharest

University of Economic Studies, Romania;

Veronika FENYVES, Ph.D., University of

Debrecen, Hungary;

Xavier GALIEGUE, Ph.D., University of

Orleans, France;

Patrizia GAZZOLA, Ph.D., Insubria University,

Italy;

George GEORGESCU, Ph.D., The Romanian

Academy, Romania;

Zizi GOSCHIN, Ph.D., The Bucharest

University of Economic Studies, Romania;

Călin GURĂU, Ph.D., Montpellier Business

School, Montpellier, France;

Camelia HATEGAN, PhD, Ph.D., West

University of Timisoara, Romania;

Nicolae ISTUDOR, Ph.D., The Bucharest

University of Economic Studies, Romania;

Marie-Noelle JUBENOT, University of Reims

Champagne-Ardenne, France;

Androniki KAVOURA, Ph.D., Technological

Educational Institute of Athens, Greece,

Goran KARANOVIC, Ph.D., University of

Rijeka, Croatia;

Ramona LACUREZEANU, Ph.D., University

Babes-Bolyai, Cluj Napoca, Romania;

Oana Ramona LOBONT, Ph.D., West

University of Timisoara, Romania;

Codruța MARE, Ph.D., “Babes-Bolyai”

University, Cluj-Napoca, Romania;

Domicián MÁTÉ, Ph.D., University of

Debrecen, Hungary;

Daniela MATUŠÍKOVÁ, Ph.D., University of

Prešov, Prešov, Slovakia;

Ovidiu MEGAN, Ph.D., West University,

Timisoara, Romania;

Nicoleta Claudia MOLDOVAN, Ph.D., West

University of Timisoara, Romania;

Valentin MUNTEANU, Ph.D., West University,

Timisoara, Romania;

Doina MUREȘANU, Ph.D., Université of

Québec in Abitibi-Témiscamingue, Québec,

Canada;

Carmen NĂSTASE, Ph.D., “Ștefan Cel Mare”

University of Suceava, Romania;

Răzvan Liviu NISTOR, Ph.D., “Babeș-Bolyai”

University, Cluj Napoca, Romania;

Nicolae PETRIA, Ph.D.,”Lucian Blaga”

University of Sibiu, Sibiu, Romania;

Mariana PREDIȘCAN, Ph.D., West

University, Timisoara, Romania;

Gabriela PRELIPCEAN, Ph.D., “Stefan cel

Mare” University of Suceava, Romania;

Cristina Teodora ROMAN, Ph.D., ”Alexandru

Ioan Cuza” University of Iași, Iași, Romania;

Flavius ROVINARU, Ph.D., University Babes-

Bolyai, Cluj Napoca, Romania;

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

Ovidiu RUJAN, Ph.D., The Bucharest

University of Economic Studies, Romania;

Steliana SANDU, Ph.D., The Romanian

Academy, Romania;

Marian SIMINICA, PhD, University of Craiova,

Romania

Klaus-Bruno SCHEBESCH, ”Vasile Goldiș”

Western University, Arad, Romania;

Nicoleta SÎRGHI, Ph.D., West University,

Timisoara, Romania;

Cristi SPULBĂR, Ph.D., University of Craiova,

Romania;

Gabriela STĂNCIULESCU, Ph.D., The

Bucharest University of Economic Studies,

Romania;

Orhan ȘANLI, Ph.D., Adnan Menderes

University, Turkey;

Hüseyin ŞENKAYAS, Ph.D., Adnan

Menderes University, Turkey;

Ioan TALPOȘ, Ph.D., West University,

Timisoara, Romania;

Valentin TOADER, Ph.D., University Babes-

Bolyai, Cluj Napoca, Romania;

Carmen TODERAȘCU, Ph.D., Alexandru

Ioan Cuza University, Iasi, Romania;

Adriana TIRON TUDOR, Ph.D., Babes –

Bolyai University, Cluj Napoca, Romania

Jean-Emmanuel TYVAERT, University of

Reims Champagne-Ardenne, France;

Gabriela ȚIGU, Ph.D., The Bucharest

University of Economic Studies, Romania;

Sherzod YULDASHEV, Ph.D., Samarkand

Branch of Taskent State University of

Economics;

Leonard Călin ABRUDAN, Ph.D., University

of Oradea, Romania;

Maria-Madela ABRUDAN, Ph.D., University of

Oradea, Romania;

Olimpia-Iuliana BAN, Ph.D., University of

Oradea, Romania;

Alina BĂDULESCU, Ph.D., University of

Oradea, Romania;

Daniel Laurențiu BĂDULESCU, Ph.D.,

University of Oradea, Romania;

Dorin-Paul BÂC, Ph.D., University of Oradea,

Romania;

Mihai BERINDE, Ph.D., University of Oradea,

Romania;

Simona-Aurelia BODOG, University of

Oradea, Romania;

Victoria BOGDAN, Ph.D., University of

Oradea, Romania;

Marcel-Ioan BOLOȘ, Ph.D., University of

Oradea, Romania;

Elena-Aurelia BOTEZAT, Ph.D., University of

Oradea, Romania;

Nicoleta-Georgeta BUGNAR, Ph.D.,

University of Oradea, Romania;

Felicia CONSTANTIN, Ph.D., University of

Oradea, Romania;

Laurentiu DROJ, PhD, University of Oradea,

Romania;

Adrian-Gheorghe FLOREA, Ph.D., University

of Oradea, Romania;

Dana-Simona GHERAI, Ph.D., University of

Oradea, Romania;

Adriana GIURGIU, Ph.D., University of

Oradea, Romania;

Ioana-Claudia HOREA, Ph.D., University of

Oradea, Romania;

Mirabela MATEI, Ph.D., University of Oradea,

Romania;

Ioana-Teodora MEȘTER, Ph.D., University of

Oradea, Romania;

Ioan Dan MORAR, Ph.D., University of

Oradea, Romania;

Adrian NEGREA, Ph.D., University of Oradea,

Romania;

Anamaria-Mirabela POP, Ph.D., University of

Oradea, Romania;

Dorina Nicoleta POPA, Ph.D., University of

Oradea, Romania;

Andra-Teodora PORUMB, Ph.D., University

of Oradea, Romania;

Ioana-Crina POP-COHUȚ, Ph.D., University

of Oradea, Romania;

Luminița RUS, University of Oradea,

Romania;

Claudia-Diana SABĂU-POPA, Ph.D.,

University of Oradea, Romania;

Monica-Ariana SIM, Ph.D., University of

Oradea, Romania;

Naiana-Nicoleta ȚARCĂ, Ph.D., University of

Oradea, Romania;

Daniela-Marioara ZĂPODEANU, Ph.D.,

University of Oradea, Romania;

Editorial Review Board

Leonard-Călin ABRUDAN, Ph.D. (University

of Oradea, Faculty of Economic Sciences,

Romania), Maria-Madela ABRUDAN, Ph.D.

(University of Oradea, Faculty of Economic

Sciences, Romania), Cristina-Laura

ABRUDAN, Ph.D. (University of Oradea,

Faculty of Economic Sciences, Romania),

Carmen ACATRINEI, Ph.D. (Bucharest

University of Economic Studies, Faculty of

Marketing, Bucharest, Romania), Bulent

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

ACMA, Ph.D. (Anadolu University, Eskisehir,

Turkey), Daniela-Tatiana AGHEORGHIESEI,

(CORODEANU), Ph.D., (“Alexandru Ioan

Cuza” University of Iași, Faculty of Economics

and Business Administration, Department of

Management, Marketing and Business

Administration, Romania), Alina Georgeta

AILINCĂ, Ph.D. (Centre for Financial and

Monetary Research, National Institute of

Economic Research, Romanian Academy),

Emre Ozan AKSOZ, Ph.D. (Anadolu

University, Turkey), Nicoleta ANDREESCU,

Ph.D. (Faculty of Faculty of Energy

Engineering and Industrial Management,

University of Oradea, Oradea, Romania),

Alina ALMĂȘAN, Ph.D. (West University of

Timișoara, Faculty of Economics and

Business Administration, Department of

Accounting and Audit, Romania), Sorin

Gabriel ANTON, Ph.D. (“Alexandru Ioan

Cuza” University of Iași, Faculty of Economics

and Business Administration, Department of

Finance, Money and Public Administration,

Romania), Laura ASANDULUI, Ph.D.

(“Alexandru Ioan Cuza” University of Iași,

Faculty of Economics and Business

Administration, Department of Accounting,

Economic Informatics and Statistics,

Romania), Emine Turkan AYVAZ GUVEN,

Ph.D. (Manisa Celal Bayar University,

Turkey), Leontina Emilia BACIU, Ph.D.

(”Babeș-Bolyai” University, Cluj-Napoca,

Romania), Diana-Elisabeta BALACIU, Ph.D.

(University of Oradea, Faculty of Economic

Sciences, Romania), Lia Alexandra

BALTADOR, Ph.D. (”Lucian Blaga” University

of Sibiu, Romania), Ionel BARBU, Ph.D.

(“Aurel Vlaicu” University of Arad, Romania),

Daniel-Laurențiu BĂDULESCU, Ph.D.

(University of Oradea, Faculty of Economic

Sciences, Department of Economics and

Business, Romania), Ionuț-Cosmin BĂLOI,

Ph.D. (Craiova University, Faculty of

Economics and Business Administration,

Department of Management, Marketing and

Business Administration, Craiova, Romania),

Dorin BÂC, Ph.D. (University of Oradea,

Faculty of Economic Sciences, Romania),

Liviu-Stelian BEGU, Ph.D. (The Bucharest

University of Economic Studies, Department

of Statistics and Econometrics, Bucharest,

Romania), Ciprian Beniamin BENEA, Ph.D.

(University of Oradea, Faculty of Economic

Sciences, Department of International

Business, Romania), Corneliu-Cristian

BENȚE, Ph.D. (University of Oradea, Faculty

of Economic Sciences, Department of

Finance-Accounting, Romania), Ana-Maria

BERCU, Ph.D. (“Alexandru Ioan Cuza”

University of Iași, Faculty of Economics and

Business Administration, Romania), Irina

Iuliana BILAN, Ph.D. (“Alexandru Ioan Cuza”

University of Iași, Faculty of Economics and

Business Administration, Romania), Jovanka

BILJAN, Ph.D. (University St. Kliment

Ohridski, Bitola, The Republic of Macedonia)

Ioana Teodora BIȚOIU, Ph.D. (National

University of Political Studies and Public

Administration, Bucharest, Romania), Gratiela

Dana BOCA, Ph.D. (Technical University Cluj

Napoca, North Center Baia Mare, Romania),

Simona-Aurelia BODOG, Ph.D. (University of

Oradea, Faculty of Economic Sciences,

Romania), Victoria BOGDAN, Ph.D.

(University of Oradea, Faculty of Economic

Sciences, Romania), Carmen BOGHEAN,

Ph.D. (“Ștefan Cel Mare” University of

Suceava, Faculty of Economic Sciences and

Business Administration, Department of

Economics, Business Administration and

Tourism, Suceava, Romania), Florin

BOGHEAN, Ph.D. (“Ștefan Cel Mare”

University of Suceava, Faculty of Economic

Sciences and Business Administration,

Department of Accounting, Finance and

Business Informatics, Suceava, Romania),

Marcel-Ioan BOLOȘ, Ph.D. (University of

Oradea, Faculty of Economic Sciences,

Department of Finance-Accounting,

Romania), Alina BOTEZAT, Ph.D. (Romanian

Academy – Iasi Branch, Iași, Romania),

Ioana-Alexandra BRADEA, Ph.D. (Bucharest

University of Economic Studies, Romania),

Laura BRANCU, Ph.D. (West University of

Timișoara, Faculty of Economics and

Business Administration, Romania),

Constantin BRĂTIANU, Ph.D. (Faculty of

Business Administration, The Bucharest

University of Economic Studies, Romania),

Grațiela BRÂNZĂ, Ph.D. (Constanța Maritime

University, Romania), Nicoleta BUGNAR,

Ph.D. (University of Oradea, Faculty of

Economic Sciences, Department of

International Business, Romania), Adrijana

BULEVSKA ZARIKJ, Ph.D. (Integrated

Business Faculty, Skopje, North Macedonia),

Esra Burcu BULGURCU GÜREL, Ph.D.

(Muğla Sıtkı Koçman University, Turkey),

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

Ștefan BUNEA, Ph.D. (Buchrest University of

Economic Studies, Faculty of Accounting and

Management Information Systems,

Department of Accounting and Economic and

Financial Analysis, Bucharest, Romania),

Simona BUTA, Ph.D. (“Ștefan Cel Mare”

University of Suceava, Faculty of Economics

and Public Administration, Romania), Eduard

Gabriel CEPTUREANU, Ph.D. (Bucharest

University of Economic Studies, Faculty of

Management, Romania), Sebastian

CEPTUREANU, Ph.D. (Bucharest University

of Economic Studies, Faculty of Management,

Romania), Carmen CHASOVSCHI, Ph.D.

(“Ștefan Cel Mare” University of Suceava,

Faculty of Economic Sciences and Business

Administration, Suceava, Romania), Viorica

CHIRILĂ, Ph.D. (“Alexandru Ioan Cuza”

University of Iași, Faculty of Economics and

Business Administration, Romania), Ana

Maria CHISEGA-NEGRILĂ, Ph.D. (“Carol I”

National Defense University, Romania),

Alexandru CHIȘ, Ph.D. (”Babeș-Bolyai”

University, FSEGA, Cluj-Napoca, Romania),

Denisa ČIDEROVÁ, Ph.D. (University of

Economics in Bratislava, Faculty of

Commerce / Fakulta obchodu Vysoké školy

ekonomickej v Bratislave, Slovakia), Elena

CIORTESCU, PhD. (Faculty of Economics

and Business Administration, "Alexandru Ioan

Cuza" University), Laura Mariana CISMAȘ,

Ph.D. (West University of Timișoara, Faculty

of Economics and Business Administration,

Romania), Maria CIUREA, Ph.D. (University

of Petroșani, Romania), COITA Dorin Cristian

(University of Oradea, Faculty of Economic

Sciences), Ph.D., COITA Ioana Florina

University of Oradea, Faculty of Economic

Sciences), Ph.D Felicia CONSTANTIN R,

Ph.D. (University of Oradea, Faculty of

Economic Sciences, Department of

International Business, Romania), Cristinel

CONSTANTIN, Ph.D. (”Transilvania”

University of Brașov, Brașov, Romania), Anca

CONSTANTINESCU-DOBRA, Ph.D.

(Technical University of Cluj-Napoca,

Romania), Smaranda Adina COSMA, Ph.D.

(”Babeș-Bolyai” University, Cluj-Napoca,

Romania), Lavinia Denisa CUC, Ph.D. (“Aurel

Vlaicu” University of Arad, Romania), Serkan

CURA, Ph.D. (Celal Bayar University, Manisa,

Turkey), Alina Beattrice CUZDRIOREAN

VLADU, Ph.D. (”Babeș-Bolyai” University,

FSEGA, Cluj-Napoca, Romania), Dan-

Cristian DABIJA, Ph.D. (”Babeș-Bolyai”

University, FSEGA, Department of Marketing,

Cluj-Napoca, Romania), Marius DEAC, Ph.D.

(Christian University “Dimitrie Cantemir”

Bucharest, Romania), Suzana DEMYEN,

Ph.D. (University “Eftimie Murgu” of Resița,

Faculty of Economic Sciences, Romania),

Laura DIACONU, Ph.D. (MAXIM), Ph.D.

(“Alexandru Ioan Cuza” University of Iași,

Faculty of Economics and Business

Administration, Romania), Adina DORNEAN,

Ph.D. (“Alexandru Ioan Cuza” University of

Iași, Faculty of Economics and Business

Administration, Romania), Larisa-Loredana

DRAGOLEA, Ph.D. (”1 Decembrie 1918”

University of Alba Iulia, Alba Iulia, Romania),

Cristina DRAGOMIR, Ph.D. (Constanța

Maritime University, Romania), Laurențiu

DROJ, Ph.D. (University of Oradea, Faculty of

Economic Sciences, Department of Finance-

Accounting, Romania), Dorel Mihai

DUȘMĂNESCU, Ph.D. (Petroleum & Gas

University of Ploiești, Faculty for Economic

Sciences, Romania), Mihaela ENACHI, Ph.D.

(Faculty of Economics, “Vasile Alecsandri”

University of Bacău, Bacău, Romania), Laura

ENDRES, Ph.D. (Preclinical Disciplines

Department, University of Oradea, Faculty of

Medicine and Pharmacy, Oradea, Romania),

Pinar ERYIGIT, Ph.D. (Celal Bayar University,

Manisa, Turkey), Hariandja EVO

SAMPETUA, Ph.D. (Universitas Pelita

Harapan, Tangerang, Indonesia), Teodora

Viorica FARCAȘ, Ph.D. (”Babeș-Bolyai”

University, FSEGA, Cluj-Napoca, Romania),

Emőke–Szidónia FEDER, Ph.D. (West

University of Timișoara, Romania), Sergei

Vladimirovich FEOKTISTOV, Ph.D. (Moscow

Academy of Business, Blagoveschensk

Branch, Russia), Bogdan Florin FILIP, Ph.D.

(“Alexandru Ioan Cuza” University of Iași,

Faculty of Economics and Business

Administration, Romania), Constantin

FILOTE, Ph.D. (”Ștefan Cel Mare” University

of Suceava, Suceava, Romania), Bogdan

Narcis FIRTESCU, Ph.D. (“Alexandru Ioan

Cuza” University of Iași, Romania), Radu

FLOREA, Ph.D. (“George Bacovia”

University, Bacău, Romania), Ramona

FLOREA, Ph.D. (“George Bacovia”

University, Bacău, Romania), Florin Sabin

FOLTEAN, Ph.D. (West University of

Timișoara, Faculty of Economics and

Business Administration, Romania), Andreea-

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

Florina FORA, Ph.D. (University of Oradea,

Faculty of Economic Sciences, Department of

International Business, Romania), Dana-

Simona GHERAI, Ph.D. (University of

Oradea, Faculty of Economic Sciences,

Department of Finance-Accounting,

Romania), Adriana GIURGIU, Ph.D.

(University of Oradea, Faculty of Economic

Sciences, Department of International

Business, Romania), Romania Eugenia

GRECU, Ph.D. (Politehnica University of

Timisoara, Faculty of Management in

Production and Transports, Department of

Management, Timișoara, Romania), Harun

GUMUS, Ph.D. (Celal Bayar University,

Manisa, Turkey), Stefán GUNNLAUGSSON,

Ph.D. (University of Akureyri, Akureyri,

Iceland), Raluca GUSE, Ph.D. (Bucharest

University of Economic Studies, Romania),

Andrea HAMBURG, Ph.D. (University of

Oradea, Faculty of Economic Sciences,

Department of International Business,

Romania), Daniela HARANGUS, Ph.D.

(Economic Department, Faculty of Economic

Sciences, “Aurel Vlaicu” University of Arad,

Arad, Romania), Mariana HATMANU, Ph.D.

(“Alexandru Ioan Cuza” University of Iași,

Romania), Camelia Daniela HAȚEGAN, Ph.D.

(West University of Timișoara, Romania),

Emilia HERMAN, Ph.D. (University of

Medicine, Pharmacy, Sciences and

Technology of Tîrgu Mureș, Romania), Ioana-

Claudia HOREA, Ph.D. (University of Oradea,

Faculty of Economic Sciences, Department of

International Business, Romania), Tao

HUANG, Ph.D. (Jiangxi University of Finance

and Economics, Nanchang, China), Andreea-

Oana IACOBUTA, Ph.D. (“Alexandru Ioan

Cuza” University of Iași, Faculty of Economics

and Business Administration, Department of

Economics and International Relations,

Romania), Liviu ILIEȘ, Ph.D. (Babeș-Bolyai

University, Faculty of Economics and

Business Administration, Cluj-Napoca,

Romania), Roxana IOAN, Ph.D. (West

University of Timișoara, Romania), Florin

Lucian ISAC, Ph.D. (Aurel Vlaicu University of

Arad, Romania), Oana Raluca IVAN, Ph.D. (“1

Decembrie 1918” University of Alba Iulia,

Romania), Mihaela KARDOS, Ph.D.

(University of Medicine, Pharmacy, Sciences

and Technology of Tîrgu Mureș, Romania),

Androniki KAVOURA, Ph.D. (Technological

Educational Institute of Athens, Greece),

Rozalia Iuliana KICSI, Ph.D. (“Ștefan cel

Mare” University of Suceava, Romania),

Mustafa KIRLI, Ph.D. (Manisa Celal Bayar

University, Turkey), Gábor Dávid KISS, Ph.D.

(University of Szeged, Faculty of Economics

and Business Administration, Hungary),

Balazs KOTOSZ, Ph.D. (Faculty of

Economics and Business Administration,

University of Szeged, Hungary), Tekmez

KULU, Ph.D. (Accounting Department, Celal

Bayar University, Manisa, Turkey), Ramona

LACUREZEAN, Ph.D. (Babeș-Bolyai

University, Faculty of Economics and

Business Administration, Cluj-Napoca,

Romania), Maria-Isadora LAZĂR, Ph.D.

(Bucharest University of Economic Studies,

Romania), Ramona LILE, Ph.D. (“Aurel

Vlaicu” University of Arad, Faculty of

Economic Sciences, Department fo Economic

Disciplines, Romania), Maria-Antoaneta

LORENTZ, Ph.D. (The Bucharest University

of Economic Studies, Bucharest, Romania),

Mariana LUPAN, Ph.D. (“Ștefan Cel Mare”

University of Suceava, Faculty of Economic

Sciences and Business Administration,

Department of Economics, Business

Administration and Tourism, Romania),

Ondřej MACHEK, Ph.D. (University of

Economics Prague, Faculty of Business

Administration, Department of Business

Economics, Czech Republic), Maria MACRIS,

Ph.D. (University of Petroșani, Romania),

Gabriela MARCHIȘ, Ph.D. (Danubius

University of Galați, Galați, Romania),

Codruța MARE, Ph.D. (”Babeș-Bolyai”

University, Faculty of Economics and

Business Administration, Department of

Statistics-Forecasting-Mathematics, Cluj-

Napoca, Romania), Camelia Loredana

MARGEA, Ph.D. (West University of

Timișoara, Romania), Diana MATICA, Ph.D.

(University of Oradea, Faculty of Economic

Sciences, Department of Finance-Accounting,

Romania), Valentin Petru MAZAREANU,

Ph.D. (“Alexandru Ioan Cuza” University of

Iași, Faculty of Economics and Business

Administration, Romania), Georgeta-

Madalina MEGHISAN-TOMA, Ph.D. (The

Bucharest University of Economic Studies,

Romania), Oznur MERT, Ph.D. (Celal Bayar

University, Manisa, Turkey), Ioana-Teodora

MEȘTER, Ph.D. (University of Oradea,

Faculty of Economic Sciences, Department of

Economics and Business, Romania), , Costică

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

MIHAI, Ph.D. (“Alexandru Ioan Cuza”

University of Iași, Faculty of Economics and

Business Administration, Romania), Gabriela

MIRCEA, Ph.D. (West University of

Timișoara, Romania), Sorina MOCIAR-

COROIU, Ph.D. (University of Oradea,

Faculty of Economic Sciences, Department of

Finance-Accounting, Romania), Claudia

Olimpia MOISĂ, Ph.D. (“1 Decembrie 1918”

University of Alba Iulia, Romania), Snezana

MOJSOVSKA SALAMOVSKA, Ph.D.

(University “St.Kliment Ohridski”, Faculty of

Economics, Department of Management,

Marketing and Business, Bitola, Macedonia),

Navid MOLLAEE, Ph.D. (Tehran Institute of

Technology, Business Management

Department, Iran), Maria Cristina MORARIU,

Ph.D. (Bucharest University of Economic

Studies, Romania), Andreea Cipriana

MUNTEAN, Ph.D. (“1 Decembrie 1918”

University of Alba Iulia, Romania), Pablo José

MOYA FERNÁNDEZ, Ph.D. (Universidad de

Granada, Spain), Carmen NĂSTASE, Ph.D.

(“Ștefan Cel Mare” University of Suceava,

Romania), Adrian NEGREA, Ph.D. (University

of Oradea, Faculty of Economic Sciences,

Department of International Business,

Romania), Mariya NEYCHEVA, Ph.D.

(Burgas Free University, Burgas, Bulgaria),

Liana Cristina NICOLAU, Ph.D.

(”Transilvania” University of Brașov, Brașov,

Romania), Iulia Monica OEHLER-SINCAI,

Ph.D. (Institute for World Economy of the

Romanian Academy, INCE, Romanian

Academy, Bucharest, Romania), Ahmet

OKUR, Ph.D. (Manisa Celal Bayar University,

Manisa, Turkey), Murat ORTANCA, Ph.D.

(Celal Bayar University, Manisa, Turkey),

Aslihan OZEL, Ph.D. (Celal Bayar University,

Manisa, Turkey), Mirela PANAIT, Ph.D.

(Petroleum & Gas University of Ploiești,

Faculty for Economic Sciences, Romania),

Iulia PARA, Ph.D. (West University of

Timișoara, Romania), Jasanta

PERANGINANGIN, Ph.D. (Institut Agama

Islam Negeri Surakarta, Indonesia), Ioan

Radu PETRARIU, Ph.D. (Bucharest

University of Economic Studies, Faculty of

International Economic Relations, Romania),

Aleksandra Zofia PIELOCH-BABIARZ, Ph.D.

(University of Lodz, Faculty of Economics and

Sociology, Department of International

Finance and Investments, Lodz, Poland),

Mariana PITAR, Ph.D. (West University of

Timișoara,, Romania), Toma PLEȘANU,

Ph.D. (“Carol I” National Defense University,

Romania), Cătălin PLOAE, Ph.D. (Bucharest

University of Economic Studies, Faculty of

International Economic Relations, Romania),

Eva PODOVŠOVNIK, Ph.D. (University of

Primorska, Faculty for Tourism Studies,

Portorož, Slovenia), Anamaria Mirabela POP,

Ph.D. (University of Oradea, Faculty of

Economic Sciences, Department of

International Business, Romania), Adela-

Laura POPA, Ph.D. (University of Oradea,

Faculty of Economic Sciences, Department of

Management-Marketing, Romania), Adriana

Florina POPA, Ph.D. (Bucharest University of

Economic Studies, Faculty of Accounting and

Management Information Systems,

Department of Accounting, Audit and

Economic and Financial Analysis, Romania),

Carmen Teodora POPA, Ph.D. (University of

Oradea, Faculty of Law, Oradea, Romania),

Dorina POPA, Ph.D. (University of Oradea,

Faculty of Economic Sciences, Department of

Finance-Accounting, Romania, Romania),

Mirela POPA, Ph.D. (”Babeș-Bolyai”

University, Faculty of Economics and

Business Administration, Department of

Management, Cluj-Napoca, Romania), Doina

POPESCU, Ph.D. (Bucharest University of

Economic Studies, Faculty of Management,

Department of Management, Romania), Felix

Angel POPESCU, Ph.D. (National Institute of

Administration, Bucharest, Romania), Andra

PORUMB, Ph.D. (University of Oradea,

Faculty of Economic Sciences), Cătălina

RADU, Ph.D. (Bucharest University of

Economic Studies, Romania), Valentin

RADU, Ph.D. (Valahia University of

Targoviste, Romania), Angela ROMAN, Ph.D.

(“Alexandru Ioan Cuza” University of Iași,

Faculty of Economics and Business

Administration, Romania), Remus-Dorel

ROȘCA, Ph.D. (University of Oradea, Faculty

of Economic Sciences, Department of

Management-Marketing, Romania), Ilie

ROTARIU, Ph.D. (”Lucian Blaga” University of

Sibiu, Sibiu, Romania), Luminița RUS, Ph.D.

(University of Oradea, Faculty of Economic

Sciences, Department of Finance-Accounting,

Romania), Corina RUSU, Ph.D. (Christian

University “Dimitrie Cantemir” Bucharest,

Faculty of Economic Sciences Cluj-Napoca,

Romania), Sergiu RUSU, Ph.D. (“Aurel

Vlaicu” University of Arad, Romania),

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

Valentina Diana RUSU, Ph.D. (“Alexandru

Ioan Cuza” University of Iași, Institute of

Interdisciplinary Research Social Sciences

and Humanities Research Department, Iași,

Romania), Claudia-Diana SABĂU-POPA,

Ph.D. (University of Oradea, Faculty of

Economic Sciences, Department of Finance-

Accounting, Romania), Sinan SARACLI,

Ph.D. (Afyon Kocatepe University, Afyon,

Turkey), Dinu-Vlad SASU, Ph.D. (University of

Oradea, Faculty of Economic Sciences,

Department of Management-Marketing,

Romania), Diana Cristina SAVA, Ph.D.

(University of Oradea, Faculty of Economic

Sciences, Oradea, Romania), Tomina

SĂVEANU, Ph.D. (University of Oradea,

Faculty of Economic Sciences, CCCDD,

Romania), Carmen SCORȚE, PhD.

(University of Oradea, Faculty of Economic

Sciences, Department of Finance and

Accounting) Oana SECARĂ, Ph.D.

(University of Oradea, Faculty of Economic

Sciences, Department of Management-

Marketing, Romania), Ioana Cristina

SECHEL, Ph.D. (”Babeș-Bolyai” University,

Faculty of Economics and Business

Administration, Cluj-Napoca, Romania),

Mariana SEHLEANU, Ph.D. (University of

Oradea, Faculty of Economic Sciences,

Department of Economics and Business,

Romania), Monica SIM, Ph.D. (University of

Oradea, Faculty of Economic Sciences,

Department of International Business,

Romania), Ovidiu Laurian SIMINA, Ph.D.

(Center for Migration and Mobility Studies-

SISEC, West University of Timișoara,

Romania), Ramona-Marinela SIMUȚ, Ph.D.

(University of Oradea, Faculty of Economic

Sciences and Business, Department of

Economics, Romania), Nicoleta SÎRGHI,

Ph.D. (West University of Timișoara,

Romania), Aurelia STĂNESCU, Ph.D.

(Bucharest University of Economic Studies,

Faculty of Management, Department of

Management, Romania), Cosmina Adela

STANILA, Ph.D. (West University of

Timișoara, Romania), Georgiana Oana

STĂNILĂ, Ph.D. (Bucharest University of

Economic Studies, Romania), Maria Gabriela

STERIAN, Ph.D. (Romanian-American

University, Bucharest, Romania), Iuliana

Claudia STOIAN, Ph.D. (BOBÂLCĂ), Ph.D.

(“Alexandru Ioan Cuza” University of Iași,

Faculty of Economics and Business

Administration, Romania), Ilija STOJANOVIC,

Ph.D. (RIT Dubai University, Dubai, United

Arab Emirates), Eduard Alexandru STOICA,

Ph.D. (”Lucian Blaga” University of Sibiu,

Romania), Ovidiu STOICA, Ph.D. (“Alexandru

Ioan Cuza” University of Iași, Romania), Ilija

STOJANOVIC, Ph.D. (RIT Dubai University,

Dubai, United Arab Emirates), Marta-Christina

SUCIU, Ph.D. (Bucharest University of

Economic Studies, Romania), Andrea

SZÉKELY, Ph.D. (University of Szeged,

Hungary), Cristina Alexandrina

ȘTEFĂNESCU, Ph.D. (Babeș-Bolyai

University, Faculty of Economics and

Business Administration, Accounting and

Audit Department, Cluj-Napoca, Romania),

Daniela ȘTEFĂNESCU, Ph.D, (University of

Medicine, Pharmacy, Sciences and

Technology of Tîrgu Mureș, Romania), Florica

ȘTEFĂNESCU, Ph.D. (University of Oradea,

Romania), Simona-Laura ȘUTA, Ph.D.

(University of Oradea, Faculty of Letters,

Oradea, Romania), Alina Iuliana TABIRCA,

Ph.D. (Valahia University of Târgoviște,

Romania), Teodora-Mihaela TARCZA, Ph.D.

(University of Oradea, Faculty of Economic

Sciences, Department of Management-

Marketing, Romania), Maria TĂTĂRUȘANU,

Ph.D. (“Alexandru Ioan Cuza” University of

Iași, Romania), Diana Alexandra

TÂRNĂVEANU, Ph.D. (West University of

Timişoara, Faculty of Economic and Business

Administration, Department of Business

Information Systems, Timițoara, Romania),

Carmen TODERAȘCU, Ph.D. (“Alexandru

Ioan Cuza” University of Iași, Romania),

Claudia Simona TIMOFTE, Ph.D. (University

of Oradea, Faculty of Law, Oradea, Romania),

Safiye TOKMAK, Ph.D. (Celal Bayar

University, Manisa, Turkey), Alvair Silveira

TORRES JUNIOR, Ph.D. (Business College

at University of São Paulo, São Paulo, Brasil),

Mihaela TULVINSCHI, Ph.D. (“Ștefan Cel

Mare” University of Suceava, Faculty of

Economic Sciences and Business

Administration, Suceava, Romania), Naiana

ȚARCĂ, Ph.D. (University of Oradea, Faculty

of Economic Sciences, Department of

Management-Marketing, Romania), Claudia

Elena ȚUCLEA, Ph.D. (Bucharest University

of Economic Studies, Faculty of Commerce,

Department of Tourism and Geography,

Romania), Diana UIVAROȘAN, Ph.D.

(Preclinical Disciplines Department,

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

University of Oradea, Faculty of Medicine and

Pharmacy, Oradea, Romania), Ioana

VADASAN, Ph.D. (West University of

Timișoara, Faculty of Economics and

Business Administration, Romania), Valentina

VASILE, Ph.D. (Institute of National Academy

– Romanian Academy, Bucharest, Romania),

Marian Catalin VOICA, Ph.D. (Petroleum &

Gas University of Ploiești, Faculty for

Economic Sciences, Romania), Utku YAPICI,

Ph.D. (Adnan Menderes University, Aydin,

Turkey), Monica ZAHARIE, Ph.D. (”Babeș-

Bolyai” University, Cluj-Napoca, Romania),

Andreea Ileana ZAMFIR, Ph.D. (Bucharest

University of Economic Studies, Faculty of

Management, Romania), Deniz ZÜNGÜN,

Ph.D. (HRM Department, Celal Bayar

University, Ahmetli Meslek Yüksekokulu

V.H.S., Manisa, Turkey).

Acknowledgement

The Annals of the University of Oradea.

Economic Sciences Journal – TOM XXXIII

2024 wishes to acknowledge all individuals for

their assistance with the peer reviewing of

manuscripts for this issue, IT support, on-line

and print publishing: ABRUDAN Maria-

Madela, Ph.D., ABRUDAN Leonard Călin,

Ph.D., AKSOZ Ozan, Ph.D., ALMASAN Alina,

Ph.D., ANTON Sorin, Ph.D., BARBU Ionel,

Ph.D., BÂC Dorin, Ph.D., BENEA Ciprian-

Beniamin, Ph.D., BENȚE Corneliu, Ph.D.,

BIBU Nicolae, Ph.D., BOCA Grațiela, Ph.D.,

BODOG Simona, Ph.D., BOGHEAN Florin,

Ph.D., BORMA Afrodita, Ph.D., BOTEZAT

Elena, Ph.D., BRADEA Ioana Alexandra,

Ph.D., BRANCU Laura, Ph.D., BUCUREAN

Mirela, Ph.D., BUGNAR Nicoleta Georgeta,

Ph.D., CHIS Alexandru, Ph.D., CIBOTARIU

Irina Stefana, Ph.D., CISMAS Laura, Ph.D.,

COITA Dorin Cristian, Ph.D., COITA Ioana

Florina, Ph.D., CONSTANTIN Felicia, Ph.D.,

CONSTĂNGIOARĂ Alexandru, Ph.D.,

CUZDRIOREAN VLADU Beattrice, Ph.D.,

DARJA Mălina, Ph.D., DEMIAN Horia , Ph.D.,

DROJ Laurențiu, Ph.D., Ph.D., FLOREA

Adrian, Ph.D., FLOREA Ramona, Ph.D.,

FORA Andreea-Florina, Ph.D., FOTACHE

Gabriela, Ph.D., GAVRILUȚ Darie, Ph.D.,

GRECU Eugenia, Ph.D., HARANGUȘ

Daniela, Ph.D., HATMANU Mariana, Ph.D.,

HATOS Roxana, Ph.D., HERȚE Elena, Ph.D.,

IDRIZI Altin, Ph.D., KARDOS Mihaela, Ph.D.,

LACUREZEANU Ramona, Ph.D., LILE

Ramona, Ph.D., MARGEA Camelia, Ph.D.,

MATEI Mirabela, Ph.D., MATICA Diana

Elisabeta, Ph.D., MAXIM Andrei, Ph.D.,

MESTER Ioana, Ph.D., MOISA Claudia,

Ph.D., MORARIU Alunica, Ph.D., NEAGU

Olimpia, Ph.D., PANAIT Mirela, Ph.D.,

PERȚICAȘ Diana, Ph.D., NEGREA Adrian,

Ph.D., POP-COHUT Ioana, Ph.D., POP

SITAR Corina, Ph.D., POPA Adela, Ph.D.,

POPA Mirela, Ph.D., POPESCU Doina, Ph.D.,

PUERTA Calderon, Ph.D., ROMAN Angela,

Ph.D., ROȘCA Remus, Ph.D., RUS Luminița,

Ph.D. SCORȚE Carmen, SASU Dinu, Ph.D.,

SĂVEANU Tomina, Ph.D., SCHEBESCH

Klaus Bruno, Ph.D., SECARĂ Oana, Ph.D.,

SEHLEANU Mariana, Ph.D., SIMUȚ Ramona,

Ph.D., SIRGHI Nicoleta, Ph.D.,

STEFANESCU Daniela, Ph.D., STOIAN

(BOBALCA) Claudia, Ph.D., TODERASCU

Carmen, Ph.D., TULVINSCHI Mihaela, Ph.D.,

ȚARCĂ Naiana, Ph.D., VOICA Marian, Ph.D.

2024, 2nd Issue December

Oradea University Press

ISSN 1582 – 5450 (electronic)

ISSN 1222-569X (print)

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
10 
 
 
Contents 
SECTION ECONOMICS, BUSINESS ADMINISTRATION, TOURISM AND 
STATISTICS ............................................................................................. 14 
DIGITALIZATION OF THE ENERGY SECTOR IN THE REPUBLIC OF 
MOLDOVA: AN ESSENTIAL STEP FOR RESILIENCE AND 
SUSTAINABILITY ..................................................................................... 14 
Oleg PETELCA, Ciprian-Constantin PĂTRĂUCEANU, Iurie BEȘLIU, 
Veronica GARBUZ ........................................................................................... 14 
THE IMPACT OF INNOVATION ON FIRM SUSTAINABLE COMPETITIVE 
ADVANTAGE IN SME FROM THE WEST REGION OF ROMANIA .......... 26 
Cristian-Dan BIRIȘ .......................................................................................... 26 
THE IMPACT OF QUALITY IN RESEARCH AND DEVELOPMENT 
ENVIRONMENTS ON ENTREPRENEURIAL ACTIVITY IN ROMANIA. A 
COMPARATIVE STUDY ........................................................................... 38 
Sorin Romulus BERINDE, Paula Ramona RĂCHIȘAN, Adrian 
GROȘANU, Alina Beattrice VLADU, Dan Dacian CUZDRIOREAN ........ 38 
SUSTAINABLE BUSINESS MODELS RESEARCH: A BIBLIOMETRIC 
ANALYSIS ................................................................................................ 53 
Xhorxhina VANGJEL, Olimpia BAN .............................................................. 53 
ISSUES AND CHALLENGES OF INTEGRATING TOURISM INTO 
REGIONAL DEVELOPMENT PLANS ....................................................... 64 
Alexandra-Carmen HODISAN, Alina BADULESCU, Elena HERTE ........ 64 
CONCEPTUAL FRAMEWORK AND LEVELS OF COMPETITIVENESS .. 74 
Orsolya Tünde NAGY, Anita KISS ................................................................ 74 
DO INTERNATIONAL REGULATIONS FORCE TRANSPORT 
COMPANIES TO REDUCE THEIR CARBON EMISSIONS? .................... 83 
Diana-Claudia PERȚICAȘ, Roxana GAVRILUȚ, Olivia-Andreea MARCU, 
Adrian-Gheorghe FLOREA ............................................................................ 83 
ANALYSIS OF THE IMPACT OF THE COVID19 PANDEMIC ON ONLINE 
FOOD SHOPPING .................................................................................... 92 

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
11 
M. Csipkés – Dorina FODOR ......................................................................... 92 
SECTION FINANCE, BANKING, ACCOUNTING AND AUDIT ................ 104 
GOVERNANCE MATTERS: INSIGHTS INTO EUROPEAN UNION FUND 
ABSORPTION ACROSS SUCCESSIVE MULTIANNUAL FINANCIAL 
FRAMEWORKS ...................................................................................... 104 
Diana BĂLAN, Ana-Cristina NICOLESCU ................................................. 104 
ON EUROPEAN UNION ECONOMIC GROWTH: IS COHESION POLICY 
STILL RELEVANT? ................................................................................ 115 
Cătălin Marian COSTACHE, Marcel Ioan BOLOȘ ................................... 115 
ANALYSIS OF THE ABSORPTION OF EUROPEAN STRUCTURAL AND 
INVESTMENT FUNDS IN THE NEW MEMBER STATES OF CENTRAL 
AND EASTERN EUROPE ...................................................................... 127 
Bogdan Cosmin MOLDOVAN ...................................................................... 127 
A CONCEPTUAL ANALYSIS OF FRAUD AND CORRUPTION IN THE 
PUBLIC SECTOR ................................................................................... 137 
Corina BOLOȘ ............................................................................................... 137 
THE ROLE OF GOVERNMENT POLICIES IN ENHANCING THE 
PERFORMANCE OF THE SAUDI FINANCIAL MARKET WITHIN THE 
FRAMEWORK OF VISION 2030 ............................................................ 151 
Djihed BOUMANKAR, Aboubaker KHOUALED, Khayreddine BOUZERB, 
Abderrahmen GUEROUI .............................................................................. 151 
NON-UNIFORM INTERCONNECTEDNESS PATTERNS AND DYNAMICS: 
EVIDENCE FROM EMERGING STOCK MARKETS ............................... 166 
Anca-Adriana SARAOLU (IONĂȘCUȚI) .................................................... 166 
INSIGHTS INTO ETHICAL PERCEPTION IN ACCOUNTING EDUCATION
 ............................................................................................................... 176 
Diana-Elisabeta MATICA, Edi-Cristian DUMITRA, Dana LUPU 
(CONSTANTINICA) ....................................................................................... 176 
INFLUENCING FACTORS ON COSTS AND DECISION MAKING . A 
LOOK AT THE BAKERY INDUSTRY ...................................................... 186 
Florina LUP, Carmen SCORTE , Daniela ZAPODEANU ........................ 186 
SECTION INTERNATIONAL BUSINESS, EUROPEAN INTEGRATION, 
FOREIGN LANGUAGES AND BUSINESS ENVIRONMENT .................. 198 

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
12 
LEGAL MIGRATION – RIGHTS AND BENEFITS IN THE EUROPEAN 
SOCIAL SECURITY SYSTEM ................................................................ 198 
Nicoleta ANDRICA , Andreea-Florina FORA ........................................... 198 
A EUROPEAN DEFENSE FORCE: A COMPREHENSIVE APPROACH TO 
STABILITY AND PROGRESS. THE ECONOMIC PERSPECTIVE ......... 203 
Cristian Romeo SPĂTARU, Cristian Constantin POPESCU .................. 203 
THE ROLE OF ARTIFICIAL INTELIGENCE IN DEVELOPING 
COMMUNICATION SKILLS IN BUSINESS ENGLISH COURSES .......... 215 
Cristina-Laura ABRUDAN , Ioana-Claudia HOREA ................................. 215 
NEW ROLE FOR THE TEACHER: PREVENT STUDENTS FROM 
COMPLETELY ABANDONING THEMSELVES TO AI AND 
RELINQUISHING CONTROL OVER THEIR LEARNING. ....................... 226 
Illustration for foreign languages for specific purposes ............................ 226 
Felicia CONSTANTIN ................................................................................... 226 
SECTION MANAGEMENT, MARKETING, ECONOMIC, INFORMATICS 
AND CYBERNETICS .............................................................................. 238 
STRENGTHS AND WEAKNESSES OF SMART TOURISM 
DESTINATIONS: A CROSS-GENERATIONAL STUDY .......................... 238 
Elena BOTEZAT, Olimpia BAN, Adela Laura POPA, Dorin Cristian 
COITA, Teodora Mihaela TARCZA, Lidia CHIRICOI ............................... 238 
A CROSS LOOK AT THE ORGANIZATION'S COMMITMENT TO SOCIAL 
RESPONSIBILITY. CASE OF A MINING COMPANY IN QUEBEC, 
CANADA ................................................................................................. 252 
Marie-Pier CÔTÉ, Doina MURESANU ....................................................... 252 
ARTIFICIAL INTELLIGENCE IN BUSINESS OPERATIONS: EXPLORING 
PRODUCTIVITY AND ACCEPTANCE .................................................... 263 
Ioana CIOFU, Giulia KONDORT, Stefana POP, Roxana CIOC ............. 263 
ARTIFICIAL INTELLIGENCE IN THE RECRUITMENT AND SELECTION 
OF EMPLOYEES WORLDWIDE VS. ROMANIA .................................... 275 
Alina Mihaela FRĂTICĂ-DRAGOMIR (GUȘE) .......................................... 275 
INVESTIGATING THE SCIENTIFIC FOCUS ON ARTIFICIAL  
EXPLORING GENERATIONAL DIFFERENCES IN ATTITUDES TOWARD 
HUMAN-LIKE ROBOTS .......................................................................... 295 

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
13 
Maria BARBUL, Irina BOJESCU, Miruna NICULESCU........................... 295 
INTELLIGENCE'S POTENTIAL IMPACT ON LABOR MARKET.............307 
    Ludovic DIOSZEGI...............................................................................307 
REVOLUTIONIZING URBAN LAST-MILE DELIVERY WITH AUTOMATED 
PARCEL LOCKERS: AN OVERVIEW ..................................................... 317 
Anca POPESCU, Adriana TULBURE ......................................................... 317 
CRISIS MANAGEMENT IN EDUCATION - CHALLENGES AND 
STRATEGIES FOR SCHOOL LEADERS IN TURBULENT TIMES ......... 328 
Sofy AMNONY, Nicolae BIBU, Maria-Madela ABRUDAN ...................... 328 
LEADERSHIP SUCCESSION ................................................................. 335 
     Ivett STUMPF-TAMÁS, Marianna MÓRÉ ........................................... 335 
CONSUMER ATTITUDES TOWARD ARTIFICIAL INTELLIGENCE: A 
COMPARATIVE ANALYSIS OF MEASUREMENT SCALES .................. 342 
Kata HORVATH ............................................................................................. 342 
QUALITATIVE RESEARCH ON THE ROLE AND IMPACT OF 
MARKETING ACTIVITY FOR CREATING A HIGHER STANDARD OF LIFE
 ............................................................................................................... 351 
Oana Maria SECARĂ, Carmen ACATRINEI ............................................. 351 
RESEARCH ON THE COSMETIC PRODUCTS MARKET IN ORADEA. 
PRACTICAL STUDY ............................................................................... 360 
Oana Maria SECARĂ .................................................................................... 360 
THE EFFECTS OF SOCIAL MEDIA CONTENT CHARACTERISTICS ON 
CONSUMER ENGAGEMENT – A SYSTEMATIC LITERATURE REVIEW
 ............................................................................................................... 373 
Flavia HERLE ................................................................................................. 373 
 
 
   

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

SECTION ECONOMICS, BUSINESS ADMINISTRATION, TOURISM

AND STATISTICS

DIGITALIZATION OF THE ENERGY SECTOR IN THE REPUBLIC

OF MOLDOVA: AN ESSENTIAL STEP FOR RESILIENCE AND

SUSTAINABILITY

Oleg PETELCA1, Ciprian-Constantin PĂTRĂUCEANU2, Iurie BEȘLIU3,

Veronica GARBUZ3

1Alexandru Ioan Cuza University of Iași, România

2University of Oradea, România

3Alecu Russo State University of Bălți, Republic of Moldova

oleg.petelca@gmail.com

patrauceanuc@yahoo.com

iurie.besliu@gmail.com

garbuz_veronica@yahoo.com

Abstract: The Republic of Moldova’s energy sector faces significant challenges,

including reliance on imported energy, outdated infrastructure, and increased

demand for sustainable solutions. Digitalization offers a transformative pathway to

enhance resilience, optimize resource use, and improve energy efficiency. This

article explores the benefits and challenges of digitalizing Moldova’s energy sector,

focusing on smart grid implementation, data-driven decision-making, and the

integration of renewable energy. By adopting digital solutions, Moldova can build a

more robust, sustainable energy system that aligns with European energy standards

and addresses the country’s unique challenges.

Keywords: sustainability transition; energy sector; digitalization; reducing

dependency; energy supply

JEL Classification: L94, L95, F15.

1. Introduction

The Republic of Moldova faces numerous challenges in its energy sector, being

heavily dependent on energy imports and with partly outdated infrastructure. In this

context, sustainable development of the energy sector is essential for ensuring

energy security and economic stability. The modernization of Moldova's energy

sector is being carried out along two major lines: digitalization of the energy

infrastructure and strengthening international partnerships. These efforts are

supported by external partners and international financial institutions, contributing

to the establishment of a more robust and efficient framework for the country’s

energy supply.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

The Republic of Moldova is at a critical juncture in its energy development. As one

of Europe’s most energy-dependent countries, Moldova imports a significant portion

of its energy, making it vulnerable to price fluctuations and geopolitical tensions. In

recent years, the global push towards energy sustainability has highlighted the need

for Moldova to modernize its energy infrastructure and adopt innovative solutions.

Digitalization represents a promising approach to address these challenges by

enhancing efficiency, enabling smart energy management, and supporting the

integration of renewable energy sources.

Objectives of Digitalization in Moldova’s Energy Sector

- Enhancing Energy Resilience: Reducing dependency on energy imports by

optimizing resource use.

- Promoting Sustainability: Integrating renewable sources through smart grid

technology.

- Improving Operational Efficiency: Leveraging data and automation to reduce

energy waste and increase grid reliability.

Moldova’s energy sector has several structural vulnerabilities, exacerbated by the

unstable geopolitical context in the region and recent energy crises. The reliance on

natural gas and electricity imports, especially from single suppliers such as the

Russian Federation, and the lack of domestic gas storage facilities increase the risk

of supply disruptions. According to the report, Moldova imports over 70% of its

energy needs, which significantly exposes it to price fluctuations and external supply

shocks.

2. Methodology

The study used the deductive logical approach, based on the elaboration of

conclusions based on independent statements considered correct and not

contradictory. The technique of abstraction has been used to bring concrete

elements to their general essentials and to highlight the most general aspects in the

form of concepts. The articles studied were selected from the Web of Science

database. The articles were sought using the combination of words “digitalization of

the energy sector”. After reading the name, the relevant articles were selected. The

content of the articles has been studied and the bibliographic list has been

accessed.

3. Literature review

Although humanity has begun producing energy from renewable sources in larger

proportions every year, most energy sources still rely on the extraction of natural

resources. More precisely, 81% of the energy currently produced comes from fossil

fuels, and we continue to burn more (Ritchie & Rosado, 2024). To date, some

countries are still struggling with a major challenge—the lack of unconditional

access to electricity across their entire national territories—and, in this context, the

search for energy for homes, economic activity, hospitals, and other institutions

remains critical. In such a scenario, green energy production becomes a secondary

concern as long as citizens are not provided with sufficient energy. Access to energy

remains one of the most significant challenges of all. For countries that have

overcome this hurdle, the next challenge is consciously directing their efforts toward

increasing the share of renewable energy (Simion et al., 2023).

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

Based on the latest scientific evidence on climate change and global warming,

countries aim to achieve net-zero greenhouse gas emissions by 2050, with a strict

goal of decarbonizing the electricity production sector by 2035 (Ahmed et al., 2023;

Binyet & Hsu, 2024). Energy-deficient countries see the development of renewable

energy as a solution to reducing their energy deficits. Renewable energy generation

technologies bring many benefits to local energy systems, but they also introduce

challenges. These challenges manifest in several ways: first, due to the dependence

of these resources on weather conditions, demand, and generation models undergo

significant changes (Ang et al., 2022). As a result, uncertainty within the system

increases, thus influencing control and management strategies (Jenkins & Kockar,

2020).

Second, system reinforcement is often needed to ensure its resilience and stability.

Moreover, energy production may prove insufficient to meet demand in cases of

reduced generation (Alkhalidi et al., 2022). Additionally, the growing share of

renewable energy generation contributes to reverse power flows, complicating

system dynamics (Yuan et al., 2022). Furthermore, localized meteorology, a lack of

load diversity, and small load aggregations create greater volatility in these systems

compared to national or regional levels (Crozier et al., 2020).

To ensure the reliability of these systems, it is necessary to parallel the increasing

share of renewable sources with the digitalization of networks. This is facilitated by

the implementation of smart meters and sensors, leading to an exponential increase

in the scale and diversity of data available within these systems (Jafari et al., 2023).

There is a range of research focused on the implementation of digitalization in the

energy sector. The definition of digitalization as a megatrend in the energy sector

was examined by Heymann et al. (2023), who proposed policy options to maximize

potential and address risks for decarbonization and consumers. Trahan and Hess

(2021) focused on the role of digitalization in driving sociotechnical changes within

local power organizations. Kazmi et al. (2021) conducted an in-depth review of

open-source datasets, models, and tools facilitated by digitalization in the energy

sector. Veskioja et al. (2022) explored the challenges and opportunities of energy

sector digitalization, considering both social and technical perspectives, while also

analyzing how to create an enabling environment for more digitalization

opportunities.

Di Silvestre et al. (2018) reviewed the impact of digitalization implementation on the

evolution of energy transmission and distribution systems. Researchers Baidya et

al. (2021) investigated how digitalization in the energy system can enhance the

existing smart grid ecosystem for better monitoring services. Song et al. (2022)

presented a comprehensive review of digital technologies and their potential

applications in energy and transportation systems, identifying corresponding

challenges and future research directions. Similarly, Ferdaus et al. (2024) provided

a comprehensive analysis of over 2,000 studies on the role of digitalization in

transforming the energy sector for a sustainable net-zero future. Lin & Huang (2023)

analyzed the applications of digitalization in moderating the effects of low-carbon

technology adoption in 33 countries. Ma et al. (2024) explored opportunities for

digitalizing the carbon neutrality process in energy systems.

These studies tend to focus on solutions applied in countries with energy systems

where all consumers are provided with the required electricity supply, emphasizing

the implementation of various digitalization-based solutions without clearly

presenting the benefits of digitalization for enhancing system reliability in countries

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

facing electricity production deficits. In such contexts, expanding renewable energy

production serves as a solution to address energy shortages and ensure energy

independence from imports. Moreover, they overlook industrial perspectives and fail

to review relevant projects in this field.

To address the gaps identified in the literature, this paper introduces a new

framework specifically designed to explore the needs and opportunities for

digitalization in systems aiming to increase electricity production from renewable

sources.

4. Benefits of Digitalization in the Energy Sector

Digitalization is a vital component for improving operational efficiency and

enhancing energy management in the Republic of Moldova. Digital technologies

enable more efficient monitoring of energy consumption, optimization of distribution,

and reduction of losses within transport networks (Jenkins & Kockar, 2020). For

example, the introduction of smart metering and real-time network monitoring

systems helps prevent outages and allows for quicker incident management (Simion

et al., 2023). The implementation of these technologies has been accelerated with

the support of international partners, such as the European Bank for Reconstruction

and Development (EBRD) and the European Investment Bank (EIB). These

financial institutions have provided funds for the modernization and digitalization of

infrastructure, aiming to align Moldova with European energy market standards.

Digital transformation in the energy sector can deliver numerous advantages,

particularly in countries like Moldova, where outdated infrastructure and energy

dependence create challenges. Smart grids employ an array of advanced

technologies to enhance traditional power grids. Key components include: digital

sensors, devices provide real-time data on grid conditions, enabling rapid detection

of issues such as power fluctuations or equipment failures; automation systems,

where automated controls allow for quick responses to changing conditions without

human intervention, such as rerouting power during an outage; advanced control

systems, which analyze data and coordinate the grid’s various elements to optimize

efficiency and balance supply and demand (Silvestre et al., 2018). Benefits of

Implementing Smart Grids in Moldova: reduction in transmission losses where

transmission and distribution losses are a persistent challenge in traditional power

systems, smart grids address this issue through advanced monitoring and optimized

routing, which reduce energy waste, for Moldova, where energy imports account for

a significant portion of electricity consumption, minimizing these losses is crucial for

cost savings and energy independence; improved supply and demand balancing,

by using real-time data, smart grids enhance the ability to forecast and manage

energy demand, this dynamic balancing prevents overloads and ensures that

energy supply meets consumption patterns efficiently, for example, during peak

usage hours, smart grids can prioritize energy allocation to critical areas while

reducing waste in low-demand regions; enhanced resilience to disruptions, where,

external disruptions such as extreme weather events, cyber-attacks, or equipment

failures pose significant risks to grid reliability, smart grids improve resilience

through their ability to quickly isolate affected sections of the grid and restore power

to unaffected areas, this minimizes downtime and mitigates the impact of disruptions

on the economy and daily life; remote management capabilities, where, traditional

grid maintenance often requires manual inspections and physical repairs, which can

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

be time-consuming, smart grids enable remote monitoring and diagnostics, allowing

issues to be identified and addressed promptly, this reduces response times and

maintenance costs while improving overall reliability (Baidya et al., 2021). While the

adoption of smart grids offers many advantages, Moldova faces several challenges

in implementing these technologies: high initial costs, deploying smart grids involves

significant investment in infrastructure and technology, however, international

partnerships, grants, and incentives can alleviate financial burdens; cyber security

concerns, the digital nature of smart grids makes them vulnerable to cyber-attacks,

developing robust cyber security frameworks and conducting regular risk

assessments are critical to mitigating these risks; skill gaps, operating and

maintaining smart grids requires specialized skills, investing in workforce training

and collaboration with international experts can bridge this gap. Countries such as

Denmark and South Korea have successfully implemented smart grid systems,

achieving notable reductions in energy losses and enhanced grid reliability. For

Moldova, learning from these examples can provide valuable insights into best

practices and strategies for overcoming challenges. The integration of smart grids

into Moldova's energy infrastructure is not merely an option but a necessity for

ensuring sustainable and efficient energy management. By leveraging digital

sensors, automation, and advanced control systems, Moldova can reduce

transmission losses, balance supply and demand, and fortify its grid against external

threats. With strategic planning, investment, and international collaboration,

Moldova can position itself as a leader in modern energy systems.

4.1 Enhanced Grid Reliability and Efficiency

Digital tools can optimize grid performance, reducing outages and improving

response times. Smart grids, which incorporate digital sensors, automation, and

advanced control systems, allow for real-time monitoring and remote management

(Baidya et al., 2021). By implementing smart grids, Moldova can reduce

transmission losses, balance supply and demand more effectively, and enhance the

grid’s resilience to external disruptions. The transition towards modernized energy

systems is a crucial step for nations seeking to improve energy security and

efficiency. Smart grids, which integrate digital tools, automation, and real-time

monitoring, represent a pivotal innovation in the energy sector (Ahmed et al., 2023).

For Moldova, the implementation of smart grid technologies promises significant

benefits, including reduced outages, optimized grid performance, and a more

resilient energy infrastructure. The energy sector is at the forefront of technological

innovation, and smart grids represent a transformative approach to improving

energy distribution and consumption (Jafari et al., 2023). Traditional power grids,

while functional, are increasingly strained by rising energy demands, aging

infrastructure, and external threats such as cyber-attacks or natural disasters. For

Moldova, the integration of smart grid technologies offers an opportunity to address

these challenges head-on, creating a more reliable, efficient, and resilient energy

system.

Smart grids incorporate digital sensors, automation, and advanced control systems,

enabling real-time monitoring and remote management of the grid. These

innovations not only optimize performance but also enhance the system's ability to

adapt to changing conditions (Baidya et al., 2021). By implementing smart grids,

Moldova can achieve significant improvements in grid reliability, reduce

transmission losses, balance supply and demand effectively, and strengthen

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

resilience to external disruptions. Smart grids rely on several key components that

work together to modernize energy management systems: digital sensors, deployed

throughout the grid, these sensors continuously monitor the system, collecting data

on voltage levels, energy flow, and equipment health, this data is critical for

identifying and addressing issues before they escalate into major disruptions;

automation systems, that reduces the reliance on manual intervention by enabling

the grid to respond dynamically to real-time conditions, for example, if a section of

the grid experiences a fault, automated systems can reroute power to maintain

service continuity; advanced control systems, which analyze data collected from

sensors to optimize energy distribution, they ensure that supply meets demand

efficiently, minimizing energy waste and preventing overloading; communication

networks, which use secure communication networks to transmit data between

components and control centers, this connectivity facilitates rapid decision-making

and coordinated responses to grid conditions (Baidya et al., 2021). Benefits of Smart

Grid Implementation in Moldova: one of the most immediate benefits of smart grid

technologies is the reduction of energy losses during transmission and distribution,

traditional grids often lose a significant portion of generated electricity due to

inefficiencies in the system, smart grids minimize these losses by continuously

monitoring and adjusting the flow of energy, ensuring optimal performance;

enhanced supply and demand management, where, Moldova's energy consumption

patterns can be unpredictable, with peaks and troughs influenced by seasonal and

economic factors, smart grids use real-time data to forecast demand accurately and

distribute energy accordingly, this capability not only prevents blackouts but also

reduces energy waste, contributing to cost savings and environmental sustainability;

increased grid resilience, where, external disruptions such as storms, cyber-attacks,

or equipment failures pose serious risks to energy security, smart grids enhance

resilience by quickly detecting and isolating affected sections of the grid, and this

targeted response minimizes downtime and prevents cascading failures that could

disrupt large portions of the network; improved outage management, with traditional

grids, outages often require manual inspections to identify the source of the

problem, leading to prolonged downtimes, smart grids streamline this process

through remote diagnostics and automated fault detection, enabling quicker

restoration of service; support for renewable energy integration, where, Republic of

Moldova is actively exploring renewable energy sources such as wind and solar

power, smart grids are essential for integrating these intermittent energy sources

into the grid, they manage fluctuations in renewable energy output and ensure a

stable supply by complementing it with energy from other sources when needed.

While the potential benefits of smart grids are significant, Moldova must address

several challenges to achieve successful implementation. The transition to smart

grid infrastructure requires substantial financial resources. Moldova can mitigate this

challenge by seeking funding from international organizations, public-private

partnerships, and grants aimed at promoting sustainable energy development. The

digital nature of smart grids makes them vulnerable to cyber-attacks. Developing

robust cyber security measures, such as encryption and multi-layered defenses, is

critical to protecting the grid from malicious threats (Trahan & Hess, 2021). Smart

grids require a skilled workforce to operate and maintain advanced technologies.

Moldova should invest in training programs and collaborate with international

experts to build local expertise in smart grid operations. Several countries have

demonstrated the transformative impact of smart grids. In Denmark, smart grids

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

have enabled the integration of high levels of renewable energy, ensuring a stable

and sustainable energy supply. South Korea's Jeju Smart Grid Demonstration

Project showcases how real-time monitoring and automation can significantly

reduce energy losses and improve grid reliability. Moldova can draw valuable

lessons from these examples, adapting proven strategies to its unique energy

landscape. Establishing pilot projects and partnerships with experienced nations

can accelerate the learning curve and ensure effective implementation. Smart grid

technologies represent a crucial step towards achieving energy security, efficiency,

and sustainability for Moldova. By leveraging digital tools, automation, and real-time

monitoring, the nation can modernize its energy infrastructure, reduce transmission

losses, and enhance resilience to external disruptions. While challenges such as

investment costs and cyber security concerns exist, strategic planning and

international collaboration can pave the way for a successful transition to a smarter

and more reliable grid.

4.2 Data-Driven Decision-Making

Digitalization facilitates the collection and analysis of vast amounts of data on

energy consumption patterns, grid performance, and demand forecasts (Ferdaus et

al., 2024). In Moldova, this data could help energy providers and policymakers make

informed decisions on resource allocation, pricing, and infrastructure investments.

Data analytics can also identify inefficiencies and recommend targeted

improvements, ultimately enhancing system performance and reducing costs. The

energy sector is increasingly leveraging digital technologies to inform strategic

decisions. Data-driven decision-making transforms raw data into actionable

insights, allowing energy providers and policymakers to optimize operations and

plan for the future (Jafari et al., 2023). In Moldova, the digitalization of the energy

sector presents an opportunity to harness vast datasets on energy consumption

patterns, grid performance, and demand forecasts. By applying advanced analytics,

Moldova can enhance resource allocation, streamline pricing strategies, and

prioritize infrastructure investments to support a modern, efficient energy system.

Modern digital sensors and smart meters capture detailed, real-time information

about energy consumption, grid stability, and load distribution. This data enables

energy providers to monitor system performance continuously and address issues

proactively. By analyzing historical and current data, predictive models can forecast

future energy demand with high accuracy. These forecasts help in planning

resource allocation, ensuring that energy supply aligns with consumption patterns,

especially during peak periods. Data analytics tools can pinpoint inefficiencies within

the energy system, such as high transmission losses, outdated equipment, or

underperforming infrastructure. Targeted interventions informed by data can rectify

these issues, improving overall efficiency and reducing operational costs. Detailed

consumption data allows policymakers to design equitable and dynamic pricing

models that reflect real-time demand and incentivize energy-saving behaviors

among consumers. Additionally, data-driven insights can guide long-term policy

decisions, such as investments in renewable energy or grid modernization projects

(Simion et al., 2023). Moldova can use data insights to prioritize infrastructure

upgrades based on critical need and potential impact. For instance, areas with

frequent outages or high energy losses can be identified and targeted for

improvements. By leveraging data analytics, energy providers in Moldova can

optimize the performance of existing assets, reducing waste and lowering

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

greenhouse gas emissions. This supports Moldova's broader sustainability goals.

Data-driven decision-making enables personalized energy solutions for consumers,

such as tailored tariffs or usage recommendations. This fosters greater

transparency and trust between energy providers and their customers. Data

analytics reduces the need for reactive maintenance and inefficient resource

allocation, leading to significant cost savings for both energy providers and

consumers. Ensuring the privacy and security of consumer data is paramount

(Veskioja et al., 2022). Moldova must adopt robust data governance frameworks

and implement advanced cyber security measures to safeguard sensitive

information. The effective use of data analytics requires specialized skills.

Developing local expertise through training programs and partnerships with

international experts is essential. Incorporating data-driven tools into existing

infrastructure can be challenging. Gradual modernization and interoperability-

focused strategies can mitigate these challenges. Data-driven decision-making is a

cornerstone of modern energy management, offering Moldova the tools to optimize

its energy sector. Through the collection and analysis of real-time data, energy

providers and policymakers can identify inefficiencies, forecast demand, and make

strategic investments. These actions not only enhance system performance and

reliability but also contribute to reducing operational costs and achieving

sustainability objectives (Trahan & Hess, 2021).

4.3 Integration of Renewable Energy Sources

As Moldova seeks to increase its renewable energy share, digital solutions are

essential for managing these variable sources. Smart grids can dynamically adjust

to changes in supply from solar or wind sources, minimizing disruptions and

ensuring a stable energy supply (Binyet & Hsu, 2024). Additionally, digital platforms

can support distributed energy generation, allowing consumers to contribute to the

grid through small-scale renewable installations (Trahan & Hess, 2021). The global

shift towards renewable energy is a critical step in achieving sustainable energy

systems (Ang et al., 2022). For Moldova, increasing the share of renewables such

as solar and wind power is a strategic priority to enhance energy independence and

reduce carbon emissions. However, integrating these variable energy sources into

the grid poses challenges in maintaining stability and reliability. Digital solutions,

including smart grids and advanced energy management platforms, play a pivotal

role in addressing these challenges, enabling Moldova to harness the full potential

of renewable energy. Renewable energy sources like wind and solar are inherently

variable, depending on weather and time of day. Smart grids equipped with real-

time monitoring capabilities can dynamically adjust to fluctuations in energy supply

(Ferdaus et al., 2024). For instance, when solar output decreases during cloudy

conditions, the grid can automatically compensate by drawing energy from other

sources or stored reserves. Digital platforms facilitate the integration of distributed

energy resources (DERs), such as residential solar panels and small-scale wind

turbines. Consumers equipped with these installations can generate surplus energy

and feed it back into the grid, creating a decentralized energy system that enhances

resilience and reduces dependence on centralized generation. Digital tools can

optimize the use of energy storage systems, such as batteries, to store excess

energy during periods of high renewable output. This stored energy can be released

during low production periods, ensuring a stable and reliable energy supply.

Advanced analytics can predict renewable energy production based on weather

forecasts and historical data. This enables grid operators to plan and allocate

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

resources efficiently, minimizing the risk of disruptions. Digital solutions make it

easier to integrate a higher percentage of renewable energy into the grid without

compromising stability (Ma et al., 2024). This supports Moldova’s goal of increasing

its renewable energy share while meeting international sustainability commitments.

By incorporating decentralized energy generation and storage systems, Moldova

can build a more resilient grid that is less vulnerable to large-scale disruptions.

Distributed energy platforms empower consumers to become active participants in

the energy system, contributing to energy generation and receiving compensation

for surplus energy (Trahan & Hess, 2021). This democratization of energy supports

economic growth and local engagement (Heymann et al., 2023). Reducing reliance

on fossil fuels through increased renewable energy integration lowers greenhouse

gas emissions and mitigates environmental impacts. Additionally, investments in

digital energy solutions can stimulate economic development and job creation within

Moldova’s renewable energy sector. Moldova’s existing grid infrastructure may

require upgrades to support renewable integration. Targeted investments in grid

modernization are essential to address this challenge. Variability in renewable

energy output can create instability. Expanding energy storage capacity and

enhancing predictive analytics can mitigate these issues. Clear policies and

incentives are needed to encourage the adoption of renewable energy and

distributed generation. Republic of Moldova can draw from international best

practices to develop effective regulatory frameworks. Digital solutions are

indispensable for integrating renewable energy sources into Moldova’s energy

system. By leveraging smart grids, predictive analytics, and distributed energy

platforms, Moldova can effectively manage the variability of renewables, ensuring a

stable and reliable energy supply. These innovations not only support Moldova’s

environmental goals but also promote economic resilience and consumer

empowerment. With strategic investments and supportive policies, Moldova can

position itself as a leader in renewable energy adoption.

5. Key Challenges of Digitalizing Moldova’s Energy Sector

The digitalization of Moldova’s energy sector is a pivotal step toward achieving

energy efficiency, sustainability, and resilience. However, transitioning from

traditional systems to digitally enabled energy infrastructure comes with significant

challenges. These hurdles stem from a combination of technical, financial, and

institutional factors that must be addressed to ensure a successful transformation.

As Moldova embarks on this journey, understanding and mitigating these

challenges is critical. Key issues include the high initial costs of digital infrastructure,

the need for robust cyber security measures, the integration of modern systems with

aging infrastructure, and the development of technical expertise within the

workforce. Addressing these challenges will not only facilitate the adoption of digital

solutions but also ensure their long-term viability and effectiveness. By identifying

and tackling these barriers, Moldova can unlock the full potential of digitalization,

setting the foundation for a more efficient and sustainable energy future. While

digitalization offers significant benefits, implementing it in Moldova’s energy sector

involves overcoming a series of challenges:

5.1 High Initial Costs and Limited Funding

Digitalizing the energy sector requires substantial investment in technology and

infrastructure, which can be a significant hurdle for Moldova’s limited budget. The

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

cost of deploying smart meters, digital control systems, and cyber security

measures may strain public and private funding sources.

5.2 Cyber security and Data Privacy Concerns

The digitalization of critical infrastructure like the energy grid makes it vulnerable to

cyber-attacks. Moldova’s energy sector needs robust cyber security measures to

protect against these threats, particularly given the country’s geopolitical position.

Effective cyber security will require investment in digital literacy, personnel training,

and security protocols to prevent breaches and safeguard data privacy.

5.3 Regulatory and Institutional Barriers

Successful digitalization depends on a supportive regulatory framework. In

Moldova, outdated regulations, slow policy adaptation, and limited interagency

coordination can impede digital transformation efforts. Reforming policies to support

digital initiatives, incentivize renewable energy investments, and promote innovation

will be essential for the sector’s digitalization.

6. Strategic Steps for Implementing Digitalization

To overcome these challenges and realize the benefits of digitalization, Moldova

can adopt a strategic approach that includes phased implementation, partnerships,

and regulatory reforms.

6.1 Phased Implementation of Smart Grids

A phased approach to smart grid implementation, starting with pilot projects in major

urban areas, can provide Moldova with valuable insights before broader adoption.

This gradual transition reduces upfront costs, allows for infrastructure testing, and

enables adjustments based on pilot project outcomes.

6.2 Public-Private Partnerships and International Support

Leveraging international aid and building partnerships with private technology firms

can help Moldova access the resources needed for digitalization. The European

Union and other international organizations are potential sources of funding and

technical expertise that could facilitate Moldova’s transition to a digitalized energy

infrastructure.

6.3 Regulatory Reforms and Policy Support

Modernizing Moldova’s regulatory framework is vital to supporting digitalization

efforts. Policies that incentivize digital technology adoption, encourage renewable

energy integration, and protect consumer data are critical. Moldova’s energy

regulators must prioritize digital-friendly policies and work with stakeholders to

ensure smooth implementation.

6.4 Workforce Development and Capacity Building

Digitalization demands a skilled workforce familiar with advanced technologies and

data analysis. Investing in workforce training programs will enable Moldova to build

a pool of skilled professionals who can manage and operate digitalized energy

systems, ensuring sustainable sector growth.

7. Case Study: Digitalization Efforts in Similar Economies

Examining case studies of digitalization in countries with similar economic

conditions and energy dependencies provides valuable insights for Moldova. For

instance, neighboring Romania has made strides in adopting smart meters and

renewable energy integration, supported by EU funding and regulatory reforms. By

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

studying these examples, Moldova can adopt best practices and avoid potential

pitfalls.

Integrating Moldova into the European energy market is a strategic priority. Joining

the European Energy Community and achieving candidate status for European

Union membership has allowed Moldova to access funding and cooperation

projects aimed at supporting modernization and diversification of energy sources.

Furthermore, partnerships with neighboring countries, especially Romania, have

been crucial for ensuring a stable energy supply and diversifying import sources,

including through interconnection projects.

8. Conclusions

Digitalization is an essential step for building a resilient and sustainable energy

sector in the Republic of Moldova. While challenges such as funding, cyber security,

and regulatory barriers exist, a strategic, phased approach to digitalization can drive

significant improvements in energy efficiency, reliability, and sustainability. By

investing in smart grids, data analytics, and regulatory reforms, Moldova can create

a modern energy system that aligns with European standards and supports the

country’s economic and environmental goals. The sustainable development of the

energy sector in the Republic of Moldova requires a combination of intensive

digitalization and the strengthening of international partnerships. Investments in

modern technologies and renewable energy resources are essential for reducing

import dependency and enhancing the country's energy security. By continuing

reforms and implementing interconnection projects, Moldova can become a more

integrated and stable player in the regional energy market, thus contributing to long-

term economic and social stability.

References:

Ahmed, N., Assadi, M., Ahmed, A., & Banihabib, R. (2023). Optimal design,

operational controls, and data-driven machine learning in sustainable

borehole heat exchanger coupled heat pumps: Key implementation

challenges and advancement opportunities. Energy for Sustainable

Development, 74, 231-257.

Alkhalidi, A., Alqarra , K., Abdelkareem, M., & Olabi, A. (2022). Renewable energy

curtailment practices in Jordan and proposed solutions. International Journal

of Thermofluids, 16(100196), 1-7.

Ang, T.-Z., Salem, M., Kamarol, M., Das, H., Nazari , M., & Prabaharan, N. (2022).

A comprehensive study of renewable energy sources: Classifications,

challenges and suggestions. Energy Strategy Reviews, 43(100939), 1-27.

Baidya, S., Potdar, V., Ray, P., & Nandi, C. (2021). Reviewing the opportunities,

challenges, and future directions for the digitalization of energy. Energy

Research & Social Science, 81(102243), 1-24.

Binyet, E., & Hsu, H.-W. (2024). Decarbonization strategies and achieving net-zero

by 2050 in Taiwan: A study of independent power grid region. Technological

Forecasting and Social Change, 204(123439), 1-21.

Crozier, C., Morstyn, T., & McCulloch, M. (2020). The opportunity for smart charging

to mitigate the impact of electric vehicles on transmission and distribution

systems. Applied Energy, 268(114973), 1-11.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

European Commission. (2022). Digitalising the energy system - EU action plan,

Strasbourg.

European Commission. (2024). The future of European competitiveness, In-depth

analysis and recommendations, Part B.

Ferdaus, M., Dam, T., Anavatti, S., & Das, S. (2024). Digital technologies for a net-

zero energy future: A comprehensive review. Renewable and Sustainable

Energy Reviews, 202(114681), 1-22.

Heymann, F., Milojevic, T., Covatariu, A., & Verma, P. (2023). Digitalization in

decarbonizing electricity systems–Phenomena, regional aspects,

stakeholders, use cases, challenges and policy options. Energy,

262(125521), 1-11.

Jafari, M., Kavousi-Fard, A., Chen, T., & Karimi, M. (2023). A review on digital twin

technology in smart grid, transportation system and smart city: Challenges

and future. IEEE Access, 11, 17471-17484.

Jenkins, M., & Kockar, I. (2020). Impact of P2P trading on distributed generation

curtailment in constrained distribution networks. Electric Power Systems

Research, 189(106666), 1-7.

Kazmi, H., Munné-Collado, Í., Mehmood, F., Syed, T., & Driesen, J. (2021). Towards

data-driven energy communities: A review of open-source datasets, models

and tools. Renewable and Sustainable Energy Reviews, 148(111290), 1-14.

Lin, B., & Huang, C. (2023). Promoting variable renewable energy integration: the

moderating effect of digitalization. Applied Energy, 337(120891), 1-10.

Ma, J., Yang, L., Wang, D., Li, Y., Xie, Z., & Lv, H. (2024). Digitalization in response

to carbon neutrality: Mechanisms, effects and prospects. Renewable and

Sustainable Energy Reviews, 191(114138), 1-20.

Ritchie, H., & Rosado, P. (2024, Ianuarie). Energy Mix. Preluat de pe Our World in

Data: https://ourworldindata.org/energy-mix

Silvestre, M., Favuzza, S., Sanseverino, E., & Zizzo, G. (2018). How

decarbonization, digitalization and decentralization are changing key power

infrastructures. Renewable and Sustainable Energy Reviews, 93, 483-498.

Simion, C.-P., Verdeș, C.-A., Mirionescu, A.-A., & Anghel, F.-G. (2023). Digitalization

in Energy Production, Distribution, and Consumption: A Systematic

Literature Review. Energies, 16(1960), 1-30.

Song, J., He, G., Wang, J., & Zhang, P. (2022). Shaping future low-carbon energy

and transportation systems: Digital technologies and applications. IEnergy,

1(3), 285-305.

Trahan, R., & Hess, D. (2021). Who controls electricity transitions? Digitization,

decarbonization, and local power organizations. Energy Research & Social

Science, 80(102219), 1-7.

Veskioja, K., Soe, R.-M., & Kisel, E. (2022). Implications of digitalization in facilitating

socio-technical energy transitions in Europe. Energy Research & Social

Science, 91(102720), 1-18.

Yuan, Y., Low, S., Ardakanian, O., & Tomlin, C. (2022). Inverse power flow problem.

IEEE Transactions on Control of Network Systems, 10(1), 261-273.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

THE IMPACT OF INNOVATION ON FIRM SUSTAINABLE

COMPETITIVE ADVANTAGE IN SME FROM THE WEST REGION

OF ROMANIA

Cristian-Dan BIRIȘ

Management and Entrepreneurship Department, Faculty of Economics and

Business Administration, West University of Timișoara - Timișoara, România

cristian.biris97@e-uvt.ro

Abstract: This study investigates the influence of product, service and process

innovation on a company's competitive advantage. The study was conducted at

small and medium-sized enterprises level from the Western Region of Romania. This

research is structured in 5 parts: 1) an introduction illustrating the general context of

the business environment in the Western Region of Romania and the opportunity to

conduct this type of research; 2) a literature review illustrating the state of knowledge

and other similar research conducted on this topic; 3) description of the

methodological process of conducting empirical research by using the questionnaire

as a method of collecting data from the regional business environment; 4) analysis

and discussion based on empirical research following the aspects identified by

applying the partial least squares structural equation modeling (PLS-SEM) method;

5) conclusions. This study comes to complement a series of previous studies both

at national and international level, which aimed to research the impact of innovation

on the competitiveness of SMEs. The results of the current research have highlighted

the importance of process innovations, respectively product or service innovations,

on obtaining sustainable competitive advantage by small and medium-sized

enterprises in the Western Region of Romania, more precisely in Timiș, Arad,

Hunedoara and Caraș-Severin counties. Moreover, the results of this study can be

used both by general managers of companies, by entrepreneurs and last but not

least by public policy makers with a direct role in stimulating the regional

competitiveness of the business environment.

Keywords: product innovation; process innovation, service innovation, business

competitiveness, sustainable competitive advantage

JEL Classification: M10, M20, O31

1. Introduction

In today's economy, innovation is a necessity for a firm to achieve long-term

competitiveness. The rapid and frequent changes in terms of applied technologies

and practices used in the international ecosystem also manifest their effects on the

regional business environment, which must be constantly adapted.

Small and medium-sized enterprises play a crucial role in the economic development

of the areas in which they operate, as they create jobs, contribute to gross domestic

product and help reduce the risk of poverty. However, a very important aspect is

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

given by their need to remain competitive for as long as possible in order to ensure

the continuity of their activities. Thus, obtaining competitive advantage for a

company is a primary condition. At national level, it has been identified that

continuous investment and innovation are two variables of radical importance in

ensuring the competitiveness of small and medium-sized enterprises (Botezatu,

Gherghina, Hosszu, & Simionescu, 2020) . Currently, in Romania, small and

medium-sized enterprises finance their activity mainly from their own funds and bank

loans (Căpșuneanu, și alții, 2018), which often hampers their ability to innovate, due

to the lack of internal resources and the difficulty of obtaining external sources (bank

loans or government / european grants) (Oncioiu, 2012). A period of many

challenges for them was in the years preceding the economic crisis of 2008, when

SMEs that successfully overcame that period were focused on innovation (Szabo,

2011). However, an identified problem is the lack of entrepreneurship and the

development of new businesses stimulation by the national culture (Brancu, Gligor,

& Munteanu, 2012).

From a Western Romania perspective, there was an increase in the number of SMEs

from 47,951 in 2016 to 56,530 in 2020 (Chirescu & Pătărlăgeanu, 2022). However,

the increase in the number of SMEs in terms of quantity must be correlated with a

qualitative increase in their business practices in order to have continuity within the

regional business ecosystem. In this respect, there has been a trend towards the

integration of SMEs into global supply chains, an increase in competitiveness as a

result of the integration of business practices in the European area and an integration

of rural and urban spaces from a production perspective in order to achieve regional

competitiveness (Popescu, 2018).

2. Literature review

2.1. Product/service innovation and process innovation

The prospects of product or service innovation and process innovation have been

intensely debated in the literature. The two types of innovation are the basis of a

firm's competitiveness, without which it could not survive the competitive economic

environment of the XXI century. The knowledge economy and the information

economy are the pillars on which innovation is underpinned at firm level, but not only

from a product innovation perspective, but rather from an operational and strategic

process innovation perspective. An important aspect in the innovation activity of a

company is given by its degree of openness to the external environment and its

absorbive capacity. In the current economy, the orientation of companies towards

the external environment, to absorb good practices models, is imperative to ensure

sustainable development (Fang & Lewis, 2012).

Within the literature there are a number of matrices and models that describe

innovation from a temporal point of view. Pavitt&Tidd (2011) presents innovation as

consisting of five successive stages, namely creativity, selection, incubation,

implementation and lifelong learning (Pavitt & Tidd, 2011).

The innovation process from the urban policymakers perspective was covered by

Nilssen (2019) which identified four areas of innovation application – technological,

organisational, collaborative and experimental (Nilssen, 2019).

Depending on the object of innovation, there are two main categories: (Huang, 2012)

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

• Process innovation – changing processes across an organization, whether

aimed at developing an existing product in other ways. This type of

innovation aims to improve the added value of the organization. In the

scientific literature, this topic was covered from the perspective of the study

conducted at the level of innovation from an organizational point of view

(César & Villar-López, 2014), updating new management systems at

organizational level viewed from the perspective of a process innovation

(Bernardo, 2014) and researching process innovations in correlation with the

performance of a business organization (Rajapathirana & Hui, 2017).

• Product or service innovation – aims to develop new products or services so

that a firm can differentiate its offer from other firms on the market. At the

literature level, this topic was covered from the perspective of analyzing

companies' capabilities for service innovation (Den Hertog, Aa, & Wietze,

2010) researching the ecological dimension in developing new products

(Dangelico & Pujari, 2010), studying new methods of product innovations

diffusion (Muller, Peres, & Vijay, 2010) and correlating big data technologies

to facilitate service innovations (Kao, Lee, & Yang, 2014).

In a national study, it was identified that Romania has an insufficient infrastructure,

which generates innovative potential problems and which in turn limits the demand

and supply of various innovative items (Prokop & Stejskal, 2017). Moreover, in

addition to the previous study, comes a research at the level of smart cities in

Romania that concludes that only some of them promote initiatives to support and

promote innovation at urban level (Butnariu, 2021).

From a regional perspective, it was identified that innovations and training facilitated

to employees are directly correlated with the total profit and profit per employee

within the SMEs included in the study from South-West Oltenia Region (a

neighboring region for West Region) (Burlea-Schiopoiu & Mihai, 2019). In the West

Region, the strategic directions related to innovation are coordinated by the West

Regional Development Agency and involve increasing the innovative potential from

the perspective of human resources, developing a coordination matrix for innovation

and last but not least promoting innovation at regional level (Enache & Morozan,

2013).

2.2. Competitiveness

Regional competitiveness is a highly important determinant at regional and urban

level as it has a direct influence on all other determinants. For gaining competitive

advantage at urban area level, that region must have organizations with long-term

competitive advantage.

Competitiveness can be studied at several levels – at individual level (the employee),

at the microeconomic level (the company) and at macroeconomic level (the entire

business environment). In this research, we will refer to the microeconomic

competitiveness of companies. The microeconomic intermediate level aims for

competitiveness at company level. A general definition of a firm's competitiveness

was laid out by Buckley and Pass (1988): "A firm is competitive if it can offer goods

and services at a higher quality and at a lower cost than competitors at home or

globally." From a pragmatic perspective, the notion of company competitiveness is

measured in terms of profitability, low costs and high quality for customers. At this

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

level, the company's potential is generated both by the individual competitiveness of

each employee and owners/entrepreneurs on the one hand, and by the external

market context on the other hand (Buckley & Pass, 1988).

Dereli (2015) covered the perspective of competition between different economic

entities in the context of innovation and competitiveness. The need to differentiate

the company's offer from that of competitors within the urban economic ecosystem

leads to the intensification of companies' efforts to innovate. Thus, each innovation

made by a company, whether it is at product / service level or at process level within

the company, leads to an increase in competition on that market niche (Dereli, 2015).

Inclusive growth is a concept that directly impacts the competitiveness of an urban

area. Neagu&Teodoru (2018) presents the positive aspects that inclusive growth

brings to competitiveness, such as sustainability, social inclusion, citizen

empowerment and security. Economic growth in the context of competitiveness must

be sustained in the long term in order to be present across all sectors and industries

at urban level. The inclusive dimension targets particularly the working population,

as well as disadvantaged people, with the aim of integrating them into productive

economic areas at urban level. Integration can be achieved by eliminating

institutional bottlenecks and implicitly increasing the chances of all people to career

growth and development opportunities. By empowering and involving citizens in the

process of economic growth, an urban environment focused on competitiveness is

created. Last but not least, eliminating social risks has a decisive role in ensuring the

security of all citizens and, implicitly, urban safety, with benefits for the economic

environment (Neagu & Teodoru, 2018).

From a company's business strategy perspective, it was identified that a strategy

based on competitiveness ensures the company's long-term competitive advantage,

in correlation with skills development, innovative ideas and entrepreneurial thinking

(Ali & Anwar, 2021). In addition to the perspective of business strategy, comes an

article that deals with the importance of a product's brand competitiveness over the

competitive advantage of a company (Foroudi, Gupta, Gallear, & Rudd, 2020).

Moreover, the researches on competitive intelligence highlights the importance of

managing data to gain competitive advantage (Umair, Wu, & Yan, 2023).

2.3. The influence of product/service and process innovation capabilities

on the sustainable competitive advantage of a company

The analysis of the correlation between product or service innovation, respectively

the process innovation on the competitive advantage of a company was carried out

from multiple points of view, depending on the objectives of that research. Thus, it

was identified that innovative performance has a direct influence on the competitive

advantage of a company, mediated by the market performance of that company.

Innovative performance referred to both process innovations (organizational in this

case) and product innovations (Alpkan, Gunday, Kilic, & Ulusoy, 2011) . The direct

and positive correlation of an SME's market orientation and product innovation on

competitive advantage has also been demonstrated in the context of organisational

performance (Arafah, Herman, & Hady, 2022). Next, another article that refers at

the same time to organizational process, product and service innovation highlights

the positive and direct impact of multiple types of innovation on business efficiency,

quality of products and services and ultimately the competitive advantage of the

respective company (Distanont & Khongmalai, 2020). In addition for the 2 studies

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

mentioned above, comes one study conducted by Ali et al. (2022), which identifies

a direct and positive correlation between process, marketing and service innovation

on the ability to create competitive advantage by a company (Ali, ElSoad,

Mohammed, & Soliman, 2022).

Dogan (2016) identified a positive and direct impact of a company's technological

innovation capacity on its competitive advantage (Dogan, 2016), while the direct

correlation between a company's performance and its competitiveness was

researched using radical and incremental innovation (product and process) as

intermediate variables in the process of researching and so it has been

demonstrated the correlation between the two variables (Chau, 2017). In a research

based on innovation capabilities, conducted at small and medium-sized companies

level in Portugal, it was identified that innovation capabilities lead to performance

and competitive advantage at organizational level (Coelho, Ferreira, & Moutinho,

2020).

The management of the innovative process in correlation with competitiveness was

studied by Dereli (2015) who noticed the importance of an efficient management of

the innovative process for a company to obtain and maintain competitive advantage

in the long run (Dereli, 2015).

Thus, as a result of the aspects set out in the previous paragraphs, the following two

hypotheses are formulated:

H1. There is a direct and positive correlation between the process innovation

capabilities of an SME and its ability to generate sustainable competitive advantage

Figure no. 1 - Correlation between process innovation capabilities

and sustainable competitive advantage

Source: Elaborated by the author

Process innovation

capabilities

- Technological process

innovation

- Costs reduction

innovation

- Organizational work

processes innovation

- Eco-process

innovation

- Inventory and internal

logistics innovation

- Managerial processes

innovation (Lin, Wu,

Yu, & Zhang, 2017)

- Sustainable competitive

advantage based on

quality

- Sustainable competitive

advantage based on

resource efficiency (costs)

- Sustainable competitive

advantage based on

reputation building

- Sustainable competitive

advantage based on

managerial capabilities

- Sustainable competitive

advantage based on

research/development

(Lin, Wu, Yu, & Zhang,

2017)

Sustainable

competitive

advantage

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

H2. There is a direct and positive correlation between the product/service innovation

capabilities of an SME and its ability to generate sustainable competitive advantage

Figure no. 2- Correlation between product/service innovation capabilities

and sustainable competitive advantage

Source: Elaborated by the author

The model of the present research is the one illustrated in Figure no. 3.

Figure no. 3 – Research model

Source: Elaborated by the author

3. Methodology

The methodology adopted to carry out this empirical research is quantitative, using

the questionnaire as a data collection tool. PLS-SEM was chosen as the main data

analysis approach for this research, due to the fact that it has a high statistical power

and high efficiency in estimating parameters, which makes it more likely to predict

and justify specific relationships between the analyzed constructs and items. The

statistical application used to process the data was SmartPLS.

Product/servic

e innovation

capabilities

- Product / Service range

replacement innovation

- Product / Service range

expansion innovation

- Product / Service green

range development

innovation

- Product / Service

redesign

- New products/services

development speed (Lin,

Wu, Yu, & Zhang, 2017)

Process innovation

capabilities

Sustainable

competitive

advantage

Product / Service

innovation capabilities

- Sustainable competitive

advantage based on quality

- Sustainable competitive

advantage based on

resource efficiency (costs)

- Sustainable competitive

advantage based on

reputation building

- Sustainable competitive

advantage based on

managerial capabilities

- Sustainable competitive

advantage based on

research/development (Lin,

Wu, Yu, & Zhang, 2017)

Sustainable

competitive

advantage

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

The questionnaire was applied exclusively to small and medium-sized enterprises

from the urban areas of the four counties in the Western Region of Romania – Timis,

Arad, Hunedoara and Caras-Severin. The questionnaire was sent to 1200

companies from various fields of activity such as production, trade, construction and

real estate development, IT and software and consulting Finally, 247 responses to it

were obtained, being a suitable sample in correlation with the number of items at the

level of this research. This questionnaire was intended exclusively for general

managers and department managers of SMEs, given that it was intended to facilitate

a concrete managerial perspective on this topic.

4. Results and discussion

4.1. Analysis of the reliability of the research model

Analysis of validity of the research model will be carried out using the following

indicators - Cronbach's Alpha, AVE, Composite Reability and Outer loadings.

Table 1 – Analysis of the validity of the research model

Latent variable

Observable variable

Observable

variable

acronym

Cronbach's

Alpha

AVE

Composite

Reability

Outer

loadings

Process

innovation

capabilities

Technological process

innovation

PrI – T

0,902

0,674

0,905

0,870

Costs reduction

innovation

PrI - CR

0,773

Organizational work

processes innovation

PrI – WP

0,746

Eco-process innovation

PrI – E

0,821

Inventory and internal

logistics innovation

PrI – SL

0,849

Managerial processes

innovation

PrI - MP

0,858

Product/service

innovation

capabilities

Product / Service range

replacement innovation

PSI - C

0,867

0,654

0,875

0,851

Product / Service range

expansion innovation

PSI – E

0,748

Product / Service green

range development

innovation

PSI – Ec

0,746

Product / Service Redesign

PSI – R

0,836

New products/services

development speed

PSI – S

0,856

Sustainable

competitive

advantage

Sustainable competitive

advantage based on

quality

SCA – Q

0,879

0,676

0,885

Sustainable competitive

advantage based on

resource efficiency (costs)

SCA – E

0,758

Sustainable competitive

advantage based on

reputation building

SCA – R

0,841

Sustainable competitive

advantage based on

managerial capabilities

SCA – M

0,761

Sustainable competitive

advantage based on

research/development

SCA - RD

0,858

Source: Elaborated by the author

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

As a result of the analysis carried out on the reliability of the research model, it is

found that at the level of Cronbach's Alpha coefficient and at the level of Compound

Reliability there are values that are above the threshold of 0.7 established to be

compliant from the scientific literature point of view, with values of 0.902 and 0.905

for Process Innovation Capabilities; values of 0.867 and 0.875 respectively for

product/service innovation capabilities, and last but not least 0.879 and 0.885

respectively for sustainable competitive advantage (Dennick & Tavakol, 2011).

As regards the convergent validity of this research model, values above the literature

threshold of 0.5 are found for all three variables, namely 0.674 for process innovation

capabilities, 0.654 for product/service innovation capabilities and 0.676 for

sustainable competitive advantage. (Shrestha, 2021)

Last but not least, the loads of indicators related to the 16 items in this research are

above the accepted threshold of 0.7 (Hair, Ringle, & Sarstedt, 2012). The highest

loads for process innovation capabilities are those related to technological and

ecological process innovation, managerial processes and inventory management

and internal logistics related innovation, with values above 0.8, while for

product/service innovation capabilities are those related to innovation through range

extension, redesigning products and services and those related to increasing the

development speed of new products and services. Last but not least, the items with

the highest load for sustainable competitive advantage were the ones related to

quality, reputation building and research and development.

With the help of the above mentioned aspects, we have a broad perspective on the

increased degree of coherence and validity of this research model, for al of the

constructs and their related items.

4.2. Testing research hypotheses

Given that the research model has been validated, the analysis proceeds further

towards testing the research hypotheses. The table below illustrates the p-value,

together with the estimated values of the track coefficients related to the two

research hypotheses.

Table no. 2 – Testing research hypotheses

Hypothesis

Track coefficient

values

P value

Result

Process innovation capabilities

→Sustainable competitive advantage

.389

.002

Confirmed

Product/service innovation capabilities

→Sustainable competitive advantage

.508

.000

Confirmed

Source: Elaborated by the author

As it can be seen, both of this research hypotheses have been confirmed, as they

have a p value lower than the maximum value accepted of 0.05 (Andrade, 2019).

Thus, this research highlights that SMEs in the Western Region of Romania base

their competitiveness at business level through a series of specific activities based

on process or product/service innovations. So, it can be seen that the company's

activities oriented towards innovation in order to improve technological processes,

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

reduce costs, reorganize work and managerial processes, improve inventory

management and internal logistics, as well as those related to products or services

based on replacing, expanding and greening the product/service range, redesigning

and increasing the speed of their development have led these SMEs to obtain a

competitive advantage.

Sustainable competitiveness in this study was seen from the perspective of a

sustainable competitive advantage based on research and development activities,

managerial capabilities, reputation, resource efficiency, as well as the quality of

products or services offered by a particular SME.

Although both types of innovation confer sustainable competitive advantage for a

company, it is important to note that product or service innovations have a greater

impact on the competitive advantage gained by an SME, according to the analysis

(.508 for product/service innovations and .389 for process innovations).

The higher impact of product or service innovations on the competitiveness of an

SME can be justified by the need for companies to constantly innovate at products

and services they offer to the end client in the turbulent business environment

(Arafah, Hady, & Herman, 2018). In this way, SMEs retain their existing customer

portfolio and even more, continuously attract others, in order to achieve sustainability

of competitive advantage and ultimately organizational performance.

5. Conclusions

The objective of this research was to analyze the impact of process innovation on

the one hand and product/service innovation on the other hand on the sustainable

competitive advantage at SME level in the West Region of Romania. The result of

the analysis confirmed the two hypotheses at the level of this research, namely that

process and product/service innovations have a direct and positive impact on the

sustainable competitive advantage of a company. The limitations of research are

represented by the general perspective on product/service and process innovation,

without taking into account their radical or incremental nature, an important aspect

in the literature(Acemoglu, Akcigit, & Celik, 2022)(Coccia, 2016).

Regarding future research directions, they may concern, on one hand, an analysis

carried out at the level of the other seven development regions, as well as an

analysis of the impact of SMEs' competitive advantage on regional competitive

advantage, taking into account the mediating effect of institutions with a direct role

in the development of the region.

References:

1. Acemoglu, D., Akcigit, U., & Celik, M. (2022). Radical and Incremental

Innovation: The Roles of Firms, Managers, and Innovators. American Economic

Journal: Macroeconomics 14(3), 199-249.

2. Ali, B., & Anwar, G. (2021). Business strategy: The influence of Strategic

Competitiveness on competitive advantage. Business strategy: The influence of

Strategic Competitiveness on competitive advantage, 1-10.

3. Ali, G., ElSoad, S., Mohammed, E., & Soliman, M. (2022). The Role of Innovation

in Achieving a Competitive Advantage of Airlines. The International Journal of

Tourism and Hospitality Studies 3(2), 21-52.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

4. Alpkan, L., Gunday, G., Kilic, K., & Ulusoy, G. (2011). EFFECTS OF

INNOVATION TYPES ON FIRM PERFORMANCE. International Journal of

Production Economics 133(2), 62-676.

5. Andrade, C. (2019). The P Value and Statistical Significance:

Misunderstandings, Explanations, Challenges, and Alternatives. Indian Journal

of Psychological Medicine 41(3), 210-215.

6. Arafah, W., Hady, H., & Herman, H. (2018). The Influence Of Market Orientation

And Product Innovation On The Competitive Advantage And Its Implication

Toward Small And Medium Enterprises (UKM) Performance. International

Journal of Science and Engineering Invention 4(8), 8-21.

7. Arafah, W., Herman, H., & Hady, H. (2022). The Influence of Market Orientation

and Product Innovation on the Competitive Advantage and Its Implication toward

Small and Medium Enterprises (UKM) Performance. International Journal of

Science and Engineering Invention 4(08), 8-21.

8. Bernardo, M. (2014). Integration of Management Systems as an Innovation: A

Proposal for a New Model. . Journal of Cleaner Production, 82, 132-142.

9. Botezatu, M. A., Gherghina, C. Ş., Hosszu, A., & Simionescu, L. N. (2020). Small

and Medium-Sized Enterprises (SMEs): The Engine of Economic Growth

through Investments and Innovation. Sustainability 12(1), 1-22.

10. Brancu, L., Gligor, D., & Munteanu, V. (2012). Study on student's motivations for

entrepreneurship in Romania. Social and Behavioral Sciences 62, 223-231.

11. Buckley, P., & Pass, C. (1988). Measures of International Competitiveness: A

Critical Survey. Journal of Marketing Management, 176 -183.

12. Burlea-Schiopoiu, A., & Mihai, L. S. (2019). An Integrated Framework on the

Sustainability of SMEs. Sustainability 11(21), 1-22.

13. Butnariu, A.-R. (2021). Public Innovation in Romania: Financing Smart City

Initiatives Using European Funds in Small and Medium Sized Cities. "Ovidius"

University Annals, Economic Sciences Series Volume XXI, Issue 2 /2021, 86-

94.

14. Căpșuneanu, S., Constantin, D.-M., Hint, M., Marin-Pantelescu, Oncioiu, I.,

Topor, D., & Turkes, M. (2018). The Sustainability of Romanian SMEs and Their

Involvement in the Circular Economy. Sustainability 2018, 10(8), 1-19.

15. César, C., & Villar-López, A. (2014). Organizational innovation as an enabler of

technological innovation capabilities and firm performance. Journal of Business

Research 67(1), 2891-2902.

16. Chau, N. (2017). Research framework for the impact of total quality management

on competitive advantage: The mediating role of innovation performance.

Research framework for the impact of total quality management on competitive

advantage: The mediating role of innovation performance 27(3), 335-351.

17. Chirescu, A. D., & Pătărlăgeanu, S. R. (2022). THE ANALYSIS OF THE SMEs

SITUATION IN ROMANIA. Romanian Statistical Review 6 / 2022, 112-119.

18. Coccia, M. (2016). Sources of technological innovation: Radical and incremental

innovation problem-driven to support competitive advantage of firms.

Technology Analysis and Strategic Management 29(9), 1-14.

19. Coelho, A., Ferreira, J., & Moutinho, L. (2020). Dynamic capabilities, creativity

and innovation capability and their impact on competitive advantage and firm

performance: The moderating role of entrepreneurial orientation. Technovation

92–93, 1–18.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

20. Dangelico, R. M., & Pujari, D. (2010). Mainstreaming Green Product Innovation:

Why and How Companies Integrate Environmental Sustainability. Journal of

Business Ethics 95, 471-486.

21. Den Hertog, P., Aa, v. d., & Wietze. (2010). Capabilities for Managing Service

Innovation: Towards a Conceptual Framework. Journal of Service Management

21(4), 490-514.

22. Dennick, R., & Tavakol, M. (2011). Making sense of Cronbach's alpha.

International Journal of Medical Education 2(5), 53-55.

23. Dereli, D. (2015). Innovation Management in Global Competition and

Competitive Advantage. Procedia - Social and Behavioral Sciences 195, 1365 –

1370.

24. Distanont, A., & Khongmalai, O. (2020). The role of innovation in creating a

competitive advantage. Kasetsart Journal of Social Sciences 41(1), 15-21.

25. Dogan, E. (2016). THE EFFECT OF INNOVATION ON COMPETITIVENESS.

Ekonometri ve İstatistik Sayı 24(1), 60-81.

26. Enache, E., & Morozan, C. (2013). Innovation – a national priority, supported by

the regional development agencies. Theoretical and Applied Economics Volume

XX 9(586), 73-86.

27. Fang, H., & Lewis, J. (2012). Openness in product and process innovation.

International Journal of Innovation Management, 8-11.

28. Foroudi, P., Gupta, S., Gallear, D., & Rudd, J. (2020). The impact of brand value

on brand competitiveness. Journal of Business Research 112, 210-222.

29. Hair, J. F., Ringle, C., & Sarstedt, M. (2012). An Assessment of the Use of Partial

Least Squares Structural Equation Modeling in Marketing Research. Journal of

the Academy of Marketing Science 40, 1-21.

30. Huang, f. (2012). Openness in product and process innovation. International

Journal of Innovation Management, 1-2.

31. Kao, H.-A., Lee, J., & Yang, S. (2014). Service Innovation and Smart Analytics

for Industry 4.0 and Big Data Environment. CIRP procedure 16(1), 3-8.

32. Lin, C., Wu, Y. J., Yu, C., & Zhang, Z. (2017). Knowledge Creation Process and

Sustainable Competitive Advantage: the Role of Technological Innovation

Capabilities. Sustainability 9(12), 1-16.

33. Muller, E., Peres, R., & Vijay, M. (2010). Innovation diffusion and new product

growth models: A critical review and research directions. International Journal of

Research in Marketing 27(2), 91-106.

34. Neagu, O., & Teodoru, M. C. (2018). The economic competitiveness and

inclusive development nexus: Empirical evidence from 101 economies. Studia

Universitatis Economics Series, 3.

35. Nilssen, M. (2019). To the smart city and beyond? Developing a typology of

smart urban innovation. Technological Forecasting & Social Change 142 , 100.

36. Oncioiu, I. (2012). Small and Medium Enterprises' Access to Financing – A

European Concern: Evidence from Romanian SME. International Business

Research 5(8), 47-58.

37. Pavitt, K., & Tidd, J. (2011). Managing Innovation: Integrating Technological,

Market And Organizational Change. University of Sussex.

38. Popescu, C. (2018). IMPACT OF CLUSTER BUILDING IN LABOR INTENSIVE

INDUSTRIES ON REGIONAL ECONOMY (WESTERN ROMANIA)*.

Transylvanian Review of Administrative Sciences 55(3), 45-61.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

39. Prokop, V., & Stejskal, J. (2017). Different Approaches to Managing Innovation

Activities: An Analysis of Strong, Moderate, and Modest Innovators. Inzinerine

Ekonomika-Engineering Economics 28(1), 47-55.

40. Rajapathirana, J., & Hui, Y. (2017). Relationship between innovation capability,

innovation type, and firm performance. Journal of Innovation & Knowledge 3(1),

44-55.

41. Shrestha*, N. (2021). Journal of the Academy of Marketing Science. American

Journal of Applied Mathematics and Statistics 9(1), 4-11.

42. Szabo, Z. (2011). The impact of the crisis on the SME sector in Romania-The

back-up of innovation and entrepreneurship development. Romanian Journal of

Economics, Institute of National Economy, vol. 33(2), 90-108.

43. Umair, M., Wu, Q., & Yan, D. (2023). Assessing the role of competitive

intelligence and practices of dynamic capabilities in business accommodation of

SMEs. Economic Analysis and Policy Volume 77, 1103-1114.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

THE IMPACT OF QUALITY IN RESEARCH AND DEVELOPMENT

ENVIRONMENTS ON ENTREPRENEURIAL ACTIVITY IN

ROMANIA. A COMPARATIVE STUDY

Sorin Romulus BERINDE1, Paula Ramona RĂCHIȘAN1, Adrian GROȘANU2,

Alina Beattrice VLADU2, Dan Dacian CUZDRIOREAN2

1Business Department, Faculty of Business, “Babeş-Bolyai” University, Cluj-

Napoca, Romania

2Department of Accounting & Audit, Faculty of Economics and Business

Administration, “Babeş-Bolyai” University, Cluj-Napoca, Romania

sorin.berinde@ubbcluj.ro

ramona.rachisan@ubbcluj.ro

adrian.grosanu@ubbcluj.ro

beattrice.vladu@econ.ubbcluj.ro

dan.cuzdriorean@econ.ubbcluj.ro

Abstract: Research and development (R&D) efforts have a great impact on the

performance of companies. However, the costs and time frame are difficult to

anticipate. Evaluation of research and development (R&D) activity assumes many

aspects related to the size of efforts and the quantification of their effects on

entrepreneurial activity, which can be achieved by aggregating several economic

indicators. The effectiveness of R&D can be regarded from various perspectives: the

extent to which it supports the increase in company performance, the time frame in

which such performance appears, and from the standpoint of the degree to which

research activities uphold performance at its maximum efficiency point. This

empirical research aims to conduct a comparative study at the Romanian level on

the impact of research activity carried out within three reputable research

environments: the private (business) environment, the government (public)

environment, and the university environment. The study aims to differentiate

between the results of these environments. This quantitative research has been

carried out based on data processed by regression analysis extracted from three

different sources and covers the time interval 2005-2022. The findings show that the

research results referring to the private environment are visible in the current year,

whereas the effects exhibit volatility in the following years. University environment

research can be regarded as the most effective as it yields a subsequent constant

increase of the effects on the entrepreneurial environment over the following three

years subjected to analysis, while the measured intensity of its impact is clearly

superior to that of the other research environments: private and governmental.

Keywords: R&D expenditure; private environment research; university environment

research; business environment; comparative study.

JEL Classification: M40; M20; O32; O30.

1.Introduction

R&D activities can have a major impact on the performance of companies, but they

also imply a series of efforts whose costs and time frame are not easily anticipated.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

It is difficult to estimate whether they will have a positive impact on the activity of

companies and if so, what the latter could be. The side effects of R&D activities are

difficult to assess and depend on the perspective from which the studies are

conducted. Therefore, R&D expenditure can be assessed through efforts, specific

inputs, such as the size of personnel involved in the research activity (Vtola and Eria,

2015), or the various effects it can trigger at the level of companies. The increase in

productivity and added value, as performance indicators of companies, are results,

effects, and known outputs that have been approached for several years (Minasian,

1962). Later, the number of innovations and patents has been included in the effects

(Anselin, Varga, and Acs, 1997; Hall, Griliches, and Hausman, 1984). This aspect is

also studied based on the area of activity of companies conducting R&D activities,

such as pharmaceuticals (Minasian, 1962) and IT (House, Parks, and Lindstrom,

2014).

When companies are part of different areas of activity, the time frame in which the

effects of R&D expenditure are visible varies (Lee and Choi, 2015; Griliches, 1979).

On the other hand, the effectiveness of different research environments can differ if

we refer to the principle of minimizing efforts and maximizing effects. This depends

on the area of research the studies refer to: private (Fortune and Shelton, 2012;

Schaeffler, 1977), public (Acosta, Coronado, and Romero, 2015; Aerts and Schmidt,

2008), or higher university education (Bonander et al., 2016; Moretti and Thulin,

2013).

Thus, although there are several studies germane to the topic of R&D, they approach

issues unilaterally or narrowly. The objective of this study is to fill in such deficiencies

and compare the impact of private, public, and university research environments

from the point of view of the effort-effect ratio for R&D expenditure and its results,

quantified at the company level. The study includes companies selected regardless

of their areas of activity, therefore endowing the research results with significance.

These aspects or variables included in the study are effort effect variables and will

be divided into two categories. They will aim to measure the impact of the R&D effort

(input variables) on innovation capacity, general entrepreneurial activity, company

results, business excellence, and overall effects of R&D (output variables). The

efforts (inputs) and the effects (outputs) will be represented by means of a complex

of variables. Additionally, apart from the effort-effect ratio, which measures the

results of R&D in space for the three research environments, the study also

measures the intensity of the results of research activities in time as a temporal

framework in which the effects are seen and maintained. From this perspective, the

latter are quantified as an ability to ensure the stability in time of the effects of R&D.

Finally, the study will establish which of the three research environments (private,

public, and university) has the most effective R&D activity. This assessment will be

twofold: spatial, relying on the effort-effect ratio as an instrument, and temporal, from

the standpoint of the time frame in which the positive results of R&D are maintained

in entrepreneurial activities.

The remainder of this paper is organized as follows: the next section presents a brief

literature review, while the following one presents the data used and displays the

methodology, followed by a section dedicated to the presentation of empirical

results. The last section concludes the paper.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

2. Literature Review

The literature classifies R&D expenditure according to the environment in which it

occurs: private, public, or university, while later studying the impact of each

environment on companies, an impact quantified from various viewpoints.

Private company R&D expenditure and its impact on their performance

The impact of the efforts of private companies germane to R&D on their general

performance has been largely studied in the dedicated literature. To evaluate results,

indicators such as turnover, productivity, profitability, and other general quantitative

performance indicators are frequently used. This topic is tackled by older and more

recent studies.

First, Minasian (1962) found some evidence after using regression. According to this

study, increasing R&D expenditure leads to productivity and finally to profitability

based on outputs such as added value, productivity, labour and capital. Furthermore,

it states that companies that spend more on R&D are not typically large. Later,

Branch (1974) argued that there is a reciprocal relation between R&D and profits.

Morbey and Reithner (1990) elaborated on the impact of R&D on the size of profit,

i.e., amid rapid market growth, there is a negative correlation between the two

variables. For the impact of R&D expenditure to be positive, the company must be

in a strong position. Other studies mention a high level of profitability for highly

innovative companies (Lu and Wang, 2024, Rađenović et al., 2023)

The conducting of R&D expenditure is closely related to patenting. This aspect is not

diminished by situations in which the company is controlled by a majority

shareholder, by the constant capacity to patent, or by the existence of history in

matters of patenting for that particular company (Nie et al., 2023; Hall, Griliches, and

Hausman, 1984).

In the case of companies conducting their activity in areas where it is necessary to

have intensive research activities, the investments of companies in R&D are a

source of above-average returns (Mittal and Mittal, 2024; Grabowski and Mueller,

1988). Then contradictory results appear, according to which there is no difference

between the results of companies with high levels of R&D expenditure compared to

those with none. Furthermore, companies in the first category exhibit, in exchange,

higher returns volatility (Chan, Lakonishok and Sougiannis, 2001). The comparatives

study conducted at international level reveals that the intensity with which R&D

expenditure is reflected in the results of companies varies from one country to

another (Fitz-Oliveira and Tello-Gamarra, 2024; Ding, Stolowy and Tenenhaus,

2007). Higher R&D expenditure is related to higher brand values and higher firm-

level financial performance metrics (Peterson and Jeong, 2010).

In the pharmaceutical area, R&D expenses revealed increased returns, with a

powerful impact on increasing performance (Fortune and Shelton, 2012). These

findings are in line with others according to which R&D expenditure implies an

increase in company profitability using the following items for the measurement of

these outputs: returns on assets, returns on equity, capitalization, and cash flows

(Boiko, 2022; Apergis and Sorros, 2014).). Additionally, studies that simultaneously

measure the impact of R&D on profitability for various sectors of activity found

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

similarities between the positive conditioning of profitability, measured as return on

assets, by R&D expenditure (House, Parks and Lindstrom, 2014).

Companies in the mining industry with R&D expenditure generate a significant

increase in sales, by 4-11%, and in profits, by 4-13% (Rafiq, Salim and Smyth, 2016).

The increase is larger in the case of older companies (Rafiq, Salim and Smyth, 2016;

Fortune and Shelton, 2014). The positive impact of R&D expenditure is even more

evident in the case of private companies than in public ones (Boeing, Mueller and

Sandner, 2016). Furthermore, R&D expenditures and investments could improve

innovation in the case of small and medium companies (Bigliardi et al., 2020).

Public-funded R&D expenditure and its impact on companies’ performance

The performance of companies can also be supported by R&D expenditure. Public

expenditure in R&D is approached only to a small extent in the dedicated literature

(Soete et al., 2022; Levy, 1990).

The two sources of funding, public and private, may overlap when supporting a

private company without creating a crowding-out effect on the part of one for the

other (Aerts and Schmidt, 2008; David, Hall, and Toole, 2000). In the case of Latin

America and the Caribbean, a complete crowding-out effect is encountered only in

smaller companies (Hall, 2005). Other more recent studies (Marino et al., 2016) state

that there is no crowding effect and no cumulative effect of public and private R&D

expenditure.

Supporting public expenditure to finance R&D expenditure is necessary but does not

necessarily lead to an increase in productivity (Acosta, Coronado and Romero,

2015). In the case of Germany, an empirical study has shown that public funding of

R&D expenditure leads to an increase in innovation activities by approximately 4%

(Almus and Czarnitzki, 2003). Later, contradictory results are found for the same

country, revealing that the effectiveness of R&D expenses is equally consistent,

regardless of their source: private or public (Hussinger, 2008).

In Spain, most companies that have benefitted from public funding for R&D

expenditure would not have reached performance (González, Jaumandreu and

Pazo, 2005). At the regional level, regardless of the field of activity, entrepreneurial

efficiency is higher in regions where R&D is more public focused than average (Min

et al., 2020)

Universities’ R&D expenditure and its impact on companies’ performance

Most studies conducted in the field conclude that the share of external R&D supplied

by universities has a positive and significant effect on product innovation (Medda,

2020). However, considering published results, studies pertaining to the impact of

R&D expenditure in universities on the economic environment exhibit mixed results.

The first results stemming from cross-sectional studies conducted on certain

geographical regions reveal intense positive correlations between research in the

university environment and its impact on the private sector, from the standpoint of

innovations (Anselin, Varga and Acs, 1997). Later, the hypothesis is confirmed that

the results of university research prompt an increase in innovations and cost

reduction (Woodward et al., 2006). The results of more recent research (Drucker,

2016) mention that the influence of university research through the increase in

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

production, entrepreneurship, and overall economic performance is felt within a 60-

mile distance of university centers.

The concentration of international companies around universities can be considered

a landmark of the effectiveness of research results that are put into practice in the

economy (Moretti and Thulin, 2013). Mixed results are obtained in different studies,

according to which the effectiveness of research results conducted in the university

environment is not particularly visible from the point of view of growth and regional

development (Bonander, et al., 2016). The explanation for this could be the fact that

the research results and innovations achieved in a certain region are difficult to find

in the evolution of businesses from that particular region, due to the mobility of

personnel and companies (Rosen, 1979; Power and Malmberg, 2008).

Evaluation of the size of R&D activities is reflected primarily through R&D

expenditure (Lehman, 2015). On the other hand, research performance indicators in

education can include patent applications and the total number of R&D personnel

and researchers (Vītola and Eriņa, 2015). The quality of human capital in universities

is an aspect that has a strong influence on maintaining the competitiveness of the

business environment in the region (Guerrero, Urbano and Fayolle, 2016). In

Germany, Estonia and Lithuania, a regression study based on the Summary

Innovation Index for 2010-2015 concludes that the number of researchers has a

significant impact on increasing innovation (Svagzdiene and Jurate, 2016).

R&D expenditure and the time-lag effect (the effect over time)

The effect of R&D expenditure on the various economic indicators attained at the

level of companies, considered in the dedicated literature, may be observed over

time, during an interval of one or more years (Lee, 2020; Griliches, 1979). There is

notable interest in studying this aspect in the dedicated literature and it is also the

subject of older articles and more recent ones, albeit without high occurrence over

time.

Some studies identify the impact of RD in a general way: short-term or long-term

(Pazarzi and Sorros, 2018). Others more specifically quantify the time horizon in

which the effect can be observed. R&D expenditure leads to an increase in profits

and market value of shares within a 20-month interval since its inclusion in financial

statements (Lev and Sougiannis, 1996). Later, it was found that the effects of R&D

are noticeable in the following 7 years, although the highest increase in the result of

exploitation is encountered during the first 3 years (Aboody and Lev, 2001).

More recent results support the idea that, albeit profitability is diminished in the year

when it is implemented, the positive effect of R&D expenditure on the former

becomes apparent after two years (Parcharidis and Varsakelis, 2007). In the global

pharmaceutical industry, 25% of the effect of R&D expenditure is visible in patents

in the following year, and its influence is perceived until the fifth year (Wang and

Hagedoorn, 2014). The results are also confirmed by the Korean pharmaceutical

industry, where the effect of R&D expenditure is visible until the fifth year (Lee and

Choi, 2015).

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

3. Research Methodology

The beginning of the study is based on the consolidation, in a preliminary phase, of

certain relevant variables leading to the objective assessment of the relation

between efforts (inputs) and effects (outputs) pertaining to R&D expenditure at the

level of the three representative environments: private, governmental/public and

university.

Evaluation of expenditure (inputs) for Romania has been achieved through the

inclusion in the study of seven aspects, collected between 2005 and 2022 inspired

by Eurostat data (the body calculating statistical information for the institutions of the

European Union) for input variables germane to R&D (OECD, 2002) taken from the

Frascati Manual (2002). They have been divided into three environments: private

(PRIV), governmental (GOV), and university (UNIV). Input variables include R&D

expenditure (Lehman, 2015; OECD, 2002), grouped based on origin criteria (self-

funding or not) and destination criteria (labour force or capital expenses).

Furthermore, variables pertaining to the number of researchers have been included,

to quantify the size of the efforts in matters of R&D expenditure (Vītola and Eriņa,

2015; OECD, 2002).

The results and effects (outputs) of the R&D activity have been quantified based on

two different sources. The first is the National Council for Small and Medium-Sized

Enterprises of Romania (CNIMMPR), founded in 1992, which represents the

interests of SMEs at national and international level. Some data have been

synthesized from the annual reports of this institution, published between 2005 and

2022, pertaining to a yearly average number of 1.158 companies. The output

variables have been broken down according to percentage intervals of 0%, 1-5%, 6-

10%, 11-20%, 21-50%, respectively, above 51%.

The second source of output variables to evaluate the effect of R&D expenditure is

the Global Competitiveness Report (GPR), issued by the World Economic Forum

(WEF) for Romania published between 2005 and 2019. The variables have been

analysed starting from two criteria: the accumulated points (score) and the position

in the ranking of the countries in the Global Competitiveness Index (GCI), comprised

in the annual Global Competitiveness Report (GPR) issued by the World Economic

Forum (WEF) between 2005 and 2019. Output variables reflect the research results

from the standpoint of the evolution of profitability and other financial indicators

(Drucker, 2016; House, Parks and Lindstrom, 2014; Peterson and Jeong, 2010;

Schoeffler, 1977; Minasian, 1962), of patenting and innovation (Acosta, Coronado

and Romero, 2015; Almus and Czarnitzki, 2003; Hall, Griliches and Hausman,

1984), and of the contribution of investments in R&D to turnover (Fortune and

Shelton, 2012; Ding, Stolowy and Tenenhaus, 2007; Grabowski and Mueller, 1988).

We have considered detailing output variables encountered at the level of

companies, depending on their age (Rafiq, Salim and Smith, 2016; Fortune and

Shelton, 2014). From these sources, the variables presented in Table 1 have been

selected to lay the basis of the study.

The statistical calculation of inputs and outputs has been achieved through multiple

regression analysis of the two categories of variables, followed by the calculation of

the coefficients of multiple correlation 𝑟 of each input variable with each output

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

variable, so that each output variable would be evaluated through the lens of all input

variables.

The coefficients of multiple correlations 𝑟 have then been aggregated by using

simple arithmetic mean, a procedure utilized in the economic field to emphasise

basic tendency (Jacquier, Kanee and Marcus, 2003). To calculate the arithmetic

mean, only those coefficients of correlation 𝑟 are considered which indicated an

intensity reasonable level of the connection between input and output variables.

Thus, we have considered the 0.60 value threshold as satisfying, as it indicates a

significant intensity connection at an average level. The possibility of obtaining

significant negative values of the coefficient of multiple correlation 𝑟 which is due to

the decrease in input and to the decrease in outputs for measuring R&D activity in

Romania, is excluded, since in the 2015-2022 period subjected to analysis,

increasing trends have been found in all cases, for all input variables. The noticed

efforts around R&D in Romania were on the increase in all three fundamental

research environments included in the study: private, governmental and university.

Table 1: Variables description

R&D Input patterns (considered for each

environment individually: private (PRIV),

governmental/public (GOV) and university (UNIV)

Measurement

unit

Source

R&D expenditure from all financing sources

Euro/inhab

Eurostat

R&D expenditure from self-financing sources

Euro/inhab

Eurostat

R&D expenditure with labour costs

Euro/inhab

Eurostat

R&D expenditure with capital (land, buildings)

Euro/inhab

Eurostat

R&D expenditure with capital (instruments,

equipment)

Euro/inhab

Eurostat

Number of researchers in full time equivalent

Number

Eurostat

Number of researchers in full time equivalent in total

employment

Eurostat

R&D Output patterns

Measurement

unit

Source

Type of innovations (none, products, technologies,

managerial approach, human resources innovations)

CNIMMPR

Intensity of investments in innovation

CNIMMPR

Share of innovation in investments made by 10-15-

year-old companies

CNIMMPR

Share of innovation in investments made by

companies older than 15 years

CNIMMPR

Investments in innovation of the largest companies

CNIMMPR

Share of turnover of revenues from innovation of 10-

15-year-old companies

CNIMMPR

Share of turnover of revenues from innovation of

companies older than 15 years

CNIMMPR

Share of turnover of revenues from innovation of the

largest companies

CNIMMPR

Share of over 20% of turnover from innovation

CNIMMPR

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

Rank in the Global Competitiveness Index for

Innovation (GCII) according to the World Economic

Forum (WEF)

Rank,

Score

WEF

Innovation capacity

Rank

WEF

Quality of scientific research institutions

Rank

WEF

Public acquisitions of advanced technologies

Rank

WEF

Availability of scientists and engineers

Rank

WEF

Number of patents achieved

Number

WEF

Number of patents applied

Rank

WEF

Turnover from innovation as percentage from all

companies’ turnover

WEF

Source: Processing performed by authors

The calculation methodology used to aggregate the values of multiple regression

correlation coefficients is presented below (Formula 1):

𝐴𝑀𝑟(𝑡𝑥)𝛼𝑎=

∑𝑟𝑖𝑝𝑜𝑧+∑𝑟𝑗𝑛𝑒𝑔

𝑚

𝑗=1

𝑙

𝑖=1

𝑛

(1)

Where,

▪ 𝐴𝑀𝑟(𝑡𝑥)𝛼𝑎- value of arithmetic mean A𝑀 of all 𝑛 values of regression

correlation coefficients calculated for correlation coefficient 𝑟, where |𝑟|≥ 0.60,

resulting from multiple regression, of the temporal series of lag 𝑡𝑥, where 𝑥 is the lag

level (the level of dephasing of the variables measuring inputs, respectively outputs),

whilst 𝑥 = −3, 0



and 𝐴𝑀𝑟(𝑡𝑥)𝛼𝑎∈ [−1; 1];

▪ 𝛼𝑎

–

the environments for which the impact of research activities is

comparatively evaluated, where a can successively represent the private,

governmental, and higher education institutions environment.

▪ ripoz - positive values of correlation coefficients ri calculated for the relation

between inputs and outputs in multiple regression, where i = 1, l



;

▪ rjneg - negative values of correlation coefficients rj calculated for the relation

between inputs and outputs in multiple regression, where j = 1, m



;

▪ Total number of variables n considered for calculated values of the correlation

coefficient r where l, m ≤ n , n = l + m.

The greater the value of the arithmetic mean calculated aggregately, the greater the

intensity of the positive relation between the input and output variables of R&D

expenditure in Romania. The significance will be that an increase in inputs supports

to an even greater extent the increase in outputs as the value of the arithmetic mean

is approaching the maximum level which can be 1. The results obtained provide a

double perspective: spatial (comparing the three fundamental research areas: the

private environment, the governmental one, and higher learning institutions, for the

same time frame), and temporal (the extent to which the intensity of the connection

for each of the three fundamental areas lasts, persists over time).

Therefore, the research activity will be even more effective and present in the

entrepreneurial activity conducted in the business environment and, implicitly, in

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

practice, as the value of the arithmetic mean for each fundamental level will be,

firstly, large, and secondly, registered more quickly and having more permanence in

time over the following years. The calculation of the value 𝐴𝑀𝑟(𝑡𝑥)𝛼𝑎 from these three

points of view will reveal the best-performing area of research of the three that have

been selected: the private environment, the governmental one, and higher learning

institutions.

4. Results and Discussions

By taking into account the correlation coefficients considered to be significant (when

|𝑟|≥ 0.60, for the data analysed stemming from the time frame 2005 – 2022), the

calculation of impact on the entrepreneurial environment is ensured only for those

variables where we have found a high level of intensity of the correlation, as it results

from the table below (Table 2). In the first year, considering a zero-time delay, the

values are generally lower for all research environments. The values noticed an

increasing trend until the fourth year since the R&D expenses were implemented for

the three research environments subjected to analysis.

In the case of the private (business) environment, the effects are seen earlier since

the year in which R&D expenses are made and are felt throughout the years

considered for the study.

Table 2: Measuring time impact on entrepreneurial activity, based on lags, of

expenses made by research environments in the period 2005 - 2022

Research

environments

Evolution of intensity in the current year and the following

three years, for variables with a correlation intensity more

than 0.6

lag 0

lag 1

lag 2

lag 3

2022

2023

2024

2025

Private

(business)

environment

0,17

0,38

0,21

0,68

Governmental

(public)

environment

-0,49

-0,52

-0,60

0,67

University

environment

-0,52

-0,41

0,32

0,72

Source: Processing performed by authors

For the private environment, the results are in line with the studies conducted by

Rađenović et al (2023), Wang and Hagedoorn (2014) and Lev and Sougiannis

(1996). In the third year, one notices a slight decrease of effects, whose maximum

level of 0.72 will be reached in the fourth year, when the intensity level reaches a

significant value as it crosses the standard threshold of 0.60.

For the two remaining research environments, the situation is somewhat different

from that of the private environment. The effects of R&D expenses are visible much

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

later: for the governmental (public) environment, in the fourth year, while for the

university environment slightly earlier, in the third year, albeit the maximum intensity

in the last (fourth) year is relatively identical to that in the private (business)

environment. In the first two-three years, the increase in R&D efforts from the

standpoint of effective expenditure and the number of personnel involved in research

activities has no positive impact on entrepreneurial activity. On the contrary, one

notices in this period that there is an almost significant negative correlation of close

values in each of the two environments. What is certain, however, is that research

in the university environment yields effects one year earlier that in the governmental

(public) environment (Lee, 2020, Pazarzi and Sorros, 2018).

Another aspect to be considered is that in the case of the university environment, it

could be observed throughout the three years a constant increase in intensity of the

effects for the entrepreneurial environment, while for the private (business) and

governmental (public) environments, there is significant volatility of research results

in the second and third years.

For all three environments, the impact of research is at its maximum in the fourth

year since the R&D endeavours, albeit in the private (business) environment, the

effects are visible earlier. In the fourth year, the intensity of the correlation measured

through regression analysis is relatively identical, which means that the effectiveness

of research for the three environments is identical and quite high. If the maximum

intensity of the results is encountered in the third year since the endeavours,

excluding the year when R&D expenses were made, the results are in line with

Abody and Lev (2001) for all three research environments.

5.Conclusions

The study conducts, at the level of Romania, a comparative evaluation of the

effectiveness of research activities in three environments: private (business),

governmental (public) and university. The evaluation is performed starting from the

effort-effects ratio, which generates a complex study by including multiple variables

for efforts (inputs) and effects (outputs). This aspect is capable of furthering unilateral

studies in the dedicated literature which rely on a low number of variables. The

results of the research may be viewed from two perspectives: the spatial and the

temporal. The spatial perspective refers to static comparison (for the same time

frame) of the results of R&D in the three research environments included in the

competition. From a temporal viewpoint, we have resorted to a comparison of the

evolution of the results of research for the three environments over time: in what time

frame they become visible in entrepreneurial activity, how intense and durable the

effect on company performance is. The study is based on data collected from three

different sources, for an 18-year period, specifically 2005 – 2022. In the future, this

research may continue by further extending the temporal series, to the extent that

data sources publish information in the following years. This aspect enables the

study results to be tested considering a longer time frame.

The research results add to the dedicated literature by mentioning the different

impacts of research endeavours on the entrepreneurial environment, depending on

where the research activity takes place. The findings show that research conducted

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

in the private (business) environment is visible in company activity as of the current

year (Wang and Hagedoorn, 2014; Lev and Sougiannis, 1996). The research

conducted in the governmental and university environments is visible after a longer

time frame of three years (Abody and Lev, 2001). However, in the private

environment, there is volatility regarding the evaluation of effects for the third year

after R&D efforts have been implemented. The university environment exhibits a

constant and increasing evolution of the impact of R&D on the business environment.

All three research environments achieve maximum effectiveness in the third year

since the implementation of R&D endeavors (Lee, 2020; Pazarzi and Sorros, 208;

Abody and Lev, 2001). Therefore, although the effects are noticeable later, research

in the university environment can be regarded as the most effective, as it exhibits a

subsequent positive and constant evolution of the effects on the entrepreneurial

environment during the following three years subjected to analysis, while the

measured intensity of impact is clearly superior to that of the other two research

environments: private (business) and governmental (public).

References

1. Aboody, D., Lev, B. (2001) R&D productivity in the chemical industry, [Online],

Available: www. baruch-lev. com, [4 Sept 2024].

2. Acosta, M., Coronado, D., Romero, C. (2015) “Linking public support, R&D,

innovation and productivity: New evidence from the Spanish food industry”, Food

Policy, Vol. 57, pp. 50-61.

3. Aerts, K., Schmidt, T. (2008) “Two for the price of one? Additionality effects of

R&D subsidies: A comparison between Flanders and Germany”, Research Policy,

Vol. 37, No. 5, pp. 806-822.

4. Almus, M., Czarnitzki, D. (2003) “The effects of public R&D subsidies on firms'

innovation activities: the case of Eastern Germany”, Journal of Business &

Economic Statistics, Vol. 21, No. 2, pp. 226-236.

5. Anselin, L., Varga, A., Acs, Z. (1997) “Local geographic spillovers between

university research and high technology innovations”, Journal of Urban

Economics, Vol. 42, No. 3, pp. 422-448.

6. Apergis, N., Sorros, J. (2014), “The role of R&D expenses for profitability:

Evidence from US fossil and renewable energy firms”, International Journal of

Economics and Finance, Vol. 6, No. 3, pp. 8-15.

7. Bigliardi, B., Ferraro, G., Filippelli, S. and Galati, F. (2020) “The influence of open

innovation on firm performance”, International Journal of Engineering Business

Management, 12, [Online], Available:

https://journals.sagepub.com/doi/10.1177/1847979020969545 [21July 2024].

8. Boiko, K. (2022) “R&D activity and firm performance: mapping the field”,

Management Review Quarterly, Vol. 72, No. 4, pp.1051-1087.

9. Boeing, P., Mueller, E., Sandner, P. (2016) “China's R&D explosion—Analyzing

productivity effects across ownership types and over time”, Research Policy, Vol.

45, No. 1, pp. 159-176.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

10. Bonander, C., Jakobsson, N., Podestà, F., Svenson, M. (2016) “Universities as

engines for regional growth? Using the synthetic control method to analyze the

effects of research universities”, Regional Science and Urban Economics, Vol.60,

pp. 198-207.

11. Branch, B. (1974) “Research and development activity and profitability: a

distributed lag analysis”, Journal of Political Economy, Vol. 82, No. 5, pp. 999-

1011.

12. Chan, L.K., Lakonishok, J., Sougiannis, T. (2001) “The stock market valuation of

research and development expenditures”, The Journal of Finance, Vol. 56, No. 6,

pp. 2431-2456.

13. David, P.A., Hall, B.H., Toole, A.A. (2000) “Is public R&D a complement or

substitute for private R&D? A review of the econometric evidence”, Research

policy, Vol. 29, No. 4, pp. 497-529.

14. Ding, Y., Stolowy, H., Tenenhaus, M. (2007) “R&D productivity: an exploratory

international study”, Review of Accounting and Finance, Vol. 6, No. 1, pp. 86-101.

15. Drucker, J. (2016) “Reconsidering the regional economic development impacts

of higher education institutions in the United States”, Regional Studies, Vol. 50,

No. 7, pp. 1185-1202.

16. Eurostat Evidence, 2005 - 2023, [Online], Available:

https://ec.europa.eu/eurostat/web/main/data/database, [15 April 2024].

17. Fitz-Oliveira, M. and Tello-Gamarra, J. (2024) "Technological capability and firm

performance: a literature review with meta-analysis of studies into manufacturing

firms", Journal of Manufacturing Technology Management, Vol. 35 No. 4, pp. 744-

765.

18. Fortune, A., Shelton, L.M. (2014) “Age matters: Disentangling the effect of R&D

investment in the global chemical products industry”, Business Management

Dynamics, Vol. 3, No. 11, pp. 35-54.

19. Fortune, A., Shelton, L. (2012), “R&D Effort, Effectiveness, and Firm

Performance in the Pharmaceutical Sector”, Journal of Business and

Management, Vol. 18, No. 1, pp. 97-115.

20. González, X., Jaumandreu, J., Pazó, C. (2005), “Barriers to innovation and

subsidy effectiveness”, RAND Journal of Economics, pp. 930-950.

21. Grabowski, H.G., Mueller, D.C. (1988) “Industrial research and development,

intangible capital and firm profit rates”, Bell Journal of Economics, Vol. 23, pp.328-

343.

22. Griliches, Z. (1979) “Issues in assessing the contribution of research and

development to productivity growth”, The Bell Journal of Economics, pp. 92-116.

23. Guerrero, M., Urbano, D., Fayolle, A. (2016) “Entrepreneurial activity and

regional competitiveness: evidence from European entrepreneurial universities”,

The Journal of Technology Transfer, Vol. 41, No. 1, pp.105-131.

24. Hall, B.H. (2005) “Government policy for innovation in Latin America”, [Online],

Available:

https://pdfs.semanticscholar.org/6968/65a4c5379c2e9e3d2847ea91ab2ff62c

3a23.pdf, [18 May 2024].

25. Hall, B.H., Griliches, Z., Hausman, J.A. (1984) “Patents and R&D: Is there a

lag?”, International Economic Review, Vol. 27, No. 2, pp. 265-283.

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
50 
 
 
26. House, W.C., Parks, D.M., Lindstrom, G.L. (2014) “Relationships between R&D 
and Profitability: An Exploratory Comparison of Two Business Simulations with 
Two Real -World. Technology Intensive Industries”,  Developments in Business 
Simulation and Experiential Learning, Vol. 21, pp. 75-78. 
27. Hussinger, K.  (2008)  “R&D  and  subsidies at  the  firm  level:  An  application  of 
parametric and semiparametric two
‐
step  selection  models”,  Journal  of  Applied 
Econometrics, Vol. 23, No. 6, pp. 729-747. 
28. Jacquier, E., Kane, A., Marcus, A.J. (2003), “Geometric or arithmetic mean: A 
reconsideration”, Financial Analysts Journal, Vol. 59, No. 6, pp. 46-53. 
29. Lee, J. W. (2020) “Lagged effects of R&D investment on corporate market value: 
Evidence from manufacturing firms listed in chinese stock markets”, Journal of 
Asian Finance Economics and Business, Vol. 7, No. 8, pp. 69-76. 
30.  Lee,  M.,  Choi,  M.  (2015)  “Analysis  on  Time-Lag  Effect  of  Research  and 
Development Investment in the Pharmaceutical Industry in Korea”, Osong Public 
Health and Research Perspectives, Vol. 6, No. 4, pp. 241-248. 
31.  Lehmann,  E.E.  (2015)  “The  role  of  universities  in  local  and  regional 
competitiveness”, The Oxford Handbook of Local Competitiveness, pp. 211-236, 
[Online],  Available: 
https://books.google.ro/books?hl=ro&lr=&id=2Hn5CQAAQBAJ&oi=fnd&pg=PA2
11&dq=Lehmann,+E.E.+(2015)+%E2%80%9CThe+role+of+universities+in+local
+and+regional+competitiveness&ots=Mnk_q4KqDy&sig=DFJ0NWXPVa8f1RojG
lokkWCRBss&redir_esc=y#v=onepage&q=Lehmann%2C%20E.E.%20(2015)%2
0%E2%80%9CThe%20role%20of%20universities%20in%20local%20and%20re
gional%20competitiveness&f=false, [18 June 2024].. 
32.  Lev,  B.,  Sougiannis,  T.  (1996)  “The  capitalization,  amortization,  and  value-
relevance of R&D”, Journal of Accounting and Economics, Vol. 21, No. 1, pp. 107-
138. 
33.  Levy,  D.M.  (1990)  “Estimating  the  impact  of  government  R&D”,  Economics 
Letters, Vol. 32, No. 2, pp. 169-173. 
34. Lu,  X.  and Wang, J.  (2024)  “Is innovation strategy a  catalyst to solve  social 
problems?  The  impact  of  R&D  and  non-R&D  innovation  strategies  on  the 
performance of social innovation-oriented firms”, Technological Forecasting and 
Social  Change,  Vol.  199,  [Online],  Available: 
https://www.sciencedirect.com/science/article/pii/S0040162523007059?casa_to
ken=_D7h-
WRlLMoAAAAA:EHbQIQcso4HHobEN8wRbX_LhZnASINSTsDjCna9gyskdo2ku
WT0hnM_ymbYNsXFUk7JRne2m-0E, [22 June 2024]. 
35. Marino, M., Lhuillery, S., Parrotta, P., Sala, D. (2016) “Additionality or crowding-
out? An overall evaluation of public R&D subsidy on private R&D expenditure”, 
Research Policy, Vol. 45, No. 9, pp. 1715-1730. 
36. Medda, G. (2020). External R&D, product and process innovation in European 
manufacturing companies, The Journal of Technology Transfer, Vol.45, No. 1, pp. 
339-369. 
37. Min, S., Kim, J., & Sawng, Y. W. (2020) “The effect of innovation network size 
and  public  R&D  investment  on  regional  innovation  efficiency”,  Technological 
Forecasting  and  Social  Change,  Vpl.  155,  [Online],  Available:  

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
51 
 
 
https://www.sciencedirect.com/science/article/abs/pii/S0040162519312703?via
%3Dihub [18 May 2024] 
38. Minasian, J.R. (1962) The economics of research and development, the rate and 
direction of inventive activity: Economic and social factors, Princeton University 
Press 
39.  Mittal,  N.  and  Mittal,  S.  (2024)  "Does  R&D  Intensity  Affect  the  Firms' 
Performance?:  A  Meta-Analytical  Review",  pp.199-215,  [Online],  Available: 
https://www.emerald.com/insight/content/doi/10.1108/978-1-83753-572-
920241010/full/html, [20 August  2024]. 
40. Morbey, G.K., Reithner, R.M. (1990 „How R&D affects sales growth, productivity 
and profitability”, Research-Technology Management, Vol. 33, No. 3, pp. 11-14. 
41. Moretti, E., Thulin, P. (2013) “Local multipliers and human capital in the United 
States and Sweden”, Industrial and Corporate Change, Vol. 22, No. 1, pp. 339-
362. 
42. National Council of Private Small and Medium Enterprises in Romania, (2005-
2022), White Charter of SMEs in Romania, Bucharest: Sigma Publishing. 
43. Nie, P. Y., Wen, H. X. and Chan, W. A. N. G. (2023) “R & D competition and 
patent  values”,  Journal of Innovation & Knowledge, Vol. 8, No.1, (1), [Online], 
Available:  https://www.sciencedirect.com/journal/journal-of-innovation-and-
knowledge/vol/8/issue/1, [20 May 2024]. 
44. OECD Publication Service (2002), Frascati manual. Proposed standard practice 
for surveys on research and experimental development, 6th  Edition, [Online], 
Available:  https://www.oecd-ilibrary.org/science-and-technology/frascati-manual-
2002_9789264199040-en, [22 December 2023]. 
45.  Parcharidis,  E.,  Varsakelis,  N.C.  (2007)  Investments  in  R&D  and  business 
performance  Evidence  from  the  Greek  market,  [Online],  Available: 
https://www.researchgate.net/profile/Nikos-
Varsakelis/publication/265927562_Investments_in_RD_and_business_performa
nce_Evidence_from_the_Greek_market/links/54b7f0ff0cf269d8cbf5a707/Invest
ments-in-R-D-and-business-performance-Evidence-from-the-Greek-market.pdf, 
[20 Sept 2024]. 
46. Pazarzi, G., & Sorros, J. (2018) “The effect of R&D expenses on earnings and 
market value”, SPOUDAI-Journal of Economics and Business, Vol. 68, No. 2/3, 
pp. 39-47. 
47. Peterson, R.A., Jeong, J. (2010) “Exploring the impact of advertising and R&D 
expenditures  on  corporate  brand  value  and  firm-level  financial  performance”, 
Journal of the Academy of Marketing Science, Vol. 38, No. 6, pp. 677-690. 
48. Power, D., Malmberg, A. (2008) “The contribution of universities to innovation 
and  economic  development:  in  what  sense  a  regional  problem?”,  Cambridge 
Journal of Regions, Economy and Society, Vol. 1, No. 2, pp. 233-245. 
49. Rađenović, T., Krstić, B., Janjić, I., & Vujatović, M. J. (2023) “The effects of R&D 
performance  on  the  profitability  of  highly  innovative  companies”,  Strategic 
Management-International  Journal  of  Strategic  Management  and  Decision 
Support Systems in Strategic Management, Vol. 28, No. 3, pp. 34-45. 

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

50. Rafiq, S., Salim, R., Smyth, R. (2016), “The moderating role of firm age in the

relationship between R&D expenditure and financial performance: Evidence from

Chinese and US mining firms”, Economic Modelling, Vol. 56, pp. 122-132.

51. Rosen, S. (1979) “Wage-based indexes of urban quality of life”, Current issues

in urban economics, Vol. 3, pp. 74-104.

52. Soete, L., Verspagen, B. and Ziesemer, T. H. (2022) “Economic impact of public

R&D: an international perspective”, Industrial and Corporate Change, Vol. 31, No.

1, pp. 1-18.

53. Svagzdiene, B., Jurate, K.. (2016) "The analysis of factors which have impact for

summary innovation index in Germany, Estonia and Lithuania", Transformations

in Business & Economics, Vol. 15, No. 2B(38B), pp. 784-800.

54. Vītola, L., Eriņa, J. (2015) “R&D Expenditures by Higher Education Sector and

Analysis of Performance Indicators of Baltic States”, Procedia-Social and

Behavioral Sciences, Vol. 213, pp. 223-228.

55. Wang, N., Hagedoorn, J. (2014) “The lag structure of the relationship between

patenting and internal R&D revisited”, Research Policy, Vol. 43, No. 8, pp. 1275-

1285.

56. Woodward, D., Figueiredo, O., Guimaraes, P. (2006) “Beyond the Silicon Valley:

University R&D and high-technology location”, Journal of Urban Economics, Vol.

60, No. 1, pp. 15-32.

61. World Economic Forum, Global Competitiveness Report (2005-2019), [Online],

Available: https://www.weforum.org/publications/, [20 March 2022].

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

SUSTAINABLE BUSINESS MODELS RESEARCH: A

BIBLIOMETRIC ANALYSIS

Xhorxhina VANGJEL1, Olimpia BAN2

1 Doctoral School of Economic Sciences, The University of Oradea, Oradea,

Romania, xhorxhinavangjel@yahoo.com

2 Department of Economics and Business, Faculty of Economic Sciences,

University of Oradea, Romania, olimpiaban2008@gmail.com

Abstract: A variety of studies are being developed to investigate sustainable

business models. This research is part of a wider one and aims at the theoretical

deepening of the existing paradigms in the literature. The realization of the

bibliometric analysis in the field of sustainable business models was mainly

influenced by the extent of this type of business models. The data in this study were

collected through the use of bibliometric tools, identifying and then analyzing the

most influential and cited publications from the Scopus and Google Scholar Metrics

platforms for the same time periods. The keyword phrase was searched in the

databases as a first step that initiates the continuation of this analysis. This action

helps to obtain valuable data for the purpose of this study. The inspiration of the topic

is guided by two objectives formulated in the form of research questions: In empirical

studies how is the sustainability of a business evaluated? What are the dimensions

that lead to the sustainability of business models, the focus on which can reveal

previously unexplored directions? We emphasize that from the total of 20 studies

selected for the bibliometric analysis, 14 of them are original articles and 6 are review

analyses. Some criteria or exponents of research units serve to conclude the findings

and conclusions of the bibliometric analysis. The construction of a comprehensive

visual analysis represented in the following figures and graphs corresponds precisely

to the results achieved by this research. Then, in this framework we integrate the

framework findings-results for the search for sustainable business models. The

findings of this study indicate that the trend of the production of academic studies in

the field of sustainability of business models is relatively positive. We aim to identify

the state of research and the possibility of completing it with a current documentary

or empirical analysis useful for the two countries, Romania and Albania. On

sustainable business models, in the future we propose to do a case study on the

evolution of the production activity system from eco-design and the effective

implementation of eco-innovative practices in these two countries, in order to

capitalize on the results obtained from the bibliometric analysis.

Keywords: bibliometric analysis; sustainable business models; current trends;

divergent points; entrepreneurial sustainability.

JEL classification: F18; F21; O10; O47

1.Introduction

Bibliometric analysis is a research method that Hawkins (1977: 13) defines as "the

quantitative analysis of the bibliographic features of a body of literature". The term

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

"bibliometrics" was coined in 1969 by Alan Pritchard. Pritchard (1969) in an attempt

to disambiguate the term "statistical bibliography", defined bibliometrics as the

application of mathematical and statistical methods to books and other media,

aiming to elucidate the processes of written communication and also the nature of

the development of a discipline. From the specialized literature research in the

interest of our study, we highlight the fact that the term "sustainable development"

was used for the first time in the Brundtland Report, which was published in 1987 by

the World Commission on Environment and Development of the United Nations

(Brundtland, 1985: 26).

2. Methodology and data collection

This study is guided by two objectives formulated in the form of research questions:

In empirical studies, how is the sustainability of a business evaluated? What are the

dimensions that lead to the sustainability of business models, the focus on which

can reveal previously unexplored directions?

Analysis of most influential and cited publications by the Scopus and Google Scholar

Metrics platforms, for the same time periods were used to collect the data. The

research methodology includes as selection criteria: frequency of citations;

academic publications; time period: 2019-2023. The aggregated results of the

Scopus search for the terms "sustainable business models" are shown in Figure 1.

The number of publications investigating sustainable business models has grown

remarkably year-on-year, from 1,806 in 2020 to 2,613 articles published in 2023. A

particular increase is also noticeable by analyzing the total annual number of

citations for this field. The flow of citations has increased significantly from year to

year, from 8 resulting in 2021 to 2,860 citations resulted in 2023.

This scientific expansion in the field of sustainable business models refers to the

amplification of research studies but also the support offered by business

practitioners for the development of entrepreneurial stability trends, possibly using

sustainable business models (Figure 1).

Figure 1: Annual indicators of publications and citations in the field of sustainable

business models (SBM).

Source: Scopus file:///C:/Users/Perdorues/Desktop/Scopus%20-

%20Citation%20overview%202.pdf, accessed in 23.12.2023

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

Using "sustainable business models" as a search key on the Scopus platform yields

a total number of 2,613 scientific articles published in 2023. Using some of Scopus'

built-in functions, we highlighted a total number of 2,860 citations for the year 2023

related to the investigated field in the interest of our study (Table 1).

Table 1: Time distribution of the flow of citations resulting from the phrase

"sustainable business models" in the Scopus database.

Citation

<201

201

202

Subtota

>202

Tota

Total

150

286

3019

166

318

Source: Scopus file:///C:/Users/Perdorues/Desktop/Scopus%20-

%20Citation%20overview%202.pdf, accessed in 23.12.2023

Eventually, an extraordinary amplification of the interest in the development of

sustainability in the entrepreneurial sector is highlighted. A variety of studies are

being developed to investigate sustainable business models. However, it is found

that bibliometric analyzes in this discipline are still limited, possibly not all dimensions

of sustainable business models are covered by the analysis of published articles.

The development of literature should be on such a trajectory that provokes "design

thinking" and "innovative thinking" in this field.

In the elaboration of the bibliometric analysis, the Google Scholar Metrics search

engine was also used, which practically offers more simplified research methods for

researchers to quickly find, select and evaluate the visibility and influence of recent

articles from a wide range of academic publications. Scholar Metrics provides the

option to browse the most cited publications, which are ranked by five-year h-index

(h5-index) and h-median (h5-median) values. The phrase “sustainable business

models: a review” was searched in the Google Scholar database as a first step

initiating the continuation of this analysis. To see articles as well as citations based

on metrics, we use the "Metrics" option. In the interest of this study, column no. 51

"Sustainability" was selected, which corresponds to the number 185 in the h5-index

column and the number 238 in the h5-median column. From the displayed

publications we find a total number of 185 articles. The intention is to filter and select

the scholarly materials that best match our search. The selection and research is

done manually by browsing the contents of those papers which, according to Google

Scholar Metrics, are among the most important in the target field. From 185 scientific

articles resulting from the Google Scholar Metrics filters, we manually selected 10

scientific papers that rank first among other papers in terms of word occurrence flow

and citation intensity, following in this sense also a chronological line of the studied

time interval, specified for the time period of the last 5 years.

In this study, the 10 most cited scientific articles were selected from the Scopus

platform and 10 scientific articles that are on top from the Google Scholar Metrics

platform. Of the 20 studies selected for the bibliometric analysis, we note that 14 of

them are original articles and 6 are review analyses. This bibliometric analysis

corresponds predominantly to original research articles due to the fact that these

articles provide a detailed account of the techniques and methods used. Original

research articles due to academic qualities are the most common types of research

articles. An original research paper often includes the background of the study,

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

defined research questions and hypotheses, methods and instruments, results,

interpretation of findings and a discussion of possible implications, analytical and

experimental studies, responses to surveys/interviews, or detailed observations.

Although in low numbers, research also includes review analyses. This is because

reviews investigate and identify gaps in research, thereby providing important

insights or valuable explanations for possible new studies.

We highlight the argument according to which the review type analyzes were

considered necessary to carry out this bibliometric analysis considering their

conceptual context as a whole; the importance of the fact that their content

corresponds to the elaboration of bibliometric analyzes (quantitative research

methods) in support of the sustainability of business models; the influx of citations;

providing relevant information for deepening the study of the sustainability of

business models.

3. Aggregated results of the Scopus search for the terms "sustainable

business models"

The search using the Scopus platform resulted in a total of 11,741 scientific

publications in the field of sustainable business models. This automatic filter

eventually served to select academic papers that are first ranked by citation intensity

and keyword usage flow that correspond to the purpose of this study. Then ten

academic publications were selected, which, in our opinion, are of high interest

according to the purpose of the study. But this purpose of study is subordinated to

two objectives that we have formulated in the form of research questions: In empirical

studies, how is the sustainability of a business evaluated? What are the dimensions

that lead to the sustainability of business models, the focus on which can reveal previously

unexplored directions?

This stage included a series of research on the content of the text, according to the

intensity of the keyword "sustainable business models", the analysis of specific

points of view that are in a way a replica of the research interests of this paper. The

trend of the production of academic studies in the field of sustainability of business

models is relatively positive with a pronounced upward turn in 2023. This is seen not

only by the intensity of publications, but also by the flow of citations. The specific

roots of the term "sustainability" in business models appear quite quickly after we

analyzed in chronological order the appearance of publications in this field. But

deeper specifications in the field of sustainable business models have only recently

intensified remarkably. Regardless of the fact that the platform used in the interest

of this study, Scopus, is a reliable data software, the volume of citations for published

articles is clearly low compared to what results in Google Scholar Metrics. This is

probably due to the fact that this software requires a subscription, while Google

Scholar Metrics allows free searches.

The bibliometric analysis of researchers carried out on the Scopus platform shows

that the most influential researchers in the field of sustainable business models are

Rusch, M., Schöggl, JP, Baumgartner, RJ.; Khan, SAR., Tabish, M., Zhang, Y.;

Broccardo, L., Zicari, A., Jabeen, F., Bhatti, ZA., and the researcher must rely on

them to theorize the field and surround their theories with extraordinary depth of

research.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

Looking at the cumulative number of publications and the increased flow of citations,

we can see that the popularity and interest in the application of sustainable business

models in the field of enterprises has increased sharply in 2023. This is a positive

algorithm in terms of further progress and objective application of the notion of

"sustainability" in business practices. The process and stages of the bibliometric

study discuss the progress of sustainable business models that possibly includes,

among others, the flow of word occurrence, the most influential researchers in this

field and the most critical scientific articles that have an important impact on the

development of this field. Eventually the selection is based on a way of reviewing the

titles, abstracts, introduction, findings and conclusions of each scientific publication.

The development of this study could favor the increase in the number of readers

familiar with the field of sustainable business models, but also allow the scientific

team to advance in knowledge, integrity, the expansion of the conceptual sphere as

well as rational thinking in the field of business.

The study highlights the existence of some gaps. This is because the sustainability

of business models has a wide scope of academic studies in the literature, but not

all aspects have been treated to the same extent, to create new perspectives in the

development of business model sustainability.

Even current new concepts dealing with the sustainability of business models can

be appreciated to be little mentioned or addressed in the literature, often even with

accentuated gaps due to superficial analyzes that often discuss the concept but not

the essence, purpose and perspectives in knowledge, usage, analytics.

4. Aggregated results of the Google Scholar Metrics search for the terms

"sustainable business models"

The search using Google Scholar Metrics resulted in a total of 185 publications, with

175 publications removed after manual inspection of publication abstracts and

citation intensity. This manual filter served to select the academic papers that make

up the top ten of the classification. The trend of the production of academic studies

in the field of sustainability of business models is relatively positive. This results not

only from the intensity of publications, but also from the flow of citations. After

analysing the succession of publications in this field, the results show early

research.

Data analysis performed through this database helped to obtain valuable data for

the purpose of this study. This approach has been accomplished not only because

of the wide access to published articles, but also because of the convenience it

offers as an easy-to-use platform. Among other things, being a free platform with

simplified research methods allows obtaining the expected results, a fact that can

be seen by comparing the flow of citations between the articles published in the

Scopus database and those published in Google Scholar Metrics. In the latter, an

amplified focus of the flow of citations is observed, many times in number compared

to the articles published in Scopus. The bibliometric analysis of researchers by

Google Scholar Metrics shows that the most influential researchers in the field of

sustainable business models are Parida, V., et al.; Alshehhi, A., et al.; and

Nosratabadi, S., et al., and the researcher must rely on them for the theoretical part

of the field and to understand their theories and depth of research. Looking at the

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

accumulated number of publications, we can see that the popularity of the

application of sustainable business models in the field of enterprises has increased

sharply. The process and stages of the bibliometric study discuss the progress of

sustainable business models that possibly includes, among others, the flow of word

occurrences, the most influential researchers in this field and the most critical

scientific articles that have an important impact on the development of this field.

Eventually the selection is based on a way of reviewing the titles, abstracts,

introduction, findings and conclusions of each scientific publication.

5. Findings and discussions

This analytical framework serves to build a more comprehensive visual structure

represented in the following figures, referring to the conclusions drawn from the

study. The bibliographic analysis highlights, among other things, precisely the

concentration of definitions in the studied literature. Regarding the probability or

intensity of in-depth knowledge, expressed in creative definitions of sustainability,

from the analysis of the 20 scientific articles studied, it appears that in 18 of these

20 academic publications ≤1 (one or more) definitions are indeed used, probability

determined for each item.

There is a positive trend in innovative insight, in-depth skills and scientific research

related to the expansion of sub-fields that make up sustainable business models.

We conclude that the literature tends to summarize rational thinking in definitions

worthy of in-depth knowledge of sustainability in business models.

Figure 2: Frequency of citations for the ten scientific articles included in the study

Source: Author’s analysis, based on Scopus and Google Scholar Metrics

We refer that from our reviewed range of 20 academic articles in total that essentially

correspond to the field of sustainability of business models, we find that ten of them

have been articulated < (in more than) 100 citations (Figure 2).

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

Figure 3: The weight of the data modeling methods used in the development of

academic publications

Source: Author’s analysis, based on Scopus and Google Scholar Metrics

We conclude with the opinion that the most used tool for academic deepening

consists precisely in the dualistic analysis of data through the quantitative and then

qualitative selection of the content of scientific publications (Figure 3).

Stating it as "a new trend that combines both quantitative and qualitative data in a

single research project, in an effort to reconcile both methods", this analytical method

simultaneously radiates in line with the productive results that define sustainability in

business models (Antwi, et al., 2015: 217).

We formulate the opinion that currently the use of inductive and deductive reasoning

is considered one of the most appreciated prospecting methods by researchers. This

is because it allows them to highlight argumentative details that serve the improved

sustainability of business models. Not only that, but it allows them to make

constructive generalizations, thus providing valuable explanations for further

research in the future.

The bibliographic research shows that the resource-based view (RBV) is an

influential approach in the analysis of studies that correspond to the field of

sustainable business models (Figure 4). We note that the resource-based view

(RBV) provides a framework for developing organizational competence by effectively

capitalizing on internal rather than external factors. This data analytics tool states

that sustainable competitive advantage can be more easily achieved by exploiting

external opportunities in combination with existing resources in a new way than by

trying to acquire new capabilities for each different opportunity. This shows that the

best approach is to analyze internal and external factors and combine both points of

view to achieve and maintain a more sustainable organizational performance as well

as a competitive advantage.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

Figure 4: The weight of data analysis tools used in academic development

publications

Source: Author’s analysis, based on Scopus and Google Scholar Metrics

The realization of this bibliometric analyzes also affect an evaluation of the types of

case studies used in the reviewed publications. The types of case studies were

classified into 9 groups (Beltramello, et al., 2013: 32): “Waste recycling systems;

Models based on greener products and processes; Optimizing efficiency through

Information and Communications Technology (ICT); Systems based on alternative

energy; Functional models of sales and management services; Industrial symbiosis;

Green neighborhoods and cities; Innovative financing schemes; Sustainable mobility

systems". Analyzing the field of entrepreneurial activity and the relevant categories

for each original article or review type analysis examined in this bibliometric study,

we find that they refer to one or a combination of overlapping categories, which we

have presented in the graph below (Figure 5).

Figure 5: Application of case studies, analyzed by category

Source: Author’s analysis, based on Scopus and Google Scholar Metrics

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

More digital and agile products/processes account for the largest share of case

studies. We found that scholars are currently predominantly interested in the digital

culture aspects of sustainable development. The analytics of building greener or

multi-green-innovative business models is a growing interest. While most studies

have focused on digital and technology considerations, very limited literature has

focused on understanding the concept of environmental, ecological and social

entrepreneurship. It is interesting to note that from the studies focused on digital

innovation and technology development, a considerable number of academic

studies impartially deal with important concepts for the development of sustainability

of business models in accordance with the protection of the ecological system.

Researchers deal with these concepts in a generic way, but without exploring all the

components as a whole. The minimalist involvement of the specialized literature in

the substantial treatment of the essence and dynamics of the development of socio-

ecological sustainable business models best shows where the research attention

for the business perspective needs to be paid. We conclude that actions taken to

radically change the environment in which businesses operate through technology

and digital often cause limitations in the development of socio-ecological systems

of entrepreneurship. This approach prevents their expansion into more stable and

sustainable trajectories. At the same time, this is due to the attention paid mainly to

digital development, turning it into a mandatory principle for business development.

By perceiving digital as the most important tool for business progress, the

implications for the development of the ecological system are quite omitted. Also,

the significant impact of technology on business behavior is the reason for excluding

social considerations from decision-making processes in client-entrepreneur

relationships. These literature analytic tools allow us to draw conclusions on a

considerable number of scientific articles, thereby identifying current research

trends and divergent ones to suggest future research directions.

6. Conclusions

• The study highlights the existence of gaps. This is due to the fact that the

sustainability of business models has a wide scope of academic studies in

the specialized literature, but not all aspects have been treated to the same

extent to create new perspectives in the development of the sustainability of

business models and outline a suitable landscape of possible areas of future

research.

• The research showed that that there is more than a conformist thinking in

almost every scientific publication which allows the development of

analytical strategies in the future, as well as the expansion of innovative

areas that support the progress of business stability towards sustainability.

• Regarding the first research question, the study showed a significant

relationship between sustainability and the philosophy of the resource-

based perspective, since RBV is a strategic management approach that

refers to explanations of the long-term success of companies based on

resources. The natural environment in the RBV approach has challenged

companies to review natural resources with their limits. This is the impetus

for companies to generate more value and gain a stable development. But

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

at the same time, we suggest that companies should consider including

green-innovation-initiatives as a means of achieving sustainable competitive

advantage.

• The demarcation of the integration of induction and deduction of the digital

has become increasingly appreciated in the field of entrepreneurial

sustainability, somehow omitting the diffusion of social sciences that are

particularly relevant for a better understanding of the behaviors and stance

of business towards sustainability.

• Regarding the second research question, the intention of this work is to

review the current scenario of SBM, to highlight application domains and to

find emerging research areas. The academic approach that refers to the

success and familiarity of sustainable business models in all fields of

application is closely related to the ever-increasing use of technology and

recently updated innovation. Some areas of application left in the shadow,

which otherwise we can call tentative growth potential, in our opinion can

ensure higher stability rather than entrepreneurial expectations and

ambitions. It is worth noting the view that rigorous treatment of the

subdominant trends that make up business models can ensure more

focused sustainability than the macro-use of mega-trends. Among the trends

treated in a minimalist way, we emphasize social responsibility, climate

change, circular economy, energy transition, social justice, population

dynamics, resource efficiency. This development will create the ability to

generate new business models with more dynamic and robust perspectives

in effectively establishing entrepreneurial comfort.

• The complex treatment of all the subfields that make up the business models

serves as a carousel of maneuvers, whose action takes business models

out of tension, bringing them to the zone of comfort, stability and

sustainability.

• We note also that literature reviews should more widely address probability

sampling for a number of benefits that enable a more qualified study setting.

In turn, these benefits are articulated through the production of deductive

reasoning when the population is usually diverse, which somehow does not

allow the one-sidedness of the conclusions to be challenged.

• On sustainable business models, in the future we propose to do a case study

on the evolution of the production activity system from eco-design and the

effective implementation of eco-innovative practices.

References

1. Alshehhi, A, Nobanee, H, Khare, N. (2018) The Impact of Sustainability Practices

on Corporate Financial Performance: Literature Trends and Future Research

Potential, Sustainability, 10(2), 494.

2. Antwi, SK., Hamza., K. (2015) Qualitative and quantitative research paradigms in

business research: A philosophical reflection, European journal of business and

management, Vol.7, No.3, pp.217-226.

3. Beltramello, A., Haie-Fayle, L., Pilat, D. (2013) Why new business models matter

for green growth, OECD Green Growth Papers.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

4. Broccardo, L., Zicari, A., Jabeen, F., Bhatti, ZA. (2023) How digitalization supports

a sustainable business model: A literature review, Technological Forecasting and

Social Change, Vol.187.

5. Brundtland, GH. (1985) World commission on environment and development,

Environmental policy and law, Vol. 14, No. 1, pp. 26-30.

6. Hawkins, D. T. (1977) "Unconventional uses of on-line information retrieval

systems: On-line bibliometric studies", Journal of the American Society for

Information Science, 28(1), pp. 13–18.

7. Khan, SAR., Tabish, M., Zhang, Y. (2023) Embracement of industry 4.0 and

sustainable supply chain practices under the shadow of practice-based view theory:

Ensuring environmental sustainability in corporate sector, Journal of Cleaner

Production, Vol.398.

8. Nosratabadi, S., et al. (2019) Sustainable Business Models: A Review,

Sustainability, 11(6), 1663.

9. Parida, V, Sjödin, D, Reim, W. (2019) Reviewing Literature on Digitalization,

Business Model Innovation, and Sustainable Industry: Past Achievements and

Future Promises, Sustainability, 11(2), 391.

10. Pritchard A. (1969) Statistical bibliography or bibliometrics, Journal of

Documentation, Vol. 25, pp. 348-349.

11. Rusch, M., Schöggl, JP., Baumgartner, RJ. (2023) Application of digital

technologies for sustainable product management in a circular economy: A review,

Business Strategy and the Environment, Vol.32, No.3, pp. 1159-1174.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

ISSUES AND CHALLENGES OF INTEGRATING TOURISM INTO

REGIONAL DEVELOPMENT PLANS

Alexandra-Carmen HODISAN1, Alina BADULESCU2, Elena HERTE3

1 Doctoral School of Economics, Faculty of Economics Sciences, University of

Oradea, Oradea, Romania

2,3 Department of Economics and Business, Faculty of Economics Sciences,

University of Oradea, Oradea, Romania

hodisancarmen.rou@gmail.com

abadulescu@uoradea.ro

elena_stiubea@yahoo.com

Abstract: Development issues have always been considered among the most

important challenges in most countries of the world, and especially for poor and

developing countries. Tourism being one of the major social and economic

phenomena of modern times, it is not surprising that, in theory or practice, tourism

is considered as an effective tool for development. Given that development can

have different meanings and priorities, depending on the historical, social economic,

community or personal context, understanding the role of tourism in the world's

economies must also be seen in a broader development perspective, from theory

to practice, revealing both its positive effects and negative implications. However,

analysis of the literature and practice in the field shows a timid, unconvincing and

often uncommitted integration of tourism into development plans at local, regional

and national levels. This could postpone or even ignore the essentials of balanced

and sustainable economic and social development, aggravating inequalities,

perpetuating underdevelopment and negative effects on the environment and the

quality of human life, on the natural and cultural-historical values of humanity. In this

paper we aim to analyse how tourism can and should be integrated into regional

development plans, starting from theoretical considerations on the meaning and

significance of economic growth in the literature, the theories and models of growth,

and the development objectives in different countries of the world, depending on

their level of development or specificities. We have also addressed a regional and

local perspective of growth, bringing into discussion tourism as an engine of

economic growth and the importance of its integration into regional development

plans. We completed our analysis with the main challenges and difficulties of

integrating tourism into development models and plans, highlighting relevant

solutions and experiences.

Keywords: regional development; tourism; developing economies.

JEL Classification: O18; L83; Q56.

1. Introduction

Development can have different meanings, depending on the socio-economic

context, priorities and resources, collective or individual perspectives, and these

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

meanings have changed over time (Wall, 1997), the term development can mean

different things to different people (Todaro, 2000). In the literature, 'the meaning of

development' has been used in many ways and is still a concept in the process of

crystallisation. Many researchers, international bodies and policy makers (Welch,

1984; Sharpley and Telfer, 2002, Polukhina et al., 2024; United Nations, 2024; The

World Bank, 2024) commonly perceive it as a complex and evolving concept.

Development can be approached as structural transformation of the economy,

social change, human development, improvement of governance and the exercise

of democracy, but also sustainability and environmental protection (Vázquez and

Sumner, 2013; Becker, 2023). A comprehensive approach to development,

considering all the above aspects (Polukhina et al., 2024), involving a careful and

controlled structural transformation of governance, economy, society and quality of

human life, seems to be essential if the development process is to be a sustainable

one, useful both for the present and for future generations (Brundtland, 1987).

Perhaps one of the limitations of the term development is that it has too often been

identified with the single concept of economic progress, particularly in many

developing countries. Economic development is simply expressed as a quantitative

increase in Gross Domestic Product (GDP), usually reflected in changes in GDP

per capita. However, as the United Nations Development Programme's Human

Development Reports (2024) indicate, the term also includes social changes such

as access to health care, education, life expectancy and many other aspects of what

is now generically referred to as 'quality of life'. Although reflecting economic growth

through GDP growth (or GDP/capita) is subject to much criticism, there are few

alternatives that are more well-founded and, above all, widely accepted by most

countries in the world.

2. Development objectives in emerging and developing countries

Development has many objectives, but they differ according to country-specific

stages and levels of development. Perhaps more than developed countries,

emerging and developing countries encompass a very diverse group, depending on

structural, geographical, historical, sociocultural, political and economic

characteristics, and this diversity is reflected both in the level and rate of a country's

development (Sharpley and Telfer, 2002) and in the objectives and modalities

chosen to achieve them.

Despite these differences, developing countries path face several relatively similar

problems and shortcomings. Thus, they have a less diversified economic structure,

rely mainly on the exploitation of natural resources and labour, and less on

competitiveness and innovation, and are marked by a chronic lack of financial capital

and institutional structures to stimulate innovation and the harnessing of domestic

resources. These countries are highly dependent on exports of primary products,

and substantial imports of industrial products and technology from developed

industrialized countries. Poor infrastructure, high unemployment and difficulties in

education, health and social protection systems create major problems, especially

when very high population growth rates threaten economic growth.

We could say that these countries (and probably others, better placed to achieve

reasonable standards of economic development) also suffer from difficulties that

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

worsen their situation or undermine their development effort - pollution, poverty,

unemployment, difficult access to education, income inequality, and so on.

Improving them becomes an important objective in development strategies. In other

words, development cannot be limited to economic and competitiveness issues

alone. However, in our research we will try to focus mainly on the economic aspects

or directly related to the economic perspective, considering that, implicitly, some of

the objectives of social and human development, sustainability etc. can be achieved,

at least partially, in parallel with the achievement of economic development

objectives.

3. Regional development models

Regions are entities that range from a small subsection of a country or geographical

area or nation to large international areas. Region concepts can be quite complex,

as regions are often not static but evolve as conditions dictate. While a geographical

region is a part of the earth's surface, it is also an area occupied by people between

whom there are affinities of language, religion, history or way of life (Tosun and

Jenkins, 1996). In practice, the region may be a large part of a country or it may

extend over the territory of several countries, and it forms a framework for diverse

social, cultural, economic and political interactions, influenced, to a greater or lesser

extent, by certain common characteristics, the so-called regional particularities.

According to Smith (2014) or Sharpley and Telfer (2002), region implies three main

types of existence. First, a region can be an area defined by a boundary, usually

political but also geographical, and bearing a name, such as a political unit.

Secondly, a region can also be a homogeneous area that is defined on the basis of

internal similarities. For example, the term 'tourist destination' has often been used

to describe this type of region, which contains existing attractions and adequate

tourist infrastructure to support tourism development. Finally, researchers speak of

the functional region - an area with a high degree of internal interaction, such as, for

example, a collection of local businesses that trade more with each other than with

the rest of the world (Blair, 1995).

Regional development theories have been studied from a variety of different

approaches. Schumpeter (1961), Myrdal (1957), Perroux (in Higgins and Savoie,

1988), Friedmann (1985), Krugman, (1998) and many others have contributed

significantly to the regional economic development literature. Newer research, such

as Blair (1995), Sharpley and Telfer, (2002), Capello and Nijkamp (2011), have

outlined a variety of fundamental theories of regional economic growth:

(1) The Key Stages model through which a city or region passes. As a region grows,

it is able to displace imports and develop its own diverse products for export;

(2) Export-led growth model (or theory) which means that for a local economy to

grow, it must increase its inflow of money and the only way to do this is through a

significant increase in exports;

(3) Supply-led growth models state that growth occurs in a regional economy as a

result of an increase in the supply of available resources or due to more efficient use

of existing resources.

There are other theories and concepts that contribute to understanding regional

development. For example, for regional development to take place, ideas must

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

produce innovations or new combinations of production or productive assets. This

may include the introduction of new goods or a higher quality for an existing good or

service, the opening of a new market, the introduction of a new means of production

or source of supply, or a new organisation of an industry (new or existing).

Some of the 'more classical' regional development theories, such as growth poles

and agglomeration economies, can still be seen as underpinning development

policies. For example, Perroux (1988) outlined the theory of growth poles and

regional development poles as early as the middle of the last century. Growth poles

are identified as locations containing dynamic enterprises that generate spill-over

effects through investment. A growth pole consists of a cluster of expanding

industries that are spatially concentrated and trigger a chain reaction of expansions

in the surrounding area. This model has particular relevance for tourism, where a

single development, such as a resort, can induce cluster investment and indirect

benefits.

However, regions need to move beyond developing traditional agglomeration

economies and develop highly competitive clusters with strong linkages to become

a highly competitive destination (Porter, 1990). Links within and between regions can

strengthen core activities. Without creating development opportunities in the regions,

there could be strong migration to urban areas, exacerbating what are already

serious problems of overcrowding, poverty, inequality, etc.

4. Tourism and economic development

Tourism has become increasingly important in its contribution to the economic

development process and will continue to attract widespread attention (Clancy,

1999). But despite the increase in tourist arrivals and spending, tourism as a

development option has also attracted much debate and controversy (Jenkins,

1982; Jenkins et al., 2014; Badulescu et al., 2021).

The importance of tourism in world economies in recent decades is evident, tourism

being a sector that generates income, employment, contributes to gross domestic

product (GDP), local, regional and national economic development, individual

prosperity, the development and promotion of a tourist destination (Sharma et al.,

2012; Mihalič, 2013; Badulescu et al., 2020) attracting financial capital and

economic initiatives in less developed areas. According to Epifani and Valente

(2023) its dynamism and potential have made it a harbinger of economic prosperity

(Hobson, 1994; Lakshmi and Shaji, 2016).

The fact that tourism is perceived (sometimes exaggeratedly) as a positive tool for

local and regional, economic, social, cultural, community and individual

development (Mason, 2003) has for a long-time overshadowed concern about

environmental protection, social impact, overcrowding of outstanding tourist

destinations. Gradually it has been realised that the careful measurement and

understanding of the positive and negative effects of tourism and destination

management, the integration of tourism into overall local, regional and national

development plans is not only a strategy aiming at economic efficiency, but also a

necessity to protect the environment, the quality of human life and social relations

(Rutty et al., 2015; Zavaleta Chavez Arroyo et al., 2024).

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

The literature on macro-economic growth and development generally ignores

tourism and few researchers on the subject place their studies in the broader context

of development. Many economists approach tourism by measuring its impact, i.e.

an ex-post analysis (of what has happened) and less on an ex-ante analysis of what

should have happened, and the conceptual leap from the (economic) benefits of

tourism to its contribution to development is still unclear (Sharpley and Telfer, 2002).

The contribution of tourism to development is not just an economic process as it is

commonly perceived. While for many developed economies tourism is an alternative

and an option for the intelligent use of resources, a way of balancing territorial

development or of bringing peripheral areas out of isolation, other authors

(Scheyvens, 2002) argue that its main purpose is to consider appropriate ways in

which "tourism can facilitate rather than impeder development, particularly from the

perspective of Third World peoples" (Scheyvens, 2002, p. 3). Tourism for

development is described as improving opportunity and quality of life by

encouraging tourism.

There are several stages that can be identified in understanding the contribution of

tourism to national and regional economic development. Thus, by the early 1970s,

tourism had gained unanimous recognition as a growth industry, with most research

emphasizing, almost exclusively, its positive economic impact on local, regional and

national economies (Mathieson and Wall, 1996). A second phase, the 1970s and

1980s, marks a growing awareness of the economic importance of tourism (Williams

and Shaw, 1988), as an effective means of promoting economic development

through foreign exchange earnings, balance of payments balancing, tax revenues,

job creation, economic growth and diversification, and a variety of other factors

(Sharpley and Telfer, 2002).

The 1980s and 2000s witnessed an increased focus on the relationship between

tourism and development, often conceptualised as multi-sectoral and multi-

dimensional (Chambers, 1997). Tourism is analysed through its impact on many

economic, social, cultural and environmental aspects of development. Tourism may

prove to be most effective as a catalyst for development at the national, regional,

local or community level (Sharpley and Telfer, 2002). Tourism is seen as a means

of enhancing development in destination areas, particularly in literature focusing on

developing countries. Since the early 1980s, research and policy have begun to pay

much more attention to environmental issues in tourism, and the spread of the idea

of sustainable development is an example of this concern.

It should be noted that with all the support for the positive role of tourism in ensuring

growth and development, there are also critical positions pointing to the negative

aspects of tourism, and these studies start to appear as early as the 1970s and are

increasingly vehement in recent decades (Turner and Ash, 1975; Smith, 2015; De

Oliveira, 2003). They argue that tourism has altered traditional culture, degraded

landscapes, encouraged prostitution, increased criminal behaviour and destroyed

the local environment (De Oliveira, 2003). Therefore, the impact of tourism on

society can be divided into positive and negative aspects for tourism theory and

practice.

Certainly, if development is considered in simple terms of economic growth, then

tourism undoubtedly has an important role, but for most people, development is

about more than economic well-being (Turner and Ash, 1975; Badulescu et al.,

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

2015). It is probably the characteristics of social existence (wealth, education,

health, opportunity, freedom, choice, self-confidence), and they are probably found

more in developed countries than in developing countries (Sharpley and Telfer,

2002).

5. Challenges of integrating tourism into regional development plans

Despite a growing trend to develop tourism development strategies at regional and

local level, a large proportion of development plans have a limited and somewhat

traditional perspective, focusing on promoting and supporting tourism in a particular

area, rather than integrating it into wider development policies that harness the

positive impacts of tourism, the benefits of planning, on controlling negative effects

and maximising positive ones (Connell et al., 2009; Khalid et al., 2013).

Some authors (Page and Hall, 1999) argue that local authorities, for all their interest

and enthusiasm for tourism, may not be well equipped to assess the impacts of

tourism and to properly target local policies for tourism development for the benefit

of the community. This would have several explanations - tourism monitoring is not

a major area of concern for local authorities, being overshadowed by more sensitive

and pressing areas for the vast majority of local people and businesses (Richins,

2000) - transport, public safety, services, jobs, social protection and education, often

under severe budgetary constraints.

Even where there are both legal conditions for involvement and financial resources

available, the implementation of tourism planning and the effective translation of

principles into policies and actions is not always high on the agendas of local and

regional authorities.

Another observation is that tourism was seen to be a particular and even isolated

phenomenon and activity, different from one locality or area to another, and local

development plans did not always fit into a comprehensive and satisfactory

approach for the respective regions (Javier and Elazigue, 2011). Leslie and Hughes

(1997) or Connell et al. (2009) consider that even in developed countries, local

authorities have ignored or put tourism on the back burner in their development

plans, precisely because they were not convinced of the importance of tourism as a

major employer of labour and a factor of economic growth. Lack of resources

(financial, expertise, time and partnerships) and poor skills in managing tourist

destinations have prevented local authorities from integrating tourism into their

development planning.

Dredge and Moore (1992) or Beaumont and Dredge (2010) summarise the main

barriers faced by local and regional authorities in integrating tourism into

development planning:

- Lack of time, expertise and financial resources;

- Lack of leadership skills, a clear and articulated vision and a set of specific

objectives;

- Poor use of relationships with NGOs and other tourism stakeholders;

- Fragmentation of the industry and local particularities, which rather creates a

complex and hard to define picture of development opportunities through tourism

for most local decision makers;

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

- Lack of strong relationships and agreements between politicians, public officials,

entrepreneurs and the local community on tourist development’s perspectives;

- Lack of understanding of the legislative environment, on competencies and

responsibilities, monitoring and reporting systems, dissemination of good practices

in the field.

In many countries local authorities do not consider tourism as a priority, limiting

themselves to providing and maintaining public facilities that also have a tourism

function or utility, such as transport, recreational areas, landscaping and cleaning

(Hamzah, 2004; Anuar et al., 2013). Another reason for the reluctance of local and

regional authorities to become actively involved in tourism development planning is

the lack of clarity of the direct revenue capture mechanism, how part of the tourism

revenues can be retained at the disposal of local authorities (Khalid et al., 2013).

6. Conclusions

The theoretical approaches on regional development are numerous and diverse.

Some consider a diversity of factors – endogenous or exogenous, the role of

knowledge and technological spillovers, labour productivity etc., others emphasize

local competitive advantages, and others, more recent, suggest other factors that

stimulate regional development such as the institutional framework, the

entrepreneurial spirit and encouraging innovation at the local level, often supporting

already economically developed regions. Tourism, although ignored in classical and

neoclassical theories of development, has relatively recently made its place in new

approaches to regional development, fuelling the expectations of researchers,

political decision-makers and local communities in economic recovery, increasing

business and employment opportunities, mitigating economic and social

imbalances or sustainable development. However, the realities of the last decades

show a mixed picture, a large part of the achievements in the exploitation of tourist

resources are found in the developed countries and regions, while less developed

areas, marked by structural hindrances, obtain modest benefits from the global

expansion of tourism.

Moreover, tourism planning and its integration into the overall development

strategies of the regions has considerable difficulties and challenges -lack of a clear

vision of the benefits of tourism, of specialized expertise, the limited engagement of

stakeholders, the prioritization of "traditional" activities etc. A careful and qualified

understanding of the advantages, effects and limits of the integration of tourism in

local and regional development plans is essential for capitalizing on the tourism

potential for the benefit of local regions and communities.

References

1. Anuar, A., Ahmad, H., Jusoh, H. and Hussain, M. (2013) "Policy and Tourism

Development Strategy towards Tourist Friendly Destination in Kuala Lumpur", Asian

Social Science, Vol. 9, No. 2, pp. 180-190.

2. Badulescu, A., Badulescu, D., Simut, R. and Dzitac, S. (2020) "Tourism–

economic growth nexus. The case of Romania", Technological and Economic

Development of Economy, Vol. 26, No. 4, pp. 867-884.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

3. Badulescu, D., Badulescu, A. and Bac, D. (2015) "Tourism and poverty in

developing countries. The case of India and Romania", Revista de turism - studii si

cercetari in turism, Vol. 20, pp. 27-33.

4. Badulescu, D., Simut, R., Mester, I., Dzitac, S., Sehleanu, M., Bac, D. P. and

Badulescu, A. (2021) "Do economic growth and environment quality contribute to

tourism development in EU countries? A panel data analysis", Technological and

Economic Developmen of Economy, Vol. 26, No. 6, pp. 1509-1538,

https://doi.org/10.3846/tede.2021.15781.

5. Beaumont, N. and Dredge, D. (2010) "Local tourism governance: A comparison

of three network approaches", Journal of Sustainable Tourism, Vol. 8, No. 1, pp. 7-

28.

6. Becker, P. (2023) Sustainability Science: Managing Risk and Resilience for

Sustainable Development. Amsterdam, The Netherlands: Elsevier.

7. Blair, J. (1995) Local Economic Development: Analysis and Practice. London:

Sage.

8. Brundtland, G. (1987) Report of the World Commission on Environment and

Development: Our Common Future, Geneva: United Nations General Assembly

document A/42/427.

9. Capello, R. and Nijkamp, P. (2011) Regional Growth and Development

Theories Revisited. In: R. Stimson, R. Stough and P. Nijkamp, eds. Endogenous

Regional Development. Cheltenham, U.K.: Edward Elgar Publishing.

10. Chambers, E. (1997) Tourism and culture: an applied perspective. Albany:

State University of New York Press.

11. Clancy, M. (1999) "Tourism and Development. Evidence from Mexico", Annals

of Tourism Research, Vol. 26, No. 1, pp. 1-20, https://doi.org/10.1016/S0160-

7383(98)00046-2.

12. Connell, J., Page, S. and Bentley, T. (2009) "Towards sustainable tourism

planning in New Zealand: Monitoring local government planning under the Resource

Management Act", Tourism Management, Vol. 30, pp. 867–877.

13. De Oliveira, J. (2003) "Governmental responses to tourism development: three

Brazilian case studies", Tourism Management, Vol. 24, pp. 97-110.

14. Dredge, D. and Moore, S., 1992. "A methodology for the integration of tourism

in town planning", Journal of Tourism Studies, Vol. 3, No. 1, pp. 8- 21.

15. Epifani, F. and Valente, D. (2023) "Sustainable Governance of Tourism-Based

Social–Ecological Landscapes, Sustainability, Vol. 15, pp. 15967,

https://doi.org/10.3390/su152215967.

16. Friedmann, J. (1985) "Political and Technical Moments in Development:

Agropolitan Development Revisited", Environment and Planning D: Society and

Space, Vol. 3, No. 2, pp. 155-167, https://doi.org/10.1068/d030155.

17. Hamzah, A. (2004) Policy and planning of the tourism industry in Malaysia.

Bangkok, Thailand 7-8 June, 2004, Proceedings of the 6th Asian Development

Research Forum (ADRF) General Meeting, pp. 1-21.

18. Harrison, D. (2001) Less developed countries and tourism: the overall pattern.

In: D. Harrison, ed. Tourism and the Less Development World: Issues and Case

Studies. Wallingford: CABI International.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

19. Higgins, B. and Savoie, D. (1988) Regional Economic Development. Essays in

Honour of Francois Perroux. 1st Edition ed. London: Routledge.

20. Hobson, J. (1994) "Growth of Tourism in East Asia and the Pacific", Tourism

Management, Vol. 15, pp. 150–156.

21. Javier, A. and Elazigue, D. (2011) Opportunities and Challenges in Tourism

Development Roles of Local Government Units in the Philippines. The 3rd Annual

Conference of the Academic Network of Development Studies in Asia. March 5-7,

2011, Japan Society for the Promotion of Science (JSPS) and Nagoya University.

22. Jenkins, C. (1982) "The effects of scale in tourism projects in developing

countries", Annals of Tourism Research, Vol. 9, pp. 229-249.

23. Jenkins, J., Hall, C. and Mkono, M. (2014) Tourism and Public Policy:

Contemporary Debates and Future Directions. In: A. Lew, C. Hall and A. Williams,

eds. The Wiley Blackwell Companion to Tourism. Hoboken, New Jersey, USA: John

Wiley & Sons, Inc., pp. 542-555.

24. Khalid, S., Saad, N. and Mahadi, R. (2013) Barriers To Integrating Tourism In

The Development Planning: The Perspective Of The Malaysia Local Authorities.

International Conference on Tourism Development, February 2013, Sustainable

Tourism Research Cluster, Universiti Sains Malaysia, Penang, Malaysia.

25. Krugman, P. (1998) "What’s New About the New Economic Geography? "

Oxford Review of Economic Policy, Vol. 14, No. 2, pp. 7–17.

26. Lakshmi, S. and Shaji, T. (2016) "Transformation of Coastal Settlements Due

to Tourism", Procedia Technology, Vol. 24, p. 1668–1680.

27. Leslie, D. and Hughes, G. (1997) "Agenda 21, local authorities and tourism in

the UK", Managing Leisure, Vol. 2, No. 1, pp. 143-154.

28. Mason, P. (2003) Tourism Impacts, Planning and Management. Oxford:

Butterworth-Heinemann.

29. Mathieson, A. and Wall, G. (1996) Tourism: Economic, Physical and Social

Impacts. London UK: Longman Pub Group.

30. Mihalič, T. (2013) Economic impacts of tourism, particularly its potential

contribution to economic development. In: C. Tisdell, ed. Handbook of Tourism

Economics: Analysis, New Applications and Case Studies. Singapore: World

Scientific, p. 645–682.

31. Myrdal, G. (1957) Economic Theory and Underdeveloped Regions. London:

Gerald Duckworth.

32. Page, S. and Hall, C. (1999) New Zealand country report, International Tourism

Report, Vol. 4, pp. 47–76.

33. Polukhina, A., Sheresheva, M., Napolskikh, D. and Lezhnin, V. (2024)

"Regional Tourism Ecosystem as a Tool for Sustainable Development during the

Economic Crisis", Sustainability, Vol. 16, pp. 884,

https://doi.org/10.3390/su16020884.

34. Porter, M (1990) The Competitive Advantage of Nations. New York: Free Press,

1990.

35. Richins, H. (2000) "Influence on local government tourism decision making: A

study of authoritative opinion", The Journal of Tourism Studies, Vol. 11, No. 2, pp.

2-14.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

36. Rutty, M., Gössling, S., Scott, D. and Hall, C. (2015) The global effects and

impacts of tourism: An overview. In: C. Hall, S. Gossling and D. Scott, eds. The

Routledge Handbook of Tourism and Sustainability. London, UK: Routledge, pp. 36–

63.

37. Scheyvens, R. (2002) Tourism for Development: Empowering Communities.

Harlow, Essex: Pearson.

38. Schumpeter, J. (1961) The Theory of Economic Development. Cambridge, MA:

Harvard University Press.

39. Sharma, A., Kukreja, S. and Sharma, A. (2012) "Role of tourism in social and

economic development of society", International Journal of Advanced Research in

Management and Social Sciences, Vol. 1, pp. 10–31.

40. Sharpley, R. and Telfer, D. (2002) Tourism and Development: Concepts and

Issues. Cleverdon: Channel View Publications.

41. Smith, M.(2015) Issues in Cultural Tourism Studies. 3rd Edition ed. London:

Taylor & Francis.

42. Smith, S. (2014) Tourism Analysis. A Handbook. 2nd Edition ed. London:

Routledge.

43. The World Bank (2024) World Development Report 2024. [Online], Available at:

https://www.worldbank.org/en/publication/wdr2024, [Accessed 14 Feb 2024].

44. Todaro, M. (2000) Economic Development. Harlow: Addison-Wesley.

45. Tosun, C. and Jenkins, C. (1996) "Regional planning approaches to tourism

development: the case of Turkey", Tourism Management, Vol. 17, No. 7, pp. 519-

531, https://doi.org/10.1016/S0261-5177(96)00069-6.

46. Turner, L. and Ash, J. (1975) The golden hordes: international tourism and the

pleasure periphery. London: Constable.

47. United Nations Development Programme (2024) Human Developments

Reports. [Online], Available at: https://hdr.undp.org/, [Accessed 13 Feb 2024].

48. United Nations (2024) UN Documentation: Development. [Online], Available at:

https://research.un.org/en/docs/dev, [Accessed 14 Feb 2024].

49. Vázquez, S. and Sumner, A. (2013) "Revisiting the Meaning of Development:

A Multidimensional Taxonomy of Developing Countries", The Journal of

Development Studies, Vol. 49, pp. 1728–1745.

50. Wall, G. (1997) Sustainable tourism - unsustainable development. In: S. Wabab

and J. Pigram, eds. Tourism, Development and Growth: The Challenge of

Sustainability. London and New York: Routledge, pp. 33-49.

51. Welch, R. (1984) "The Meaning of Development: Traditional View and More

Recent Ideas", New Zealand Journal of Geography, Vol. 76, No. 1, pp. 2-4,

https://doi.org/10.1111/j.0028-8292.1984.tb00153.x.

52. Williams, A. and Shaw, G. (1988) Tourism and Economic Development:

Western European Experiences. London: Pinter Publishers Limited.

53. Zavaleta Chavez Arroyo, F.O., Sánchez Pantaleón, A.J., Aldea Roman, C.E.,

Esparza-Huamanchumo, R.M. and Álvarez-García, J. (2024) "Structural Analysis of

the Economic Impact of Tourism and the Perspective of Tourism Providers in Kuélap,

Peru", Land, Vol. 13, pp. 120, https://doi.org/10.3390/land13010120.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

CONCEPTUAL FRAMEWORK AND LEVELS OF

COMPETITIVENESS

Orsolya Tünde NAGY1, Anita KISS2

1Institute of Accounting and Finance, Faculty of Economics and Business, University

of Debrecen, Debrecen, Hungary, nagy.tunde@econ.unideb.hu

2Institute of Accounting and Finance, Faculty of Economics and Business, University

of Debrecen, Debrecen, Hungary, kiss.anita@econ.unideb.hu

Abstract: Rivalry, competition itself, is essentially ancient to humanity, but the

concept's rise to prominence dates back to the 19th century, a natural feature of

capitalist economies, in the underlying marketplace, all essential activities take the

form of competition.

The concept of competitiveness, however, only entered the public consciousness in

the 1980s, in connection with the activities of the Sectoral Competitiveness

Committee set up by Ronald Reagan. In 1979, he published his academic paper

"How Competitive Forces Shape Strategy", in which he identified the five forces that

influence industry competition, providing a framework for conducting industry

analysis and business strategy development. In the years that followed, an

increasing number of academic works on the conceptual definition and empirical

analysis of competitiveness were published. Among the competitiveness

approaches, there are comprehensive analyses that look at the main elements and

aspects of competitiveness in a general sense. In addition to comprehensive

approaches, academic works identifying different levels of competitiveness

predominate, with national and regional competitiveness being the most frequently

highlighted on a territorial basis, and industry and firm competitiveness being the

most frequently highlighted in relation to economic factors. There is no consensus

on the relationship between the different levels.

Keywords: efficiency, competitiveness, business competitiveness

JEL Classification: G12, G15, G32

1. Introduction

The use of the concept of competitiveness is quite common, many researches deal

with the identification of influencing factors belonging to each level of

competitiveness. It can be stated that the appropriate level of competitiveness at the

international, national, regional and company levels is important, not only for the

business sector, but for society as a whole in order to build a sustainable and

prosperous future. Competitiveness research helps to identify the factors that

contribute to productivity growth, GDP expansion and economic stability. Another

value of competitiveness research is that it can help identify the industries with the

greatest job creation potential, thus helping to increase employment and reduce

unemployment. Competitiveness research makes it possible to compare the

performance of countries with those of other countries. This can help identify

strengths and weaknesses and adapt best practices and strategies.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

The purpose of this study is to present the results of theoretical research related to

the conceptual definition of competitiveness and the identification of competitiveness

factors in a unified framework. It presents in detail the economic and management

science approaches that provide a framework for the concept of competitiveness,

the main views and definitions of competitiveness belonging to each approach. The

focus of the study is on corporate competitiveness, so it mainly deals with the

description of the concepts of corporate competitiveness most often used in the

literature, and the presentation of the factors influencing corporate competitiveness.

The summary presentation of the theoretical background of competitiveness lays the

foundation for empirical competitiveness research to be carried out later.

2. Conceptual framework of competitiveness

When examining competitiveness, two things should be borne in mind. Firstly, it is

dynamic, i.e. it is in a constant state of change, and secondly, it is relative, i.e. it can

only be assessed in relation to competitors (Viszt, 2006).

There are several approaches to defining competitiveness. One of these is the

economic interpretation. Its proponents include Smith, Ricardo, Hechscher, Ohlin,

Krugman, among others, who have primarily sought to clarify the conceptual

definition. Competitiveness typically refers to the international relations of the

national economy, the market share of exports and the factors influencing the

development of international trade. From 1990 onwards, the emphasis shifted to an

economic approach to competitiveness. This approach does not derive the definition

of competitiveness from a fundamental economic finding, but rather from observable

economic processes (Nagy, 2016). The econometric approach is associated with

Porter. This approach draws conclusions related to competitiveness based on

observable economic processes and the characteristics of firms' strategies.

Table 1 summarises the competitiveness interpretations of the economics and

management approaches.

Table 1: Economic and managerial approaches to competitiveness

Representative

Focus area, keywords

Adam Smith

An absolute advantage that gives a country an edge over another

country in terms of labour productivity and cost levels in the

production of certain products.

Ricardo

Comparative advantage, where a country has an advantage over

other countries in terms of relative labour productivity and relative

input costs in the production of products in international trade.

Heckscher és

Ohlin

Comparative advantage, a country can gain an advantage in

international trade if it specialises in the production of products for

which factors of production are relatively abundant, given the

relatively different factor intensity of the products (labour intensive

or capital intensive).

Krugman

Comparative advantage, achieved through mutually

advantageous division of labour arrangements between countries.

Porter

Competitive advantage, which occurs over direct competitors and

is a function of factors that are sustainable over time and cannot

be offset by competitors.

Source: own editing based on Somogyi (2009a)

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

Adam Smith defined the concept of absolute advantage as the driving force of

international trade in the late 18th century (Madarász, 2014), which he argued was

the way to make good use of available resources: each country specialises in

producing goods that it can produce at a lower cost, i.e. has an absolute advantage

over the other country. At the beginning of the 19th century, David Ricardo

introduced the concept of comparative advantage, according to which international

trade is caused by differences in labour productivity between countries (Krugman -

Obstfeld, 2003). Ricardo was followed by Heckscher and Ohlin, and later by

Krugman, in the formulation of theories related to comparative advantage.

In my opinion, the problem with the classical comparative approach presented here

is that it only takes into account the supply side of competitiveness and does not

take into account other factors such as demand, the market's operating model,

technological and supplier linkages. Taking into account both supply and demand

factors is essential when assessing the competitiveness of countries.

It is only by looking at the supply side that a false picture can be created that

competitiveness is nothing more than the recognition of the comparative advantage

that factor endowments can bring at world level. Moreover, other factors such as

market imperfections, tariff barriers, transnational corporations and the costs of

international trade should also be taken into account when defining competitiveness.

However, these factors are missing from the economic approach.

Somogyi (2009a) also criticises the economic approach. He highlights demand-

driven product differentiation as a possible basis for competitiveness.

The economics approach focuses on the participation of firms in international

competition and considers the success of firms as the determinant of a country's

success and competitiveness. The aim of this approach is not conceptual

clarification but the identification and application of proposals for improving

competitiveness.

In contrast to comparative advantages, Porter thinks in terms of competitive

advantages, which are displayed against competitors. This advantage depends on

factors that are sustainable over time and cannot be offset by competitors. Porter

argues that the focus should be on productivity in the case of competitiveness,

preferably by industry. This approach has the advantage of taking into account the

fact that countries cannot be competitive in all industries (Somogyi, 2009a). Porter

has interpreted national, industry and firm competitiveness separately, based on cost

advantages and the benefits of product differentiation (Porter, 1990). Porter's model

has been applied by a number of researchers, such as Őz (2002), Jackson (2006),

Zhao et al. (2012), Hoványi (1999), Vanhove (2002).

Porter criticised the theory of comparative advantage for not taking into account

economies of scale, technology, the importance of know-how, product differentiation,

the strengthening of international business networks and strategic alliances,

changes in the factors of production in countries and flows between countries.

However, competitiveness must take into account the competitive strategy of global

companies within the industry and their innovative developments.

Since the mid-1990s, the economic and managerial approaches have co-existed as

a basis for competitiveness analysis (Somogyi, 2009a).

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

I believe that the econometric approach is much more complex, and that in addition

to the understanding of competitiveness at the level of the national economy, it is

appropriate to interpret the concept at both the industry and the firm level.

Building on the economic approach outlined above, there are a number of other

approaches to competitiveness. In the following, the conceptual definitions of

competitiveness of D'Andrea Tyson, OECD, Aiginger and Landesmann, Attila

Chikán, György Szilágyi are presented in detail. The definitions of these authors are

summarised in Table 2.

Table 2: Other approaches to competitiveness

Representative

Focus area, keywords

Laura D’Andrea Tyson

Competitiveness linked to prosperity.

OECD

The concept of competitiveness is linked to the longer-

term maintenance and improvement of living standards

of the population.

Aiginger –

Landesmann

Emphasis on the social and environmental relationship,

income generating capacity, competitiveness over time,

broader definition of competitiveness.

Attila Chikán

Understanding competitiveness at the micro and macro

level, with a focus on profitability at the micro level and

the well-being of citizens at the macro level.

György Szilágyi

Competitiveness is a system of endowments and

capabilities.

Source: own edits based on Somogyi (2009a), Somogyi (2009b)

A new approach was brought by Laura D'Andrea Tyson's (USA, 1992) definition of

sustainable well-being, which citizens can enjoy if their country produces products

and services that are competitive and thus competitive. This approach has been

criticised by Krugman, who argues that in the case of low export volumes,

competitiveness is merely another way of describing productivity, since in such a

case the trade balance is affected by the correct choice of exchange rate (Csáki,

2004). This has been confirmed by research on tourism in the North Great Plain

tourist region (Sőrés et al., 2012). Low exports also have little economic impact, and

the exchange rate has no significant effect on living standards. In the case of low

exports, it is therefore not possible to speak of a comparison of the competitiveness

of a country with other countries, as it is only a comparison of productivity changes

over time, typically along internal factors. At higher levels of external trade, real

competitiveness may emerge, due to the continued devaluation of national

currencies to make products exportable. This will bring a fall in living standards

through more expensive imports, which will offset domestic economic growth. The

definition of competitiveness linked to welfare is therefore not necessarily clear-cut

from this point of view.

Despite the criticisms, this approach - with additions - has been adopted by many.

One of the international organisations is the OECD, which links the concept of

competitiveness to the longer-term maintenance and growth of living standards of

the population, using it as a kind of yardstick to measure a country's ability to produce

for international markets under free market conditions (OECD, 1997). The OECD

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

interprets the concept not only at the country level but also at the regional level,

which differs from the country approach only in that the place of sale is not only the

international but also the domestic market. Going further, the organisation also

extends the concept to the micro level. At this level, it uses the term structural

competitiveness, which refers to the corporate feedback of national competitiveness

through structural factors such as infrastructure, research and development, service

quality and economic policy.

Aiginger - Landesmann (2002) also define the concept of social and environmental

relations, which is increasing in the case of the ability to maintain market share.

Three levels of competitiveness of a given state have been defined:

- The income generating capacity of an open economy (productivity and employment

effect);

- periodic competitiveness analysis (where the country started and how it has

maintained its development);

- a broader definition of competitiveness, including social, health, education,

environmental, etc.

Chikán interprets competitiveness at both micro and macro levels (Somogyi, 2009b).

At the macro, national economic level: "the ability of a national economy to create,

consume and sell goods and services in a globally competitive environment in such

a way that the returns to its own factors of production and, in turn, the welfare of its

citizens, increase in a sustainable manner. This competitiveness is conditional on

the promotion of resource productivity growth through the continued maintenance of

conditions that ensure the efficiency gains of firms and other institutions (Chikán et

al., 2006:8)."

Another approach is linked to György Szilágyi's name, according to which

competitiveness is a set of characteristics that help a given participant to win,

regardless of the nature of the field or the technique used. According to him,

competitiveness is a system of aptitudes and abilities. In the economic environment,

competitiveness can be measured at three levels: firm, regional and national

(Szilágyi, 2008). Competitiveness helps to assess the overall rating of economies

and measure their performance. However, neither its concept, nor its level of

analysis and interpretation has been clearly defined to date.

3. Levels of competitiveness

There are many different interpretations of competitiveness, and no consensus on

the level at which the concept can be understood (Nagy, 2015). Increasingly, a range

of levels of competitiveness is becoming accepted. According to Balkyté -

Tvaronaviciené (2010), six levels of competitiveness can be distinguished:

- product-level competitiveness,

- firm competitiveness,

- sectoral competitiveness,

- regional competitiveness,

- national/national competitiveness,

- international competitiveness (global, external competitiveness).

However, competitiveness is typically measured at national/national and company

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

level. In addition, it is nowadays increasingly accepted to measure competitiveness

at the regional level alongside countries (Lukovics, 2008; Rittagasszer - Lukovics,

2012; Papp, 2012; Tömöri et al., 2022). The separate treatment of regions is also

justified because they contribute to the growth of the national economy as separate

entities (Maleczki, 2002). Enterprise competitiveness is described in more detail

below.

4. Company level

The company-level interpretation of competitiveness is the most widely accepted,

alongside the national level. The most common interpretations of enterprise

competitiveness are summarised in Table 3.

Table 3: Different interpretations of corporate competitiveness

Representative

Focus area, keywords

Krugman

Productivity is the basis of competitiveness at both

national and company level.

Porter

Competitive advantage is the basis of competitiveness

at both national and company level.

Ferenc Kozma

Profitability, exchange rates and factor efficiency are

the basis of competitiveness, and competitiveness can

be interpreted at the product level as well as at the

country and firm level.

Attila Chikán

He interpreted competition in a broader sense,

emphasising profitability and the ability to adapt to the

environment at the firm level.

Gyula Horváth

Successful adaptation, the optimisation of the economic

base, is the decisive factor, while company

competitiveness determines regional and national

competitiveness.

Source: own edits based on Somogyi (2009a), Somonyi (2009b)

Krugman, a proponent of the economic approach, saw competitiveness as the

existence of comparative advantage, which is achieved through a mutually beneficial

division of labour arrangement between countries. However, he also saw

competitiveness as a concept that can be understood at the firm level. In this

approach, competitiveness is a competition between firms, and in his view only firms

with sufficient productivity can compete successfully.

Porter's model incorporates five competition factors at the firm level (new entrants,

threat of substitution, bargaining power of customers, bargaining power of suppliers

and competition between industry rivals). For new entrants, it is the constraints that

new entrants face in a profitable industry that determine the entry barriers. Such

barriers or constraints include size, brand loyalty, specific knowledge, strength of

incumbents, etc. Incumbents also need to pay attention to these factors in order to

maintain their market position. Linked to this is the threat of substitutes, as these

products satisfy the same customer needs and consumers choose between the

options they know in terms of quality, utility and cost. The bargaining power of

suppliers comes to the fore when the buyer is interested in the purchase and knows

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

few alternative suppliers or when switching to another supplier/product would be too

costly. Buyer bargaining power can be considered in several cases. Typically, where

there are few and large buyers on the market or where the buyer is well informed or

where the product purchased is not very important to the buyer. Rivalry between

competing firms is an indication of the intensity of the behaviour of market players.

In order to compete on price and to increase market share, it is essential to know

and analyse the competitor, to compare key competences and to define the future

strategy (Porter, 1990).

Ferenc Kozma interprets the concept of competitiveness at two plus one levels -

product, company and nation. He links it to profitability, which is no less than that

expected for corporate competitiveness. The competitiveness of the company is thus

seen as a factor that adds up to the competitiveness of the products. A company is

competitive if its goods are competitive and generate the expected profit. Market

competitiveness is observed according to an external and an internal signal. The

external sign of competitiveness is the nature of the use-value, i.e. how much

demand there is for the product, how marketable it is. The internal signal is a profit

rate - expected profit - which indicates the lowest level of profit that does not yet

threaten the dynamic level of the firm (Kozma, 1995). From a competitiveness point

of view, firms are considered successful if they are able to perform in the market in

several aspects at the same time (Szentes et al., 2005). This is therefore a capability

that depends on a number of components at the firm level.

Attila Chikán interpreted competition in a broader sense, not only at the national and

company level, but also for products, product groups and sectors. At the micro, firm

level: 'firm competitiveness is the ability of a firm to offer consumers products and

services that they are more willing to pay for on terms that ensure a profit for the firm

than those of its competitors, while adhering to standards of social responsibility.

This competitiveness requires that the company is able to perceive and adapt to

environmental and internal changes by meeting market competition criteria that are

consistently more favourable than those of its competitors (Chikán et al., 2006:9)."

In his definition, Gyula Horváth stresses the importance of gaining a position in the

market competition, of maintaining a stable position, and that different levels of

competition have different characteristics of competitiveness (Horváth, 2001). He

emphasised the interrelationship between corporate, regional and national

competitiveness. He defined competitiveness as the adaptability of firms, i.e. their

ability to successfully adapt best practices to their operating environment, and the

competitiveness of a region or country is fundamentally influenced by the overall

adaptability of the firms operating there. Competitiveness is also affected by the

extent to which a company is able to optimise parts of its economic base, such as

the quality of inputs or infrastructure. I do not fully agree with Gyula Horváth's

interpretation. Corporate competitiveness does indeed have an impact on the

competitiveness of the country or region in which it operates, but the competitive

position of the country or region itself also has a fundamental impact on the

competitiveness of the companies operating in it. In addition, the success of

adaptation, the adoption of best practice from another business environment, is not

in itself, in my opinion, a guarantee of a company's competitiveness; rather than a

follow-on attitude, a proactive, change-averse attitude may be the key to

competitiveness.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

5. Conclusions

After reviewing the presented definitions and approaches to competitiveness, it can

be stated that science has so far failed to provide a clear definition of

competitiveness. Many researchers directly question the definability of the concept

of competitiveness, considering that, this concept cannot be derived directly and

unambiguously from any of the basic paradigms of economics, i.e. it cannot be

defined theoretically. It can be stated that until now the international and national

competitiveness interpretation is the accepted one, but competitiveness is

interpreted more and more broadly. The interpretation of corporate competitiveness

is becoming more and more widespread, and among the influencing factors, "soft"

factors, such as company management, the quality of human resource

management, the customer center, flexibility are increasingly prominent.

However, it is important to talk about the limitations of the present literary research.

The provided theoretical overview includes the concepts of competitiveness related

to each level, the related competitiveness factors, but also other factors of an

empirical corporate competitiveness research, which need to be taken into account,

and appropriate methodological support is required.

References

1. Aiginger, K. – Landesmann, M. (2002): Competitive Economic Performance: the

European View. Wifo Working Papers. No. 179. 87. p.

2. Balkytė, A. – Tvaronavičienė, M. (2010): Perception of competitiveness in the

context of sustainable development: Facets of „sustainable competitiveness”.

Journal of Business Economics and Management. Volume 11. Issue 2. pp. 341-365.

3. Chikán A. – Czakó E. – Kazainé Ónodi A. (2006): Gazdasági versenyképességünk

vállalati nézőpontból – Versenyben a világgal 2004–2006 kutatási program.

Zárótanulmány. Budapesti Corvinus Egyetem, Vállalatgazdaságtan Intézet,

Versenyképesség Kutató Központ, Budapest, 59 p.

4. Csáki Gy. (2004): Versenyképesség és külföldi közvetlen befektetések a mai

magyar világgazdaságban. MTA Világgazdasági Kutatóintézet, Budapest, 67 p.

5. Horváth Gy. (2001): A magyar régiók és települések versenyképessége az

európai gazdasági térben. Tér és Társadalom. 15. évf. 2. sz. pp. 203-231.

6. Hoványi G. (1999): A vállalati versenyképesség makrogazdasági és globális

háttere. Michael Porter két modelljének továbbfejlesztése. Közgazdasági Szemle.

46. évf. 11. sz. pp. 1013-1029.

7. Jackson, J. (2006): Developing regional tourism in China: The potential for

activatingbusiness clusters in a socialist market economy. Tourism Management.

Volume 27. Issue 4. pp.695-706.

8. Kozma F. (1995): Gondolatok a versenyképességről. Ipar– gazdaság. pp. 1–8.

9. Krugman, P. – Obstfeld, M. (2000): Nemzetközi gazdaságtan - Elmélet és

gazdaságpolitika. Panem Könyvkiadó, Budapest. 667 p. ISBN: 963-545-339-6

10. Lukovics, M. (2008): Térségek versenyképességének mérése. JATEPress,

Szeged, 231 p.

11. Madarász A. (2014): A láthatatlan kéz – szemelvények egy metafora

történetéből. Közgazdasági szemle, 61. évf. 7. sz. pp. 801-844.

12. Malecki, E. J. (2002): Hard and Soft Networks for Urban Competitiveness. Urban

Studies, Volume. 39. Issues 5-6. pp. 929-945.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

13. Nagy, T. O. (2016): SME sector, a crucial area corporate competitiveness

measurement. Gradus. Volume 3. Issue 1. pp. 446-453.

14. Nagy, T. O. (2015): Versenyképesség növelés a Lean gondolkodás

segítségével. In: II. Gazdálkodás és Menedzsment Tudományos Konferencia. A

vidék él és élni akar. pp. 431-435. (Szerk. Ferencz, Árpád) Kecskeméti Főiskola,

Kertészeti Főiskolai Kar, Kecskemét, Magyarország

15. OECD (1997): Regional Competitiveness and Skills. OECD Publishing, Párizs,

193 p.

16. Őz, Ö. (2002): Assessing Porter’s framework for national advantage: the case of

Turkey. Journal of Business Research. Volume 55. Issue 6. pp. 509-515.

17. Papp Zs. (2012): A turisztikai desztinációk versenyképessége – hogyan mérjük?

Modellek és módszerek áttekintése. In: Regionális innovációs képesség,

versenyképesség és fenntarthatóság. (Szerk. Bajmócy Z. – Lengyel I. – Málovics

Gy.) JATEPress, Szeged, pp. 225-238. ISBN: 978–963–315–071–9

18. Porter, M. E. (1990): The Competitive Advantage of Nations. Harward Business

Rewiew. March-April pp.71.-91.

19. Rittgasszer I. – Lukovics M. (2012): A versenyképesség és a kreativitás területi

szintű kapcsolatrendszere. pp. 207-224. In: Regionális innovációs képesség,

versenyképesség és fenntarthatóság. (Szerk. Bajmócy Z. – Lengyel I. – Málovics

Gy) JATEPress, Szeged, 393. ISBN: 978-963-315-071-9

20. Somogyi M. (2009a): Versenyképesség a szakirodalomban- A fogalmi

megközelítések összegzése és elemzése (I. rész) Vezetéstudomány. XL. évf. 4. sz.

pp. 54- 64.

21. Somogyi M. (2009b): Versenyképesség a szakirodalomban- A fogalmi

megközelítések összegzése és elemzése (II. rész) Vezetéstudomány. XL. évf. 5. sz.

pp. 41-52.

22. Sőrés A. – Pető K. – Csipkés P. (2012): Examining life quality in Hajdúszoboszló

Tourist Area, with a special focus on health conditions. Agrárinformatika. 3. évf. 1.

sz. pp. 1-9.

23. Szentes T. – Bató M. – Blahó A. – Dorner A. – Kutasi G. – Magas I. – Polyánszky

T. Z. (2005): Fejlődés, versenyképesség, globalizáció II. Akadémiai Kiadó,

Budapest. 292 p. ISBN: 963-05-8316-0

24. Szilágyi Gy. (2008): A versenyképesség mérése a nemzetközi

összehasonlítások módszertanának tükrében. Statisztikai Szemle. 86. évf. 1. sz. pp.

5-21.

25. Tömöri G. – Bács Z. – Felföldi J. – Orbán I. (2022): Impact of Pharmaceutical

R&D Activity on Financial Flexibility and Bargaining Power. Economies. 2022;

10(11), 277. https://doi.org/10.3390/economies10110277

26. Vanhove, N. (2002): Tourism policy — between competitiveness and

sustainability: The case of Bruges. Tourism Review. Volume 57. Issue 3. pp. 34-40.

27. Viszt E. (2006): Versenyképesség – nemzetközi kitekintésben. pp. 7-28. In:

Honnan hová? Tanulmányok a versenyképességről. (Szerk. Viszt E.) MTA

Szociológiai Kutatóintézete, Budapest, 260 p. ISBN 978-963-8302-28-1

28. Zhao, Z. Y. – Zuo, J. – Zillante, G. – Zhao, X. J. (2012): Foreign architectural and

engineering design ﬁrms’ competitiveness and strategies in China: A diamond model

study. Habitat International. Volume 36. Issue 3. pp. 362-370.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

DO INTERNATIONAL REGULATIONS FORCE TRANSPORT

COMPANIES TO REDUCE THEIR CARBON EMISSIONS?

Diana-Claudia PERȚICAȘ1, Roxana GAVRILUȚ1, Olivia-Andreea MARCU2,

Adrian-Gheorghe FLOREA1

1Department of Economics and Business, Faculty of Economic Sciences, University

of Oradea, Oradea, Romania

2Faculty of Medicine and Pharmacy, University of Oradea, Oradea, Romania

diana_perticas@yahoo.com

roxanagavrilut9@gmail.com

oli_baciu@yahoo.com

adiflorea01@gmail.com

Abstract: The pressure on conventional resources, along with the consequences

of global warming, have imposed a reaction by International Economic and

Environmental Organizations regarding their more careful management. Our study

analyzes the current state of the vehicle park in Romania from the point of view of

the degree of aging of the vehicles distributed in the development regions of

Romania, analyzing the situation of almost 10,000 trucks with a mass of more than

7.5 tons. The novelty of this research is not given from the analysis of the types of

vehicles that can be purchased, which is a controversial and long-debated issue in

the specialized literature. The model we developed shows that in most cases the

earnings from salaries and wages, and the inflation rate have a positive influence

on the decision to purchase a new freight vehicle, as against the length of

modernized roads and the GDP. We believe that increased attention should also be

given to increasing the degree of digitization in transport companies, an activity that

can highlight a series of negative consequences of old vehicles.

Keywords: renewable energy, road freight transport, economic efficiency

JEL Classification: R12, R41, Q52, Q42

1. Introduction

The transportation of goods by road heavily relies on traditional fuels, unlike the

increasing adoption of hybrid or electric engines seen in smaller passenger vehicles.

However, the feasibility of such alternatives for freight transport remains unproven

at a significant scale. In light of the pressing need for countries to lessen their

reliance on imported energy, it is crucial to thoroughly examine this situation. Our

paper seeks to identify and assess the key factors involved in reducing the use of

fossil fuels in road freight transport. Due to the multitude of factors affecting global

demand, we will focus our analysis on those deemed most significant.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

2. Literature review

We start from the following idea: a freight transport vehicle, the newer it is, the less

fuel it will consume and, implicitly, it will have lower gas emissions (Duan, S et al.,

2023) However, this paper shall not focus on fleet replacement with alternative fuel

vehicles (Rustom, C. et al., 2020); (Madre, J.L. et al., 2022); (Abdulvahitoglu, A. et

al., 2022), but rather on fleet renewal with more economical internal combustion

engine (Candelaresi, D. et al., 2023) vehicles [(Benvenutti, M.L.M. et al., 2020);

(Rovai, F.F. et al., 2023) since the greener alternative is newer on the Romanian

market, and also less affordable (Contilo, V. et al., 2023); although the authors

presume that those businesses willing to invest in a new and energy efficient fleet

i.e. by buying new vehicles to replace the older ones or to expand the business,

would be more willing to invest in new technology and alternative fuel vehicles in

the future.

The fleet purchase decision making could be influenced by several variables,

whereas the current paper assesses several macroeconomic factors (Zhang, R. et

al., 2022) in order to present a model suitable for the Romanian transport

companies, and to high-light the guidelines to support acquisition of new vehicles,

which approval and implementation is needed at a national level. The influential

factors chosen in this analysis concern the levels of net wages, Gross Domestic

Product (GDP), road infrastructure, and inflation rate (Jawadi, F. et al., 2023). The

dependent variable is analyzed as number of purchased new vehicles, seen as an

investment for the surveyed companies.

Generally, investment are made in order to produce higher rates of earnings,

assessed and presented via financial reports; however, nowadays state of play in

which gas supply faces serious shortages, and the climate change impact is strongly

felt and governments impose fees to polluters or to those sectors with high carbon

footprint , the investment rate should consider also business’ efficiency in terms of

energy and fuel consumption; anyways, the spillover effect is noticeable as lowered

expenses with the energy and fuel supply in the financial records, as well. At least,

investments in green energy and in other ways to save fuel have been proving

effective with significant positive impact on energy consumption, and even more, on

economic growth (Lisowski, R. et al., 2021); (Wan,Y. et al., 2022).

As already mentioned, the first influential factor included in the current analysis is

the net wage. Wages as operating costs for the businesses, definitely impact the

availability of investment funds (Bossler, M. et al., 2020), but they also could

represent a motivation to reduce other costs and therefore, to invest in energy

saving technology in order to reduce the energy costs in the long run. Since the

personnel expenditure in some cases are rigid, because in Romania the

Government imposes a certain minimum wage level, the evolution of this threshold

definitely impacted salary earnings in general, and investment potential. As higher

levels of salary costs could limit the investment levels, there could be also possible

positive outcomes from paying higher wages, such as higher motivation and job

satisfaction, leading to higher levels of employees’ involvement, dedication and

productivity.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

Another important variable for this model is the GDP, this indicator being one of the

most used macroeconomic outputs for this type of analysis (Alali, L. et al., 2022).

The investment levels are largely acknowledged to impact positively the GDP

growth (Anghelache, C. et al., 2012) and more recently the environmental protection

and the efficient energy use (Li, C. et al., 2016); (Lisowski, R. et al., 2021); (Liao, H.

et al., 2022), one of the best proofs are the financial incentives offered for electric

vehicles; purchase, determining a positive change in the GDP’s level (Alali, L. et al.,

2022). However, the authors considered useful to evaluate the influence of the GDP

level on the investment – as fleet purchases in this case – as a bidirectional

relationship between these two is noticed: the investments were essential for the

economic growth, moreover investment levels were increasing at the same time as

the economy was growing, and the GDP was scoring higher levels (Lili,S. et al.,

2022); (Tudose, G. et al., 2012); (Sawng, Y.W. et al., 2021).

The road infrastructure as length of the modern roads is another influence factor

essential in determining fleet renewal, as Sierzchula (Sierzchula,W. et al., 2014)

highlighted, it could represent a bottleneck in the replacement of the old fleet, as

unmodernized road infrastructure cancels the energy efficiency of the newer

vehicles, and so, there is no point of continuing with such investment. As Romanian

road infrastructure will bene-fit from an increased number of highways over the next

years and so, more kilometers of modernized roads will be commissioned, we will

test whether the previous assumption is valid for Romania.

As the investment decision making is strongly impacted by the uncertainty in terms

of inflation, the last influential factor is the inflation rate itself. This economic indicator

is an essential determinant as low inflation rates could enhance investment,

whereas higher rates could stop or decelerate investment and economic growth.

High rates of inflation reduce the efficiency levels of investment (Smith, R.T. et al.,

2005); (Cizkowicz, P. et al., 2013); (Evers, M.- 2020); (Kamasa, K. et al., 2020); as

inflation increases the costs artificially, and so it is even propelled by the selling

prices, which are including the inflated costs, a snowball effect is rolling also over

the demand levels. The transport sector’s im-portance is insufficiently

acknowledged in the economy, even if all other sectors rely on its services; transport

services influence significatively the costs and therefore the prices in the general

economy.

As economic growth is positively associated with environmental quality (Bilal, K. I.

et al., 2020), the current analysis will show how the evolution of the selected factors

deter-mined the fleet renewal in the Romania’s transport sector.

3. Materials and Methods

The purpose of our research is to analyze the willingness of transport companies to

reduce fossil fuel consumption through voluntary measures and to align with

industry regulations. The present paper starts from the previous analyzes in which

the willingness to invest in new, less polluting technologies was debated. The

novelty of this research is not given from the analysis of the types of vehicles that

can be purchased, which is a controversial and long-debated issue in the

specialized literature. What we propose to analyze is: when the transport company

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

decides to purchase a new vehicle, is it a new one or a used one? How old is the

car fleet in Romania dedicated to road freight transport? Are there macroeconomic

indicators that can influence this decision?

In the following section of the paper, the authors deemed necessary to analyze the

impact of a number of factors on the decision to purchase new commercial

vehicles for road freight transport purposes. The factors reviewed are of economic

nature and are presented in Table 2 below:

Source: Authors’ calculations based on data provided by INSSE

Statistical analysis was performed on specific statistical package SPSS24 (Armonk,

NY: IBM). A significance level of 0.05 was considered in all the analysis, otherwise

mentioned. In order to assess the impact of CSN, PIB, LDP and RI on the INN

variable were used linear regression models.

Variables

Acronym

Description

Source

New registrations of new road freight

vehicles

INN

The following categories

of vehicles were

considered here: trucks,

tractors, tugs, trailers and

semi-trailers;

INSSE

Length of public road by road categories

LDP

The following categories

of roads were considered

here: modernized roads;

from modernized roads:

motorways (in km)

INSSE

Net monthly earnings from salaries and

wages by national economy activities

NACE rev. 2.

CSN

The following categories

of net monthly earnings

from salaries and wages

were considered here:

transport by land and

transport by pipeline

(FOM106E)

INSSE

GDP by macro-regions, development

regions and counties, computed based

on NACE rev. 2 - sec-2010

PIBR

In mil. lei

INSSE

Inflation rate

In %

EUROSTAT

Current vehicle fleet

FLE

The following categories

of vehicles were

considered here: vehicles

with a maximum

permissible laden weigh

exceeding 7.5 tons for

freight transport,

machinery, trailers and

semi-trailers.

SC CARGO

TRACK

SOLUTIONS

SRL

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

where:

=ith observation of the dependent variable Y, i=1,2,..

= independent variables, j=1,2,3,4

= ith observation of the jth independent variable

= intercept term

=slope coefficient for each of the independent variable

=error term for the ith observation

Table 3. statistical characteristics of all the variables in the recorded time frame (2002-2021).

Bucuresti

Centru

CSN

PIB

LDP

INN

CSN

PIB

LDP

INN

Mean

2345,85

180472,42

631,07

3,59

17285,87

1731,00

76452,94

4501,33

3,59

3261,80

St Dev

828,52

54872,84

123,90

2,60

9166,07

527,38

20739,89

1211,03

2,60

1230,64

NORD- EST

NORD- VEST

CSN

PIB

LDP

INN

CSN

PIB

LDP

INN

Mean

1541,00

72284,33

5092,71

3,51

2327,43

1450,36

35755,56

3700,60

3,59

3378,47

St Dev

436,69

17905,95

1090,92

2,68

919,36

428,31

8947,59

529,40

2,60

1454,45

SUD- EST

Sud- Muntenia

CSN

PIB

LDP

INN

CSN

PIB

LDP

INN

Mean

1697,79

71848,43

3618,53

3,59

1759,00

1691,43

82975,91

4773,73

3,59

2424,47

St Dev

534,45

17391,44

1093,93

2,60

590,89

474,49

19774,42

630,29

2,60

919,75

SUD- VEST Oltenia

VEST

CSN

PIB

LDP

INN

CSN

PIB

LDP

INN

Mean

1598,86

51670,63

4386,07

3,59

1532,47

1573,14

65235,12

4334,00

3,59

2349,33

St Dev

411,96

13749,26

586,92

2,60

650,90

442,00

16614,61

1202,39

2,60

807,74

Source: Authors’ calculations based on data provided by INSSE

In table 3 are presented the main statistical characteristics of all the variables in the

recorded time frame (2002-2021), mean and standard deviation. The highest CSN

average is in Bucharest (2345, 85) with a mean deviation of 828.52 from the

average. Also, the highest mean PIB was reached in Bucharest, 180472.42 with a

standard deviation of 54872.84. LDP reached the highest mean value in the NORD-

EST region (5092.71) and a standard deviation of 1090.92. Except for the Nord-

East region, in all regions the RI average is 3.59 and standard deviation 2.6. INN

has the highest average in Bucharest (17285.87), with a standard deviation of

9166.07.

All models are consistent at a significance level of 0.05, except for the Bucharest-

Ilfov region where a significance threshold of 0.1 was considered. Most of the

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

variability in the regression models is explained based on the independent variables

used, with a minimum R2 in the Bucharest-Ilfov region of 0.62 (R= 0.788).

Table 4. Results obtained following the application of the regression model.

Region

Regression model

value

Bucharest-Ilfov

INN= 88935- 30.43*CSN+ 0.267*PIB-91.29*LDP+ 1964.57*RI

0.788

0.072

Center

INN= 1752.57+ 6.485*CSN- 0.04*PIB- 1.435*LDP- 98.64*RI

0,94

0.001

INN= -506.13+ 2.33*CSN- 0.003*PIB- 0.104*LDP+ 6.69*RI

0,95

0.001

INN= 01880.52+ 9.37*CSN- 0.241*PIB- 0.189*LDP+ 31.898*RI

0,99

0.005

INN= 806.24+ 2.586*CSN- 0.038*PIB- 0.236*LDP+ 37.04*RI

0,87

0.013

South Muntenia

INN= 3239.2+ 4.61*CSN- 0.034*PIB- 1.192*LDP- 24.385*RI

0,908

0.004

SW Oltenia

INN= -306.11+ 3.73*CSN- 0.405*PIB -0.506*LDP+ 109.716*RI

0.936

0.001

West

INN= -616.045+ 3.5*CSN- 0.084*PIB+ 0.702*LDP+ 548.54*RI

0.932

0.001

Source: Table developed by authors based on the results obtained following the

application of the regression model

To make it easier to understand and read the results obtained following the

application of the regression model concerning the eight regions studied, we

summarized the information in Table 5 below.

Table 5. Reading of the regression model applied

Region

Salary and

wage earnings

Inflation rate

Modernised

roads

GDP

Bucharest-Ilfov

Negative

Positive

Negative

Positive

Center

Positive

Negative

Positive

Negative

Positive

Negative

Positive

Negative

South-Muntenia

Positive

Negative

SW-Oltenia

Positive

Negative

West

Positive

Negative

Source: Table developed by the authors based on the regression model put

forward

The model we developed shows that in most cases the earnings from salaries and

wages, and the inflation rate have a positive influence on the decision to purchase a

new freight vehicle, as against the length of modernized roads and the GDP. The

explanations for this phenomenon are diverse and primarily relies on the fact that

most carriers want to perform transport services for foreign companies, due to the

advantageous offers of the latter. It results that the evolution of the GDP or even the

length of modernized roads does not have an impact on this decision to purchase

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

new vehicles. On the other hand, the low level of technology available to the

transport companies entails that, in the analysis of the estimated profit, not all factors

are considered as mostly only the financial ones are taken into account in the

analysis, namely: the driver’s salary, the cost with the purchase of fuel and road

taxes. It is demonstrated the fact that Romania is ranked last by the EC in terms of

technology incorporation by the companies according to the DESI criteria.

In this way, only financial factors have a positive impact on the decision to purchase

a new vehicle and implicitly to make any changes aimed at reducing the consumption

of fossil fuels. We also recall that in the case of drivers who perform intra- Community

transport services, the salary consists of a basic and a daily pay, which, according

to the new regulations approved last year, only part of the daily pay is un-taxed, the

difference being subjected to taxation in the same way as the basic salary.

The GDP on the decision to purchase a new freight vehicle can be found only in the

Bucharest-Ilfov development region, a phenomenon that can be deduced either by

analyzing the Chart no. 1 or by the regression model presented herein.

5. Conclusion

Our research focused on finding those economic factors that influence the decision

to purchase new freight transport vehicles, depending on the buyer’s region. We

conducted this study by applying the regression model concerning the eight-

development region of Romania and analyzing the presence of a correlation

between the decision to purchase a new freight transport vehicle and the indicators

submitted to analysis. The factors we found as essential to analyze were the

following ones: earnings from salaries and wages, inflation rate, length of

modernized roads, and GDP. Thus, the model we developed shows us that in most

cases the salary and the inflation rate play a positive role on the decision to

purchase a new freight transportation vehicle for the transport of goods, while the

length of modernized roads and the GDP rate are at the opposite pole. Regarding

the decision to invest in new technologies, about which not all aspects are known,

many of them are only at the analysis stage, the infrastructure is not adequate in

many countries, including Romania, is difficult. The work managed to highlight the

degree of aging of the cars that carry out road freight transport, from all eight regions

of Romania. Of course, the factors that can influence the decision to change the car

for a new one (which uses fossil fuels or an alternative one) is influenced by a series

of factors, which are both economic, but also social and psychological, which were

not analyzed in this paper, but which we believe are particularly important. We

believe that increased attention should also be given to increasing the degree of

digitization in transport companies, an activity that can highlight a series of negative

consequences of old vehicles.

References

1. Alali, L.; Niesten, E.; Gagliardi, D. The impact of UK financial incentives on the

adoption of electric fleets: The moderation effect of GDP change.

Transportation Research Part A, 2022, Vol. 161, pp. 200-220.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

2. Sierzchula,W. Factors influencing fleet manager adoption of electric vehicles.

Transportation Research Part D: Transport and Environment, 2014, Vol. 31, pp.

126-134.

3. Rustom, C.; Tate, J.; Shepherd, S. A novel method for comparing passenger

car fleet and identifying high-chance gross emitting vehicles using kerbside

remote sensing data. Dcience of The Total Environment, 2020, Vol. 750, pp. 9.

4. Madre, J.L.; Bussiere, Y.; Gimal, R. A life Expectancy-Period-Cohod model to

project private car fleet and trafiic applied to France. Transportation Research

Procedian, 2022, Vol. 48, p. 8.

5. Abdulvahitoglu, A.; Kilic, M. A new aprropach for selecting the most suitable

oilseed for biodisel production; the integrated AHP-TOPSIS method. Ain Shams

Engineerig Journal, 2022, Vol. 13, pp. 1-3.

6. Candelaresi, D.; Valente, A.; Iribarren, D.; Dufour, J.; Spazzafumo, G. Novel

short-term national strategies to promote the use of renewable hydrogen in road

transport: A life cycle assessment of passenger car fleets partially fuelled with

hydrogen. Science of Total Environment, 2023, Vol. 859, p. 160325.

7. Benvenutti, M.L.M.; Campos, L.M.; Vazquez, B.D.; Heyes, L.C. Electric versus

ethanol? A fleet-based well-to-wheel system dynamic model for passenger

vehicles. Transportation Research Part D; Transport and Environment, 2023,

Vol. 115, p. 103604.

8. Rovai, F.F.; Cal, S.S.R.; Mady, K.C.E. Regional energy policies for electrifying

car fleets. Energy, 2023, Vol. 278 p. 127910.

9. Contilo, V.; Amaya, J., Serrano, I., Cantillo, G.V., Galvan, J. Influencing factors

of trucking companies willingness to shift to alternatives fuel vehicles, Transport

Research Part E: Logistics and Transport Review, 2022, Vol. 163 p. 102753.

10. Zhang, R. The role of the transport sector in energy transition and climate

change mitigation: insight from an integrated assessment model. Transport and

Energy Research, 2022 pp. 15-30.

11. Jawadi, F.; Cheffou, I.A.; Bu, R. Revising the linkages between oil prices and

macroeconomy for the euro area: Does energy inflation still matter? Energy

Economics, 2023, p. 107058

12. Lisowski, R.; Wozniak, M.; Jastrzebski, P.; Karafolas, S.; Matejun, M.

Determinants of Investments in Energy Sector in Poland. Energies, 2021, Vol.

14, p. 4526.

13. Wan,Y.; Sheng, N. Clarifying the relationship among green investment, clean

energy consumption, carbon emissions, and economic growth: a provincial

panel analysis of China. Environ Sci Pollut Res, 2022, Vol. 29, pp. 9038-9052.

14. Bossler, M.; Gurtzgen, N.; Lochner, B.; Betzl, U.; Feist, L. The German Minim

Wage: Effects on Productivity, Profitability, and Investments. Jahrbucher fur

Nationalokonomie und Statistik, 2020, Vol. 240, no. 2-3, pp. 321-350.

15. Anghelache, C.; Manole, A. Correlation between GDP direct investments – an

econometric approach. Metalurgia Interna-tional, 2012, Vol. XVII, no. 8, pp. 96-

98.

16. Li, C.; Luo, L.; Xue, Y.; Liu, X.; Zhang, M.; Zhang, W. Study on the Influence of

Environmental Protection Investment on GDP in China. Proceedings of the

2016 International Conference on Education, Management and Computer

Science, Advances in Intelligent Systems Research, 2016, pp. 229-232

17. Liao, H.; Peng, Y.; Wang, F-Z., Zhang, T. Understanding energy use growth:

The role of investment – GDP ratio. Structural change and Economic Dynamic,

2022, Vol. 63, pp. 15-24.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

18. Lili,S.; Yunhong, L. The influence of Investment in Fixed Assets on GDP in

Liaoning Province of China. Proceedings of the 9th International Conference on

Innovation & Management, Edindhoven, The Nederlands, 14-16. November

2012, Editors: Geert Duysters, Arnolodo Do Hoyos, Ken Kaminishi, Publisher:

Wuhan University of Technology Press, Wuhan, China, 2022, pp. 648-654.

19. Tudose, G.; Țoțan, L.Ș.; Cristache, S.E. Statistical modeling of the variables for

investment activity in Romania. Proceedings of the 6th International

Management Conference ”Approaches in organisational management”,

Bucharest, Romania, 15-16 November 2012 pp. 767-772.

20. Sawng, Y.W.; Kim, P.R.; Park, J. ICT investment and GDP growth: Causality

analysis for the case of Korea. Telecommuni-cations Policy, 2021, Vol. 45,

Issue 7, pp. 451-465.

21. Smith, R.T.; Egteren, H. Inflation, investment and economic performance: The

role of internal financing. European Economic Review, 2005, Vol. 49, Issue 5,

pp. 1283-1303.

22. Cizkowicz, P.; Rzonca, A.. Does inflation harm corporate investment? Empirical

evidence from OECD countries. Economics: The Open-Access, Open-

Assessment E-Journal, 2013, Vol. 7, p. 6.

23. Evers, M.; Niemann, S.; Schiffbauer, M. Inflation, liquidiy and innovation.

European Economic Review, 2020, Vol. 128, pp. 232-233.

24. Kamasa, K.; Kpodo, E.E.; Bonuedi, I., Forson, P. Does inflation uncertainty hurt

domestic investment? Empirical evidence from Ghana. Cogent Economics &

Finance, 2022, Vol. 10, pp. 78-81.

25. Bilal, K. I.; Tan, D.; Azam, W.; Hassan, S.T. Alternate energy sources and

environmental quality: The impact of inflation dynamics. Gondwana Research,

2022, Vol. 106, pp. 51-63.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

ANALYSIS OF THE IMPACT OF THE COVID19 PANDEMIC ON

ONLINE FOOD SHOPPING

M. Csipkés1 – Dorina FODOR1

1University of Debrecen (Faculty of Economics, Institute of Statistics and

Methodology), Debrecen, Hungary

csipkes.margit@econ.unideb.hu

Abstract: In our research, we analyzed the shopping habits that have developed due

to the Covid-19 pandemic. The reason for this is that, as a result of the pandemic,

consumers were forced to adapt to the new conditions, which caused a significant

increase in online grocery shopping. In our research, we tried to examine the impact

of Covid on the online food market. Consumer behavior is a complex pattern of

behavior that is made up of many elements, from individual needs to environmental

factors and available information. Within this, the purchase decision process plays a

prominent role, which we analyzed in our research using a five-step model. The

model spans from recognition to post-purchase evaluation and is key to

understanding consumer satisfaction. In the early stages of the epidemic, panic

buying occurred, which is why we considered it important to examine the topic. We

examine the evolution of the number of online food orders, the popularity of online

food shopping, and the issue of sustainability and environmental awareness in the

field of online shopping. In order to review the topic, we conducted a questionnaire

survey, as we found that the Covid-19 epidemic brought about fundamental changes

in consumer behavior and online food shopping. In our research, we performed a

detailed analysis based on the answers of the respondents. The obtained results

can highlight the importance of sustainability and trust in digital transactions, as well

as the evolution of modern consumer behavior and shopping preferences.

Keywords: online food, shopping, questionnaire

JEL classification: F18, L81

1. INTRODUCTION

The purpose of our research is to examine the impact of the COVID-19 pandemic

on online shopping habits and the evolution of consumption behavior. The virus

spread quickly, so many restrictions and measures had to be put in place to slow it

down, which had a significant impact on people's daily lives. These measures also

had an impact on shopping habits and consumption behavior. Due to the restrictions

and closures, most of the society restrained their spending and tried to save. There

were those who supported local small and medium-sized businesses in order to

manage the crisis and tried to buy from them. Due to the rise of digital technology,

the number of online purchases has increased significantly. Responding quickly and

effectively to these changes is extremely important in the life of various businesses.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

In our research, we conducted a questionnaire survey among the Hungarian

population. In the questionnaire, we asked the respondents about the effects of the

epidemic and their shopping habits. In the questionnaire, we sought the answer to

how much the rate of online shopping increased during the epidemic, and which

products or services were the most popular in this process. Based on the answers,

we also considered it important to examine what factors encouraged consumers to

shop online during the epidemic?

2. Literature review

Household expenditures are basically influenced by the products and services they

consider necessary. These needs represent a diversity that can change in space

and time. Individuals have different needs and these are constantly changing from

time to time (Table 1). When planning our total expenses, we must primarily take into

account the costs related to everyday life and subsistence. These are called current

consumption expenditures (Merényi et al., 2012).

Table 1: Distribution of household expenses per capita, %

Source: KSH, 2019

Customers go through a complex decision-making process during the purchase

process, only one part of which is visible while the other part is unknown. The

external influencing factors and the results of purchase decisions are the visible

elements, while the decision process itself is unknown, since it takes place in the

"black box" of the customer. As Figure 1 illustrates, external (characteristics of the

environment outside the customer) and internal (characteristics of the customer)

stimuli affect the customer and elicit a response. The task of marketing specialists is

to try to understand the contents of the "black box" by studying the inputs (stimulus

streams) and consumer responses (Horváth, 2012). Food consumption is influenced

by many things. Among these, the largest share is represented by previous

Categories 2010 2019

Home maintenance and household energy 25,20% 18,50%

Food and non-alcoholic beverages 22,80% 24,40%

Transport 11% 11,90%

Culture, entertainment 7,80% 7,30%

Other products and services 6,40% 8,10%

Communication 6% 7%

Healthcare 4,90% 5,10%

Hospitality, accommodation service 3,90% 4,80%

Home furnishing, housekeeping 3,90% 4,30%

Clothing and footwear 3,90% 4,20%

Alcoholic beverages, tobacco products 3,20% 3,50%

Education 0,90% 0,90%

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

experiences and composition (Soós, 2022). After that comes price, sustainability,

and brand and other factors.

2.1.The impact of COVID-19 on online shopping habits

Online commerce is growing four times as fast as traditional commerce. This is due

to the wider availability of suppliers, rich product selection, high quality goods,

competitive prices, alternative fulfillment and delivery options, various payment

options, simpler websites and increasing user trust (NIELSEN, 2018a).

The appearance of the coronavirus in mid-March 2020 drastically transformed the

daily life of both Europe and Hungary. Most of the people were surprised by the

spread of the epidemic in Hungary, and almost at the same time the government

announced the #maradjotthon campaign. As a result, everyone started panic-buying

the most important food, cleaning products, and tools for working and studying at

home. In the meantime, the economy has almost completely stopped, but the

situation has caused online trade to change gears. The rapid growth of the online

sector is due to the significant increase in popularity of many product categories. As

a result of the epidemic situation, certain categories, such as food, cleaning products,

vitamins, and medicines, enjoyed increased demand in the online space. In other

categories, demand has increased due to digital education and remote work, such

as technical items, laptops and computer accessories (Gkid, 2020).

During research conducted in March 2020, it was revealed what people did not buy

during the examined period (Figure 1). fruit (15.4%), fresh meat (17.3%) or

handicrafts (50.7%). In addition, it was noted that in the case of clothing and footwear

products (64.2%), online sales were the breaking point for manufacturing

companies. During the quarantine, those who had the necessary resources and

needs preferred online shopping instead of traditional stores. It seems that this trend

will continue and they will continue to rely on online shopping in the future (Sikos et

al., 2021).

Figure 1: Range of products not purchased during the COVID-19 epidemic, March

2020

Source: Sikos et al., 2021

In the following, we present the change in the number of online purchases, as during

the period during the Covid-19 epidemic, it was observed in many parts of the world

that, as a result of the epidemic measures, closures and social distancing, people

increasingly prefer online platforms when shopping. This process brought about

significant changes in the field of online retailing, where the number of online

purchases increased greatly.

64,20%

50,70%

48,80%

17,30%

15,40%

0% 10% 20% 30% 40% 50% 60% 70%

Clothing and footwear products

Handmade products

Unwrapped bread

Fresh meats

Vegetables and fruits

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

2.2. The growth of online grocery shopping during the epidemic

The impact of COVID-19 on online shopping habits brought about major changes as

people had to quickly adapt to the new circumstances. Online commerce exploded

at the start of the pandemic as people panicked to buy essentials. In the online

space, this was particularly evident in increased demand for food, cleaning products

and other essential items. At the same time, the rise of digital education and remote

work brought with it an increase in demand for technical goods and laptops.

The prominence of online shopping has fundamentally changed people's shopping

habits, especially during quarantine. Those who had the right resources and

opportunities chose online platforms instead of traditional stores. This trend is likely

to continue in the future as people get used to the convenience and security of online

shopping.

It showed a particularly significant increase during the epidemic, partly due to the

restrictions on going out and the shortage of goods in stores. Online stores have had

to adapt quickly to increased demand and supply chain disruptions. Although some

goods were missing in the first period, the shortages quickly eased and a wide range

of products became available to customers on online platforms.

As a result of the coronavirus, the demand for online food orders has increased

significantly, which was partly a consequence of the restrictions on going out and the

shortage of goods in stores.

In the second half of March 2020, time windows filled up quickly, customer baskets

grew, stores became overloaded, and online service providers were operating at full

capacity. Department stores have had to deal with suddenly and without transition

increased demands and confused supply chains.

Most shoppers thought it was safer to "stock" key products, but neither brick-and-

mortar stores nor online stores were prepared for this, so some essential products

were quickly sold off the shelves. In particular, the turnover of paper goods (e.g. toilet

paper), durable foods (flour, sugar, pasta), baking supplies (e.g. yeast) and

household cleaning products increased.

The product shortages of the first 1-2 weeks soon returned to normal, and a month

later, at Easter, practically all products were available. Yeast was the only product

that was missing for a longer period of time and was only available again after the

holiday (Gkid, 2020).

If we examine the growth stages of online food shopping, the change in e-commerce

can be divided into 5 stages. The first phase (end of February-beginning of March

2020) is the so-called "calm before the storm", this is the period of careful

preparation. Here, the virus still has no detectable effect on everyday life, but the

more cautious customers are already preparing. Orders in online stores are slightly

higher than average, but the change is not outstanding. During this period, the

volume of traffic increased by 11% in the second month of the year (KSH, 2020).

The second phase (starting on March 10, 2020) is called panic buying, during this

period the sudden preparation for the quarantine period takes place. Delivery chains

and retailers are caught off guard by the outbreak, resulting in some products running

out of stock early.

The third stage (from March 28, 2020 to April 14, 2020) is the quarantine, which

came into effect on March 28, 2020. At that time, new fresh food delivery companies

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

start up, partly due to the government decree. Online orders are soaring as the

number of orders approaches the Christmas season.

The fourth stage is the period of habituation itself. Easter 2020 will be spent

differently than ever before. Overall, the food supply chain is normalized here, as it

is now possible to order 1-2 days in advance, stock shortages (flour, yeast) will

disappear.

Then the final stage is the fifth, which will be the new "normal" (from May 4, 2020).

Things are starting to return to their old ways, as everything is now available in both

traditional and online stores, and food can even be ordered for the same day.

2.3. The popularity of online grocery shopping platforms

The popularity of online grocery shopping platforms has grown significantly in recent

years. People are increasingly choosing to shop online for food products. There are

many reasons for this popularity and it gives an answer to why the world of ordering

has become so popular for consumers.

One very important aspect that has contributed to its popularity is that shopping

platforms offer convenience and time savings to consumers. They allow customers

to easily order food from home or anywhere, even with the help of their mobile phone.

This results in significant time savings as they do not have to visit stores or

department stores in person. In addition, online platforms are available 24 hours a

day, so consumers can shop at any time of the day to suit their own schedule and

preferences.

They have a wide range of products, which is an advantage for consumers. They

can find many different foods in one place, so they can easily find the products they

need. In addition, online platforms allow you to compare prices between different

sellers. This helps customers find better value products and even save money when

shopping.

They provide flexible shipping and logistics services that provide consumers with

convenience and a convenient shopping experience. These services allow the food

to be delivered to customers' homes, or even provide the opportunity to pick it up at

special customer pick-up points. Such delivery and logistics services are usually fast

and reliable, so customers can get their food on time and as planned.

When shopping, it is important for consumers to have trust and quality guarantees.

These platforms offer secure payment options and quality guarantees that reassure

customers about the quality and freshness of their food. Many online food shopping

platforms have implemented, for example, a money-back guarantee or the option to

return the product if the customer is not satisfied with it. This trust factor and the

presence of quality guarantees increase consumer confidence in online shopping

platforms and encourage them to buy food online.

As I mentioned above, when shopping for food online, consumers often rely on online

ratings and reviews from other customers. These ratings and reviews can help

customers make informed decisions about the quality of a particular product or seller.

In this section, it has been proven how popular online grocery shopping has become

during this period, and in the following I would like to see how prices have changed

as a downside of this.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

2.4. The evolution of food prices in webshops over the past 5 years

There is a close correlation between the popularity of online food shopping platforms

and the consequences of the prices and workload of food in webshops during the

COVID-19 epidemic. As a result of the growing demand, online grocery shopping

platforms have become extremely popular as people have been able to conveniently

and safely purchase the products, they need from home. However, this increased

demand led to an increase in prices in online webshops, while the workload resulted

in increased delivery times and limited product stock. This phenomenon has

encouraged shoppers to look for alternative solutions, such as buying from local

stores or directly from producers, while leaving open the possibility for local farmers

and producers to sell online. At the same time, it has become crucial for webshops

to increase the flexibility of prices and strengthen the stability of supply chains in

order to efficiently and satisfactorily serve the needs and expectations of consumers

in the future.

Comparing the prices of some basic household products ordered from different

webshops, we found that Tesco sold its products online the most expensively,

followed by Spar and Kifli. It is especially noticeable that in the case of dry pasta and

paper goods, even if you choose the cheapest option, there is a significant increase

in price, they can be purchased at double or even higher prices.

2.5. The evolution of product choice and demand during the epidemic

In 2019, the turnover of domestic retail amounted to about 2,500 billion forints, which

means an average of 12 billion forints per week (Az én pénezem, 2023). Compared

to the same period of the previous year, there have been significant changes in food

consumption. (9th week of 2019 and 9th week of 2020). The turnover of sugar, for

example, jumped by 178 percent, which means outstanding growth (Figure 2). The

sale of flour also showed a significant increase, as it increased by 168 percent. They

also bought large quantities of dry pasta, rice and cooking oil.

Figure 2: Changes in the turnover of the given food products in Hungary compared

to the same period of the previous year

Source: Az én pénzem, 2023

Significant changes can also be observed among durable foods. The consumption

of various canned goods increased to an exceptionally large extent, more than twice.

This suggests that consumers preferred preserved foods and bought more of them.

In addition, sales of bagged soups, shelf-stable milk and frozen vegetables also

178%

168%

159%

139%

126%

0% 50% 100% 150% 200%

Sugar

Flour

Dry pasta

Rice

Cooking oil

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

increased significantly, indicating that consumers paid more attention to foods with

a long shelf life and easy preparation.

Figure 3: Changes in value turnover of categories in Hungary based on data

scanned by Nielsen of international retail chains

Source: Az én pénzem, 2023

As a result of the COVID-19 epidemic, consumers paid more attention to their home

supplies and spent more time at home. Perishable foods such as canned goods,

bagged soups, and frozen foods allowed them to be stored longer and easily

prepared in the home environment. This trend had a significant impact on the food

market, and companies had to adapt to consumer needs and changing preferences

(My money, 2023). In the recent period, health-conscious behavior has increased

remarkably in developed societies (Figure 3). "Disinfectants and hand sanitizers

have temporarily run out of domestic retail outlets; of the former, 91 percent more

were sold in the last week of February than in the same period of the previous year.

The turnover of cleaning and hygiene products increased by 142 percent, vitamins

by 108 percent, and hand sanitizers by 73 percent" (Az én pénezem, 2020). It can

therefore be seen that foods with health-protective effects are gaining more and

more space on the market. A higher proportion of health-conscious consumers

choose well-informed and independently, and as a result, more and more foods that

have a positive effect on health come to the fore.

In Hungary, in terms of health effects, particular attention is paid to the prevention of

cardiovascular problems, the influence of bacterial flora, body weight regulation, and

energy and vitamin supplementation (Papp-Bata, et al., 2021). In the case of

medicines and vitamins, consumers experienced slight supply difficulties, but

pharmacies adapted flexibly with the help of manufacturers and wholesalers. When

the medicines were issued, a monthly or three-month supply was provided, so there

were only occasional problems in this area (Sikos et al., 2021).

During the transition period, disinfectants and hand sanitizers ran out of the shelves

of domestic retail units; 91 percent more disinfectants were sold in the last week of

February than in the same period of the previous year. The turnover of cleaning and

hygiene products increased by 142 percent, while that of vitamins rose by 108

percent and that of hand sanitizers by 73 percent (Az én pénezem, 2020).

2. MATERIAL AND METHOD

To achieve the research goal, we chose a quantitative survey, which is a

questionnaire survey based on completely random sampling. Based on the size of

the research sample, the research cannot be considered representative of the entire

91%106%

108%

114% 142%

0% 20% 40% 60% 80% 100% 120%140% 160%

Disinfectants

Soap

Vitamins

Cleaning products

Cleaning and hygiene products

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

population, so it is not suitable for drawing general conclusions regarding the entire

population, but it can help to learn about the behavior and habits of consumers in

the period before, during and after the pandemic.

For the purpose of quantitative research, I chose to use an online questionnaire as

the survey method, since it is possible to reach the broad target group quickly and

efficiently.

The main purpose of the questionnaire is to reveal how the respondents' online

shopping behavior changed after the coronavirus epidemic compared to the previous

period.

The questionnaire consisted of a total of 26 questions, of which 20 were subject-

specific questions, while 6 were demographic questions. In terms of answer options,

we used single- and multiple-choice closed questions, closed questions to be

decided, and questions to be decided. There were also semi-open and closed

questions in the questionnaire.

The group of respondents was 348 people, the place of inquiry was the Google

Forms platform. We shared the questionnaire in various professional Facebook

groups. Descriptive statistical indicators and cross-tab analysis were used for

analysis.

3. RESULTS

The gender distribution of the respondents showed that 64% were women and 36%

were men. The age group of the interviewees was mixed. The majority of the

respondents live in urban areas, as the proportion of people living in cities is 48.56%.

This high number can partly be explained by the higher population density in urban

areas and the better infrastructure there, which offers people more opportunities in

all areas of life. The residents of the capital and the county seat spent almost the

same amount of time. Villages also represent a significant proportion, which shows

that the respondents live in diverse places of residence.

The respondents are in different marital statuses: the largest proportion, 38.79%, are

single, while 30% are married. The proportion of cohabitants is also significant, which

is 25%. The proportion of widows and divorcees is relatively low, only 2% and 4%

respectively. These data reflect the diversity of modern society and the spread of

increasingly diverse family forms.

Figure 4: Distribution of respondents by educational level

Source: Calculation based on own questionnaire survey, 2024

Figure 4 shows a diverse picture of the distribution according to educational level:

41% of the respondents have a high school diploma, while 39% have a higher

41,46% 38,79% 14,76% 4,99%

0% 20% 40% 60% 80% 100%

Graduation College, university

Vocational training, vocational school Max. 8th grade

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

100

education, college/university diploma. There is also a significant proportion of those

who have graduated from vocational training or vocational schools, whose proportion

is 15%. Those with a lower education, who completed a maximum of 8 general

education, represent a relatively smaller proportion, only 5%.

Figure 5 shows that the largest number of respondents indicated shopping at the

supermarket. It can also be observed that the 46-55 age group chose 3 purchase

options in equal proportion. These were the hypermarket, supermarket and

convenience store. 30% of the 35-45 and over 65 age groups chose the local small

grocery store. The reason for this will be examined later, as it is possible that this

category was chosen due to the characteristics of the different places of residence.

Internet ordering, i.e. home delivery, was mostly chosen by those under the age of

18. The reason for this may be that the younger generation considered it simpler and

faster, and it is also possible that it was the most suitable purchasing method for

college students.

Figure 5: Changes in the shopping locations of each age group as a result of the

epidemic

Source: Calculation based on own questionnaire survey, 2024

Further calculations revealed that, regardless of marital status, the majority of

respondents shopped two or three times a week before the outbreak of the epidemic

(Table 2). In contrast, after the epidemic, this was reduced to once a week (Table 3).

The root cause of this could be various restrictions, such as the curfew or the

maximum number of certain products that can be purchased, as well as caution

arising from health reasons.

13,61% 21,31% 26,67% 26,80%

60,00%

44,90% 40,98% 19,60% 26,80%

10,00%

17,69% 18,03%

16,40%

24,10%

30,00%

8,84% 4,92% 29,92% 16,90%

0,00%

9,52% 9,84% 1,79%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

under 25 years between 26-35

years between 36-45

years between 46-55

years Over 56 years

of age

Hypermarket Supermarket Convenience store

Small local grocery store Organic shop, drug store Online order

Other

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

101

Table 2: Comparison of marital status with the frequency of weekly personal

shopping in the period before the Covid epidemic

Source: Calculation based on own questionnaire survey, 2024

Table 3: Comparison of marital status with the frequency of weekly personal

shopping in the period after the Covid epidemic

Source:

Calculation based on own questionnaire survey, 2024

After reviewing the frequency of purchases, we examined how much they used the

opportunity to shop online as a result of the epidemic.

Figure 6: Food shopping habits during the epidemic

Source: Calculation based on own questionnaire survey, 2024

The majority of those filling in bought less in person in stores during the epidemic

(Figure 6), however, this soon resulted in more than the "I bought the same as

before" category. The reason for this may be that that age group was afraid of this

kind of shopping habit.

We examined to what extent those who bought food online for the first time during

the covid period will maintain this shopping method after the epidemic. 71% of the

respondents would not order food online after the epidemic, because people with

lower education had other problems and for this reason, they are less inclined to do

so or online shopping is more expensive for them. In the case of the correlation

Marital status

Never in person,

only online (%)

(%)

2-3x

(%)

4-5x

(%)

More than

5x (%)

1. Married 3,85 17,3 47,12 19,23 12,5

2. Unique 5,19 23,7 46,67 14,81 9,63

3. In a partnership 7,95 15,9 55,68 13,64 6,82

4. Divorced 42,86 14,3 35,71 0 7,14

5. Widow 14,29 28,6 42,86 0 14,29

Marital status

Never in person,

only online (%)

(%)

2-3x

(%)

4-5x

(%)

More than

5x (%)

1. Married 6,73 46,15 35,58 9,62 1,92

2. Unique 28,57 14,29 28,57 14,29 14,29

3. In a partnership 10,37 48,15 34,07 3,70 3,70

4. Divorced 9,09 53,41 30,68 4,55 2,27

5. Widow 21,43 28,57 28,57 14,29 7,14

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

102

analysis, we found that those with a higher education did not experience any

problems during online payment, while those with a maximum of 8 general education

or vocational education had a problem. The reason for this could be the less frequent

use of the technology or its more difficult handling. In the case of lower earners, the

lower use of online ordering can also be explained by the fact that people belonging

to this group may regularly have daily living problems, which also contributes to the

fact that they order less online, and that they do not order even after the end of the

epidemic, since different fees charged by this purchase method, such as the amount

paid for delivery.

4.Conclusions

The Covid-19 pandemic has resulted in fundamental changes in people's daily lives,

including the transformation of shopping habits and food procurement methods. As

a result of the epidemic, consumers were forced to adapt to the new conditions,

which caused a significant increase in the area of online grocery shopping. By

carrying out the research, our goal was to gain more insight into consumer behavior

in relation to food purchases. We wanted to get an answer to how much online

grocery shopping has changed from before the covid pandemic to today. We used

an online questionnaire for the research. With the help of the questionnaire, we

assessed online shopping habits and assessed the places of change in the topic of

online shopping. In our research, we found that the frequency of personal food

purchases decreased due to the Covid-19 epidemic during the epidemic. In the

period before the epidemic, those filling in went shopping in person 2-3 times a week

on average, until the outbreak of the epidemic, this number dropped to 1 time a week.

This may be primarily due to health precautions, followed by measures related to

going out and shopping that were introduced later. We also received an answer that

people stockpiled more food as a result of the panic caused by the Covid pandemic,

which has now returned to the pre-Covid state. As a result of Covid, booming online

grocery shopping has emerged, which is slowly returning to the form of personal

shopping these days. This is because buying live food is safer than buying online.

The popularity of online grocery shopping during the Covid era was due to several

factors: convenience, time savings, a wide selection of products and flexible delivery

options. Of course, we also discovered disadvantages in the research, according to

which the prices of household products showed significant differences when bought

online. Tesco was the most expensive, followed by Spar and Kifli.

In the initial stages of the epidemic, consumers carefully prepared for the period of

the epidemic, followed by panic buying. During the quarantine, the number of online

food orders increased rapidly, then stabilized during the year. In the course of our

research, we also examined payment methods for online food purchases during the

epidemic. The use of bank cards dominated (e.g. Visa or MasterCard), as consumers

preferred fast and convenient transactions. PayPal was the second most popular

payment method. The decrease in the use of cash during the epidemic is due to the

effort to minimize personal contact. The majority of respondents felt that the security

of online payment was guaranteed, although technological security measures and

further strengthening of trust are needed for full acceptance.

The Covid-19 epidemic brought about fundamental changes in consumer behavior

and online food shopping. During my research, I analyzed these trends and related

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
103 
 
 
demographic,  psychological,  economic  and  technological  factors  in  detail.  The 
results highlight the importance of sustainability and trust in digital transactions, as 
well as the evolution of modern consumer behavior and shopping preferences. 
 
References 
1. Az én pénzem (2023) https://www.azenpenzem.hu/ download: 01.04.2024 
2.  Gkid  (2020)  A  koronavírus  nyertese?!  –  lendületben  az  e-kereskedelem, 
download: 06.05.2023. https://gkid.hu/2020/05/07/koronavirus/ 
3.  KSH  (2019)  A  háztartások  életszínvonala. 
https://www.ksh.hu/docs/hun/xftp/idoszaki/hazteletszinv/2020/index.html download: 
14.02.2024 
4.  KSH  (2020)  Központi  Statisztikai  Hivatal.  (2020).  Helyzetkép  a 
kiskereskedelemről. 
https://www.ksh.hu/docs/hun/xftp/idoszaki/jelkisker/2020/index.html  download: 
12.12.2023 
5. Merényi Zs. and Megyesi G. (2012) Pénziránytű: Milyen bevételei lehetnek egy 
háztartásnak? In: Merényi Zsuzsanna–Megyesi Gabriella: Az én pénzem. Pénzügyi 
oktatási program – Második, átdolgozott kiadás. http://penziranytu.hu/archivalt-pop-
torzsanyag/konyv/azen-penzem/iii-akik-gazdalkodnak-%E2%80%93-szereplok-
gazdasagban/haztartasok/8-bevetelek-kiadasok/2-milyen-bevetelei-lehetnek-eg 
download: 15.03.2024 
6. Nielsen (2017). Az élelmiszerek online forgalma öt éven belül túlszárnyalhatja a 
hagyományos  bolti  kereskedelmet. 
https://www.nielsen.com/hu/hu/insights/article/2017/the-online-turnover-offood-can-
surpass-traditional-store-saleswithin-five-years/ download: 05.02.2024 
7. Papp-Bata, Á., Csiki, Z., & Szakály, Z. (2021) Az egészségvédő élelmiszerekkel 
kapcsolatos  fogyasztói  magatartás:  A  hiteles  tájékoztatás  szerepe.  Debreceni 
Egyetem,  Gazdaságtudományi  Kar,  Marketing  és  Kereskedelem  Intézet. 
https://ebib.lib.unideb.hu/ebib/CorvinaWeb?action=cclfind&resultview=longlong&ccl
text=idno+BIBFORM077402 download: 10.11.2023 
8. Sikos, T. T., Papp, V., & Kovács, A. (2021) A hazai vásárlói magatartás változása 
a  COVID-19-járvány  első  hullámában.  Budapest:  Központi  Statisztikai  Hivatal. 
https://www.ksh.hu/statszemle_archive/terstat/2021/2021_02/ts610201.pdf?fbclid=I
wAR26N_etneBwUb3CalHJeN5S-sGIy2q94ZXJhbs3HMzzfzrTA9D1okR_aHQ 
download: 27.11.2023 
9. Soós, G.  (2020)  Élelmiszer-fogyasztói szokások  változása  a COVID-19 vírus 
megjelenéséhez  kapcsolódóan  Magyarországon.  Marketing  &  Menedzsment, 
2020(3). 
  
  
   

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

104

SECTION FINANCE, BANKING, ACCOUNTING AND AUDIT

GOVERNANCE MATTERS: INSIGHTS INTO EUROPEAN UNION

FUND ABSORPTION ACROSS SUCCESSIVE MULTIANNUAL

FINANCIAL FRAMEWORKS

Diana BĂLAN1, Ana-Cristina NICOLESCU2

1West University of Timisoara, Doctoral School of Economics and Business

Administration, Timisoara, Romania

2West University of Timisoara, Romania, Faculty of Economics and Business

Administration, Department of Finance, Business Information Systems and

Modelling

diana.balan01@e-uvt.ro

cristina.nicolescu@e-uvt.ro

Abstract: This paper explores the relationship between governance quality and

European Structural and Investment Funds (ESI Funds) efficiency at the European

Union (EU) level. This research proposes a new approach by classifying Member

States into distinct groups based on governance indicators and ESI Funds

absorption. The study uses a comprehensive dataset for 27 EU Member States from

2007 to 2022. This time frame covers the last two multiannual financial frameworks

(MFFs): 2007-2013 and 2014-2020. The main results reveal a clear connection

between the quality of governance and the degree of ESI Funds absorption for each

period. Countries with high regulatory standards, the rule of law, and government

efficiency demonstrate remarkable results in absorbing ESI Funds. These findings

highlight the essential role of aligning national regulations with those of the EU. On

the other hand, low levels of these governance indicators generate deficiencies in

managing these financial resources. The comparative analysis of the two MFFs

reveals notable progress in streamlining European funds' regulations and absorption

process. The reduction in the number of clusters from six in 2007-2013 to four in

2014-2020 signifies a more streamlined and efficient distribution and absorption of

ESI Funds. Countries with robust governance systems, such as Denmark, Finland,

and Sweden, demonstrate tangible advantages in managing these funds. On the

other hand, countries with weaker governance, including Romania and Bulgaria,

demonstrate a low absorption rate. Intermediate clusters with a moderate level of all

indicators – such as Italy and Spain – oscillate between the groups in which they are

located, which reveals both periods of progress and stagnation. The insights gained

from this research underline the importance of fostering governance reforms tailored

to the specific needs of Member States to ensure fair and balanced utilisation of

European financial resources. This study provides valuable information for

policymakers, highlighting the need to adapt monitoring mechanisms to identify the

individual challenges and opportunities of each Member State. The analysis

promotes equitable development in the European Community by strengthening

administrative capacities and reducing inequalities.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

105

Keywords: EU Funds; absorption rate; governance indicators; cluster analysis

JEL Classification: O52; G28; C38

1. Introduction

As one of the largest chapters in the European Union (EU) budget, the European

Structural and Investment Funds (ESI Funds) finance thousands of infrastructures,

health, sustainable development, agriculture, energy, and telecommunications

projects. Thus, the absorption of ESI Funds is an essential pillar of the social,

economic, and territorial cohesion of the Member States. The absorption rate of

these funds reflects the efficiency with which the beneficiary states use these

financial resources in a predefined timeframe. Although the allocation of ESI funds

is differentiated according to the specificity of each region, the efficiency of their use,

quantified by absorption rates, varies considerably from country to country,

influenced by the administrative capacity and quality of governance. This

discrepancy has attracted both the attention of policymakers and researchers in

recent years, as attempts are being made to understand the interconnections

between government quality and ESI funds' efficiency.

The paper aims to investigate the interdependence between the quality of

governance and the efficiency of ESI funds, focusing on how governance indicators

influence the absorption rate during the two MFFs, 2007–2013 and 2014–2020, to

provide a comprehensive understanding of this phenomenon across EU Member

States.

The novelty of this research lies in cluster analysis, an empirical method that allows

for the systematic classification of countries according to governance and absorption

indicators. Thus, cluster analysis provides an innovative perspective in the current

academic discourse. The paper also contributes significantly to the specialised

literature by offering practical recommendations for policymakers to improve

governance mechanisms that maximise the socio-economic impact of ESI funds.

The results revealed that the efficiency of ESI Funds is higher in an environment with

solid policies that ensure accountability, political stability, regulatory quality, rule of

law, government effectiveness, and anti-corruption. These main findings contribute

to the policy discourse on the efficiency of the ESI Funds at the level of the European

community and provide practical guidance on improving the governance

characteristics that support the effective use of funds. By identifying the

interconnections between the various aspects of governance and the use of ESI

funds, policymakers can make decisions tailored to each context, thus promoting fair

development in all EU member states.

The work is structured as follows: the introduction is followed by the section

dedicated to literature reviews of relevant papers in this field. The second section

illustrates the methodological framework of cluster analysis. The third section

presents the results of the empirical study and provides a detailed interpretation of

them. The last section concludes the results, underlining at the same time the

essential role of the quality of governance in the process of absorbing the ESI funds.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

106

2. Literature review

The ESI Funds were created progressively, starting in 1958, in response to internal

problems and needs, enlargement, globalisation, and changes in political

preferences (Piattoni and Polverari, 2019). Although the initial objective of these

funds was to eliminate regional disparities, over the years, they have been

associated with economic growth, competitiveness, employment, sustainable

development, subsidiarity, good governance, and bringing the European Union

closer to its citizens (Wallace et al., 2020).

Considering the evolution and the redistributive nature of the ESI Funds, the debates

of the European communities have gradually expanded around the impact, added

value, and administrative costs, as well as on the institutional features necessary to

make the management of these funds more efficient (Piattoni and Polverari, 2019).

In this context, at the end of the 1980s, as a result of the discrepancies between the

available resources and the real budgetary needs of the European communities, the

concept of a multiannual financial perspective emerged to strengthen fiscal discipline

and have the budget execution through better planning (Delasnerie, 2023). Starting

with 2009, the Lisbon Treaty transformed the multiannual financial framework (MFF),

also called the long-term budget, from an interinstitutional agreement into a Council

regulation, which must be adopted unanimously and is subject to the approval of the

European Parliament under a particular legislative procedure (Delasnerie, 2023).

This treaty strengthened monitoring and accountability mechanisms, recognising

that weak governance in the state can compromise the political objectives of

cohesion. Therefore, implementing the funds in the 2007-2013 financial framework

was more efficient in the states with solid institutions and high administrative

capacity, such as the Western and Northern countries. In contrast, Central and

Eastern European (CEE) countries have recorded limited results. Factors

contributing to this phenomenon include governance inefficiency and systemic

problems (Bachtler and McMaster, 2008), the migration of skilled professionals from

less developed regions to Western economies (Gravili et al., 2019), the global

financial crisis, which led to severe economic disruptions and high social costs,

significantly affecting vulnerable regions (Pirtea and Nicolescu, 2013), insufficient

finances in research and development activity (Avram et al. 2019), as well as the

redistributive nature of fiscal policies at that time (Dima et al. 2009).

To make the following multiannual financial framework more efficient, the European

Commission has introduced stricter regulations for the beneficiaries of ESI funds,

including the rule of law conditionality (Blauberger and Van Hüllen, 2021). These

changes responded to the institutional deficiencies identified in the previous financial

framework. Thus, the member countries were forced to adopt reforms to improve

administrative capacities. Dotti et al. (2024) demonstrated that this approach

positively influenced several regions, which also led to simplifying the

implementation process of projects financed by ESI funds. However, governance

challenges persisted, especially in less developed areas, thus limiting the overall

impact of ESI funds. This disparity underscores some sustained efforts to create

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

107

governance frameworks, particularly in countries where structural weaknesses

remain entrenched.

Overall, this literature review underlines the importance of governance quality for

streamlining ESI fund absorption processes. As the EU continues to refine its funding

mechanisms for member states, the focus must remain on fostering institutional

resilience, innovation in public administration, and collaborative governance.

3. Data and methodology

This study provides a cluster analysis based on a dataset of 27 EU Member States

from 2007 to 2022, with an annual frequency. The variables were standardised to

ensure compatibility between the analysed countries. Key indicators include ESI

funds absorption rates and six governance metrics: Government Effectiveness,

Voice and Accountability, Political Stability, Regulatory Quality, Rule of Law, and

Control of Corruption. These metrics were chosen for their relevance to governance

quality and potential impact on fund absorption rates.

Model-based clustering is applied, which partitions the dataset into distinct clusters

by analysing the data distribution to maximise within-cluster homogeneity. The

number of clusters was determined using the elbow method, ensuring an optimal

balance between variance explanation and interpretability.

Table 1 summarises the description and sources of the indicators included in the

dataset.

Table 1: Description of dataset indicators

Variable

Description

Source

Absorption rate

(ABR)

The proportion of the total funds allocated by the

European Commission to a Member State during

an MFF that has been utilised, as evidenced by

payments made.

European

Commission

(2015; 2016)

Government

Effectiveness (GE)

A measure of the perceived quality of public

services, the competence and independence of

the civil service, the quality of policy design and

implementation, and the credibility of the

government's commitments to these policies.

World Bank

(2023)

Voice and

Accountability (VA)

An assessment of the extent to which citizens can

participate in governmental selection processes

alongside indicators of freedom of expression,

freedom of association, and the presence of

independent media.

World Bank

(2023)

Political Stability and

Absence of

Violence/Terrorism

(PS)

A measure of the perceived likelihood of political

unrest, instability, or violence, including acts of

terrorism.

World Bank

(2023)

Regulatory Quality

(RQ)

An evaluation of the government's capacity to

develop and enforce policies and regulations

conducive to private sector growth and

development.

World Bank

(2023)

Rule of Law (RL)

An indicator of the extent to which individuals and

organisations have confidence in and comply with

World Bank

(2023)

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

108

societal rules, including the effectiveness of

contract enforcement, the protection of property

rights, the performance of the police and judiciary,

and the prevalence of crime and violence.

Control of Corruption

(CC)

A measure of the degree to which public power is

used for personal gain, encompassing minor and

significant forms of corruption, as well as state

capture by private interests and elites.

World Bank

(2023)

Source: Authors' processing

Table 2 presents a detailed summary of the descriptive statistics for all indicators

included in the econometric models, covering the 2007-2013 MFF and a two-year

extension period spanning 2007 to 2015. This inclusion of the 2014 and 2015 years

corresponds with the application of the n+2 rule (European Union, 2006), which

allows funds committed during the 2007-2013 MFF to be spent up to two years

beyond the official end of the period.

Table 2: Descriptive statistics of the variables used for the 2007-2015 period

Variables

Valid

Mean

Std. Deviation

Minimum

Maximum

ABR

243

3.024×10-16

0.983

-4.043

4.667

243

-5.763×10-17

0.983

-2.314

1.887

243

-1.786×10-17

0.983

-2.142

1.554

243

4.809×10-17

0.983

-2.694

1.954

243

1.013×10-16

0.983

-2.119

1.756

243

-8.543×10-17

0.983

-2.074

1.481

243

2.448×10-17

0.983

-1.63

1.74

Source: Authors' processing using JASP software, https://jasp-stats.org/

Similarly, Table 3 illustrates the descriptive statistics for the variables included in the

econometric models for the 2014-2020 MFF and a two-year extension period,

respectively, 2021 and 2022.

Table 3: Descriptive statistics of the variables used for the 2015-2022 period

Variables

Valid

Mean

Std. Deviation

Minimum

Maximum

ABR

216

-4.754×10-17

0.984

-2.139

3.032

216

4.969×10-19

0.984

-2.225

1.785

216

2.515×10-17

0.984

-2.222

1.511

216

-8.510×10-17

0.984

-2.502

2.285

216

1.391×10-16

0.984

-1.952

1.815

216

3.807×10-17

0.984

-2.000

1.691

216

3.050×10-17

0.984

-1.662

1.868

Source: Authors' processing using JASP software, https://jasp-stats.org/

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

109

4. Results

The results of this analysis highlight a significant relationship between the quality of

governance, quantified by the World Bank's Worldwide Governance Indicators, and

the efficiency of European funds, quantified by the absorption rate.

The analysis of the 2007-2013 MFF (Table 4) illustrates six distinct clusters. High

scores in both governance and performance of the use of European funds

characterise the first cluster. Intermediate clusters – 2 and 3 indicate a medium

institutional quality but also a medium absorption rate. Contrary to these, Cluster No.

4 has the lowest values for all indicators, reflecting a low quality of regulations and

significant deficiencies in the management and implementation of non-reimbursable

funds. Clusters 5 and 6 illustrate below-average values for all indicators, indicating

the existence of various challenges at both governmental and European funds

management levels.

Table 4: Cluster Means for 2007-2013 MFF

ABR

PS.

Cluster 1

0.122

1.275

1.297

0.994

1.391

1.253

1.417

Cluster 2

0.23

-0.168

-0.065

0.145

-0.378

-0.107

-0.016

Cluster 3

0.103

0.692

0.651

0.153

0.455

0.78

0.659

Cluster 4

-0.569

-1.568

-1.874

-0.96

-1.472

-1.71

-1.389

Cluster 5

-0.06

-0.582

-0.45

0.02

-0.383

-0.565

-0.777

Cluster 6

0.079

-0.295

-0.416

-1.703

-0.48

-0.375

-0.478

Source: Authors' processing using JASP software, https://jasp-stats.org/

This analysis categorises EU member states into distinct clusters based on

governance quality and EU fund absorption performance during the 2007–2013 MFF

(Table 5), highlighting significant disparities in institutional capacity and resource

utilisation. Cluster 1, comprising the Nordic countries such as Denmark, Finland, and

Sweden, demonstrates exceptional governance quality and high absorption rates.

Cluster 2, comprising Cyprus, Poland, and Slovenia, reflects moderate governance

deficiencies but relatively efficient fund absorption. Cluster 3, comprising Austria,

Belgium, and France, shows balanced governance performance and consistent use

of funds. In contrast, Cluster 4 (Bulgaria, Romania, and Croatia) has the lowest

governance scores and weak fund absorption, highlighting substantial institutional

challenges affecting the efficient use of these financial resources. Cluster 5,

comprising Greece, Italy, and Poland, shows moderate levels of governance with

mixed results in fund absorption. Finally, Cluster 6 (Cyprus, Greece, and Latvia)

demonstrates significant governance deficiencies and low absorption capacity.

These groups highlight substantial discrepancies between the levels of governance

quality and fund absorption at the Member State level, underlining the need for

interventions adapted to this context.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

110

Table 5: Country Classification by Cluster for the 2007–2013 MFF

Cluster

Countries

Cluster 1

Denmark, Finland, Germany (2014), Ireland (2007-2009, 2014, 2015),

Luxembourg, Netherlands, Sweden

Cluster 2

Cyprus (2012-2015), Estonia (2007,2009,2010-2015), Malta (2015), Poland

(2011-2013,2015), Portugal, Slovenia

Cluster 3

Austria, Belgium, France, Germany (2007-2013,2015), Ireland (2010-

2013), Malta (2007-2008), Spain (2011-2012)

Cluster 4

Bulgaria, Croatia, Hungary (2014-2015), Romania

Cluster 5

Czech Republic, Greece (2007-2008), Hungary (2007-2013), Italy, Latvia

(2007-2014), Lithuania, Malta (2009-2014), Poland (2007-2010,2014),

Slovak Republic

Cluster 6

Cyprus (2007-2011), Estonia (2008), Greece (2009-2015), Latvia (2015),

Spain (2007-2010,2013-2015)

Source: Authors' processing using JASP software, https://jasp-stats.org/

Unlike the 2007-2013 MFF period, which illustrated six distinct clusters, the 2014-

2020 MFF analysis consolidates them into four groups (Table 6), indicating

increasing convergence both at the governmental level and in the efficiency of using

ESI funds between some Member States. As in the 2007-2013 case, Cluster 1

presents the most relevant governance scores with a high absorption rate, indicating

exemplary ESI fund management. In contrast, cluster 4 (the last), reflecting low

scores on the governance indicators, highlights persistent institutional deficiencies

that negatively influence the efficient absorption of EU funds.

Table 6: Cluster Means for 2014-2020 MFF

ABR

PS.

Cluster 1

0.215

1.07

1.081

0.709

1.233

1.093

1.251

Cluster 2

0.027

-0.078

-0.162

0.19

-0.256

-0.146

-0.406

Cluster 3

0.112

0.612

0.588

-0.488

0.348

0.768

0.58

Cluster 4

-0.286

-1.229

-1.147

-0.735

-1.121

-1.24

-1.073

Source: Authors' processing using JASP software, https://jasp-stats.org/

In terms of clustering (Table 7), cluster 1 includes countries such as Denmark,

Finland, and Sweden, which consistently demonstrate strong governance and high

efficiency of fund absorption. Cluster 2 comprises countries like Cyprus, Latvia, and

the Czech Republic, with moderate governance and reasonable absorption rates.

Cyprus's repeated but variable inclusion (2015, 2017–2021) suggests both periods

of improvement and governance stagnation within this group. In contrast, Cluster 4

includes Bulgaria, Romania, and Greece, which have the weakest governance and

fund absorption performances. The inclusion in the same group of Poland (2016–

2022) and the Slovak Republic (2015–2020, 2022) indicates governance challenges

in these years, despite occasional progress.

These results highlight significant variability across EU Member States – from

countries that maintain robust performance across countries to countries that

perform, then stagnate. This underscores the necessity for a tailored approach for

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

111

each region category, aiming to address specific challenges while leveraging unique

opportunities.

Table 7: Country Classification by Cluster for the 2014-2020 MFF

Cluster

Countries

Cluster 1

Belgium (2021), Denmark, Estonia, Finland, Germany, Ireland,

Luxembourg, Netherlands, Sweden

Cluster 2

Cyprus (2015, 2017-2021), Czech Republic, Latvia, Lithuania, Malta,

Poland (2015), Portugal, Slovak Republic (2021), Slovenia, Spain

Cluster 3

Austria, Belgium (2015- 2020, 2022), France

Cluster 4

Bulgaria, Croatia, Cyprus (2016, 2022), Greece, Hungary, Italy, Poland

(2016-2022), Romania, Slovak Republic (2015-2020, 2022)

Source: Authors' processing using JASP software, https://jasp-stats.org/

The comparative analysis of the mapping of the member states for the two analysed

periods – 2007-2013 and 2014-2020 (Table 8) illustrates distinct profiles of the

governance and absorption of the ESI funds. In both MFFs, countries with robust

governance systems, such as Denmark, Finland, and Germany, find themselves in

the same cluster, characterised by the highest scores in the governance and

absorption of EU funds. In contrast, countries with government deficiencies, such as

Bulgaria and Romania, remain in the same cluster from one period to another. These

results highlight the crucial link between the quality of governance and the efficiency

of using ESI funds. Intermediate clusters covering countries such as Spain and the

Czech Republic vary from period to period, suggesting some improvements in the

capacity to use the ESI Funds and governance systems.

Table 8: EU Member States by Governance and Fund Absorption Clusters for 2007-

2013 MFF and 2014-2020 MFF

Cluster

Countries (MFF 2007-2013)

Countries (MFF 2014-2020)

Cluster 1

Denmark, Finland, Germany

(2014), Ireland (2007-2009, 2014,

2015), Luxembourg, Netherlands,

Sweden

Denmark, Finland, Germany,

Ireland, Luxembourg, Netherlands,

Sweden, Belgium (2021), Estonia

Cluster 2

Cyprus (2012-2015), Estonia

(2007, 2009, 2010-2015), Malta

(2015), Poland (2011-2013, 2015),

Portugal, Slovenia

Cyprus (2015, 2017-2021), Malta,

Poland (2015), Portugal, Slovenia,

Czech Republic, Latvia, Lithuania,

Slovak Republic (2021), Spain

Cluster 3

Austria, Belgium, France,

Germany (2007-2013,2015),

Ireland (2010-2013), Malta (2007-

2008), Spain (2011-2012)

Austria, Belgium (2015-2020,

2022), France

Cluster 4

Bulgaria, Croatia, Hungary (2014-

2015), Romania

Bulgaria, Croatia, Hungary,

Romania, Cyprus (2016, 2022),

Greece, Italy, Poland (2016-2022),

Slovak Republic (2015-2020,

2022)

Cluster 5

Czech Republic, Greece (2007-

2008), Hungary (2007-2013), Italy,

Latvia (2007-2014), Lithuania,

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

112

Malta (2009-2014), Poland (2007-

2010,2014), Slovak Republic

Cluster 6

Cyprus (2007-2011), Estonia

(2008), Greece (2009-2015),

Latvia (2015), Spain (2007-

2010,2013-2015)

Source: Authors' processing

5. Conclusions

In conclusion, this study illustrates a pronounced relationship between the quality of

governance and the efficiency of ESI funds, quantified by the absorption rate, in

correlation with other relevant previous research (Incaltarau, Pascariu and Surubaru,

2020; Tiganasu and Lupu, 2023; Mendez and Bachtler, 2024).

The cluster analysis reveals that Member States with high regulation standards, rule

of law, and government efficiency demonstrate remarkable results in the absorption

of ESI funds. These results highlight the essential role of national regulations in

aligning with EU policies. On the other hand, low levels of governance indicators

generate deficiencies in using these financial resources.

The comparative analysis of the two multiannual financial frameworks 2007-2013

and 2014-2020 reveals both progress at the Member State level and stagnation.

While some countries have registered substantial improvements in governance and

efficiency of the management of European funds, others have remained stuck in

excessive bureaucracy, corruption, and poor administration. However, the reduction

in the number of distinct clusters from 6 in 2007-2013 to 4 in 2014-2020 suggests

progress, also generated by the European Commission's measures regarding ex-

ante conditionalities and the rule of law. Although these rules have positively

impacted intermediate countries like Spain and the Czech Republic, other countries

still have significant deficiencies. We consider it imperative to adapt differentiated

policies to distinct governance frameworks to eliminate these discrepancies.

For the European Union, strengthening the Member States' governance levels

remains an indispensable element to ensure a balanced and equitable allocation of

financial resources. These results can form the basis of future initiatives focused on

strengthening the administrative capacities of the Member States. Such measures

could positively influence the absorption process of ESI funds and contribute to the

socio-economic cohesion of the community.

References

1. Avram, A., Nicolescu, A. C., Avram, C. D., and Dan, R. L. (2019) Financial

communication in corporate social responsibility Growth. Amfiteatru Economic, Vol.

21 no. 52, pp. 623-638. [Online], Available:

https://www.amfiteatrueconomic.ro/temp/Article_2843.pdf [30 November 2024]

2. Bachtler, J., and McMaster, I. (2008) EU Cohesion policy and the role of the

regions: investigating the influence of Structural Funds in the new member states.

Environment and Planning C: Government and Policy, Vol. 26, no. 2, pp. 398-427.

[Online], Available: https://doi.org/10.1068/c0662 [18 November 2024]

3. Blauberger, M., and Van Hüllen, V. (2021) Conditionality of EU funds: an

instrument to enforce EU fundamental values? Journal of European Integration, Vol.

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
113 
 
 
43,  no.  1,  pp.  1-16.  [Online],  Available:  
https://doi.org/10.1080/07036337.2019.1708337  [27 December 2024] 
4.  Crescenzi,  R.,  and  Giua,  M.  (2020)  One  or  many  Cohesion  Policies  of  the 
European Union? On the differential economic impacts of Cohesion Policy across 
member states. Regional Studies, Vol. 54, no. 1, pp. 10-20. [Online], Available:  
https://doi.org/10.1080/00343404.2019.1665174 [19 November 2024] 
5.  Delasnerie,  A.  (2024).  Cadrul  financiar  multianual. [Online],  Available:   
https://www.europarl.europa.eu/factsheets/ro/sheet/29/cadrul-financiar-multianual 
[22 November 2024] 
6. Dima, B., Lobonţ, O., and Nicolescu, C., (2009) The fiscal revenues and public 
expenditures:  is  their  evolution  sustainable?  The  Romanian  case.  Annales 
Universitatis Apulensis Series Oeconomica, Vol. 11, p. 416-425. [Online], Available:  
https://shorturl.at/md3SO [22 November 2024] 
7. Dotti, N. F., Colnot, L., Walczyk, J., Kupiec, T., and Pellegrin, J. (2024) Triggering 
policy learning via formal EU evaluation requirements in the case of Cohesion Policy. 
[Online], Available:  European Policy Analysis. https://doi.org/10.1002/epa2.1226 [ 
22 November 2024] 
8. European Commission. (2015) SF 2007-2013 Funds Absorption Rate Cohesion 
Open  Data  Platform.  [Online]  Available:  https://cohesiondata.ec.europa.eu/2007-
2013-Finances/SF-2007-2013-Funds-Absorption-Rate/kk86-ceun/about_data  [22 
January 2024] 
9. European Commission. (2016) ESIF 2014-2020 Finance Implementation Details. 
Cohesion  Open  Data  Platform.  [Online]  Available: 
https://cohesiondata.ec.europa.eu/2014-2020-Finances/ESIF-2014-2020-Finance-
Implementation-Details/99js-gm52/about_data [22 January 2024] 
10. European Union (2006) Council Regulation (EC) No 1083/2006 of 11 July 2006 
laying down general provisions on the European Regional Development Fund, the 
European Social Fund, and the Cohesion Fund and repealing Regulation (EC) No 
1260/1999.  [Online]  Available  :  https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32006R1083 [19 November 2024]. 
11. Gravili, G., Avram, A., and Nicolescu, A. C. (2019) Gender Equality and Firm 
Financial Performance: The Case of Central and Eastern Europe Financial and IT&C 
Sectors. In Proceedings of the ICGR 2019 2nd International Conference on Gender 
Research, Rome, Italy, pp. 316-326. [Online], Available:  https://shorturl.at/sksZc [23 
November 2024] 
12.  Incaltarau,  C.,  Pascariu,  G.C.  and  Surubaru,  N.C.  (2020)  Evaluating  the 
determinants of EU funds absorption across old and new member states–The role 
of  administrative  capacity  and  political  governance,  JCMS:  Journal  of  Common 
Market  Studies,  Vol.  58,  no.  4,  pp.  941-961.  [Online],  Available: 
https://doi.org/10.1111/jcms.12995 [19 November 2024] 
13. Mendez, C., and Bachtler, J. (2024) The quality of government and administrative 
performance: explaining Cohesion Policy compliance, absorption and achievements 
across  EU  regions.  Regional  Studies,    Vol.  58,  no.  4,  pp.  690-703.  [Online], 
Available: https://doi.org/10.1080/00343404.2022.2083593 [27 December 2024] 
14.  Piattoni,  S.,  and  Polverari,  L.  (2019)  Cohesion  policy  and  European  Union 
politics.  In  Oxford  Research  Encyclopedia  of  Politics. 
https://doi.org/10.1093/acrefore/9780190228637.013.1160 [22 November 2024] 

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

114

15. Pirtea, M. and Nicolescu, C., (2013) Corporate governance codes of best

practice of top Romanian banks. Annals of Faculty of Economics, Vol. 1, no. 2, pp.

390-397. [Online], Available:

https://anale.steconomiceuoradea.ro/volume/2013/n2/037.pdf [23 November 2024]

16. Tiganasu, R., and Lupu, D. (2023) Institutional quality and digitalization: Drivers

in accessing European funds at regional level? Socio-Economic Planning Sciences,

Vol. 90, Article no. 101738. [Online], Available:

https://doi.org/10.1016/j.seps.2023.101738 [27 December 2024]

17. Wallace, H., Pollack, M. A., Roederer-Rynning, C., and Young, A. R. (Eds.).

(2020). Policy-making in the European Union. Oxford University Press. [Online],

Available: https://shorturl.at/ShD4 [19 November 2024]

18. World Bank (2023) Worldwide Governance Indicators, World Bank. [Online]

Available: https://www.worldbank.org/en/publication/worldwide-governance-

indicators [22 January 2024].

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

115

ON EUROPEAN UNION ECONOMIC GROWTH: IS COHESION

POLICY STILL RELEVANT?

Cătălin Marian COSTACHE1, Marcel Ioan BOLOȘ2

1 Doctoral School of Economic Sciences, Faculty of Economic Sciences, University

of Oradea, Oradea, Romania

2 Faculty of Economic Sciences, University of Oradea, Oradea, Romania

c.costache@protonmail.com

marcel_bolos@yahoo.com

Abstract: The geostrategic and macroeconomic landscaped is quickly changing

and, lately at a faster pace. The European Union is faced with many challenges and

has to find appropriate instruments to address them. Cohesion policy was a staple

of EU instruments addressing regional disparities by supporting competitiveness,

human capital and territorial cohesion and quality of life. The fields of intervention

of the cohesion policy have increased over time and have diversified in a multitude

of objectives and programs diluting its resources. But new circumstances require

new approaches. NextGenerationEU RRF has risen to be an adapted instrument to

a multitude of crises with a performance mechanism that sees reforms performed

at the same time with investments. In this article we analyse the concepts, macro-

economic neoclassical theory and empiric results a show that there is still an

important role for the Cohesion policy especially in increasing the efficiency factors

in the neoclassical production functions which would ensure and advancement in

the growth of the EU economy while also allowing for cohesion “the glue that keeps

Europe together”.

Keywords: Cohesion Policy; NextGenerationEU; Neo-classical theory.

JEL Classification: E13; E60; E61.

1. Introduction

The Cohesion policy has long been a staple of European Union’s social, economic

and territorial integration. Induced as part of the regional development policy since

the formation of European Economic Community, following the 1957 Treaty of Rome

(Guyomarch, Machin and Ritchie, 1998) the Cohesion policy evolved to be a pillar of

EU economic growth.

Although formally branded as „Cohesion policy” in 1993, following the 1992 Treaty

of Maastricht, its purpose of addressing regional and territorial disparities and to

ensure convergence in economic growth and prosperity, was inherently embedded

in the solutions envisaged for the effects of establishing a free single market on the

EU territory (Jouen, 2017).

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

116

EU Cohesion Policy is a key component of the European Union strategy, designed

to reduce economic, social, and territorial disparities between EU regions. It aims to

promote balanced and sustainable development by allocating funding to less

developed regions, supporting infrastructure, innovation, and job creation.

The practical application of the Cohesion policy is done through interventions

financed out of the following six funds:

• European Regional Development Fund (ERDF) – the largest fund in terms

of allocation which tackles interventions in competitiveness, innovation, digital and

green transition and territorial cohesion;

• Cohesion Fund (CF): dedicated to countries with a gross national income

per capita below 90% of EU-average, targets environment and transport

infrastructure but also energy interventions, with a strong green and digital

dimension;

• European Social Fund Plus (ESF+): focuses on human capital development

(employment and skills) and social aspects;

• Just Transition Fund: supports the green transition in regions previously

dependent on fossil fuels’ industry;

• European Maritime, Fisheries and Aquaculture Fund (EMFAF): budget for

the EU common fisheries policy

• European Agricultural Fund for Rural Development (EAFRD) which

represents a Cohesion/regional policy instrument but in tune with the Agricultural

policy to foster development in rural areas;

In addition to these six main instruments, following the various crises that have

occurred over time, the Cohesion Policy has been relied upon to identify funding

instruments to support Member States in recovering from or mitigating the effects of

the crises. Examples are:

• Recovery Assistance for Cohesion and the Territories of Europe (REACT-

EU) – technically an NGEU instrument aimed at fostering crisis repair capacities

following the coronavirus crisis, as well as investments in operations contributing to

preparing a green, digital and resilient recovery of the EU economy.

• Cohesion’s Action for Refugees in Europe (CARE) – which supports

Member States and regions in providing emergency assistance to people fleeing

from Russia’s invasion of Ukraine.

All the programs presented previously are implemented generally through indirect

management and present very high granularity in the forms of hundreds of

operational programs at the level of the regions/countries of the EU.

This underlying complexity and fragmentation impose extensive burdens on strategic

programming and advancement at the EU level (Schwab, 2024).

Cohesion policy is considered to be a redistributive policy (Albanese et al. 2018).The

criticism of redistributive approach revolve around the interpretation to which the

European redistribution supports extant national systems with all their imperfections

and ineffectiveness and was not in a position to shepherd reforms to these policies

(Adamski, 2018).

However other points of view regard the Cohesion policy as a conduit to equal

opportunity in economic development and moreover as a tool to increase economic

growth overall, or at least to ensure the pre-requisites to growth and development in

the Union (European Parliament, 2024).

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

117

Since 1998 the Cohesion/Regional policy allocation in the EU budget have

amounted to approximatively 2 trillion EUR in current prices. The allocation

percentage out of the total EU budget over the programming periods averaged 27%

percent, with a peak during the 1993-1999 programming period of 34% of the total

EU budget.

Table 1: Total Cohesion envelope in the EU budget

- Bln. Ecu/Eur -

Indicator /

Budgetary

period

1988-

1992

1993-

1999

2000-

2006

2007-

2013

2014-

2020

2021-

2027

Cohesion

(nominal prices)

53.14

176.40

213.01

308.04

325.15

327.79

Cohesion (2024

prices)

113.42

326.46

344.93

462.79

435.60

403.12

Percent of total

20%

34%

28%

29%

26%

27%

Source: Own analysis based on The History of the EU Budget (Benedetto, 2024)

Totaling around 2 trillion EUR in current prices, the entirety of the EU – Cohesion

budget for the last 40 years is equal to 10 years’ worth of Germany’s national budget

or 11% of one year’s of EU GDP. For the current programming period total Cohesion

policy allocations are under 0.03% of annual EU GDP, therefore in comparable

terms, the Cohesion allocation is secondary to other national funding sources.

However, the Cohesion allocation is not negligible, especially to less developed

countries/regions and it is very important to understand weather this important

amount of funding has had an impact on the objectives of reducing

disparities/convergence, territorial cohesion and equal prosperity.

2. A theoretical framework

The theory of reducing economic disparities is based on the 1957 Solow - Swann

growth model, which is a very simple and elegant framework to describe the main

factor pushing economic growth in the form of capital accumulation per capita

(Prettner and Bloom, 2020).

The capital stock envisaged by the Solow – Swann model is based on gross

investment in productive facilities like factories, equipment but also infrastructure like

roads, railways etc. However, capital accumulation is offset by capital depreciation

and where in an economy the change in gross investment meets the change in

depreciation is where it is considered that the economy is in a ‘steady state’ a, point

of equilibrium where further positive change should be subject to other factors related

to capital accumulation and/or labor productivity.

Later on, Solow (1957) showed that capital accumulation alone (physical capital) is

not enough and that technological progress is at heart of advancing economic growth

in the long.

Romer (1990) showed that technological progress is advanced by innovation and

Mankiw, Romer and Weil showed that beside technological and related innovation

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

118

the human capital factor can also augment the Solow model and explain differences

in disparities and speed of convergence of different economies.

The production function developed following Solow-Swann model is also dependent

of the productivity of labor. The productivity factor was proven to be improved by

technology and efficiency and out of the two the efficiency has a larger contribution

to disparities between different regions/countries (Howitt and Weil, 2008).

There are many variables that affect efficiency, including know-how, health and

social welfare but also infrastructure and services, especially mobility and

accessibility.

In particular mobility infrastructure, especially roads infrastructure was determined

to have a positive effect on reducing inequities and „crowding-in” other factors that

help efficiency (Eden, M. and A. Kraay, 2014, Calderon and Serven, 2014),

especially when combined with education, technology and research (Zhang and Fan

2004).

Aschauer (1989), Barro (1990) and Aniket (2021) showed that accumulation of

capital in the Solow model could be not only private but also public through a

separate (tax) channel. Interestingly, Barro showed that it is actually the flow of public

productive expenditure and not the public capital that has a greater contribution to

growth of output and that the welfare-maximizing level of productive expenditure is

shown to be the same as that which maximizes the economy’s growth rate which is

achieved when the share of productive government expenditure in GDP (hence the

tax rate) equals the elasticity of aggregate output with respect to the same variable

(Calderon and Serven, 2014).

The neo-classical models presented above introduce the notions of

convergence/divergence as the movements towards the ‘steady state’ of a country’s

economy from either side of the gross investment curve.

The accumulation of capital / gross investment is considered to ensure economic

growth and the further from the ‘steady state’ an economy is, the faster the growth

should be.

The neo-classical model therefore predicts a conditional convergence in the case of

similar regions/countries depending on how far from the steady state the respective

economy is. However, the neo-classical model does not predict absolute

convergence where there are dissimilar regions/countries. There are very many

factors that differentiate between regions/countries and throughout the last half

century many economists tried to figure out which other factors affect output per

capita and as such differentiate in the amplitude of the capital intensity curve

The speed of convergence calculated by means of regressions show that that the

neoclassical model predicts a negative coefficient which measures the speed of

convergence. Barro and Sala-i-Martin (1992) use this model in their influential

empirical analysis of convergence across US states. The general conclusion is that

there is indeed convergence and the estimated coefficients are surprisingly similar

across different data sets and point to a speed of convergence of about two percent

per year in the US (Sala-i-Martin (1996). This percentage is similar in the EU

(Licchetta and Mattozzi, 2023).

Factors that are generally considered to determine differences between

regions/countries include: mobility and transport infrastructure, education, health and

life expectancy, demographic change, openness of an economy, strength of the

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

119

judicial process, governmental efficiency, corruption, cultural habits, strength of the

financial/capital markets, fertility of land, climate and geographical characteristics.

3. Impact of the EU’ Cohesion Policy

The Cohesion policy includes fields of intervention that tackle all the factors and main

variables included in the macro-economic growth theory and neo-classical models

presented above and as such should have produced significant impact on the growth

of the regions/countries which were treated by this policy.

So, did the Cohesion policy interventions have a positive impact on regional

economic growth?

During the years many studies tried to answer this question and the results are

mixed. The academic papers on the economic effectiveness of cohesion policy are

not conclusive, despite a generally positive tendency (von Ehrlich, 2024).

Studies, reports and evaluations released by the European Commission show in

general positive impacts both on economic growth and convergence for the

Cohesion/Regional policy interventions, even if usually the ex-ante evaluations are

more optimistic than the ex-post results.

Studies by other researchers show that all regions in the EU have increased in

economic prosperity since the creation of the Single Market and that convergence is

taking place among the regions of Europe (Gerland and Schwab 2022) and that less

developed regions/countries have had remarkable increases (Kopiński et al., 2024,

Konya, 2023)

Certain studies present favorable outcomes. For example, (Bucur, 2012) prove the

fact that the new member states (the EU-10+2 group) enjoyed a higher rate of

convergence compared to the old member states (the EU-15 group) and that this

situation actually confirms the neoclassical theory concerning the economic growth

which supports the convergence within the countries with similar elements,

according to which the poorer economies have certain advantages in terms of

economic growth compared to the richer countries, advantages which allow them to

grow more rapidly and to make up for the existing gaps.

On the impact of Cohesion policy (Paliova and Houbenova-Delisivkova, 2020)

suggest for Bulgaria a 1 to 3% annual additional economic growth by end-2020

compared to the baseline scenario.

Other papers find that Cohesion policy is likely to generate substantial positive

spillovers (for example, Mohl and Hagen, 2010, and Fidrmuc et al., 2019). On the

spatial spillovers, finds show that there are possibly larger spillovers in the core than

in the periphery (Bourdin, 2019).

Blouri and von Ehrlich (2020) show that of three important channels of Cohesion

interventions (wage subsidies, local productivity amenities and infrastructure, it is

actually infrastructure most likely to generate positive spillover effects across the EU

regions.

Giannakis, Bruggman 2020 reveal that there are significant differences in economic

resilience across the urban–rural divide. Their model indicated that migration is the

factor with the greatest positive effect in regional resilience, whereas the ageing

population had a strong negative effect on regional resilience. Both effects were

highest for rural areas.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

120

Not all studies present favorable outcomes. For example, certain regions are

stagnating / diverging, being in or at threat of being in a “development trap” (Diemer

et al., 2022, European Commission 2023) or inequality between urban and rural

areas or within countries is increasing (Marzinotto, 2012. Eurofound, 2023).

Di Caro and Fratesi (2021) find that the long‐term macroeconomic effect of the EU

policy varies across and within EU countries, with positive and significant effects

registered in about 40% of EU regions. This suggests that regional specificities need

to be considered when discussing about the one size fits all approach of policy in

Europe (Bachtler et al., 2019).

The same empirical analysis showed that there are regions where large amounts of

cohesion funds do not correspond to positive growth effects - this category includes

several regional areas in Southern and Mediterranean Member States. On the

contrary, there are regions, mostly located in Germany and France, which received

relatively low amount of EU funding, but where we find positive and significant policy

effects. There are also cases of effective policy, with high amount of funds and

positive and significant effects, like in Eastern Germany, in some NMS and Northern

countries.

Finally, yet importantly, Di Caro and Fratesi (2021) suggest that the heterogeneous

effects of cohesion policy effectiveness can be related to the presence of a selected

number of national and regional contextual factors, including the level of national

development, the quality of regional institutions and regional human capital

endowment.

On the other hand, Breidenbach et al. (2019) suggest that spillovers may be negative

due to intensified competition for scarce production factors.

San Juan Mesonada and Sunyer Manteiga (2020) have estimated the impact of the

structural funds on the convergence in per capita GDP between autonomous

communities, and. The empirical results show that in the period 2000-13, without

taking into account the crisis, the models using the data of both the European

Regional Development Fund (ERDF) executed and that of the set of budgeted

structural funds (not implemented investment) seems to detect a weak impact of

these projects on growth.

Capello and Caragliu (2021) show that in the wake of COVID 19 Crisis - in the long

run, total disparities decrease, but within country disparities increase.

The concept of Cohesion policy is not relevant only for the European Union. There

are other countries/regions that have appreciated the value of such a regional policy.

One of such examples is China where there are significant differences in regional

development between Eastern, Central and Western China, with Eastern China

being the most developed region.

Zhang (2021) shows important disparities between Easter China and Central and

Western China in respect to technological innovation and discover that the factors

have a positive impact on reducing disparities are innovation investment, market

environment, support and foreign technology spillover.

Hong, Chu and Wang (2016) using data from a sample of 31 Chinese provide strong

evidence that differences in transport infrastructure, physical capital and labor quality

did account for a significant part of the observed variation in the economic growth of

provinces.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

121

However, at the beginning of the third decade of the century, the Cohesion policy

started to fade from the forefront of EU policy discussions.

NextGenerationEU (NGEU) programs were developed on a backdrop of COVID-19

crisis and even if rushed by the European institutions they were programmed with a

profound mission of reshaping of the structure of EU economy especially in the fields

of digital and green transition. This was moreover accentuated in February of 2022

when the Russian invasion of Ukraine occurred and the economic relationship

between EU and Russia, especially in the energy sector started to be reconsidered.

All these funding instruments developed on an urgency background are considered

temporary instruments under the title "NextGenerationEU". Indeed, the COVID-19

crisis, together with the subsequent inflationary crisis in the euro area and the conflict

in Ukraine, have been the basis for the development of an innovative financial

instrument under Cohesion Policy in the form of the Recovery and Resilience Facility

(RRF). The RRF is a temporary instrument and a central element of

NextGenerationEU - the plan to make the EU stronger and more resilient in the wake

of recent crises. The RRF is also essential for the implementation of the REPowerEU

plan - the Commission's response to the socio-economic hardship and disruption of

the global energy market caused by Russia's invasion of Ukraine.

Therefore, the Recovery and Resilience Facility is in fact "cohesion policy" but

contains the innovative aspect of raising its financial resources by borrowing on the

capital markets (it issues bonds on behalf of the EU). These funds are then made

available to its Member States to implement reforms and investments to make their

economies and societies more sustainable, resilient and ready for the green and

digital transition, in line with the Union's priorities, as recommended in the country-

specific recommendations of the European Semester for economic and social policy

coordination.

The Recovery and Resilience Facility is implemented via National Recovery and

Resilience Plans (RRPs) submitted by EU governments, outlining important reforms

and investments, in particular in line with the Council recommendations following the

European Semester exercise. Total allocation of the Facility is 650 billion EUR, of

which 359 billion EUR in form of grants and 291 billion in form of loans.

The Recovery and Resilience Facility is performance based, which means that the

Commission only pays out the amounts to each country when they have achieved

the agreed milestones and targets towards completing the reforms and investments

included in their RRP.

Currently all 27 RRPs were approved and disbursements amount to a total of 269.5

billion EUR, of which 174,8 billion EUR in form of grants and 94.7 billion EUR in form

of loans.

NGEU/RRF is also in line with policy studies that aim to increase freedom of action

by the EU as a whole by allowing a unitary fiscal system. For instance, Allemand et

al. (2023) argue that only the production of European public goods financed by a

truly European tax system, not by national contributions, would enable the creation

of a genuine democratic basis for the EU, a further step in the European integration

process that would permit the EU to face urgent challenges. Moreover Allemand et

al. (2023) suggests that with a permanent NGEU, Europeans could decide to allocate

for themselves a share of the common wealth drawn from the high profits made from

the internal market which would mean a true Hamiltonian moment for Europe: the

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

122

advent of a European fiscal capacity to provide public goods and, meanwhile, to tax

the internal market and give birth to a European democracy, since "no representation

(can work) without taxation".

RRF is supposed to run from 2022 to 2026 and is too soon to evaluate the impact of

the program however midterm evaluations performed by the Commission do reflect

a positive impact.

Also, estimates by European Central Bank suggest that NGEU could raise euro area

potential output by 1.4% over the long run and over the longer run, NGEU may also

mitigate some of the most entrenched structural divergences in EU as a whole.by

triggering a catch-up process for investment and, therefore, involve a capital

reallocation across EU Member States.

Bańkowski et al 2022 estimate that the NGEU programme is expected to increase

GDP in the euro area by up to 1.5% by 2026. However, there are some caveats.

For example, NGEU can only unfold its full potential if all national investment and

reform plans are completed in a timely and effective way. It could be possible that

problems might arise in certain euro area countries from possible administrative

bottlenecks.

A good indication in terms of future strategy that the EU will develop is comprised in

the Draghi report issued by in September this year. Starting from the existing macro-

economic issue of the EU of which of relevance is that since 2019, production per

European worker has grown by 0.5% a year, compared with 1.6% in the United

States. An that the economic disparity between the two real GDPs has widened,

from 17% in 2002 to 30% in 2023 the report lays out the following priorities for the

next term of the Commission:

The first is aiming at closing the innovation gap with the United States and China by

facilitating innovation. Eliminate bureaucratic hurdles and progress to a Capital

Market Union.

The second area for action is a joint plan for decarbonization and competitiveness

but firstly prioritizing lowering the energy prices, then pressing ahead with clean

energy installation in a technology-neutral way and invest in strengthening the grids

The third area for action is increasing security and reducing dependencies by

increasing EU independence through securing supply chains for critical raw

materials and technologies and increasing production capacity in strategic sectors,

like, for example in defense and space, by raising the share of joint defense

procurement and common R&D spending.

The report also resets the aim of the Cohesion policy by re-focusing it on areas such

as education, transport, housing, digital connectivity and planning in order to

increase the attractiveness of a range of different cities and regions.

The report also concludes that the achievement of the three directions of action

would entail EUR 750-800 billion in additional investment each year, an estimation

which is confirmed by an analysis of the European Central Bank.

In terms of identifying the most suitable funding instruments for conducting this

amount of investment, the report hints towards the NGEU, considering that the

current macro-economic imbalances of the European Union, even if not as dramatic

as the crisis which preceded NGEU still present circumstance that are equally

serious.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

123

4. Conclusions

It is obvious that the strategy for the future of the EU sees the Cohesion policy having

a secondary and supportive role to other instruments which are fiscally empowered

to address regulatory changes and investments/capital accumulation in the key

competitiveness weaknesses of the EU.

As mentioned previously the neo-classical growth models shows that accumulation

of capital through the saving channel combined with technological and related

innovation and educated and skilled working force with efficiency increasing factors

like basic infrastructure and mobility is required to have economic growth. Taking

this into account the Draghi report keeps in line with these economic models.

However, as also shown above in order to achieve technological and related

innovation and educated and skilled force you need a number of efficiency pre-

requisites among which basic infrastructure like land and water transport

infrastructure water and waste infrastructure, as well as health and education

infrastructure are very important.

The implementation of basic infrastructure represents also capital accumulation,

albeit public capital funneled through a tax channel which is competing for

uncommitted output with the savings channel (Aniket, 2021). In addition, basic

infrastructure has the advantage of “crowding-in” other factors that help boost

growth.

All this indicates that investments in basic infrastructure should not be discarded

even if not precisely in line with the digital and green transition in order to ensure the

foundation for economic growth. However, caution has to be given not to “over-

accumulate” this type of stock as this will divert important capital accumulation in

productive capital and overall will diverge from the equilibria and achieve a

diminishing output.

The excessive granularity of EU programs under the Cohesion policy can make it

more challenging to monitor and evaluate their effectiveness. With numerous

programs targeting different objectives and regions, it can be difficult to achieve the

overall desired impact on output in an efficient way.

A possible reconciliation of Cohesion policy and NGEU approach could be the

association of reforms that specially tackle the efficiency of the tax channel to

promote public capital accumulation, as well as the efficiency of government by

reducing red tape, governmental inefficiencies and corruption and other factors

impending project implementation and efficient accumulation of public capital in the

developing regions/countries.

Another idea worth further studying is for the Cohesion policy to cater for regional

particularities in terms of competitiveness and human capital development, but

ensuring and adequate level of endowment of mobility and other types of basic

infrastructure as well as spatial development of adequate level of agglomerations.

The levels of appropriate endowment of each type basic infrastructure and

agglomerations should be subject to empirical research in various types of regions

all across the EU.

In conclusion Cohesion policy seems to fall out of fashion, however it still has plenty

to offer for the desired goal of increasing European competitiveness and economic

growth for all member states. The policy could shape itself to include reforms

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

124

together with investments especially those aimed at increasing governmental

efficiency and administrative capacity in the implementation of especially publicly

funded investments.

References

1. Acemoglu, D. Introduction to Modern Economic Growth, Chapter 12-13, Princeton

University Press, (2008).

2. Adamski D., Redefining European Economic Integration, pp. 265 – 308,

Cambridge University Press, (2018).

3. Albanese , G.et al. 30 years of EU policies for deprived areas: the impact of

cohesion in Italy and Europe, Ufficio Valutazione Impatto, Senato della Repubblica,

(2018).

4. Allemand F., Creel J., Leron N., Levasseur S. and Saraceno F. Making Next

Generation Eu A Permanent Tool, Foundation for European Progressive Studies &

the Friedrich-Ebert Stiftung, (2023).

5. Aniket K., Role of Infrastructure in the Solow Growth Model, University College

London, (2021).

6. Aschauer, D., Is Public Expenditure Productive?, pp 177-200, Journal of Monetary

Economics 23, (1989).

7. Bachtler, J., Martins, J. O., Wostner, P., & Zuber, P., Towards Cohesion Policy

4.0: Structural transformation and inclusive growth, RSA Europe, (2019).

8. Bańkowski K., Bouabdallah O., Semeano J.D., Dorrucci E., Freier M., Jacquinot

P., Modery W., Rodríguez-Vives M., Valenta V., Zorell N., The economic impact of

Next Generation EU: a euro area perspective, ECB Occasional Paper Series No

291, (2022).

9. Barro, R.J. 1990. Government spending in a simple model of endogeneous

growth, pp 103-125, Journal of Political Economy 98(S5), (1990).

10. Barro R.J. and Sala-i-Martin, X., Convergence, pp. 223-251, Journal of Political

Economy Vol. 100, No. 2 (1992),

11. Barro, R.J and Sala-I-Martin, X., Economic Growth, Chapter 6, The MIT Press,

(2004).

12. Benedetto G., The History of EU Budget, European Parliament's Committee on

Budgets. (May 2024)

13. Blouri, Y., von Ehrlich, M., On the optimal design of place-based policies: a

structural evaluation of EU regional transfers, Journal of International Economics

125, (2020).

14. Bourdin, S., Does the cohesion policy have the same influence on growth

everywhere? A geographically weighted regression approach in Central and Eastern

Europe, pp 256–287 Journal of Economic Geography 95(3), (2019).

15. Breidenbach, P., Mitze, T., and Schmidt, C.M., EU regional policy and the

neighbour's curse: Analyzing the income convergence effects of ESIF funding in the

presence of spatial spillovers pp 388-405, Journal of Common Market Studies 57(2),

(2019).

16. Bucur Vasile Iulia Andreea, National and Regional Coordinates of the Real

Convergence Process Intensity in the Enlarged European Union, (2012)

https://www.researchgate.net/publication/233731315_National_and_Regional_Coo

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

125

rdinates_of_the_Real_Convergence_Process_Intensity_in_the_Enlarged_Europea

n_Union.

17. Calderon C. and Serven L., Infrastructure, Growth, and Inequality; An Overview,

World Bank Policy Research Working Paper 7034, (2014).

18. Capello R. and Caragliu A., Regional growth and disparities in a post

‐

COVID

Europe: A new normality scenario, pp 710–727, Journal of Regional Science

2021:61, (2021).

19. Di Caro P. and Fratesi U., One policy, different effects: Estimating the region

‐

specific impacts of EU cohesion policy, pp 307–330, Journal of Regional Science

2022:62, (2021).

20. Diemer, A., Iammarino, S., Rodríguez-Pose, A., and Storper, M. The Regional

Development Trap in Europe pp 487–509 Economic Geography, 98(5), (2022).

21. Eden, M. and A. Kraay “’Crowding in’ and the returns to government investment

in low-income countries”. World Bank Policy Research Working Paper 6781, (2014).

22. Eurofound, Bridging the rural–urban divide: Addressing inequalities and

empowering communities, Publications Office of the European Union, (2023).

23. European Commission, Regional Trends for Growth and Convergence in the

European Union, Commission Staff Working Document, SWD(2023) 173 final.

24. European Parliament – Resolution, No one should be left behind! For an inclusive

and participatory cohesion policy in support of social, economic and territorial

cohesion (11.07.2024).

25. Fan, S., and Zhang X., Infrastructure and regional economic development in rural

China, pp 203– 214, China Economic Review 15, (2004).

26. Fidrmuc, J., Hulenyi, M., and Zajkowska, O. The elusive quest for the holy grail

of an impact of EU funds on regional growth. CESifo Working Paper No. 7989,

(2019).

27. Gerland, C., & Schwab, T.. Upward Convergence? The History of EU Cohesion.

Global & European Dynamics https://globaleurope.eu/%20europes-future/upward-

convergence-the-history-of-eu-cohesion/ (2022)

28. Giannakis E. and Bruggeman A. Regional disparities in economic resilience in

the European Union across the urban–rural divide, pp 1200-1213, Regional Studies,

54:9, (2020).

29. Guyomarch, A. ; Machin, H. & Ritchie, E., France in The EU, New York : St.

Martin's Press, (1998).

30. Hong J., Chu Z. and Wang Q., Transport infrastructure and regional economic

growth: Evidence from China, Springer Science+Business Media, LLC. (2011

updated 2016).

31. Howitt P. and Weil D.N., Economic Growth, The New Palgrave Dictionary of

Economics, 2nd edition, (2008)

32. Jouen, M. La future politique de cohésion doit symboliser la solidarité européene

en action. Warsaw Conference The future of Cohesion Policy post-2020, co-

organised by the European Committee of the Regions and the Region of Mazovia.

https://institutdelors.eu/publications/la-future-politique-de-cohesion-doit-symboliser-

la-solidarite-europeenne/ (2017, 3rd of March).

33. Konya I., Catching up or getting stuck: convergence in Eastern European

economies, pp 237-258, Eurasian Economic Review 13, (2023)

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

126

34. Kopiński, D., Lubasiński, J., Michalski, B., Pilszyk, M., Święcicki, I., & Wąsiński,

M. The Big Bang Enlargement – 20 Years of Central Europe’s Membership in the

EU. Polish Economic Institute https://pie.net.pl/wp-content/uploads/2024/04/The-

Big-Bang-Enlargement_20-years-of-Central-Europes-membership-in-the-EU.pdf

(2024).

35. Licchetta M. and Mattozzi G., Convergence in GDP per Capita in the Euro Area

and the EU at the Time of COVID-19, pp. 43-51, Intereconomics, 58(1), (2023)

36. Mankiw, N.G., Romer D., and Weil D.N. A contribution to the empirics of

economic growth, pp. 407-437, Quarterly Journal of Economics 107 (1992).

37. Marzinotto, B., The growth effects of EU cohesion policy – a meta-analysis.

Bruegel working paper https://www.bruegel.org/working-paper/growth-effects-eu-

cohesion-policy-meta-analysis (2012).

38. Mohl, P., Hagen, T., Do EU structural funds promote regional growth? New

evidence from various panel data approaches. Pp 353–365 Reg. Sci. Urban Econ.

40, (2010).

39. Paliova I. and Houber Nova de Lisivkova T., Assessing the European Funds’

impact on economic growth and the New Generation Europe prospects pp 73,

Proceedings of the 7th International Conference ESPERA (2020).

40. Prettner, K and Bloom D.E. Automation and its Macroeconomic Consequences:

Theory, Evidence and Social Impact, Chapter 4, Cambridge Academic Press,

(2020).

41. Romer, P. Endogenous Technological Change, S71-S102, Journal of Political

Economy no.98, (1990).

42. Sala-i-Martin, X., Regional cohesion: Evidence and theories of regional growth

and convergence, pp 1325-1352, European Economic Review, 40, (1996).

43. San Juan Mesonada, C.; Sunyer Manteiga, C. European structural and

investment funds and regional convergence: The impact of public deficit in beta-

convergence, EconPol Working Paper, No. 47, (2020).

44. Schwab T., Quo Vadis, Cohesion Policy? European Regional Development at a

Crossroads, pp. 284-292, Intereconomics, (2024).

45. Solow, R.M. A Contribution to the Theory of Economic Growth, pp 65-94,

Quarterly Journal of Economics no.70, (1957).

46. von Ehrlich, M. The Importance of EU Cohesion Policy for Economic Growth and

Convergence. The Future of EU Cohesion – Final report of the research project

“Ausrichtung der europäischen Strukturpolitik in der nächsten Förderperiode 2028-

2034 aus finanzpolitischer Sicht” commissioned by the German Federal Ministry of

Finance under coordination of Prof. Dr. Friedrich Heinemann, Dr. Zareh Asatryan

and Carlo Birkholz https://ftp.zew.de/pub/zew-

docs/gutachten/EUCohesionPolicyFinal-Report_ZEW2024.pdf (2024).

47. Zhang Y., The Regional Disparity Of Influencing Factors Of Technological

Innovation In China: Evidence From High-Tech Industry, Vilnius Gediminas

Technical University, (2021).

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

127

ANALYSIS OF THE ABSORPTION OF EUROPEAN STRUCTURAL

AND INVESTMENT FUNDS IN THE NEW MEMBER STATES OF

CENTRAL AND EASTERN EUROPE

Bogdan Cosmin MOLDOVAN

Doctoral School of Economic Sciences, University of Oradea, Romania

moldovan_bogdan_cosmin@yahoo.com

Abstract

The present research aims to analyze the impact of the allocation of structural and

investment funds on regional development in the new member states of Central and

Eastern Europe and to identify pragmatic ways to improve absorption, useful in the

future financial exercises.

The aim of the research is to discover ways to improve the quality of life and increase

the absorption of European funds in Central and Eastern Europe by: identifying the

ways in which the countries of Central and Eastern Europe know how to benefit from

and manage the structural funds, funds in which they participate by co-financing

projects financed from the respective funds, identifying the main shortcomings of the

systems, proposing viable solutions to improve the absorption model of the funds.

Keywords: European funds, absorption capacity, regional development, structural

and investment funds

JEL classification: F62, F63, F65

1. Introduction

European funds for the Central and Eastern European region have had a major

impact on the economic growth of each country in various areas, the most obvious

being in transport infrastructure and environmental protection, both of which were

considerably neglected during the communist regime. A large part of the funds has

been invested in improving living conditions, citizen involvement in the community,

supporting non-governmental organizations, restoring historical heritage,

reorganizing urban areas and expanding urbanization.

Many government administrations, as well as local authorities and municipalities,

have used funds to improve their IT systems, for data processing, e-government and

to facilitate public access to current communication technologies. In addition, the

accessibility of EU funds has evolved in parallel with the global economic crisis.

Politicians and residents in Central and Eastern Europe have found that efficient

management of funds can be extremely beneficial in supporting their economies

during periods of economic recession.

Absorption rates can be defined as the percentages of EU funding that have been

paid by the European Commission to Member States’ Operational Programs (OPs)

at a given point in time.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

128

Understanding the factors that determine the absorption of cohesion policy funds is

essential for shaping the future of this policy, which aims to promote economic

growth and social cohesion and reduce disparities between EU Member States and

their regions. In particular, it is essential to understand what influences the speed of

absorption, how it is linked to the effects of cohesion policy, and whether factors that

accelerate (or hinder) the absorption of funds can and should be encouraged (or

eliminated) at both EU and Member State level.

The capacity to absorb European funds refers to the extent to which a country is able

to consume financial resources that have been allocated in the multiannual financial

framework. Therefore, the absorption rate of European funds is calculated based on

the amounts reimbursed by the European Commission to the Member State. These

amounts correspond to the expenses incurred by national beneficiaries of European

fund projects, validated and settled by national administrative bodies.

The absorption capacity of a country depends on several factors manifested both at

European and national level. It has also been observed that there is a link between

the level of economic development of a region and its capacity to absorb European

funds. The most common obstacles in this regard include the difficulty of co-

financing, the lack of staff with experience in European funds, poor cooperation

between local partners, so we can specify that the main influence on the absorption

capacity is the administrative-managerial and co-financing capacity.

The absorption of Structural Funds is a process that manifests itself in different

stages. A first stage would be the programming architecture of the European Funds

(number of priorities, their content, managing authorities, intermediate bodies and

final beneficiaries); a second stage would be the level of commitment (funds

allocated to projects by managing authorities); and the third stage would be

payments to beneficiaries at different implementation levels.

Absorption issues depend to a large extent on institutional factors. At EU level,

institutional factors are primarily linked to the European Commission: the

transparency of the fund allocation process, the consistency of the use of the various

funds and other factors such as bureaucratic administration. Other important

determinants of absorption capacity relate to programming and institution building

and the development of administrative capacity in the pre-accession period. In line

with the Commission's recommendations and the best practices of EU countries, the

smaller the number of institutions involved at different levels of management and

programmes (sectoral and regional) in the new member countries, the greater the

possibility of higher absorption rates of structural funds.

2. Literature review

The starting point of this research was the bibliographical and webliography

documentation from books, national and international articles or various current

studies in the specialized literature. I will take into account both the national and

European context. I took into account the statistical reports made available by local,

national and, last but not least, those at the European level. I used the “Web of

Science” platform to obtain bibliographical information.

Sabău-Popa (2010) briefly presents the budgetary developments of the European

Union, since its establishment, the budgetary process at the level of the European

Union, the budgetary impact of the member states on the European Union. The last

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

129

chapter of the work "Bugetul Uniunii Europene și fondurile comunitare" analyzes in

detail the financing provided to the member states through the community funds

allocated to the various common policies of the European Union. The main

contributions of the paper are clarifications regarding the European Union's own

resources, common policies and community funds, graphic and descriptive analysis

of European Union payments on the territory of the Member States, their

contributions to the community budget, analysis of the absorption capacity of

structural and cohesion funds in Romania, the conclusion reached being that

facilitating the fastest possible absorption of funds allocated to Romania could be

achieved by improving administrative capacity, in order to increase the eligibility of

projects, establishing shorter deadlines for evaluation and response to funding

applications, ensuring an adequate level of co-financing and using the expertise of

commercial banks to access community funds.

Popescu, A. S. (2015), The absorption capacity of European funds – Concepts. This

article highlights a series of influencing factors that can be grouped into three

categories: macroeconomic capacity, financial capacity and administrative capacity.

Vladoi, J. M. (2021), presents in the work “Accesarea fondurilor europene: miza

pentru dezvoltarea României” conceptual aspects regarding the European Union,

principles and values that govern it, the purpose for which European funds are

established and how they are allocated and reimbursed to the Member States. The

investment priorities for the next financial period 2021-2027 are highlighted, the role

and impact of European funds on the economies of the Member States, their

contribution to economic growth, exemplifying successes through the Poland model

as a success story. It presents how the funds allocated in the periods 2007-2013 and

2014-2020 have been accessed and managed to date. It also identifies the

difficulties encountered and the impact of the deficiencies found, the causes that

generated them and the effects recorded in the short, medium and long term that led

to the recording of a deficient absorption.

Țigănașu R., Încălțărău C., Pascariu G.C (2018), Administrative Capacity, Structural

Funds Absorption and Development. Evidence from Central and Eastern European

Countries. The main purpose of this article is to analyze the impact of administrative

capacity on the level of absorption of European funds in Central and Eastern

European countries (CEEC), given that they were facing common transformations in

the transition period, as well as the impact of structural funds on development,

controlling for the level of absorption. Multiple regression analysis was used to test

the impact of administrative capacity on the level of absorption in the period 2007-

2015, on the one hand, but also to estimate the impact of structural funds on

development, on the other hand. The results showed that institutional quality and

management performance positively influenced absorption rates and that SFs were

able to support economic development.

Antonescu, D. (2019), Politica de coeziune și dezvoltare regională în noua

perioadă de programare 2021-2027. This article contains the main aspects and

elements for the next programming period and the future regional policy of the

European Union. It also compares these proposals with previous periods, presents

the main guiding principles and an overview of the future allocation process.

Nevima J. and Kiszova Z. (2011), Evaluation of regional competitiveness in

case of the Czech and Slovak Republic using analytic hierarchy process. This article

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

130

focuses on the alternative approach in the evaluation of regional competitiveness in

the case of the Czechs and Slovaks. It argues that gross domestic expenditure on

research and development is the source of future economic growth.

3. The impact of structural and investment fund allocation on regional

development in the new member states of Central and Eastern Europe

Before joining the European Union (EU), the Central and Eastern European

countries (CEEC) used pre-accession instruments that helped the transition to a

market economy through institutional progress, supporting the private sector,

infrastructure and stimulating economic development. The Central and Eastern

European countries (CEEC) went through a process of understanding the

implementation mechanism related to the structural instruments. As member states

of the European Union, the Central and Eastern European countries focused their

attention mainly on creating optimal conditions for the efficient absorption of

European funds and on an efficient management aimed at supporting socio-

economic cohesion in the region (Țigănașu R., Încalțărău C., Pascariu G.C., 2018).

The absorption of European funds is a challenge for each of the member states, but

even more so for those that later joined the European Union.

Absorption capacity is closely linked to the country's GDP, price stability, interest and

exchange rates, and the economy's ability to respond to additional costs. Financial

capacity primarily refers to the extent to which administrative institutions can co-

finance programs and encourage other (private) entities to participate and support

these programs. Administrative capacity is the extent to which authorized institutions

can support the absorption of funds, the skills needed to design and manage

programs.

Barriers to absorption may include: delays in the adoption of EU legal frameworks

and guidelines, which may also change frequently, as well as late adoption and

overlaps between the periods of the Multiannual Financial Frameworks and

Operational Programs; limited quality of governance and lack of continuous political

support, political instability; GDP per capita, limits on available counterpart funds,

low level of development and innovation infrastructure, low investment, vulnerability

to external crises, low exposure or ability to benefit from knowledge spillovers, limited

workforce capacity; and inefficient institutional structures, training gaps, low

employment of the public administration workforce, inadequate practices and

procedures for selecting operations and insufficient digitalization (Ciffolilli A., Pompili

M., Borowczak A., Hranilovic M., 2024).

Regional development promotes balanced interregional and intraregional growth,

which it uses to reduce regional disparities. In addition, it ensures the integration of

these regions at the national level (Hossam Abdel-Ghaffar F. M., Abdel-Latif Aboul-

Atta T 2019). These processes could increase the country's competitiveness on an

international scale, the pre-established objectives of regional development can be

explored in the following point: achieving a balance between production, quality and

level of service and volume of consumption, population growth and improving the

quality of life, reducing development gaps between and within territories and

establishing optimal use of available resources in a sustainable manner,

strengthening regional specialization, as well as ensuring and developing

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

131

infrastructure, providing job opportunities and restricting internal migration between

regions, diversifying economic structures in regions and promoting economic

cooperation internally and externally, by distributing projects and investments in

accordance with the conditions, potentials and needs of each region, thus avoiding

uneven growth and subsequent problems.

The indicators for measuring the impact of regional development at the national level

are analyzed and determined by numerous studies in which the authors confirmed

the links between some indicators: the implementation of the GDP indicator was

influenced by the opinion of Sen A. (1999) who considered the Gross Domestic

Product as the main means of achieving human development; another indicator,

research and development expenditures and their growth are very important for

increasing competitiveness. Nevima J. and Kiszova Z. (2011) argue that gross

domestic expenditures for research and development are the sources of future

economic growth; Michaud P.C. and Soest A. (2008) argue that in many

industrialized countries there is a positive association between health, wealth and

population; health tends to increase with the level of economic development of the

country. At the same time, improvements in health tend to reduce infant mortality

rates; Eugenio-Martin, J. L., Morales, N. M., and Scarpa, R. (2004) state that tourism

has two positive effects on the economy: on the one hand, an increase in production

and income; on the other hand, since the tourism sector requires an intensive

workforce, it causes an increase in employment. Similarly, tourism plays an

important role in solving economic and social problems, providing more jobs,

initiating an increase in the employment of the economically active population and

increasing the welfare of a nation, and at the same time has a stimulating effect on

the development of many related areas of the economy – contributes to socio-

economic development; Basu, S., Basu, P. (2005) consider that the human

development index is primarily a national-level indicator, estimated for a country as

a whole, but due to its general nature it cannot be applied to all economies in general.

Therefore, many countries have introduced their own modified indices to better

reflect local circumstances.

Figure 1 Absorption rates of cohesion policy funds in the period 2007-2013 in

Central and Eastern Europe

Source: data taken from Țigănașu R., Încălțărău C., Pascariu G.C (2018), p. 46

85.20%

70.90%

85.30% 95.00% 94.90% 88.50% 95.00% 95.00% 95.00% 84.70%

Bulgaria Romania Slovakia Slovenia Poland Hungary Lithuania Latvia Estonia Czech

Republic

Absorption rates of cohesion policy funds in the

period 2007-2013

Absorption rate

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

132

Some states manage to implement coherent strategies that facilitate the path to

performance in attracting European funds, others, on the contrary, get stuck in

obstacles related to the quality of governance, stability laws, macroeconomic

climate, etc. Of the 10 countries analyzed (Bulgaria, Czech Republic, Estonia,

Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia), 8 entered the

European structures earlier, in 2004, which certainly influenced the values of the

indicators that were chosen for the analysis. Since the first group had approximately

three more years to better adapt to the procedures for submitting, evaluating,

implementing and monitoring projects, they showed a better performance in the

2007-2013 programming period.

Regarding the absorption levels of cohesion policy funds, the absorption

performance of the Central and Eastern European countries proved to be quite

different. While Estonia, Latvia, Lithuania, Slovenia and Poland had the highest

absorption rates, reaching around 95%, the other countries had absorption levels

below 90%. Romania showed real difficulties in attracting structural and investment

funds, lagging far behind the other Central and Eastern European countries with only

71%. However, it should be recalled that payments could have increased even more

after 2015, as the European Commission allowed some of the countries to extend

the initial implementation period, from n+2 to n+3.

Figure 2 Institutional quality, management performance in Central and

Eastern Europe in the period 2007-2013

0,54 0,53 0,65 0,69 0,66 0,64 0,66 0,64 0,72 0,68

0,78 0,74 0,87 0,84 0,79 0,75 0,86 0,85 0,9 0,84

Bulgaria Romania Slovakia Slovenia Poland Hungary Lithuania Latvia Estonia The Czech

Republic

Institutional quality, management performance in Central and

Eastern Europe in the period 2007-2013

Institutional quality Management performance

Source: data taken from Țigănașu R., Încălțărău C., Pascariu G.C (2018), p. 46

The institutional quality and management performance index ranges from 0 to 1, with

1 indicating the maximum level of the indicator (maximum efficiency).

Next, regarding the differences in institutional quality, management performance and

absorption rates (calculated as a percentage of funds paid out of the total budget

available), they are closely linked. While Estonia, Latvia, Lithuania, Slovenia and

Poland have the highest values of the indices in terms of both institutional quality

and management performance, which helped them to achieve the highest absorption

level at the end of the 2007-2013 programming period, Bulgaria and Romania are

placed at the other end of this ranking in terms of absorption, demonstrating weak

administrative capacity. But administrative capacity does not guarantee high

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

133

absorption, as Slovakia and the Czech Republic experienced low absorption levels,

despite good scores in terms of both institutional quality and management

performance.

Also, high absorption is not a sufficient condition for development. Among the best

absorption performers, Latvia, Estonia and Slovenia recorded the lowest economic

growth rates. In Slovenia, EU funds could not compensate for the negative impact of

the economic crisis and recorded negative growth (Slovenia – from 87% in 2007 to

82% in 2015). On the contrary, Romania, despite its really poor absorption

performance, recorded the fastest catch-up during this period from 42% in 2007 to

56% in 2015.

Bulgaria has made great efforts to increase the absorption of funds. The acceleration

of implementation achieved was the result of substantial improvements in in the

allocation and use of European funds.

The limited administrative and technical capacities of public administrative bodies at

local and beneficiary level contributed to delays in the absorption of funds in the case

of Croatia.

The Czech Republic has been criticised on several occasions for errors and lack of

transparency in public procurement, which led to the suspension of payments for

some programmes. Complicated administration caused a delay in reimbursement

payments, which led to insufficient use of allocated funds.

According to the Ministry of Finance of the Republic of Latvia, the results achieved

in the 2007-2013 programming period show that there have been positive

contributions to the Latvian economy and its population. For example, in the field of

labour and social assistance, 148,609 unemployed and job seekers were retrained

and educated; 205,457 unemployed were involved in useful social work; and 59,525

people at risk of social exclusion were supported. In the field of education, 21,832

teachers in general education improved their skills and qualifications, 71,284

students in vocational education received direct support in the form of scholarships,

and 153 research projects received funding.

The Romanian authorities responsible for the implementation of the Structural Funds

have adopted a set of measures that have led to an increase in the absorption rate

in the 2007-2013 programming period. The most important include: Improving the

cash flow for public and private beneficiaries who cannot pay invoices for goods,

works and services by introducing the direct payment mechanism for payment

requests; Reducing the procedural deadline for processing reimbursement requests

from 45 to 20 working days.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

134

Figure 3 Absorption rates of cohesion policy funds at the end of 2023, by

country

Source: created by the author according to information available on the website

https://cohesiondata.ec.europa.eu/cohesion_overview/14-20

In Poland, the absorption rate of cohesion policy funds was 99.4% at the end of

2023, well above the EU average (90.4%). Obstacles to absorption related to the

complexity of EU rules and uncertainty about their application were, for example, a

weak alignment between national and EU procurement legislation causing

uncertainty in the 2014-2020 period, while another cause for doubt in 2021-2027 is

the application of the DNSH principle. Particularly for large infrastructure

investments, very complex and lengthy public procurement procedures are a

considerable delaying factor. EU-specific provisions on the eligibility of certain

categories of aid are also considered difficult to apply or inadequate (e.g. monitoring

mechanisms or the eligibility of costs for the modernisation of heating in buildings)

and limit the absorption capacity of beneficiaries.

Notable obstacles are also the significant increase in costs in the construction sector,

partly due to investment flow/market saturation and partly due to external factors,

such as the consequences of the war in Ukraine.

Solutions adopted in Poland to address implementation obstacles include legislative

initiatives undertaken to stimulate behavioural change and absorption of funds in

some policy areas, such as environment and energy, where absorption is more

difficult (e.g. specific initiatives taken to encourage fuel switching); conducting an

assessment of the readiness of various beneficiaries to propose projects; using a

phasing mechanism for major infrastructure projects (e.g. rail infrastructure);

strengthening the capacity of contracting departments (e.g. temporarily moving

experienced staff from implementation or control departments to contracting); and

improving the digitalisation of application, selection and contracting processes.

In Bulgaria, the absorption rate of cohesion policy funds was 89.2% at the end of

2023. Significant absorption obstacles are encountered in large infrastructure

projects, which require longer time for the preparation of technical documentation,

procurement, execution and final approval. For example, the delay in the

implementation of railway projects influences the overall absorption rate of the

programmes. A problem affecting public works is related to archaeological

discoveries, which immediately block investment projects and can sometimes take

a year or more to proceed. Another cause of delay is related to the fact that some

99.00% 100.00%

93.00%

100.00% 100.00% 100.00% 99.00%

91.00% 93.00%

89.00% 88.00%

80.00%

85.00%

90.00%

95.00%

100.00%

105.00%

Czech

Republic

Estonia Latvia Lithuania Hungary Poland Slovenia Slovakia Romania Bulgaria Croația

Absorption rates of cohesion policy funds at the end of 2023

Absorption rate

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

135

projects start only with a pre-feasibility study, but have to be significantly changed in

the technical design phase.

In Croatia, the absorption rate of cohesion policy funds was 87.7% at the end of

2023. The obstacles to absorption mainly relate to the national context and

administrative capacity. Project preparation procedures are very long, as ownership

issues and permits need to be resolved. Complaints are also a significant source of

delays. There is a clear need to strengthen the capacity of technical bodies in relation

to project planning (e.g. the ability to identify a pipeline of projects ready for

financing).

4. Conclusions

The capacity to absorb European funds refers to the capacity of a country to

consume financial resources that have been allocated in the multiannual financial

framework. Thus, the absorption rate of European funds is calculated based on the

amounts reimbursed by the European Commission to the Member State. These will

correspond to the expenses incurred by the national beneficiaries of European fund

projects, validated and settled by the national administrative bodies.

The process of absorption of structural funds occurs in different stages. A first stage

would be the programming architecture of the European Funds; a second stage

would be the level of commitment; and the third stage would be payments to

beneficiaries in different implementation levels.

Absorption capacity is closely linked to the country's GDP, price stability, interest and

exchange rates, and the economy's ability to respond to additional costs. Financial

capacity primarily refers to the extent to which administrative institutions can co-

finance programs and encourage other (private) entities to participate in and support

these programs. Finally, administrative capacity refers to the extent to which

authorized institutions can support the absorption of funds, the skills required to

design and manage programs.

The main problems that characterize the absorption of European Structural and

Investment Funds are: co-financing and ineligible expenditure, access to European

financial resources, absorption situation, simplified costs, bureaucracy and

procedural excess, the principle of co-implementation, programming errors.

References:

1. Antonescu, D. (2019), Dezvoltarea regională, Teorie și practică, Editura

Lumen, Iași, ISBN: 978-973-166-531-3

2. Basu, S., Basu, P. (2005). Regional Disparity in Australia: Analysis of

Gender Development Index. International Review of Business Research Paper,

Vol.1, Issue 2, 56-66

3. Ciffolilli A., Pompili M., Borowczak A., Hranilovic M. (2024). Absorption rates

of Cohesion Policy funds. Policy Department for Structural and Cohesion Policies,

European Parliament. Research for REGI Committee

4. Eugenio-Martin, J. L., Morales, N. M., Scarpa, R. (2004). Tourism and

Economic Growth in Latin American Countries: A Panel Data Approach. FEEM

Working Paper No. 26.2004. Milano: FEEM

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

136

5. Hossam Abdel-Ghaffar F. M., Abdel-Latif Aboul-Atta T (2019). Determine the

Indicators that Influence for Measuring Development at the Regional Level.

International Journal of Engineering Research and Technology. Vol. 12, No. 7, 1100-

1109

6. Nevima J. și Kiszova Z. (2011). Evaluation of regional competitiveness in

case of the Czech and Slovak Republic using analytic hierarchy process. Advances

in Economics, Risk Management, Political and Law Science, 1-6

7. Michaud P.C. și Soest A. (2008). Health and wealth of elderly couples:

Causality tests using dynamic panel data models. Journal of Health Economics,

Vol.27, Issue 5, 1312-1325

8. Popescu, A. S. (2015). The absorption capacity of European funds –

Concepts. Annals of the „C. Brancusi” University of Targu Jiu, Economy Series, 3,

117-125

9. Sabău-Popa, C. D. (2010), Bugetul Uniunii Europene şi Fondurile

Comunitare, Editura Economică, București, ISBN: 978-973-709-525-1

10. Sen A. (1999). Development as Freedom. Oxford: Oxford University

Publishing

11. Țigănașu R., Încălțărău C., Pascariu G.C (2018). Administrative Capacity,

Structural Funds Absorption and Development. Evidence from Central and Eastern

European Countries. Romanian Journal of European Affairs, Vol.18, No.1, 39-59

12. Vlădoi, J. M. (2021), Accesarea fondurilor europene: miza pentru

dezvoltarea României, Editura Pro Universitaria, București, ISBN: 978-606-261-287-

13. https://kohesio.ec.europa.eu

14. https://cohesiondata.ec.europa.eu/cohesion_overview/14-20

15. https://data.gov.ro/dataset/proiecte-contractate

16. https://ec.europa.eu

17. https://mfe.gov.ro

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

137

A CONCEPTUAL ANALYSIS OF FRAUD AND CORRUPTION IN

THE PUBLIC SECTOR

Corina BOLOȘ

University of Oradea, Doctoral School of Economic Sciences, Oradea, Romania,

boloscorina@gmail.com

ABSTRACT: This paper explores the connection between corruption and usurpation

aspirations. The article demonstrates that corruption continues to permeate all levels

of the political and socio-economic system. The study reveals strong evidence that

apart from the traditional factor of corruption – it is also a driver for fraud. In short,

our analysis draws attention to the fact that the phenomena of corruption and fraud

in society are placed at the center of public opinion, daily either through the press,

radio or television, from the Parliament's rostrum and other sources, various facts of

a criminal nature regarding fraud and corruption in Romanian society in which

representatives of state authorities, political parties and officials of various ranks are

involved. It is obvious that the appearance and development of these phenomena

has destabilized Romania over time. It is also very true that in the analysis and

evaluation of these phenomena, sometimes rhetorical notions are used, inaccurate

or exaggerated statements are made. However, there are important differences

between the phenomena of fraud and corruption in the legal sense and their

perception by public opinion.

Keywords: public procurement, fraud, corruption, prevention, avoidance,

authorities, economic operators, recommendations, ethical conduct

JEL CLASSIFICATION: K 34

1.Introduction

One of the sectors most affected by the phenomena of fraud and corruption is the

public sector, with all the negative influence derived throughout society. In order to

evaluate the main models of fraud, a clear distinction must be made between

irregularities and the phenomenon of fraud because cases of fraud are difficult to

detect and the existing estimates related to this phenomenon do not reflect reality,

the extent of the problem being almost certainly underestimated and in the absence

of adequate data with regarding these phenomena, combating them is much more

difficult to prevent.

The advantages of developing strategies to combat the phenomena of fraud and

corruption at the national level consist in ensuring an effective and efficient protection

in the use of the state's financial interests. The main benefits are:

- Interconnectivity between budget expenditures and revenues;

- Improving the prevention, detection and combating of fraud and

corruption phenomena;

- Ensuring a legal framework for the recovery of improperly spent public

funds;

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

138

- Establishing a more efficient framework.

Causes of corruption and fraud in the spending of public financial resources

At EU level, fraud and corruption are perceived as a threat to the security and

financial interests of the Union and are a priority at EU level both for the efficient use

of taxpayers' money and for the fight against organised crime and terrorism, which

are rooted in corruption, providing the framework for the development of these

categories of crime.

Corruption fundamentally undermines good governance, weakens public systems

and violates human rights, and disrupts progress towards the goals set at member

country level. Governments, development partners and researchers in different fields

are promoting various strategies in the fight against corruption to control corruption

in public systems around the world. However, existing research does not provide a

comprehensive picture of how these efforts align.

Corruption is defined as the abuse of power used for private gain achieved through

the misappropriation of resources transferred from federal/national level municipal

bank accounts, the claiming of purchases that never took place, the valuation of

goods and services at above market value, and public procurement irregularities

marked by illegal bidding in any respect (such as the awarding of the contract to the

firm of a family member). The UN Convention against Corruption (UNCAC), specifies

that signatory countries must criminalise specific forms of corruption, including

bribery of national and foreign public officials, embezzlement of funds,

misappropriation of property by public officials, trading in influence, abuse of office

and illicit enrichment. Although internationally agreed standards have been set by

various treaties, compliance by countries varies according to country and context.

The legal framework underpinning the fight against EU fraud and other illegal

activities affecting the interests of the Union is, whereby Member States make it a

priority to protect the EU budget from potential frauds developed as a result of the

corrupt system.

At EU level, the European Anti-Fraud Office (OLAF) carries out the following

activities:

- carry out independent administrative investigations in order to identify

fraud, corruption and any other illegal activity involving non-

reimbursable external funds, to ensure that European taxpayers' money

is invested in projects that contribute to the creation of new jobs as well

as to the promotion of economic growth in Europe;

- investigating cases of serious misconduct by European Union staff as

well as members of EU institutions, contributing to strengthening public

trust in the institutions;

- the elaboration of European Union policies regarding combating fraud

with European funds.

In accordance with Regulation 2017/1939 (https://eur-

lex.europa.eu/eli/reg/2017/1939/oj?locale=ro) the establishment of the European

Public Prosecutor's Office will represent the EU body with powers in carrying out

criminal investigations and prosecution cases of fraud and corruption affecting the

EU's financial interests.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

139

The European Commission, through the Directorate-General for Migration and

Internal Affairs (DG HOME), addresses the issue of corruption at European and

international level.

Corruption creates uncertainty in the business environment, reduces the level of

investment and prevents the smooth functioning of the single market. In particular, it

undermines trust in governments, public institutions and democracy in general.

The institutions of the European Union aim to:

- rationalization and modernization of legal norms with an impact on

corruption:

- monitoring the progress made related to the fight against corruption in

EU countries;

- supporting the implementation of national anti-corruption measures

through financing, technical assistance and exchange of experience.

3. Literature review

Regardless of the field, the specialized literature is visibly enriched from one day to

the next. For example, a search for the terms "fraud, corruption" in Web of Science

generated 843 articles (articles in ISI journals and ISI indexed conference volumes),

of which: 71 articles in the period 1993-2008, 183 documents in the period 2009-

2013, 321 documents in the period 2014-2019, and in the period 2020-2023 the

number of documents is already 268, the most being published in the year 2022:

11.032%, i.e. 93 scientific articles.

Figure 1: Results from the Web of Science Core Collection for: “fraud, corruption”

(all domains) by year of publication

Source: Web of Science Core Collection

According to the Web of Science publication category, of the 843 scientific articles,

most are published in journals in the fields of criminology and law (29.893%, i.e.

252 articles), followed by economics and business (25.504% - 215 articles ),

finance and management (20.522% - 173 articles), political science and public

administration (17.548% - 147 articles), ethics (4.982% - 42 articles).

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

140

Figure 2: Results from the Web of Science Core Collection for: "fraud, corruption"

(all domains) by publication category

Source: Web of Science Core Collection

Depending on the country/region of Web of Science publication, most scientific

articles on the topic of fraud and corruption are published by researchers from the

USA (25.386%, i.e. 214 articles), followed by a long distance from England (12.1%

- 102 article), Australia (4.508% - 38 documents), Germany (4.508% - 38 articles),

Romania occupying the 7th place in the top of publications, only 3.677% - 31

documents.

Figure 3: Results from the Web of Science Core Collection for: “fraud, corruption”

(all domains) by country/region of publication

Source: Web of Science Core Collection

The VOSviewer program, version 1.6.19, which is a software tool for building and

viewing bibliometric networks, was used for data analysis. In the first phase, the

analysis of the co-occurrence term was carried out for the analyzed sample, applying

limitation no. of keyword occurrences at 18. The main findings that can be deduced

from the visualization map of the correlation network between the keywords indicate

that 21 items were recorded, grouped into 5 clusters, which generated 149

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

141

connections, with a power total links of 864. The keywords grouped in the 5 resulting

clusters are symbolized in different colors for each cluster, as follows: behavior,

business, culture, ethics, impact, management, organizations (cluster 1 - red),

responsibility, governance, governance corporate, performance, trust (cluster 2 -

green), bribery, corruption, crime, law, money laundering (cluster 3-blue), fraud,

elections (cluster 4-mustard yellow), public procurement (cluster 5-purple).

Figure 4: Network visualization map based on text data – keyword co-occurrence

Source: VOSviewer, version 1.6.19

The spread of fraud and corruption is one of the main social problems and an

obstacle to the implementation of reforms in Romania, posing an undeniable threat

to national security.

The phenomena of corruption and fraud threaten on the one hand the security of the

state as a result of the spread within local public authorities through the combination

of political influence and business. These phenomena develop as a result of the

disregard and violation of public rules and laws by officials and others, as a result of

the influence of personal interests at the expense of national interests and as a result

of the ineffectiveness of internal and external policies in the fight against corruption.

4. Determinant Factors of Corruption and Fraud in the public sector

The main determinants of corruption and fraud and the extent to which they spread

are mainly generated by:

1. Political factors, through the politicization of central/local public

administration, lack of decision-making and financial transparency, poor

implementation of organizational policies and communication gaps:

• excessive freedom given to the decision-maker by restricting

responsibilities up the hierarchy;

• poor political accountability;

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

142

• group interests;

• influence peddling in the media;

2. Legislative factors characterized by insufficient and inconsistent

regulations and legislative framework mainly due to the following elements:

• legislative gaps, interpretable and subjective legislation, confusing

legislative regulations;

• unstable and interpretable legislation on preventing and combating

corruption and fraud;

• lenient legislative framework;

3. Institutional factors that are reflected in the inefficient organization of

public institutions through the implementation of poor management, cumbersome

and/or difficult to implement and inefficient working procedures, which are generated

as a result of:

• Extreme politicization of public institutions;

• Promotion of untrained and unprofessional (sometimes

incompetent) individuals who have close direct and/or indirect links

with the political environment and are implicitly obedient to the

political environment, a political affiliation which is often a condition

for the promotion of these individuals to management positions.

• Organizational structures tailored to interests, generally political

interests;

• The deliberate implementation of inefficient and cumbersome

control systems by groups temporarily in power in order to create

chaos and to make it difficult or impossible to identify irregularities

and/or deviations from legality and compliance;

• The implementation of European and international anti-corruption

instruments at the whim and/or in the interest of personal group

interests which are contrary to the national interest, as well as the

undemocratic and non-transparent amendment of anti-fraud/anti-

corruption legislation through government ordinances;

• Perfection in the commission of fraud and corruption, so that, with

a will against anti-corruption, the practical application of criminal

legislation and the fight against fraud and corruption becomes an

extremely difficult and unsuccessful challenge for the competent

authorities;

4. Social factors through the creation of conflictual, tense and discriminatory

situations within public institutions, mainly caused by:

• The economic and social environment of education and

development of the individual;

• Natural and geographical factors affecting the individual's natural

environment;

• Lack of equal opportunities and discrimination within public

administrations;

• Favoritism, clientelism and nepotism in public administrations;

In consideration of individual criminogenic factors, long ago Plato stated that "human

greed is the source of corruption and this erodes the moral values of the collectivity

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

143

and its common goals", and in our times Caiden notes that: "greed, as a cause of

corruption, arises when persons of a negative character rise to positions of power",

and Warren to appreciate that "in seeking to satisfy their greed, corrupt individuals

or groups cause the exclusion of social groups from decision-making processes that

directly affect them, resulting in a deficit of democracy".

5. Educational factors characterized by a poorly developed and deficient

educational environment and a lack of professional ethics, the main defining

elements of which are the following:

- Lack of early specific education leading to knowledge of the causes and

effects of corruption, the existing risks as well as the forms of prevention;

- Deficient and corrupt educational system that implicitly demonstrates and

develops forms of corruption from the very beginning of school, which inevitably

leads to the formation of future germs of corruption;

6. Behavioral/human factors materialized by a lack of moral and professional

conduct, namely:

- Promotion of individuals with criminal records, with anti-social orientations,

who very easily pursue and identify various opportunities for committing acts and

deeds oriented towards illicit profit, promoting the idea and co-opting followers;

- Inefficiency of vocational training systems;

- Promotion of individuals with corrupt characteristics and inclinations and

political affiliations at the expense of professional, honest and fair officials;

7. Financial factors, i.e. salary grievances and lack of material incentives in

conjunction with rising inflation. Thus, due to limited material possibilities and the

desire for material wealth and social comfort, illegal activities are carried out, the

effects of corruption being extremely numerous and found both at national and

transnational level, generating serious phenomena in the environment:

• Economic - inefficiency in tax collection, reduction of investments

especially in infrastructure, increase in inflation, etc.

• Social - lower living standards, lack of confidence in public

institutions and in the act of government, poor quality of healthcare,

etc.

• Institutional - inefficiency in the management of public funds,

• Protection of EU financial interests - by decreasing absorption of

non-reimbursable European funds, consequences of the

development of fraud and corruption;

• Political - decrease in confidence in participation in elections,

considerable decrease in democratic values, etc.

5. Forms and mechanisms of corruption and fraud in the use of public

financial resources

Infringements of the law lead to administrative and criminal sanctions which are

regulated by national legislation. In EU Member States there are specialized services

for the investigation and/or prosecution of possible cases of fraud affecting the EU's

financial interests (e.g. DLAF in Romania: Department for the Fight against Fraud).

National anti-fraud strategy:

• imposes regulations on the effective and efficient use of EU

financial interests

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

144

• ensures cooperative links between budgetary expenditure and

revenue;

• refers to the possibilities for funding from the EU budget;

• adds value in terms of preventing, detecting and combating

illegality and fraud;

• imposes strict measures to recover unduly spent funds from

European Union budget;

• develops methods to prevent and combat fraud, corruption and

other illegal activities affecting the Union's financial interests;

• impose proportionate penalties in accordance with the relevant

legislation;

• develops recommendations or actions to improve administrative

capacity;

• imposes methods as regards transparency in the process of

protecting the EU's financial interests;

• develops new methods of access to information for the general

public given that the National Anti-Fraud Strategy is a public

document;

• helps to develop the national legal framework and an update and

renewal of cooperation agreements;

• strengthens cooperation with OLAF and the competent EU

institutions, EU Member States and other countries.

The classification of the main forms of corruption and fraud as part of the offences

covered by national legislation are as follows:

• Bribery or passive corruption defined as the act committed

intentionally by a public official directly or through a third party for

advantages of any kind, for himself or for someone else, or the

acceptance of a promise to this effect, in order to perform or not to

perform, in violation of his duties as a public official, an act in

accordance with his duties or in the exercise of his office, an act

provided for in Article 289 of the new Criminal Code.

• Bribery or active corruption defined as the act committed with

intent, by any person, of promising, offering or granting, directly or

through a third party, an advantage of any kind, for oneself or for a

third party, to a public official, in order to perform or refrain from

performing, in violation of his public duties, an act in accordance

with his duties or in the exercise of his office, an act provided for in

Article 290 of the new Criminal Code.

• Influence peddling is defined as the request, receipt or acceptance

of the promise of money or other benefits, directly or indirectly, for

oneself or for another person, committed by a person who has

influence or gives the impression of having influence over a public

official and who promises to induce the latter to perform, not to

perform, to accelerate or to delay the performance of an act falling

within his or her official duties or to perform an act contrary to these

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

145

duties, an offence provided for in Article 291 of the new Criminal

Code.

• Buying influence is defined as requesting, offering or giving money

or other benefits, for oneself or for another person, directly or

indirectly, to a person who has influence or gives the impression of

having influence over a public official, in order to induce the latter to

perform, not to perform, to speed up or to delay the performance of

an act falling within his or her official duties or to perform an act

contrary to those duties, an offence provided for in Article 292 of the

new Criminal Code.

• Use of office to favor persons, defined as the act of a public official

who, in the exercise of his/her duties, has performed an act by which

a pecuniary benefit has been obtained for himself/herself, his/her

spouse, a relative or a relative up to and including the second

degree, with the exceptions provided by law in Article 301,

paragraph (1) of the new Penal Code.

• Acts committed by or in connection with members of

arbitration tribunals (in relation to the offences of taking and giving

bribes) the provisions of Articles 289 and 290 of the Criminal Code

also apply to persons who, on the basis of an arbitration agreement,

are called upon to give a ruling on a dispute submitted to them for

settlement by the parties to this agreement, regardless of whether

the arbitration proceedings are conducted under Romanian law or

under another law, an offence provided for in Article 293 of the new

Criminal Code.

• Corruption and service offences committed by other persons,

the provisions of Articles 289-292, 295, 297-300 and Article 304 of

the new Penal Code relating to public officials shall also apply

accordingly to acts committed by or in connection with persons who

perform, permanently or temporarily, with or without remuneration,

a task of any kind in the service of a natural person referred to in

Article 175, paragraph 1, of the new Penal Code. (2) or within any

legal person Å Article 308 of the new Penal Code.

• Acts committed by or in connection with foreign officials,

corruption offences under Chap. I of the new Penal Code shall apply

in respect of the following persons, unless otherwise provided by

international treaties to which Romania is a party:

a) civil servants or persons working on the basis of an employment contract

or other persons performing similar duties in a public international organization to

which Romania is a party;

b) members of parliamentary assemblies of international organizations to

which Romania is a party;

c) civil servants or persons working on the basis of an employment contract

or other persons exercising similar functions within the European Union;

d) persons exercising legal functions in international courts whose

jurisdiction is accepted by Romania, as well as officials of the registry of such courts;

e) officials of a foreign State;

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

146

f) members of parliamentary or administrative assemblies of a foreign State;

g) jurors of foreign courts, Article 294 of the new Penal Code.

Classification of forms of corruption according to their extent:

• Individual corruption, also called petty corruption, is characterized

by the incorrect application of the law and most often takes the form

of bribery, influence peddling or abuse of power;

• Corruption in accordance with the law or functional corruption, which

does not involve breaking the law but incorrect interpretation of it;

• Bribery against the law or dysfunctional corruption characterized by

the demand for money or other material benefits by the individual

holding public office in order to favor certain advantages to

undeserving persons who would not normally benefit under the law;

• Widespread corruption, which can be observed particularly in

organizations where corrupt practices are flourishing;

• Grand corruption or widespread corruption at the political level and

is defining both in the capacity held by the perpetrators who are

usually political leaders, parliamentarians, governors and others

and in the enormous amount of damage;

• The concept of "state capture" - manifested by influencing the

decision-making process (usually at the highest level) or the

legislative process in order to obtain benefits (privatization is a prime

example);

Depending on its implications, corruption can be: - low; - medium; - high.

Small" corruption is manifested at the level of the institutions by public officials who,

in the exercise of their duties, receive undue advantage even though they are legally

remunerated for their work. In general, petty corruption consists of obtaining

information on factors involved in making decisions, rushing through authorizations,

accepting incomplete documents in order to create advantages, etc.

Medium" corruption is characteristic of higher level functions and refers to the

interpretation of the law for one's own benefit and interest, or in other words the

exercise of powers in violation of the law or at the limits of the law associated with

fraud, embezzlement, etc.

High" corruption is characterized by the involvement of dignitaries in the drafting of

legislation in their own interest, which would seem to lead to a certainty of the legality

of the illegalities committed by both dignitaries and persons in their service.

Depending on the nature of the corruption, this includes:

- abuse of power in the exercise of official duties;

- fraud;

- favoritism;

- use of illicit funds to finance political parties;

- the subjective orientation of public procurement decisions;

- abuse of power in the field of privatization;

- conflict of interest.

Depending on the areas in which it manifests itself, corruption can be administrative,

economic and political.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

147

Administrative corruption occurs in the work of local and central public

administration, health and social assistance, education and culture, justice, defence

and public order, national security, etc.

Economic corruption is characterized by abuses and irregularities in the financial-

banking, agricultural, industrial, commercial, etc. sectors.

Political corruption refers to the abuse of power manifested through parliamentary

and political party activity, the negative influence of legislative initiatives according

to the interests of criminal groups that finance political parties and electoral

campaigns in order to obtain legislative advantages, etc.

Depending on the nature of criminal activities at European level, corruption can take

the following forms:

- smuggling of cigarettes manufactured abroad;

- tax evasion;

- money laundering;

- credit card forgery;

- illegal sale of alcohol;

- environmental crime or waste trafficking;

- fraudulent money transfers by electronic means;

- misappropriation and misuse of subsidies.

- different categories of trafficking such as arms, nuclear materials, drugs or

human beings;

The mechanisms of corruption are generally analyzed under three hypotheses:

• misappropriation of budget funds for personal gain;

• political corruption;

• the selection of government employees on subjective criteria.

The misappropriation of budgetary funds for personal gain, a form of corruption

which can manifest itself as follows: the main authorizing officer, who may be a

minister or mayor, proposes the breakdown of budgetary expenditure by chapter

(autonomous regions, state-owned companies, subordinate public institutions), the

public institution concludes contractual relations with the economic operator

specializing in carrying out certain works (execution, concession works imposed by

the head of the administration who in turn concludes sub-contracting contracts with

natural or legal persons in certain areas of activity.

Political corruption, exemplified by controls on institutions triggered through the

bodies with control attributions and in case of identification of irregularities the head

of the institution under control asks the political leader on the party line for support,

who intervenes at the head of the institution with control attributions to determine the

employees under control to renounce the irregularities found, which implicitly

ensures the head of the institution with control attributions to keep his position or

even his promotion.

The selection of employees in the administration on subjective criteria, a form of

corruption which manifests itself both in the 'buying' of bosses and in the appointment

of people as a result of favoritism, seduction, harassment of individuals, etc.

According to the legislation in force, fraud means any intentional act or omission

relating to the submission of false/fictitious, incomplete or incorrect statements

and/or documents, the non-disclosure of information through the breach of

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

148

obligations which has the effect and is carried out with the purpose of

misappropriating funds.

The categories of economic offences punishable under the criminal code

(https://lege5.ro/gratuit/gezdmnrzgi/cuprins-codul-penal?dp=gqytsojshe4do) are:

• Embezzlement is defined as misappropriation of assets under

management on the basis of official duties, use or trafficking by an

official, for his own benefit or for the benefit of another, of money,

valuables or other assets which he manages or administers, an

offence provided for in Article 295 of the new Criminal Code.

• Tax evasion is defined as the concealment of the taxable object,

the understatement of the taxable amount or the use of other

means to evade all or part of the payment of taxes and duties, of

income and assets acquired which are subject to taxation.

• Money laundering is defined as:

- the transfer of property or the exchange of property knowing it to be

derived from the commission of a criminal offence in order to conceal

the source of the property or to assist the person who committed the

offence to evade prosecution, trial or execution of sentence;

- concealing the true source or ownership of property or rights therein,

knowing that the property or assets result from the commission of a

crime;

- obtaining, using or possessing property knowing that it is the proceeds

of crime.

• Deceit is defined as misleading a person by presenting a

falsehood or a falsehood as true in order to obtain for oneself or

for another person an unjust pecuniary benefit, an offence

provided for and punished by Article 244 of the new Penal Code.

In addition to the offences expressly mentioned in the new Criminal Code or other

special laws, there are other offences which may fall within the scope of offences

against the financial interests of the European Union in Romania, such as corruption

offences, service offences, etc.

References

1. I. Amundsen, “Political Corruption”, CMI Working Paper WP 1999:7,

(1999, pp. 2);

2. Banca Mondială & Transparency International Romania, “Raport

National asupra coruptiei”, 2004, disponibil online la link-ul

https://www.transparency.org.ro/files/File/RNC%202004%20ro.pdf ,

accesat online în 31.05.2023, (2004);

3. GS Becker, GJ Stigler, “Law Enforcement, Malfeasance, and

Compensation of Enforcers”, The Journal of Legal Studies, vol 3, no.

1(1974);

4. Beyerle, S.,“People Power Versus the Corruption-Impunity-

Authoritarian Nexus”, capitol al cărții Is Authoritarianism Staging a

Comeback?, Mathew Burrows and Maria Stephan (eds.), Washington,

DC: Atlantic Council. (2015);

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
149 
 
 
5.  Maria Bigoni, Sven-Olof Fridolfsson, Chlo´e Le Coq, lamarlo Spagnolo, 
“FINES,  LENIENCY,  and  REWARDS  in  antitrust”,  RAND  Journal  of 
Economics, Vol. 43, No. 2,  2012, pp. 368–390 
6. Paolo  Buccirossi,  Giancarlo  Spagnolo,  “Leniency  policies  and  illegal 
transactions”, Journal of Public Economics 90 (2006) 1281– 1297 
7.  Mark  Button,  Les  Johnston,  Kwabena  Frimpong,  Geoff  Smith,  “New 
directions  in  policing  fraud:  The  emergence  of  the  counter  fraud 
specialist in the United Kingdom”, International Journal of the Sociology 
of Law Sociology of Law 35 (2007) 192–208 
8. Convenția civilă asupra corupției adoptată la Strasbourg (1999); 
9. Convenția penală privind corupția, adoptată la Strasbourg (1999); 
10. M Coppedge, J Gerring, D Altman, M Bernhard, “Conceptualizing and 
Measuring Democracy: A New Approach”, Perspectives on Politics, Vol. 
9, No. 2 (June 2011), pp. 247-267, (2011); 
11. Danilet Cristian, “Coruptia si Anticoruptia în Sistemul Juridic”, EDITURA 
C.H. BECK (2009); 
12. Directiva (UE) nr. 1371/2017 privind combaterea fraudelor îndreptate  
împotriva intereselor financiare ale Uniunii prin mijloace de drept penal; 
13. Alan  Doig  and  Stephanie  Mcivor,  “The  National  Integrity  System: 
Assessing  Corruption  and  Reform”,  Public  administration  and 
development,  Public  Admin.  Dev.  23,  317–332  (2003),  DOI: 
10.1002/pad.287 
14. Dobrescu, E., Sima, E. and Sima, M, “Sensurile si existentele coruptiei”, 
Cluj-Napoca, Series Humanistica, tom. VIII, pp. 261-270 (2010); 
15. Quentin  Dupont,  Jonathan  M.  Karpoff,  “The  Trust  Triangle:  Laws, 
Reputation,  and  Culture  in  Empirical  Finance  Research”,  Journal  of 
Business Ethics, https://doi.org/10.1007/s10551-019-04229-1, (2019) 
16. CM Fombad,  “Endemic  corruption in  Cameroon:  insights  on 
consequences  and  control”,  capitol  în  cartea  Corruption  and 
Development in Africa, DOI: 10.1057/9780333982440_13, (2000); 
17. Maryvonne Génaux,  “Social  sciences  and  the  evolving  concept 
of corruption”, Crime, Law and Social Change, volume 42, pages 13–24 
(2004); 
18. Gregory  Jackson,  Stephen  Brammer,  JonathanM.  Karpoff,  Donald 
Lange,  Anastasiya  Zavyalova,  Brooke  Harrington,  Frank  Partnoy, 
Brayden G King, and David L. Deephouse “Grey areas: irresponsible 
corporations  and  reputational  dynamics”,  doi:10.1093/ser/mwt021, 
Socio-Economic Review (2014) 12, 153–218 
19. Jain, A.K. (2001) Corruption: A Review. Journal of Economic Surveys, 
15, 71-121, http://dx.doi.org/10.1111/1467-6419.00133 
20. Klarskov Jeppesen, K. (2019). The Role of Auditing in the Fight Against 
Corruption.  British  Accounting  Review,  51(5),  [100798]. 
https://doi.org/10.1016/j.bar.2018.06.001 
21. Joel Hellman, Geraint Jones, and Daniel Kaufmann, "Seize the State, 
Seize the Day: State Capture, Corruption, and Influence in Transition 
Economies (2000); 
22. M Johnston  Corruption and democratic consolidation (1999); 

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

150

23. Jonathan M. Karpoff, “The future of financial fraud”, Journal of

Corporate Finance, https://doi.org/10.1016/j.jcorpfin.2020.101694,

(2020)

24. Kahana , N. , & Qijun , L, “Endemic corruption”, European Journal of

Political Economy, 2010, vol. 26, issue 1, pg. 82-88, ( 2010 );

25. R Karklins, “Typology of Post-Communist Corruption”, Problems of

Post-Communism, vol. 49, no. 4, July/August 2002, pp. 22–32

(2002:32);

26. http://sgglegis.gov.ro/legislativ/docs/2017/05/pnqyfw0t91s7c5k_4drz.p

df;

27. https://lege5.ro/gratuit/gezdmnrzgi/cuprins-codul-

penal?dp=gqytsojshe4do;

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

151

THE ROLE OF GOVERNMENT POLICIES IN ENHANCING THE

PERFORMANCE OF THE SAUDI FINANCIAL MARKET WITHIN

THE FRAMEWORK OF VISION 2030

Djihed BOUMANKAR1, Aboubaker KHOUALED1, Khayreddine BOUZERB2,

Abderrahmen GUEROUI3

1Badji Mokhtar University, Annaba, Algeria.

2Mohamed Seddik Benyahia University, Jijel, Algeria.

3Higher School of Management Sciences, Annaba, Algeria.

djihad.boumenkar@univ-annaba.dz

aboubaker.khoualed@univ-annaba.dz

k.bouzerb@univ-jijel.dz

abderrahmen.gueroui@essg-annaba.dz

Abstract: Financial markets are the backbone of the economy for many countries

worldwide due to their importance in achieving balance within the overall financial

system. They do this through various roles and tasks, such as hedging operations

and managing different investments in financial instruments like stocks and bonds.

This makes the management policies of financial markets significantly impact the

financial environment specifically, and the global economy in general. The primary

objective of this study is to clarify the role played by various government policies and

procedures in improving the performance of financial markets and enhancing their

contribution to the local economies of emerging countries, with a focus on the case

of the Kingdom of Saudi Arabia. Equally important is the study’s aim to draw attention

to ways to improve the performance of financial markets and provide an initial study

on this topic, which is relatively new for Arab countries, where previous local studies

remain scarce. On another level, diagnosing the governmental policies adopted in

managing financial markets and revealing their various advantages and the

challenges they face is highly beneficial for developing future strategies to advance

these markets and enhance their competitiveness. To achieve this objective, an

exploratory study was conducted based on various secondary sources, data, and

reports issued by the Saudi Tadawul market. The study concluded that the different

government measures adopted by the Kingdom of Saudi Arabia as part of its vision

during the period 2010-2030 had a positive impact on the Saudi financial market,

which has notably improved despite the economic conditions and geopolitical crises

the world is currently witnessing.

Keywords: Performance; Financial Market; Financial System; Government Policies;

Kingdom of Saudi Arabia.

JEL Classification: G10; G18.

1. Introduction

While financial markets are important for developed countries, they are even more

critical for developing and emerging countries due to several considerations:

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

152

− First, the structural changes in financial markets within emerging economies

enable them to adopt promising financial openness policies. This enhances

those markets through the financial and technological resources that

financial openness transfers from developed countries to emerging ones

(Lee & Chou, 2018).

− Second, the restructuring and reform of institutional and regulatory

frameworks that financial markets in emerging economies have recently

witnessed. This includes the increasing pace of efforts to meet listing

requirements, improve disclosure rules, adopt greater transparency and

accountability, ensure fairness in trade practices, and protect shareholders'

rights (Chari & Henry, 2002).

− Third, the financial markets of emerging countries are better equipped to

face financial crises. This is highlighted in various World Bank studies, where

the bond markets of emerging economies outperformed during the 2008

global financial crisis, reducing economic disruptions, supporting companies

and individuals, and enhancing their financial solvency (Atack & Neal, 2009).

When discussing the financial markets of emerging countries, the Saudi stock

market asserts itself as one of the most prominent financial markets in emerging

economies, as noted by (Saudi Exchange, 2014):

− It is considered the largest financial market in the Gulf Cooperation Council

region and the Middle East and North Africa.

− It ranks among the largest financial markets out of the 67 members of the

World Federation of Exchanges.

− It is the third-largest financial market among its peers in emerging markets.

− It includes 422 listed securities distributed across various Saudi trading

platforms.

− Its market capitalization reached USD 2.87 trillion, equivalent to SAR 10.80

trillion, making it the largest in the Arab region.

All these positive global and regional indicators achieved by the Saudi stock market

were undoubtedly the result of a series of measures and policies implemented by

the financial and monetary authorities in the Kingdom of Saudi Arabia. In this context,

this article will shed light on the various governmental policies adopted by the

Kingdom to enhance the performance of the Saudi financial market.

2. Literature review

Research on financial markets is relatively recent compared to studies in the fields

of banking, economics, and business administration, which can be attributed to the

modern emergence of financial markets. In discussions of financial markets, the

primary focus of previous studies has been on the performance and efficiency of

financial markets. The financial literature is replete with numerous studies that have

attempted to uncover the various mechanisms and tools influencing the performance

of financial markets and contributing to their development.

Our current study, however, focuses on government policies as one of the most

significant factors influencing the performance of the financial market. Given the

considerable difficulty in comprehensively covering all governmental policies, most

previous studies have concentrated on one specific policy, aiming to assess its

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

153

impact on the financial market's performance, particularly: monetary policy, fiscal

and tax policy, financial liberalization, advanced technology, and others. The current

study has attempted to summarize the various governmental policies affecting

financial market performance, albeit in a brief manner, thus narrowing the scope of

previous studies within this field.

A recent study by (Savari, Rostomi, Shams, & Jamali, 2023) aimed to measure the

impact of government regulations and procedures on the performance of financial

markets. To achieve this objective, the researchers applied the Generalized Method

of Moments (GMM) to the Iranian financial market and selected other emerging

countries during the period from 2000 to 2021. The results indicated a positive impact

of the quality of government regulations and procedures on stock returns.

Additionally, the effects of inflation, exchange rates, and industrial production growth

were positive and significant. The impact of crude oil prices was negative and

substantial, while trade openness had a positive effect on stock market returns,

though this effect was not statistically significant at the 5% significance level.

In another study conducted (Ashrafi & Mashhadi, 2014), the aim was to clarify the

government's role in financial development. The study focused on indicators of good

governance, such as regulatory quality, government effectiveness, anti-corruption

efforts, and accountability. For this purpose, the study was applied to several OPEC

countries during the period from 2002 to 2011 using panel data methodology. The

results supported the view that the government should intervene in the development

of the financial sector. The study also found that good governance, GDP per capita,

hydrocarbon exports, and the workforce had a positive impact, while inflation had a

negative effect on financial development in OPEC countries.

Meanwhile, the study by (Asongu, 2011) aimed to clarify the impact of governmental

policies and institutions on the performance of stock markets in African countries.

The paper explored various dynamics of government quality, particularly anti-

corruption, government effectiveness, political stability, voice and accountability,

regulatory quality, the rule of law, income levels, debt control, press freedom, and

legal regulation of financial markets. The study found a significant positive correlation

between stock market performance and the quality of governmental institutions. The

results also showed that countries with better-developed governmental institutions

tend to have stock markets with higher market capitalizations, better turnover ratios,

and a larger number of listed companies.

In a similar study by (Kolapo, 2023), the goal was to analyze the impact of

institutional quality and openness on the development of the Nigerian stock market.

To achieve this, the researcher applied the ARDL method to data from the World

Bank and the Lane-Milesi Index during the period from 1996 to 2021. The results

revealed that institutional quality and openness had a significantly positive impact on

the development of the Nigerian stock market. The study also emphasized the

importance of interaction between institutional quality and openness, along with

several recommendations, including updating the legal framework and strengthening

the role of monetary authorities.

In contrast to the findings of most previous studies, the study by (Li, Zheng, & Liu,

2020) concluded that government intervention, which made China's financial system

a hybrid one, was primarily responsible for the Chinese stock market crisis in 2015–

2016. Through theoretical analysis based on the Legal Theory of Finance (LCF), the

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

154

study emphasized that the government’s actions led to market destabilization and

regulatory turmoil, resulting from bureaucratic inefficiencies that contributed to the

crisis.

3. The Kingdom's Vision 2030 for Financial Sector Development and the Role

of Government Policies

The Kingdom of Saudi Arabia has developed a strategic plan for the country beyond

oil, which includes various programs across all sectors, collectively referred to as the

"Vision 2030." These programs serve as the driving force behind the realization of

the vision. Saudi Arabia is actively working to translate and transform these

programs into a tangible reality, with each program representing a specific roadmap

aligned through approved implementation plans. However, these programs are not

fixed; they have been restructured to meet evolving needs and reflect the ambitions

and capacities of the Kingdom. The following figure illustrates the Vision 2030 for

developing the financial sector in detail:

Figure (01): "Vision 2030" for the Financial Sector Development Program

Source: Capital Market Authority, 2024.

The programs designed to achieve the "Vision 2030" of the Kingdom of Saudi Arabia

are diverse, including the "Financial Sector Development Program," which aims to

create a prosperous financial sector that promotes financing, investment, and

saving. It also seeks to provide citizens and residents with a variety of advanced

financial products and services, without compromising the strategic objectives of

maintaining the stability and resilience of the financial sector in the Kingdom (Saudi,

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

155

2023). The "Financial Sector Development Program" has played a significant role in

supporting national economic development by fostering the growth of the financial

sector. The program aims to achieve five key objectives: financial diversity, financial

inclusion, financial stability, digital transformation, and financial sector depth, through

a series of initiatives based on three main pillars:

− Enabling financial institutions to support private sector growth.

− Developing an advanced financial market.

− Enhancing and empowering financial planning.

The Saudi financial market began developing and implementing its strategic plans

in 2009. In 2016, the "Financial Leadership Program for 2020" was launched,

through which the financial market aimed to adopt a series of initiatives from the

Financial Sector Development Program. This program represents one of the

executive programs of the Kingdom’s Vision 2030, serving strategic objectives and

initiatives related to the development of an advanced financial market. This was

achieved through studying and reviewing the existing strategies and initiatives of the

Capital Market Authority, selecting approved strategic indicators and initiatives,

which have had an impact on the overall growth and development of the financial

sector, as well as advancing the financial market to rank among the leading global

markets. In continuation of the "Financial Leadership Program for 2020," the

Authority developed its strategic plan for the years 2021-2023, aligning it with the

Financial Sector Development Program to ensure that this plan keeps pace with both

local and global developments in the financial market, and to support the objectives

of Vision 2030 (Capital Market Authority, 2024).

The Kingdom of Saudi Arabia has placed great emphasis on enhancing the

performance of its financial market and activating its role to meet all the financing

needs of the economy. To achieve this, the Kingdom has undertaken several key

governmental actions, including (Financial Sector Development Program, 2023).

− The Kingdom of Saudi Arabia launched the open banking policy, which will

enhance trust among customers and market participants, including banks,

fintech companies, other financial entities, and stakeholders.

− The inclusion of the Saudi financial market in the FTSE Russell Emerging

Markets Government Bond Index, which will positively impact the expansion

of the investor base and improve liquidity levels in the market.

− The announcement by the Securities Depository Center Company "Edaa" of

activating the linkage with Clearstream, the post-trade services provider for

the Deutsche Börse Group, allowing international investors to benefit from

the services of the International Central Securities Depository (ICSD) and

invest in Sukuk, bonds, and exchange-traded funds listed in the Saudi

financial market.

− The Saudi Central Bank provided indirect support to micro, small, and

medium-sized enterprises to ensure their financing through various

programs and initiatives, including the Kafalah Program, the Indirect Lending

Initiative, and financing through venture capital.

− The Public Investment Fund's investment in financial institutions, listed

companies, and various financial instruments in the Saudi financial market,

in addition to offering several companies in its portfolio for public

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

156

subscription, contributing to capital recycling and expanding the growth of

the Saudi financial market.

− The financial market's efforts to diversify available financial products and

facilitate the requirements for obtaining investment management licenses,

as well as developing regulations related to investment funds in line with

global practices.

− Enhancing the financial market’s appeal to foreign investors by developing

regulations to encourage foreign companies to list their shares and increase

foreign ownership.

− Government authorities have addressed the mechanism for calculating

zakat on financial securities to incentivize issuance and trading, given its

significant impact on the profits obtained. Additionally, the regulatory

framework for the direct listing of Sukuk and debt instruments has been

established.

− The Capital Market Authority (CMA) has created a legislative and regulatory

environment for financial technology products in the financial market, while

continuously developing to attract innovative business models and emerging

technologies that open new avenues for facilitating financing and stimulating

investment in the financial market.

− Simplifying the procedures for listing and offering Saudi and foreign

companies on the Saudi financial market, whether in the main market or the

parallel market (Nomu), particularly for companies from new and promising

sectors.

− Signing multiple agreements with European exchanges to develop the Saudi

financial market, including a memorandum of understanding with the Swiss

Stock Exchange. The discussions focused on digitizing sustainable financial

services, mutual market access, and sovereign debt management.

− The CMA has worked on raising and enhancing awareness of the financial

market system and its implementing regulations, as well as promoting

financial and investment literacy, which contributes to increased confidence,

knowledge, and skills necessary for managing investment tools.

− Establishing a digital process for "Know Your Customer" (KYC) and opening

an investment account to increase the number of investors in the financial

market and make it more accessible, as well as providing quick and direct

access to the financial market for qualified foreign investors.

− Establishing a Central Counterparty Clearing House (CCP) based on the

peer counterpart model to increase post-trading revenues for the Saudi

financial market and facilitate dividend distribution.

− Adopting the executive regulations of the new corporate law for listed joint-

stock companies, with the aim of clarifying the provisions required to

implement the law, thereby contributing to the achievement of its objectives.

− Issuing executive regulations aimed at organizing securities operations, as

well as developing procedures to mitigate the risks associated with

securities transactions and providing investor protection, thereby enhancing

their confidence in the financial market.

Thus, the aforementioned government actions reflect the Kingdom of Saudi Arabia’s

desire to develop and activate its financial market by increasing its attractiveness

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

157

locally, regionally, and internationally; enhancing the confidence of both local and

foreign investors; and diversifying financial products. These efforts are part of the

Kingdom's Vision 2030.

4. Analysis of the Saudi Financial Market's Performance (2010-2023) in Light

of Vision 2030

4.1. Evolution of the Saudi Financial Market's General Index "TASI" for the

Period (2010-2023)

The Saudi Financial Market's General Index "TASI" measures the overall

performance of the financial market. It provides investors with insights into the

direction of buying and selling forces, as well as the general level of price increases

and decreases among the listed institutions in the Saudi financial market. The

following figure illustrates the series of developments in the Saudi Financial Market's

General Index "TASI" over the period from 2010 to 2023:

Figure (02): Evolution of the Saudi Financial Market's General Index "TASI" for

the Period (2010-2023)

Source: Prepared by the researchers based on the annual statistical reports of the

Saudi financial market for the period (2010-2023), available on the official website of

the Saudi financial market: www.saudiexchange.sa.

It is observed from the previous figure that the Saudi stock market's General Index

"TASI" closed at 662,075 points by the end of 2010. The index then dropped in 2011

by approximately 20,302 points compared to the previous year’s close, a decline of

3.07%, reaching 641,773 points by the end of the year. This decrease can be

attributed to the global financial crises that affected all financial markets, including

201

202

TASI 7E+0 6E+0 7E+0 9E+0 8E+0 7E+0 7E+0 7E+0 8E+0 8E+0 9E+0 1E+0 1E+0 1E+0

200000

400000

600000

800000

1000000

1200000

1400000

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

158

the Saudi financial market. Among these crises were the Dubai World crisis in 2009,

the European sovereign debt crisis in 2009, the flash crash in financial markets in

2010, and the Arab Spring events in early 2011. However, by 2012, signs of recovery

from these financial crises emerged, with the index rising to 680,122 points, marking

a growth rate of 5.98% compared to 2011. This recovery was primarily driven by

unprecedented increases in oil prices, which boosted Saudi Arabia's oil revenues,

improving the performance of economic sectors and reflecting positively on the

market index. Furthermore, the government's strong intervention, including issuing

a series of royal decrees and statements from the Minister of Finance to support the

market, played a key role in preventing another market collapse, all in line with the

efforts to achieve the Kingdom's Vision 2030.

The index continued its upward trend in 2013, closing at 853,560 points. However,

this rise was short-lived, as the market index declined again in 2014 and 2015,

closing at 833,330 points and 691,176 points, respectively. This decline was

primarily due to the slowdown in global economic recovery, falling oil prices, and

rising interest rates, all of which impacted the performance of the Saudi financial

market.

The Saudi financial market recorded mixed performance in its indices during the

following two years, 2016 and 2017, overcoming the lingering effects of earlier

downturns. By the end of 2016, the index closed at 721,043 points compared to

691,176 points at the end of 2015, representing a growth rate of 4.32%. In 2017, the

general index closed at 722,632 points, marking a slight growth of 0.2%. This upward

trend continued in 2018, with the general index closing at 782,673 points, a rise of

8.31% compared to 2017. This growth was attributed to the inclusion of the Saudi

financial market in several global market indices, aligning with the Kingdom's Vision

2030 goals.

In 2019, the index further increased by 7.19% compared to 2018, closing at 838,923

points. This growth was driven by the historic listing of Aramco on the main financial

market, as well as the Capital Market Authority's decision to allow foreign institutions

to be listed in the Saudi financial market, aiming to strengthen the market. By the

end of 2020, the general index closed at 868,953 points, a 3.58% increase compared

to 2019. Despite the economic challenges resulting from the COVID-19 pandemic,

which affected financial markets worldwide, including the Saudi market, the

measures implemented by the Capital Market Authority helped the market weather

the crisis. The Authority reinforced actions to mitigate the risks associated with

securities trading during the pandemic.

By 2021, the general index closed at 1,128,171 points, marking a growth rate of

29.83% compared to 2020. This surge was due to the recovery of the Saudi financial

market from the pandemic's effects and the return of commercial and economic

activities to their previous levels. However, this growth was short-lived, as the index

declined in 2022 to 1,047,846 points. This decrease was due to the global financial

market fluctuations, particularly in Saudi Arabia, resulting from political conditions,

inflation, and rising food and fuel prices, which had significant impacts on the global

economic system. In 2023, the index rebounded to reach its highest closing point

during the study period, at 1,196,739 points, representing a growth rate of 14.20%

compared to 2022. This growth was attributed to the Saudi financial market's

investment in infrastructure, achieving strong performance as a result.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

159

4.2. Performance Indicator Evaluation for the "Financial Leadership Program

2020" in the Saudi Financial Market

To assess the success of the "Financial Leadership Program 2020" within the

framework of the Kingdom's Vision 2030, a set of key performance indicators was

utilized. The following table outlines these indicators:

Table (01): Performance Indicators for the "Financial Leadership Program

2020"

Performance Indicator

Target

Value

Achieved

Value

Achievement

Rate

Market capitalization (stocks and

debt instruments) as a percentage of

GDP

0.88

0.94

Managed assets as a percentage of

GDP

0.22

0.2057

0.94

Market capitalization concentration

for the top 10 institutions

0.55

0.565

0.97

Institutional investor trading volume

as a percentage of total trading

volume

0.2

0.1

0.5

Foreign investor ownership as a

percentage of total market

capitalization

0.15

0.09

0.6

Micro and small enterprises listed as

a percentage of total listed

companies

0.4

0.19

0.48

Volatility rate of the Saudi financial

market index

<=25%

15.31

Minimum free-float market

capitalization as a percentage of

total market capitalization

≥45%

0.558

Percentage of investment accounts

opened through electronic Know

Your Customer (e-KYC) procedures

0.1

0.95

Source: (Capital Market Authority, 2020).

The table above represents the performance measurement indicators for the "2020

Financial Leadership Program" adopted by the Kingdom of Saudi Arabia. It includes

a range of indicators that reflect the performance of the financial market and the

extent to which the set goals have been achieved. It is observed that the program

successfully attained the target percentage, achieving 94% of the market

capitalization index as a percentage of GDP, indicating strong financial market

performance relative to the domestic economy, which aligns with the objectives of

Saudi Vision 2030.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

160

Regarding the assets under management index as a percentage of GDP, the

program did not meet the targeted 22%, achieving 20.57%, slightly below the target,

with an achievement rate of 94%. This suggests significant progress in asset

management within the financial market, despite not fully reaching the set goal.

Similarly, the market concentration index for the top 10 companies' market

capitalization also fell short of the target of 56.5%, with an achievement rate of 97%.

This highlights the dominance of the top 10 companies in market capitalization,

which is typical of emerging financial markets despite government interventions.

Furthermore, the institutional investor trading volume as a percentage of total trading

volume was 10%, while the program aimed for 20%. This shows that the Saudi

financial market has not yet reached its set goal, reflecting the dominance of

individual trading and the market’s limited attraction of institutional investors.

Additionally, the index for foreign investors' ownership as a percentage of total stock

market capitalization reached 9%, representing 60% of the achievement rate.

Despite progress, foreign ownership remains low compared to the set target, despite

the Saudi financial market authority’s efforts to enhance market attractiveness for

foreign investors.

As for the index of micro and small companies listed as a percentage of total listed

companies, the percentage reached 19%, while the target was 40%, resulting in an

achievement rate of 48%. This indicates a low achievement rate due to the

challenges that small and micro companies still face in listing on the financial market.

On the other hand, the volatility index for the Saudi financial market was achieved

with high efficiency, with an actual volatility rate of 15.31%, significantly lower than

the target, reflecting relative stability in trading activity within the market.

Moreover, the index for the minimum value of free-floating shares as a percentage

of total market capitalization was achieved with high efficiency, with a 100%

achievement rate, indicating good liquidity in freely traded stocks. Additionally, the

achievement rate for the indicator of investment accounts opened through electronic

Know Your Customer (KYC) procedures was 100%, fully meeting the set target,

which enhances trust and security in the financial market.

In conclusion, the 2020 Financial Leadership Program achieved many positive

results regarding the specified indicators and their rates, despite some indicators not

being fully met. This presents a greater challenge for the Financial Market Authority

to improve its indicators in alignment with Vision 2030.

4.3. Evaluation of the performance indicators for the Financial Market

Authority’s strategic plan 2021-2023

To assess the success of the Financial Market Authority's 2021-2023 strategic plan

within the framework of Saudi Vision 2030, a set of key performance measurement

indicators was relied upon. The following table illustrates this:

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

161

Table (02): Performance measurement indicators for the Financial Market

Authority’s strategic plan 2021-2023

Performance

Indicator

Year 2021

Year 2022

Year 2023

T. V

A. V

A. R

T. V

A. V

A. R

T. V

A. V

A. R

Market

Capitalization

(stocks and debt

instruments) as a

percentage of

GDP

75%

109.

20%

146

77%

91%

118%

78.10

80%

102

Assets under

management as a

percentage of

GDP

23.8

28.9

121

25.2

23.80

94%

27.40

21%

77%

Number of listings

in the financial

market

100

204

179

Institutional

investor trading

volume as a

percentage of

total trading

volume

38%

24.5

64%

40%

38.80

97%

41%

41.3

101

Foreign investor

ownership as a

percentage of

total stock market

capitalization

15%

15.2

101

16%

14.03

88%

16.50

12.8

78%

Number of micro

and small

companies listed

as a percentage

of total listed

companies

42%

17.8

43%

55%

128%

44%

77%

175

Size of the sukuk

and debt

instruments

market as a

percentage of

GDP

17.2

28.7

167

18.7

32%

171%

20.10

18.3

91%

Target Value = T. V; Achieved Value = A. V; Achievement Rate = A. R.

Source: (Capital Market Authority, 2024).

The table above represents the performance indicators of the strategic plan for the

Capital Market Authority for 2021-2023, which was adopted by the Kingdom of Saudi

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

162

Arabia. It addresses a set of indicators reflecting the performance of the financial

market and the extent to which it achieved the specified objectives. It is observed

that the market value index (stocks and debt instruments) as a percentage of GDP

exceeded the targeted value in all three years, reaching its peak in 2023 with an

achievement rate of 146%. This indicates growth in the financial market and a

positive response from investors, driven by the measures implemented by the

government.

As for the managed assets index as a percentage of GDP, the strategy managed to

meet the target value in 2021, surpassing 100%, but it failed to maintain this in 2022

and 2023, with achievement rates of 94% and 77%, respectively, indicating a decline

in asset management performance compared to what was planned. This decline is

attributed to the conditions and crises witnessed by the Kingdom during that period.

Meanwhile, the number of listings on the financial market saw an increase,

surpassing the strategic target, which indicates that the government measures

supporting listings in the financial market were successful.

Additionally, the institutional investor trading volume index as a percentage of the

total trading volume showed continuous improvement, with the achievement rate

reaching approximately 101% in 2023 compared to 64% in 2021 and 97% in 2022.

This demonstrates the effectiveness of efforts to enhance the role of institutional

investors in the market. Conversely, the foreign investors’ ownership percentage of

the total market value of stocks did not meet the target, except in 2021, with an

achievement rate of 101%. In subsequent years, the achievement rates declined,

indicating the market's inability to reach the targeted percentages. This suggests that

challenges remain in attracting more foreign investments despite the measures in

place.

Regarding the index of micro and small enterprises listed as a percentage of the total

number of listings, there was notable growth in the achievement rate, from 43% to

175% over the three years, reflecting the government's increased support to

enhance the participation of these enterprises in the financial market. As for the

sukuk and debt instruments market size index as a percentage of GDP, the achieved

rate significantly exceeded the target in 2021 and 2022, with values of 167% and

171%, respectively. However, the achievement rate declined to 91%, reflecting the

global economic conditions and their impact on Saudi Arabia. Nevertheless, this

decline is not substantial, indicating the strength of the Saudi financial market.

In conclusion, the Capital Market Authority managed to achieve most of the goals

set in its strategic plan for the Saudi financial market for the 2021-2023 period,

despite the economic and political challenges as well as the fluctuations experienced

by global and local markets.

5. Challenges to Achieving Saudi Arabia's Vision 2030 for the Financial Market

The Saudi financial market has made significant achievements in recent years as

part of Saudi Arabia's Vision 2030. However, despite these accomplishments, the

financial market continues to face several key challenges, including:

− Global economic and political fluctuations: Like other financial markets,

the Saudi financial market is influenced by global economic and political

conditions. This impact on the general index of the Saudi financial market

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

163

leads to instability, as the market is subjected to multiple pressures due to

investors' reluctance to trade because of non-systematic risks. This results

in a decline in stock prices and liquidity levels. Moreover, as one of the

largest oil exporters in the world, Saudi Arabia's financial market is highly

sensitive to changes in oil prices caused by economic fluctuations and

geopolitical conflicts. Despite the measures taken by the Kingdom under

Vision 2030, there is still a long way to go, and maintaining market stability

in the face of these challenges remains a continuous task.

− Attracting investors to the financial market: One of the biggest

challenges facing the Saudi financial market is attracting both local and

international investors. The Capital Market Authority seeks to address this

through the reforms and measures linked to Vision 2030, yet the percentage

of new investors remains lower than targeted. Therefore, more efforts are

needed to improve the business environment, enhance transparency and

governance, simplify procedures, and reduce bureaucracy. Additionally,

attention must be given to large-scale projects that represent major

investment opportunities, such as the "NEOM" project, which envisions the

design of sustainable future cities. However, the biggest challenge for the

Saudi financial market is attracting "institutional investors," as the market

heavily relies on "individual investors." The low share of institutional

investment in trading makes the market more exposed to volatility.

− Diversifying financial products: The Capital Market Authority has

implemented numerous measures to introduce financial products in the

Saudi financial market as part of its Vision 2030. However, despite these

efforts, the market still suffers from a lack of diversity. This is primarily due

to the fact that the Saudi financial market is considered an emerging market,

which necessitates collaboration between various entities to develop new

financial instruments. This remains a significant challenge for the Capital

Market Authority in particular and the Kingdom in general.

− Listing micro and small enterprises in the market: The proportion of

micro and small enterprises listed in the financial market compared to the

total number of listed companies is very low, despite the extensive support

provided by the government to facilitate their entry into the financial market

to enhance its diversity. This is due to the nature and limited capabilities of

these enterprises, particularly in terms of disclosure and governance, which

hinder their ability to comply and increase their operational costs. Moreover,

the listing requirements in the financial market are not well-suited to these

enterprises. Investors are also hesitant to invest in these businesses due to

the high potential risks and their limited financial capacities.

− Tax challenges: The mechanism for calculating zakat on securities, as well

as the taxes imposed on investors, especially foreign investors, can

negatively impact attracting investments and expanding the financial market.

This tax system is somewhat complex compared to the systems in foreign

financial markets. Although the Capital Market Authority has clarified the

regulatory frameworks for calculating zakat, it remains a major challenge.

− Financial technology in the financial market: In line with the global digital

transformation, the Saudi financial market has seen significant

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

164

advancements in financial technology, in pursuit of the Kingdom's Vision

2030. However, this remains an ongoing challenge due to the difficulty of

fully integrating traditional systems with technology, as traditional financial

companies still dominate the Saudi financial market, with only a limited

number of startups. Furthermore, the reliance on financial technologies in

the market brings an urgent need for securing digital transactions against

cyberattacks. Additionally, given that Saudi society is predominantly Muslim,

there is a preference for financial technology solutions that align with Islamic

principles, which is a unique feature of Islamic financial markets. Achieving

this is a significant challenge.

Achieving the goals of Vision 2030 to develop the Saudi financial market requires

overcoming all the challenges that hinder progress. These challenges span various

areas, which the Kingdom has addressed through several future strategies and

initiatives aimed at achieving its objectives.

6. Conclusions

The Kingdom of Saudi Arabia aims to develop its financial sector through Vision

2030, which seeks to strengthen its economy and reduce its reliance on oil as an

unsustainable resource. The vision adopted by the Kingdom includes a set of

strategies, among them those focused on improving and activating its financial

market. The Saudi financial market has shown remarkable progress and solid

performance during the period from 2010 to 2023, reflecting the efficiency of the

governmental measures and strategies implemented by the Kingdom. These efforts

have supported the Kingdom's direction and vision despite the global economic

conditions and geopolitical crises that have affected the financial market. The historic

listing of Aramco and its inclusion in the main financial market, which became the

largest listing in the world, enhanced the position of the Saudi financial market.

Additionally, the full integration of the Saudi financial market into global indices has

further increased its attractiveness. However, despite all the achievements and

progress made in recent years, the Saudi financial market still faces numerous

challenges, which the Kingdom will need to address in the future.

References

1. Ashrafi, Y., & Mashhadi, M. (2014). The Government role in financial development:

case study of OPEC countries. Quarterly Journal of Economic Research and

Policies, 22(70), pp. 205-222.

2. Asongu, S. (2011). Government quality determinants of stock market performance

in African countries. AGDI Working Paper. Yaounde, Cameroon: African

Governance and Development Institute (AGDI).

3. Atack, J., & Neal, L. (2009). The origins and development of financial markets and

institutions. Cambridge: Cambridge University Press.

4. Capital Market Authority. (2020). Annual report 2020. Kingdom of Saudi Arabia.

5. Capital Market Authority. (2021). Annual Report 2021. Kingdom of Saudi Arabia.

Retrieved from Capital Market Authority.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

165

6. Capital Market Authority. (2022). Annual reports 2022-2024. Kingdom of Saudi

Arabia.

7. Capital Market Authority. (2023). Annual report 2023. Kingdom of Saudi Arabia.

8. Capital Market Authority. (2024). Strategic Plan 2021-2023. Kingdom of Saudi

Arabia.

16. Chari, A., & Henry, P. B. (2002). Capital account liberalization: allocative

efficiency or animal spirits? NBER Working Papers 8908. National Bureau of

Economic Research, Inc.

18. Financial Sector Development Program. (2023). Annual Report 2023. Saudi

Arabia: Financial Sector Development Program.

29. Kolapo, F. T. (2023). Drivers of stock market development in Nigeria: Does

openness matter? International Journal of Current Science Research and Review,

6(8), pp. 5445-5455.

30. Lee, C. H., & Chou, P. I. (2018). Financial openness and market liquidity in

emerging markets. Finance Research Letters, 25(C), 124-130.

31. Li, C., Zheng, A., & Liu, Y. (2020). The hybrid regulatory regime in turbulent

times: The role of the state in China's stock market crisis in 2015-2016. Regulation

and Governance, 16(2), pp. 392-408.

40. Saudi Exchange. (2014, 09 15). About Saudi Exchange. Retrieved from Saudi

Exchange: https://www.saudiexchange.sa/wps/portal/saudiexchange/about-saudi-

exchange/aboutus/saudi-exchange?locale=en

41. Saudi, K. S.-A. (2023). Vision 2030. Kingdom of Saudi Arabia. Saudi Arabia:

Government of the Kingdom of Saudi Arabia.

42. Savari, Z., Rostomi, M., Shams, M., & Jamali, J. (2023). Regulatory quality, rule

of law, and stock market performance: A system GMM approach. International

Journal of Nonlinear Analysis and Applications, 14(6), 211-220.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

166

NON-UNIFORM INTERCONNECTEDNESS PATTERNS AND

DYNAMICS: EVIDENCE FROM EMERGING STOCK MARKETS

Anca-Adriana SARAOLU (IONĂȘCUȚI)

Doctoral School of Economics and Business Administration, West University of

Timişoara, Timişoara, Romania

anca.ionascuti96@gmail.com

Abstract: In the last decades, past financial crises have proved that financial

markets worldwide are interconnected, however the subject was scarcely analysed

from the viewpoint of financial stock markets. Therefore, the paper aims to analyse

interconnectedness between emerging stock markets. The methodology employed

is the “Wavelet Local Multiple Correlation” as it allowed to introduce the dominance

feature and to capture the time-varying shifts in correlations, as well as the non-

uniform frequencies over time. The study involves five emerging markets worldwide

for a long-time span from 2005 to 2024. The results report considerable variations

within the correlation pattern, at different frequencies over time. Therefore, the

findings display considerable evidence of interconnectedness and temporal

dependence among the emerging stock markets.

Keywords: emerging stock markets, interconnectedness, temporal dependence,

Wavelet Local Multiple Correlation (WLMC)

JEL classification: F65, G11, G15

1. Introduction

In the last decades, past financial crises have proved that financial markets

worldwide are interconnected; as Gofman (2017) argued, the financial systems have

become “too interconnected to fail”. However, such interconnectedness among

financial markets encompasses a major disadvantage namely, the risk spillover

which is caused by negative externalities. In this sense, the interest for the study of

interconnectedness increased considerably and was addressed by various scholars

such as (Pretorious, 2002; Flavin et al. 2002; Phylaktis and Ravazzolo, 2002; Zeti

2014).

Martinez-Jaramillo et al. (2019) argued that interconnectedness could be viewed

from both sides of the spectrum where one market could either absorb shocks or

propagate them. Nonetheless, as stated in the literature, interconnectedness of

financial stock markets is mainly driven by various factors that lay on the increased

levels of global financial integration (which implies openness of capital flows, real

and financial linkages, regional regulation systems, and so on).

The interconnectedness at the level of emerging markets was scarcely investigated

in the literature, and a relatively low volume of studies could be identified such as,

Kumar et al. (2023), Zhao et al. (2023), Okhrin et al. (2023), Roy et al. (2023), Younis,

et al. (2024), Xiang and Borjigin (2024), Hoque et al. (2024), and Zargar at al. (2024),

who found significant evidence of interconnectedness between the financial markets.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

167

Liu (2013) researched the interdependence mechanisms in emerging markets and

found that they are driven by economic integration, rather than financial

dependences (such as, financial integration and investments). The concept of

economic integration mainly implies the unification of trade and is assessed by

taking into account the volume and intensity of bilateral trade. Hence, economic

integration enhances the cash flows convergence from one economy to another,

further leading to the synchronisation of the business cycles. Therefore, this

convergence and synchronisation represents a mechanism of interconnectedness

and fosters the emerging stock markets inter-relationships.

Younis et al. (2024) analysed the interconnectedness in stock markets and found

that in periods of financial turmoil, the spillover effects are heightening. Also, they

found that most of the emerging markets within their analysis were shock receivers,

while the developed markets were shock transmitters. Their results reported that

the equity markets were the transmitters of shocks to the commodity markets (such

as, oil, gold, metals, energy, and so on).

Given the complexity of the subject, the methods used in the assessment of

interconnectedness depend on two major factors, either the availability and type of

data, or the kind of economic/financial activity (Raddant and Kenett, 2021).

Therefore, the data involved in the measurement are the direct exposures data

(which is often available only for regulatory and supervisory entities), and the

publicly available data (such as the market prices). As Raddant and Kenett (2021)

argued, one of the best methods to assess interconnectedness is based on the

asset returns’ correlation and their causality. In this sense, the correlation and

causality could describe the systemic structure of the financial system and could

boost potential transmission mechanisms and contagion channels. In this regard,

this study focuses on analysing interconnectedness based on the co-movement

patterns of different financial markets by employing a methodology that is able to

capture and to identify the correlation between multivariate time-series, namely the

Wavelet Local Multiple Correlation (WLMC).

The importance of the interconnectedness pattern in relation to time-frequency and

dependence is instrumental for investors and other stakeholders, especially in the

investment and diversification strategies. For instance, let’s consider that the gold

market in Country A is the leading market on the long run, while the financial stock

market in Country A is the leader on the short run. The time-frequency analysis in

this regard illustrates that diversification opportunities with gold imply advantages

on the long run, so lower risk on the low-frequency scale.

On the same path, let’s consider that the financial stock market in Country A is

leading on the long run, while on the short run it is substituted by the stock market

in Country B. Here, the time-frequency analysis reports instrumental information for

stakeholders in taking investments decisions in Country A versus Country B based

on their investment scope and risk aversion.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

168

For a better assessment of interconnectedness in emerging stock markets, the

dominance feature of market interrelations was introduced within the analysis. While

interrelationships refer to co-movement in both directions, the “dominance” feature

displays the precise direction of risk spillover, further identifying the causality from

a specific market to another. Considering the time-varying nature of

interconnectedness, it can be considered that dominance is also subject to temporal

dependence (i.e. functional connection). Therefore, from both conceptual and

methodological viewpoints, it is instrumental to acknowledge the possibility of

dominance swaps overtime (for instance, long-term versus short-term), among

emerging stock markets. In this sense, the Wavelet Local Multiple Correlations

(WLMC) was a relevant methodology for the research, as it allows to identify and

illustrate the dominance that could happen at the level of multivariate series’

dynamic interconnectedness.

The study proposes a three-fold contribution: (1) it aims to analyse

interconnectedness in emerging stock markets and is meant to fill in a gap in the

literature, as most studies focus on interconnectedness in other financial markets

such as, the gold, oil and energy markets, currency and crypto-currency markets,

and commodities market; (2) it significantly contributes to the literature through the

methodology employed, the “Wavelet Local Multiple Correlation” (WLMC)

(Fernández-Macho, 2018), that is able to capture the correlation patterns between

time-series, and that adds-in the dominance feature of interconnectedness; (3) the

study is meant to capture the potential non-uniform evolutive interconnectedness

patterns, that could display a time-varying nature at different frequencies.

The study is built based on the following structure: the first section introduces some

relevant literature upon the study of interconnectedness. The second section

introduces the applied methodology, as well as the international data. The third

section provides the empirical results, while the fourth section presents the

conclusions.

2. Methodology and International data

2.1. Methodology

The study is build based on the “Wavelet Local Multiple Correlation” (WLMC)

(Fernández-Macho, 2018), which was implemented based on the “VisualDom” R

package (Polanco-Martínez, 2023) and “wavemulcor” R package (Fernández-

Macho, 2022).

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

169

In the specific literature, the methodology was used to analyse the time-scale co-

movement of different markets such as, the cryptocurrencies, the gold, wheat and

cooper, and the oil and petroleum markets. Therefore, in the area of emerging stock

markets analysis this methodology was scarcely used, although it encompasses

significant advantages. First, the WLMC allows the analysis of data from the

viewpoint of both time and frequency; thus, it could capture the pattern in the

evolution of stock markets correlations and dynamics over time. Second, the WLMC

can identify localized correlations between the stock markets’ assets and their

variations overtime due to specific market conditions. This fact is important in risk

management as stakeholders could better manage their portfolio risk. Third, WLMC

provides flexibility in capturing nonlinear and non-stationary relationships between

stocks, making it suitable for analysing complex and dynamic stock market data.

Therefore, the motivation for selecting this methodology stands in its ability to

capture the co-movement and interrelations between emerging stock markets, as

well as the dominance within the multi-variate series’ dynamic interconnectedness.

The detailed methodology is available within Fernández-Macho (2018) and

Polanco-Martínez, (2023). However, the practical details for the implementation of

the WLMC analysis are the following:

1. The weight (window) function selection – a Gaussian window was

considered based on its properties (Fernández-Macho, 2018 and Polanco-

Martínez, 2020).

2. The selection of the wavelet filter for MODWD estimation – the “Daubechies

LA (8)” long wavelet filter was selected and considered more appropriate

for the non-stationary correlation structures.

3. The variable that maximises the multiple correlation for every wavelet scale

was chosen automatically by the implementation since the relationships

among the markets’ return dynamics are unknown.

2.2. International data

The dataset was built based on daily log returns for the period January 1st, 2005 –

May 30th, 2024. This period encompasses the 2007-2010 global financial and real

turmoil, the crisis triggered by the appearance of the COVID-19 coronavirus, and

the post-2020 energy crisis and geopolitical instability. The dataset involves five

emerging stock markets worldwide namely, IBOVESPA Index (Brazil), IPC Mexico

(Mexico), SEE Composite Index (China), S&P BSE SENSEX (India), and JSE

Limited (South Africa).

The data used for the analysis was taken from the “Yahoo Finance”

(https://finance.yahoo.com/) publicly available database, by employing the R

package “yfR” (Perlin, 2023). The data was synchronised by cutting off the non-

available data, further resulting the input data of 3830 daily observations.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

170

These emerging markets were selected as they play an instrumental role within the

international financial system, for instance the economies of Brazil, India, China,

and South Africa are members of the BRICS group of countries which represent a

new source of diversification and investment opportunities. At the same time, these

emerging markets play an instrumental role in the regional financial system as they

boost economic growth, they offer opportunities for investment diversification, and

they contribute to financial stability and foster the economic integration within the

region.

As these markets are mainly chosen by international investors to trade their assets

for portfolio diversification purposes, these markets absorb the shocks from

developed markets and further transfer it within their geographic proximity. In this

sense, it could be considered that these markets imply a significant degree of

functional integration, meaning co-dependence of prices and returns due to portfolio

diversification processes. Hence, these emerging markets might display evidence

of functional interlinkages between them, being subject to non-linear, time-varying

co-movements.

3. Main results

By employing the WLMC method, the study aims to analyse the dynamic

relationship between the five emerging markets in terms of time and frequencies.

The correlation coefficients report a significantly high correlation between the

involved emerging stock market indices, varying from 0.38 to 0.99. However, the

correlation is not homogenous for the entire time series length, as significant spans

prove the heterogeneity of the results.

The first half of Figure 1 illustrates the WLMC for the return series, results that

display similar return patterns throughout the analysed period, as well as strong

correlation among the emerging stock markets. The second half of Figure 1

illustrates the wavelet correlation coefficients’ “heat-map”. It displays the

heterogeneity of the correlation structure, the dynamic non-uniform nature of the

returns’ relationship in terms of time and frequency.

On the figure there are at least two significant frequency spikes where correlations

coefficients are quite lower, on the short to medium term, namely around 2008 and

during 2019. Consequently, the highest correlation coefficients’ levels are caught

on the long term (on the annual scale, and from 2 to 4 trading years).

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

171

Figure 1: The wavelet correlation coefficients’ “heat-map”

Source: The wavelet correlation coefficients’ “heat-map” at a confidence interval of

95%. Results are derived through the Daubechies wavelet of length L=8, and times

and scales are displayed in days.

Figure 2 displays the dominant variables in time-frequency. On the short run,

meaning intra-week scales (from 2 to 4 days), weekly scales (from 4 to 8 days), and

monthly scales (from 16 to 32 days), the system is dominated by SEE Composite

Index and to a lesser extent by IPC Mexico. On the quarterly scales (from 32 to 64

days), the system is mainly dominated by IPC Mexico, by Ibovespa to a lesser

extent, and even less by SEE Composite Index.

On the long run, SEE Composite Index maintains its dominant position in the

system. However, IPC Mexico also displays significant dominance evidence,

followed by Ibovespa to a lesser extent. An important result here is that for the

highest time scale (from 2 to 4 trading years), the dominance of SEE Composite

Index is overpassed and substituted by IPC Mexico.

Another significant observation based on the results in Figure 2 is that JSE Limited

and S&P BSE SENSEX do not report any significant dominance.

500 1000 1500 2000 2500 3000 3500

IBOVESPA, IPC Mexico, SEE Composite Index, S&P BSE SENSEX, JSE Limited

Time

-10

-5

IBOVESPA

0.4 0.5 0.6 0.7 0.8 0.9



[2-4]

(8-16]

(32-64]

(128-256]

(512-1024]

Periods

1000 2000 3000

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

172

By summing up, on the short run the main dominant market is the Chinese one,

while the main dominated markets are the emerging stock markets in India, South

Africa, and Brazil. On the long run, the Mexican stock market is the dominant one,

while the dominated emerging stock markets are in India, South Africa, and Brazil.

Figure 2: Dominant variables in time-frequency

Source: Based on the same specifications in Figure 1, this figure displays the

dominance changes in time.

4. Conclusions

The results prove the functional integration of the emerging financial markets within

the analysis. The stock markets are functionally connected (i.e. they are subject to

temporal dependence) over the analysed period and the correlation pattern variates

in time at different frequencies. Even though the analysis does not aim to study the

factors that lead to such variations, it is important to highlight that the fluctuations in

frequency occur during and post negative events (such as the global financial crises

in 2008-2010, the period of increased volatility in 2018, and the post-2019 turmoil

periods). These frequency fluctuations that occur especially on the short run, at

lower timescales, prove the non-stationary nature of the time-series and could be

considered as decoupling periods among the emerging stock markets.

500 1000 1500 2000 2500 3000 3500

IBOVESPA, IPC Mexico, SEE Composite Index, S&P BSE SENSEX, JSE Limited

Time

-10

-5

IBOVESPA

IBOVESPA IPC Mexico SEE Composite Index S&P BSE SENSEX JSE Limited

[2-4]

(8-16]

(32-64]

(128-256]

(512-1024]

Periods

1000 2000 3000

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

173

An important observation is given by the substitution of the dominant emerging

markets on the low timescale compared to the high timescale. In essence, the

factors that drive short-term dominance, such as fleeting market sentiment or

specific events, may not necessarily translate into sustained long-term dominance,

which requires a broader set of economic, structural, and geopolitical factors.

Nonetheless, the substitution of the dominant emerging markets reflects the

dynamic nature of global finance and the ever-changing interplay of economic,

political, and market forces.

The results imply several policy implications for various stakeholders such as,

policymakers, investors, and financial institutions, that could help them overcome

potential risks by capturing and accounting for the shifts in correlation patterns

overtime.

From the viewpoint of investors, the results have significant implications in the area

of asset allocation and diversification and portfolio management strategies. They

should consider the time-dependences and frequencies patterns in order to take

investment decisions that follow their long-term and/or short-term scope, the risk

mitigation and the return maximization. Also, they could simulate based on such

patterns, different scenarios concerning the potential impact of the trade timing upon

their portfolios.

For policymakers and market regulators, the results provide implications in the area

of regulation and supervision policies. They should run different dynamic risk

assessment processes that could predict and anticipate times of increased risk.

Based on such dynamic assessment processes, they should be able to identify the

shifts in co-movement and correlation patterns; in other words, they should design

and implement “early warning” systems that could identify such patterns in order to

avoid periods of market disruptions. They should adopt flexible policies fostering

coordination with counterparts at the international level and information sharing.

Also, policymakers should consider the good practices implemented within

developed stock markets and further adopt them within emerging stock markets

(i.e., the BRICS group of financial markets, which are situated at the

boundary/frontier of developed and emerging markets).

Financial institutions are also impacted by the interconnectedness of emerging

stock markets. Therefore, several implications for their perspective could be

identified. They should adapt their strategies for capital management and liquidity

by running robust stress testing analysis that could accurately estimate the impact

of interconnectedness in different time-horizons.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

174

The limitations within this research are given by the limited dataset, despite the

length of the timespan that encompasses two different categories of turmoil periods,

namely pre-2019 where the shocks were endogenous or inside the market, and

post-2019 where the shocks were of exogenous nature. Also, the analysis of the

mechanisms that drive the substitutions in dominance on the short-term (lower

timescales), compared to long-term (higher timescales).

The results within this study encourage towards various future research paths. First,

the analysis of the substitution mechanisms and effects of market dominance on the

long-run compared to short-run. Second, the study of the factors that lead to such

variations and frequencies in the evolutive pattern of emerging markets correlations

over the timespan. Third, the comparison of these factors and their effects pre-2019

(where the shocks that lead to financial turmoil periods were of endogenous nature),

and post-2019 (where the turmoil periods were induced by exogenous shocks).

References

Fernández-Macho, J. (2012). Wavelet multiple correlation and cross-correlation: A

multiscale analysis of Eurozone stock markets. Physical A: Statistical Mechanics

and its Applications 391(4): 1097-1104.

Fernández-Macho, J. (2018). Time-localized wavelet multiple regression and

correlation. Physica A: Statistical Mechanics and its Applications 492: 1226-1238.

Fernández-Macho, J. (2022). wavemulcor: Wavelet Routines for Global and Local

Multiple Regression and Correlation, R package version 3.1.2, October 12, available

at: https://CRAN.R-project.org/package=wavemulcor.

Flavin, T., Hurley, M. & Rousseau, F. (2002). Explaining Stock Market Correlation:

A Gravity Model Approach. Manchester School, 70: 87-106.

Hoque, M.E., Sahabuddin, M., & Bilgili, F. (2024). Volatility interconnectedness

among financial and geopolitical markets: Evidence from COVID-19 and Ukraine-

Russia crises. Economic Analysis and Policy, 82: 303-320.

Kumar, G., Lakhotia, M., & Pandey, D.K. (2023). Pre- and during-pandemic

interconnectedness between Asian stock markets. Reference Module in Social

Sciences. DOI: 10.1016/B978-0-44-313776-1.00115-X.

Martinez-Jaramillo, S., Carmona, C. U. & Kenett, D. Y. (2019). Interconnectedness

and financial stability. Journal of Risk Management in Financial Institutions, 12(2):

168-183.

Okhrin, Y., Uddin, G.S., & Yahya, M. (2023). Nonlinear and asymmetric

interconnectedness of crude oil with financial and commodity markets. Energy

Economics, 125: 106853.

Pretorious, E. (2002). Economic determinants of emerging stock market

interdependence. Emerging Markets Review, 3(1): 84-105.

Phylaktis, K. and Ravazzolo, F. (2002). Measuring financial and economic

integration with equity prices in emerging markets. Journal of International Money

and Finance, 21(6): 879-903.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

175

Polanco-Martínez, J. M., Fernández-Macho, J., & Medina-Elizalde, M. (2020).

Dynamic wavelet correlation analysis for multivariate climate time series. Scientific

Reports, 10(1), 21277: 1-11.

Polanco-Martínez, J.M. (2023). VisualDom: Visualize Dominant Variables in

Wavelet Multiple Correlation, R package version 0.8.0, available at: https://CRAN.R-

project.org/package=VisualDom.

Raddant, M. and Kenett, D.Y. (2021). Interconnectedness in the global financial

market. Journal of International Money and Finance, 110: 102280.

Roy, A., Soni, A., & Deb, S. (2023). A wavelet-based methodology to compare the

impact of pandemic versus Russia–Ukraine conflict on crude oil sector and its

interconnectedness with other energy and non-energy markets. Energy Economics,

124: 106830.

Xiang, Y. and Borjigin, S. (2024). Multilayer networks for measuring

interconnectedness among global stock markets through the lens of trading volume-

price relationship. Global Finance Journal, 62: 101006.

Younis, I., Du, A.M., Gupta, H., & Shah, W.U. (2024). Dynamic spillover effects and

interconnectedness of DeFi assets, commodities, and Islamic stock markets during

crises. International Review of Financial Analysis, 96, Part A: 103563.

Zargar, F.N., Mohnot, R., Hamouda, F., & Arfaoui, N. (2024). Risk dynamics in

energy transition: Evaluating downside risks and interconnectedness in fossil fuel

and renewable energy markets. Resources Policy, 92: 105032.

Zeti, A. A. (2014). Managing Financial Crisis in an Interconnected World:

Anticipating the Mega Tidal Waves. 2014 Per Jacobsson Foundation Lecture,

Basel, Switzerland.

Zhao, Z., Lau, C.H.M., Soliman, A., & Farhani, S. (2023). Energy commodity and

stock market interconnectedness: Evidence from carbon emission trading system.

Technological Forecasting and Social Change, 194: 122669.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

176

INSIGHTS INTO ETHICAL PERCEPTION IN ACCOUNTING

EDUCATION

Diana-Elisabeta MATICA1, Edi-Cristian DUMITRA2, Dana LUPU

(CONSTANTINICA)3

1Department of Finance and Accounting, Faculty of Economics, University of

Oradea, Oradea, Romania

2Department of Economic Doctrines and Communication, Faculty of Theoretical and

Applied Economics, Bucharest University of Economic Studies, Bucharest, Romania

3Ovidius University of Constanta, Constanta, Romania (the department, faculty, and

name of institute), Town, Country

maticadiana@yahoo.com

edi.dumitra@economie.ase.ro

lupu.dana@yahoo.com

Abstract: Recently, ethics has become increasingly central in higher education, with

more and more researchers and educators focusing on its integration into curricula

and academic practice. The renewed attention to ethical aspects in accounting is

evident, with notable references to past scandals such as Enron, WorldCom, and

Tyco, highlighting the risks of unethical behaviour. Client pressure to present a

positive financial image can sometimes lead to breaches of ethical standards,

underscoring the need for ongoing education and awareness in this field. The

present quantitative investigation is grounded in empirical analysis and scrutinizes

the perspectives of both master's and bachelor's students in accounting regarding

business ethics and the aims of ethics education in accounting. To assess students'

viewpoints concerning the significance of business ethics and education in

accounting ethics, we use Likert scale and employ an exploratory factor analysis on

data collected through a questionnaire-based survey (a replication of the one

conducted by Adkins and Radtke, 2004) distributed among both bachelor's and

master's accounting students at one of the universities in Romania, namely The

Faculty of Economics from University of Oradea (FSE). Our results, based on

statistical analyses, indicate that master's and bachelor's students exhibit consistent

views on the importance of ethics courses in accounting, regardless of their

completed accounting courses.

Keywords: ethics, higher education, accounting.

JEL Classification: M41

1. Introduction

In today’s business environment, ethical standards in both management and

accounting have become more crucial than ever. The surge in corporate scandals,

fraudulent behavior, and financial crises has highlighted the essential role of ethics

in sustaining trust and integrity across the economic system. Business ethics, along

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

177

with ethical leadership and managerial practices, form the foundation of sustainable

and socially responsible operations. These principles not only ensure legal

compliance but also reinforce core societal values. For future business leaders,

particularly students of Economics and Business, gaining a strong grasp of these

ethical standards is indispensable. Consequently, the study of business ethics will

remain a central focus for researchers and practitioners alike.

Business students play a pivotal role in shaping business ethics. As stakeholders,

they are first impacted as citizens by the business activities occurring in their

environment. Additionally, many are also consumers of these businesses. Upon

graduating and entering the workforce, they once again take on the role of

stakeholders, this time as employees. In both capacities—as citizens and as future

professionals—they develop attitudes and expectations about ethical business

conduct. These ethical perspectives will influence the direction and development of

the organizations they join as members of the workforce.

The primary objective of this research is to examine students' awareness and

attitudes toward ethics education and to evaluate the effectiveness of existing

teaching methods. The key questions guiding the study include: What is students'

perception of the importance of ethics in business and accounting? How do male

participants compare to female participants in terms of the number of accounting

courses completed? Do younger participants consider the significance of ethics in

accounting to be lower as compared to older participants? To what extent do women

regard ethics in accounting education as more important than men do? Are master's

students more cognizant of the importance of ethics in accounting education

compared to other student groups?

To explore these questions, the study utilizes a quantitative approach based on

survey data. This methodology allows for a detailed exploration of students' ethical

perspectives through statistical analysis. The findings provide valuable insights into

the current state of ethics education and offer potential directions for enhancing its

effectiveness.

The structure of this paper is as follows: the introduction emphasizes the critical role

of ethics in business and accounting; the literature review covers prior research and

theoretical perspectives on ethics education; the research methodology section

details the study design, sample selection, and survey methods; the results section

presents the findings, followed by a discussion that interprets these results within the

context of existing literature. Finally, the conclusion summarizes key insights and

makes recommendations for improving ethics education in university programs. By

thoroughly examining students' perceptions, this study aims to support ongoing

efforts to foster ethical awareness and responsibility among future business and

accounting professionals.

2. Literature review

Teaching ethics in accounting can be implemented through two main approaches:

standalone courses and specific course integration, each contributing uniquely to

students' understanding of ethical principles. However, in line with C. Blanthorne

(2017), we believe that there are obstacles to meaningful implementation.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

178

For several decades, researchers have examined the comparative effectiveness of

standalone ethics courses versus the integration of ethics into existing curricula

(Hartman and Werhane, 2009; Dellaportas et al., 2014; Jonson, McGuire and

O’Neill, 2015; Martinov-Bennie and Mladenovic, 2015), but a definitive consensus

has not been reached. This dilemma is compounded by the reduction in teaching

hours following the Bologna Process, which aimed to standardize higher education

across Europe and led to a decrease in study duration, ultimately affecting the

inclusion of ethics content in accounting education (Cardoso et al., 2008; Kovtun and

Stick, 2009; Rebele and Pierre, 2021).

Standalone courses focus solely on ethics, separately from topics like auditing or

taxation. These courses are supported extensively in the literature for their role in

providing comprehensive ethical education, as highlighted by Thompson et al.

(2008) and Massey and Van Hise (2009). Additional research conducted by Klimek

and Wenell (2011) underscores the critical nature of these courses for cultivating

ethical reasoning and preparing students for professional exams, such as the CPA,

required in some U.S. states. These studies reinforce that standalone ethics courses

can deeply impact students' moral development, equipping them with ethical

frameworks specific to accounting. Jorge et al. (2015) further analyzed the factors

influencing the inclusion of standalone ethics and CSR courses in top accounting

master's programs, revealing a concerning lack of such courses despite their

potential benefits. Conversely, the integration of ethics into specific courses offers a

complementary approach by embedding ethical issues within technical accounting

subjects. This method encourages students to confront ethical concerns directly in

contexts like earnings management in financial accounting, thus fostering practical

ethical awareness alongside technical skills. Studies by Kovar Blanthorne and Fisher

(2007) point to a preference among educators for this integrated approach, a view

supported by Mintz (2021), who suggests that applied learning experiences

strengthen ethical reasoning within the professional context.

A variety of effective methodologies for teaching ethics has been recognized in the

literature. These methods encompass the utilization of case studies (Liu, Yao and

Hu, 2012; Cheng and Flasher, 2018), active learning strategies (Loeb, 2015),

thematic instructional approaches (Tweedie et al., 2013), role-playing exercises

(Taplin et al., 2018), and immersive environments using virtual reality (Sholihin et al.,

2020). Each of these pedagogical techniques contributes to enhancing students'

comprehension and application of ethical principles, fostering a more interactive and

responsive learning experience that aligns with their educational needs. However,

there remains a lack of agreement in the literature regarding the most effective

approach. Research conducted by Fleming, Romanus, and Lightner (2009), as well

as by Guffey and McCartney (2008), emphasizes the importance of case studies in

enhancing ethical decision-making skills and developing students' moral reasoning

through their interaction with realistic scenarios. These studies illustrate how

practical engagement with real-world dilemmas significantly benefits students'

understanding of ethical principles. Furthermore, Poje and Zaman (2023) found that

utilizing the Ethics Education Toolkit (EET) significantly enhances students' moral

judgment, underscoring the tool's role in ethical education. The Ethics Education

Toolkit (EET) is designed to reduce the impact of various moral philosophies—such

as justice, utilitarianism, and relativism—on students' moral judgments across

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

179

different dilemmas. It assists learners in identifying unethical behaviors, including

breaches of unwritten agreements. This focus aligns with the EET's strong emphasis

on following established rules and codes of conduct in accounting. Additionally, Loeb

(2015) addresses the challenges associated with implementing active learning in

ethics education, suggesting techniques like Giving Voice to Values (GVV) as

effective strategies. Collectively, these methods not only engage students more

deeply in the learning process but also enhance their ethical reasoning abilities,

contributing to a more profound understanding of ethical principles.

Huong Giang's study (2024) aligns with broader research trends in ethics education,

emphasizing both students' recognition of ethical principles and the ongoing

challenges they face in applying these principles practically. Earlier research by

O'Leary and Radich (2001) indicated that while students who participate in ethics

training feel more prepared to tackle ethical challenges, they often face difficulties in

applying their knowledge practically. This finding highlights a gap between

theoretical understanding and real-world application of ethical principles. Similarly,

May, Luth, and Schwoerer (2014) found that interactive learning methods, such as

case studies and role-playing, are significantly more effective in enhancing ethical

reasoning than traditional lecture-based approaches. This underscores the

importance of experiential learning strategies in bridging the divide between

theoretical concepts and practical implementation in ethical decision-making.

Giang's research also points to an evolution in ethical reasoning as students

progress academically, especially among accounting majors, who increasingly see

ethics as integral to their professional identity. This supports theories like Kohlberg’s

moral development stages and Rest’s Four-Component Model (Rest, 1986), which

argue that ethics education must actively engage students in decision-making

processes to cultivate moral sensitivity and sound judgment.

Adding further context, Nguyen’s study (2021) on students' satisfaction with moral

education highlights a general approval of ethics training but suggests improvements

could be made in content, teaching styles, and supportive learning environments.

Nguyen's insights underscore the need to refine ethics curricula to meet varied

student needs, ultimately preparing them more effectively for complex ethical

decisions they will face in their careers.

3. Research Methodology

Our research is focusing on empirical evidence, based on the interpretative type.

The current study has been conducted during March 2024, using investigation as

the main research method, while the research instrument has been the

questionnaire, which has been adapted from the study conducted by Adkins and

Radtke (2004) and publicly posted on an Internet page.

In the beginning of the study, four research hypothesis have been constructed, as

following:

RH1: Male subjects will differ from female subjects regarding the number of

accounting courses graduated.

RH2: Younger subjects do not perceive ethics in accounting less important than older

subjects do.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

180

RH3: Women will perceive ethics in accounting education to be more important than

men will.

RH4: Master students will be more aware of the importance of ethics in accounting

education.

Hence, the authors have adapted the questionnaire for the current study and opened

and distributed it to the subjects. After the data has been collected, it has been

cleared, coded, and organized, while the t-Tests and ANOVA have been run using

Microsoft Excel. For coding the data, possible answers for questions based on

qualitative nominal variables were coded and integrated as: ”yes”- 1; ”no” – 0; ”I don’t

know” – 9, and “not applicable” – 999. At the same time, the main genders have

been coded with 0 for masculine and 1 for feminine.

Regarding the distribution of the study, the total population it has been addressed to

is around 300 subjects, of whom the authors collected data from 120 subjects,

representing 40% of the total population, providing a sample medium-representative

for the total population. The questionnaire has been distributed to the students

enrolled in accounting related study programs from The Faculty of Economics in The

University of Oradea, Romania.

4. Data analysis

Since the questionnaire was distributed to students enrolled in accounting-related

programs at The University of Oradea in Romania, the maximum number of

participants that could have been included in the study was approximately 300. From

the total population, 40% of the subjects (120 respondents) have filled in the

questionnaire. Based on the subjects’ descriptive statistics, the mean age is 21.73,

while the median is 21 years old, and the mode is 19, with a standard deviation of

3.85. The range between the subjects is a relatively large one, with a value of 25,

determined by the minimum age of 18 and the maximum age of 43, which is not

surprising taking into account that the subjects are students enrolled in both

bachelor’s and master’s programs. At the same time, determining the quartiles, it

has been observed that the first 3 quartiles are relatively equal (Q1 – 19 subjects,

Q2 – 21 subjects, Q3 – 23 subjects) while the 4th quartile (Q4) consists of 43 subjects.

As regards the study program distribution, 79 subjects (65.8%) are from Bachelor

and 41 subjects from Masters, while as regards the gender distribution, the authors

collected data from 109 female subjects (90.9%) and 11 male subjects (9.1%).

Table 1: Subjects distribution by study program and gender

Bachelor

CIG – 60 subjects

FB – 19 subjects

subjects

Feminine

Masculine

Feminine

Masculine

91.6%

8.4%

89.4%

11.6%

Masters

CAGA – 21 subjects

FBA – 13 subjects

FGF – 7 subjects

subjects

Feminine

Masculine

Feminine

Masculine

Feminine

Masculine

95.2%

4.8%

77%

23%

100%

Source: Data collected by the authors.

Using the codes, the subjects’ distribution by bachelor programs consists of students

from Accounting and Management Informatics (CIG) and Finance and Banking (FB).

Meanwhile, the students from master’s programs are enrolled in Accounting,

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

181

Auditing and Business Management (CAGA), Finance, Banking and Insurance

(FBA), and Taxation and Financial Management (FGF).

At the same time, the subjects reported that 44 had been enrolled in an ethics

course, while 76 participants (63.3%) have not taken part into any ethics course,

even if 80 subjects (66.6%) strongly believe that a business profile faculty should

instruct a course on ethics. Moreover, 93 subjects believe that completing an ethics

course during their bachelor’s program aids in addressing the moral and ethical

challenges encountered in both the accounting profession and the broader business

community.

Therefore, as the data has been cleared and coded and the descriptive statistics

have been discussed, four hypotheses have been explored during the analysis,

using the t-Test tool provided by Microsoft Excel.

The first hypothesis, H1, states that Male subjects are different from female subjects

regarding the number of accounting courses graduated, with the null hypothesis

stating that the mean for male participants is equal to that for female participants,

and the alternative hypothesis suggesting a significant difference between the two

means. After running the t-Test, mean male is 2.909091 while mean female is

2.779817. Hence, with a T stat of 0.22, P one-tail of 0.41 (>0.05) and P two-tail of

0.82 (>0.05), the null hypothesis cannot be rejected, concluding that there is no

significant difference between mean male and mean female. Therefore, male

subjects are not different from female subjects regarding the number of accounting

courses graduated.

The second hypothesis, H2, states that younger subjects perceive ethics in

accounting less important than older subjects do. For running the t-Test, the authors

have clustered the subjects by age, defining the younger subjects aged 18 to 22 and

older subjects aged 23 to 43. Hence, the null hypothesis consists in mean age 18-

22 to be equal to mean age 23-43, while the alternative hypothesis takes into account

the significant difference between mean age 18-22 and mean age 23-43. Running

the t-Test, the value of T stat (0.87), P one-tail (0.19) and P two-tail (0.38) facilitates

the null hypothesis to be accepted as the mean age 18-22 is not significantly different

than mean age 23-43. Hence, younger participants do not view ethics in accounting

as less important than their older counterparts do.

The third hypothesis, H3, states that Female subjects perceive ethics in accounting

to be more important than male subjects do. To test this assumption, the null

hypothesis asserts that the mean for male participants is equal to that for female

participants, while the alternative hypothesis posits a significant difference between

the two means. The values provided after running the t-Test, as shown of -4.77 for

T stat, 2.56 for P one-tail and 5.23 for P two-tail, offer enough evidence to reject the

null hypothesis. Hence, as the mean masculine is significantly different from mean

feminine, the statement regarding the fact that the feminine subjects perceive ethics

in accounting to be more important than masculine subjects do can be validated.

The fourth and last hypothesis, H4, states that Master’s students are more impacted

by the study cycle to consider ethics in accounting to be an important aspect of their

professional carrier. Accordingly, the null hypothesis posits that the mean for

bachelor’s students is equal to that for master’s students, representing the average

perceptions across the two study levels. Conversely, the alternative hypothesis

suggests a significant difference between the means of bachelor’s and master’s

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

182

students. With a T stat of -1.06, P one-tail of 0.14 and P two-tail of 0.29, it has been

statistically shown that the mean of master’s is not significantly different from the

mean of bachelor, hence the study cycle (bachelor’s or master’s) does not impact

students’ perception on the importance of ethics in accounting.

Additionally, an ANOVA test was conducted to gain further insights into ethical

perceptions in accounting education, specifically examining differences in how

master’s students perceive the importance of ethics courses in accounting,

independent of the number of accounting courses they have graduated. Hence, as

for the four research hypotheses, the null hypothesis considers that the mean of

bachelor’s is equal to the mean of master’s, while the alternative hypothesis states

that the mean of bachelor is significantly different from the mean of masters. While

running the ANOVA, the value of R Square (0.074809) provides a clear perspective

on how approximatively 7.5% of the results are explained by the model, while 92.5%

of the results appear to be influenced by additional factors that were not included in

the analysis. Meanwhile, the Significant F valued at 0.01 is greater than 0.05, which

provides validity to the model and enough evidence to reject the null hypothesis.

Therefore, it has been proved that there is a significant difference between how

master’s students and bachelor’s students perceive the importance of ethics courses

in accounting, regardless of the number of accounting courses graduated.

For summing up the results obtained by running the statistical analysis, the authors

have concluded that ethics in accounting are important, taking into account the main

perspective provided by the data collected. Both male and female subjects showed

comparable completion rates of accounting courses, a fact which highlights the

gender equality in accounting courses. At the same time, age is not a factor in ethical

importance, since younger participants hold ethics in accounting at a similar level of

importance as older participants do. Also, there is gender neutrality in ethical

perception, since there have not been any significant differences in how male and

female subjects perceive the importance of ethics in accounting. Meanwhile, the

study cycle showed its irrelevance, considering that either pursuing a bachelor’s or

a master’s degree, students’ perception of ethical significance remains consistent.

Nevertheless, a cohesive perception is shown across study levels, study programs,

and gender. Master and bachelor students, male and female subjects exhibit

consistent views on the importance of ethics courses in accounting, regardless of

their completed accounting courses.

5. Conclusions

The educational framework for ethics in accounting includes a diverse set of

pedagogical approaches. Standalone courses and integrated ethics instruction each

offer unique benefits, reflecting an active academic discourse on how best to prepare

accounting professionals to address ethical challenges. This ongoing discussion

emphasizes the necessity of ethics in accounting education, ensuring that ethical

training adapts to evolving professional standards and supports the development of

responsible accountants.

The findings of this study reveal important insights into the dynamics of gender and

age within accounting education. Notably, the similar completion rates of accounting

courses among male and female students suggest progress toward gender equality

in this field. The study also reveals that age has no substantial impact on how

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

183

participants perceive the importance of ethics in accounting; younger participants

regard ethics just as highly as older ones. Likewise, there is notable gender

neutrality, with both male and female students equally acknowledging the

significance of ethics in the field.This consistency is observed across various

academic levels, with no significant differences in how undergraduate and graduate

students view the relevance of ethical considerations in their studies.

Finally, the aligned perspectives of both master’s and bachelor’s students regarding

the value of ethics courses highlight the integral role of ethical awareness in

accounting education, transcending individual academic paths. These findings

emphasize the necessity for a consistent focus on ethical training within accounting

programs, as students of different genders and from diverse educational

backgrounds demonstrate shared commitment to the ethical aspects of their future

careers.

6. Limitations and further research

As the current study has been explored by the authors only over the month of March

2024, a temporal limitation has occurred in collecting data and distributing the

questionnaire to its target population. At the same time, the sample was drawn

exclusively from bachelor and master students enrolled in the accounting-related

study programs within the Faculty of Economics at the University of Oradea,

Romania. Hence, this concentration of subjects represents a limitation of the present

study, as it could affect the validity and generalizability of the obtained results.

Further research might be conducted. The authors aim to extend the current study

to include more students and professors instructing economics-related disciplines

across different universities nationwide, with a particular emphasis on the

accounting-related programs. Meanwhile, the authors consider that future research

could shed light on disparities among faculty members’, professors’, and students’

expectations.

References

1. Adkins, N. and Radtke, R.R. (2004) ‘Students’ and Faculty Members’ Perceptions

of the Importance of Business Ethics and Accounting Ethics Education: Is There an

Expectations Gap?’, Journal of Business Ethics, 51(3), pp. 279–300. Available at:

https://doi.org/10.1023/B:BUSI.0000032700.07607.02.

2. Blanthorne, C. (2017) ‘Designing a Theme-Based Ethics Course in Accounting’,

in Advances in Accounting Education: Teaching and Curriculum Innovations.

Emerald Publishing Limited (Advances in Accounting Education), pp. 135–140.

Available at: https://doi.org/10.1108/S1085-462220170000020006.

3. Blanthorne, C., Kovar, S.E. and Fisher, D.G. (2007) ‘Accounting Educators’

Opinions about Ethics in the Curriculum: An Extensive View’, Issues in Accounting

Education, 22(3), pp. 355–390. Available at:

https://doi.org/10.2308/iace.2007.22.3.355.

4. Cardoso, A.R. et al. (2008) ‘Demand for Higher Education Programs: The Impact

of the Bologna Process’, CESifo Economic Studies, 54(2), pp. 229–247. Available

at: https://doi.org/10.1093/cesifo/ifn013.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

184

5. Cheng, C. and Flasher, R. (2018) ‘Two Short Case Studies in Staff Auditor and

Student Ethical Decision Making’, Issues in Accounting Education, 33(1), pp. 45–52.

Available at: https://doi.org/10.2308/iace-51881.

6. Dellaportas, S. et al. (2014) ‘Ethics Education in the Australian Accounting

Curriculum: A Longitudinal Study Examining Barriers and Enablers’, Accounting

Education, 23(4), pp. 362–382. Available at:

https://doi.org/10.1080/09639284.2014.930694.

7. Fleming, D.M., Lightner, S.M. and Romanus, R.N. (2009) ‘The Effect of

Professional Context on Accounting Students’ Moral Reasoning’, Issues in

Accounting Education, 24(1), pp. 13–30. Available at:

https://doi.org/10.2308/iace.2009.24.1.13.

8. Giang, T.H. (2024) ‘Students’ Perceptions of Business Ethics and Accounting

Ethics Education among University Students Majoring in Economics and Business’,

European Journal of Theoretical and Applied Sciences, 2(4), pp. 442–448. Available

at: https://doi.org/10.59324/ejtas.2024.2(4).36.

9. Guffey, D.M. and Mccartney, M.W. (2008) ‘The Perceived Importance of an Ethical

Issue as a Determinant of Ethical Decision-making for Accounting Students in an

Academic Setting’, Accounting Education, 17(3), pp. 327–348. Available at:

https://doi.org/10.1080/09639280701272666.

10. Hartman, L.P. and Werhane, P.H. (2009) ‘A Modular Approach to Business

Ethics Integration: At the Intersection of the Stand-Alone and the Integrated

Approaches’, Journal of Business Ethics, 90(3), pp. 295–300. Available at:

https://doi.org/10.1007/s10551-010-0427-z.

11. Jonson, E.P., McGuire, L.M. and O’Neill, D. (2015) ‘Teaching Ethics to

Undergraduate Business Students in Australia: Comparison of Integrated and Stand-

alone Approaches’, Journal of Business Ethics, 132(2), pp. 477–491. Available at:

https://doi.org/DOI: 10.1007/s10551-014-2330-5.

12. Klimek, J. and Wenell, K. (2011) ‘ETHICS IN ACCOUNTING: AN

INDISPENSABLE COURSE?’, 15(4). Available at:

https://ethicaldevelopment.ua.edu/uploads/8/4/9/8/84986096/_2011__ethics_in_ac

counting_-_an_indispensable_course.pdf.

13. Kovtun, O. and Stick, S. (2009) ‘Ukraine and the Bologna Process: A Case Study

of the Impact of the Bologna Process on Ukrainian State Institutions’, Higher

Education in Europe, 34(1), pp. 91–103. Available at:

https://doi.org/10.1080/03797720902747066.

14. Larrán Jorge, M., Andrades Peña, F.J. and Muriel de los Reyes, M.J. (2015)

‘Factors Influencing the Presence of Ethics and CSR Stand-alone Courses in the

Accounting Masters Curricula: An International Study’, Accounting Education, 24(5),

pp. 361–382. Available at: https://doi.org/10.1080/09639284.2015.1051562.

15. Liu, C., Yao, L.J. and Hu, N. (2012) ‘Improving Ethics Education in Accounting:

Lessons from Medicine and Law’, Issues in Accounting Education, 27(3), pp. 671–

690. Available at: https://doi.org/10.2308/iace-50150.

16. Loeb, S.E. (2015) ‘Active Learning: An Advantageous Yet Challenging Approach

to Accounting Ethics Instruction’, Journal of Business Ethics, 127(1), pp. 221–230.

Available at: https://doi.org/10.1007/s10551-013-2027-1.

17. Martinov-Bennie, N. and Mladenovic, R. (2015) ‘Investigation of the Impact of

an Ethical Framework and an Integrated Ethics Education on Accounting Students’

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

185

Ethical Sensitivity and Judgment’, Journal of Business Ethics, 127(1), pp. 189–203.

Available at: https://doi.org/10.1007/s10551-013-2007-5.

18. Massey, D.W. and Van Hise, J. (2009) ‘Walking the Walk: Integrating Lessons

from Multiple Perspectives in the Development of an Accounting Ethics Course’,

Issues in Accounting Education, 24(4), pp. 481–510. Available at:

https://doi.org/10.2308/iace.2009.24.4.481.

19. May, D.R., Luth, M.T. and Schwoerer, C.E. (2014) ‘The Influence of Business

Ethics Education on Moral Efficacy, Moral Meaningfulness, and Moral Courage: A

Quasi-experimental Study’, Journal of Business Ethics, 124(1), pp. 67–80. Available

at: https://doi.org/10.1007/s10551-013-1860-6.

20. Mintz, S. (2021) Accounting Ethics Education, The CPA Journal. Available at:

https://www.cpajournal.com/2021/10/19/accounting-ethics-education/ (Accessed:

31 October 2024).

21. Nguyen, C.H. (2021) ‘Vietnamese Students’ Perceptions of Moral Values: An

Assessment by Students at An Giang University’, Universal Journal of Educational

Research, 9(11), pp. 1814–1825. Available at:

https://doi.org/10.13189/ujer.2021.091102.

22. O’Leary, C. and Radich, R. (2001) ‘An Analysis of Australian Final Year

Accountancy Students’ Ethical Attitudes’, Teaching Business Ethics, 5(3), pp. 235–

249. Available at: https://doi.org/10.1023/A:1011482910937.

23. Poje, T. and Zaman Groff, M. (2023) ‘Ways ethics education toolkit impacts moral

judgment of accounting students’, Accounting Research Journal, 36(2/3), pp. 251–

273. Available at: https://doi.org/10.1108/ARJ-10-2022-0258.

24. Rebele, J.E. and Pierre, E.K. (2021) ‘Barriers to Teaching Accounting Ethics:

Accounting Faculty Qualifications and Students’ Ability to Learn’, in Accounting

Ethics Education. Routledge.

25. Rest, J.R. (1986) Moral development: advances in research and theory. New

York: Praeger. Available at: http://digitool.hbz-

nrw.de:1801/webclient/DeliveryManager?pid=3657473 (Accessed: 30 October

2024).

26. Sholihin, M. et al. (2020) ‘A new way of teaching business ethics: The evaluation

of virtual reality-based learning media’, The International Journal of Management

Education, 18(3), p. 100428. Available at:

https://doi.org/10.1016/j.ijme.2020.100428.

27. Taplin, R. et al. (2018) ‘The use of short role-plays for an ethics intervention in

university auditing courses’, Accounting Education, 27(4), pp. 383–402. Available at:

https://doi.org/10.1080/09639284.2018.1475244.

28. Thompson, A. et al. (2008) ‘APLG Panel on Academia and the Accounting

Profession: The Big 4 Respond’, Issues in Accounting Education, 23(2), pp. 199–

209. Available at: https://doi.org/10.2308/iace.2008.23.2.199.

29. Tweedie, D. et al. (2013) ‘Teaching Global Ethical Standards: A Case and

Strategy for Broadening the Accounting Ethics Curriculum’, Journal of Business

Ethics, 115(1), pp. 1–15. Available at: https://doi.org/10.1007/s10551-012-1364-9.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

186

INFLUENCING FACTORS ON COSTS AND DECISION MAKING .

A LOOK AT THE BAKERY INDUSTRY

Florina LUP1, Carmen SCORTE2 , Daniela ZAPODEANU3

1. University of Oradea, Faculty of Economics Sciences, Accounting, Audit and

Business Administration, Romania

2,3. University of Oradea, Faculty of Economics Sciences, Department of Finance

Accounting,Romania

ina.mada@yahoo.com; carmen.scorte@yahoo.com; danizapodeanu@yahoo.com

Abstract

The economic growth and development of any country is determined by the future

of the economic entities in each sector, and this future is an important objective, with

a decision-making process that will be influenced by various factors. But what are

the factors influencing bread consumption, what are the factors influencing costs and

decisions in this sector?

The objectives of this paper are to answer some general and specific questions in

this field: What are the factors influencing costs? How can costs influence the

production decision and the consumption decision? Can the concept of circular

economy influence costs? Do macro-economic issues influence costs and

decisions?

The paper is an empirical, quantitative research, based on the analysis of cost

information, analysis of cost changes and the impact of factors that we consider to

be determinants: the cost of purchasing raw materials under the influence of inflation,

circular economy principles and other pedoclimatic or geopolitical factors, the cost

of labour under the influence of legal regulations, the cost of energy under the

influence of inflation, the energy crisis, geopolitical factors.

In order to have a concrete perspective, we started from a case study of an entity

that has an activity authorized under CAEN code 1071 Manufacture of bread;

manufacture of cakes and fresh pastry goods. The analysis of cost information and

the calculation of short-term decision indicators according to the CVP model started

from the concrete situation in March 2023 to analysing the situation in March 2024

while taking into account the inflation confirmed by BNR and the legislative changes

and trying a prospective analysis for March 2025.

Keywords:, Cost, Direct costing, Calculation of cost, Management, Decizion

process, Bakery

JEL Classification: L11, M11, M41

1. Introduction

Since ancient times, bread and bakery products have played an important role in the

history and civilization of folks. The bread market and bakery-pastry products is

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

187

perhaps the most important in the food sector, as it is always present in anybody's

diet.

The avalanche of price increases that has been felt in the Romanian market in recent

years, increases generated by the price of raw materials, energy, fuels, the price of

labor, and were further perpetuated in the final price from the shelf, brought a variety

of changes in the food industry, changes in consumer demands and changes in

company strategy. The trend towards a healthy diet, greater attention to spending

resources, a more careful measurement of costs and their reduction target, reduction

of food waste and resources in general, the appearance of new brands and the

disappearance of others, all these challenges are present in the Romanian food

industry.

In Romania, citizens allocate 32% of their spending budget on food and drinks, which

places us on the first place in the EU alongside Estonia, and the fact that we import

a large part of the food that we end up consuming also reveals the reduced strength

of Romanian companies. Bread remains one of the most consumed goods, Romania

being among the biggest consumers, but the bakery sector is also important at the

European level. Perhaps this is also why the largest investment announced in a new

factory built from scratch is the one in the Lantmännen Unibake Romania factory.

The company, one of the biggest players on the local bakery market, has started the

construction of the new factory in Pantelimon, where it will produce premium bread

specialties and which implies an investment of over 90 million euros.

On Romania’s territory, registered under the Caen code 1071-“Bread manufacture;

the manufacture of cakes and fresh pastry products” there is a number of 6,416

companies, distributed by counties according to Figure no. 1, which represents

approximately 0.29% of the total number of economic agents. The total number of

employees in this sector of activity is 52,337 people, while the total turnover achieved

is 8,298,544,753 Ron, and the entities in this sector obtaining a profit of 858,163,250

Figure 1: Number of economic agents with a 1071 CAEN code in each county

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

188

The top 10 companies in terms of size according to turnover, but also specifying 2

other important indicators: profit and number of employees in the period 2020-2022

can be found in the following Table.

Table 1: Top firms in the bakery field

Source: Authors’ projection based on https://www.topfirme.com/ and mfinanțe.ro

Considering the desire of economic agents to face this wave of challenges, we

established that a starting point would be the information provided by accounting,

especially the cost information, the analysis of the influencing factors on the costs,

the calculation of some indicators that can be the foundation of the decision-making

process.

2. Objectives and Research Methodology

In this article, we started from the belief that in any sector of activity, production cost

is one of the main pawns that influence the economy's chessboard, impacting both

the decision-making managers and the consumers.

However, production cost itself is influenced by other factors and, in turn, affects the

production and sales strategy of economic entities, their pricing policy, as well as

consumer behaviour and their decision to purchase a product.

Therefore, the objectives of this paper are to answer several research questions:

▪ What are the factors that influence costs?

▪ How can cost-related information influence the decision-making process?

▪ Are there macroeconomic or geopolitical factors that influence costs and

decisions?

Regarding the research methodology, both types of scientific research—

fundamental and applied—were combined for this paper. Fundamental research was

Nume

firma

JUDET

2022

2021

2020

Profit

Salariati

Profit

Salaria

Profit

Salariat

SC VEL

PITAR SA

VL 586,263 922 68,507,218 1,906

LORRAINE

SRL

CJ 217,253,397 10,414,488 266

FORNETTI

ROMANIA

SRL

TM 212,943,491 9,055,255 482

TREI

BRUTARI

DB 106,607,123 20,248,635 291

Lantmanne

n Unibake

Romania

IF 102,165,534 3,993,771 103

S.C. TRANS

AGAPE

S.R.L.

SB 133,569,740 3,419,373 436

SC SIMPA

SB 105,974,642 9,704,713 331

LIDO

GIRBEA SRL

PH 79,406,363 3,103,994 147

LIDAS TL 86,605,564 234,351 198

S.C.

HARMOPA

N S.A.

HR 73,224,505 3,706,295 355

762,776,584 90,365,092 1,897 556,377,313 77,219,226 2,148

337,839,922 399 143,992,425 0

293,016,990 28,736,207 461 156,022,585 987,932 443

149,591,791 18,425,158 368 88,984,965 18,698,269 272

110 75,110,193 8,738,035 91

125,732,932 4,573,683 443 126,652,412 2,183,863 374

119,402,144 13,327,411 326 94,709,396 6,366,321 205

116,481,989 14,910,240 156 122,357,418 8,979,644 147

110,755,427 1,993,505 217 77,095,474 2,420,100 302

11,476,480 2,116,044

2,672,714134,118,789

100,020,694 8,600,738 374 62,136,585 3,093,802 332

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

189

aimed at creating the theoretical framework for the research topic, while applied

research was used to conduct the case study. The case study was conducted at the

microeconomic level within an economic entity operating in the bakery sector.

Additionally, in order to obtain an overview, we also analyzed the situation of the

leading entities authorized under CAEN code 1071, as presented in Table 1.

The table shows the top 10 companies based on turnover registered in 2022, along

with their results and it also presents turnover, and number of employees for the

years 2020 and 2021. It is worth noting that in 2022, the companies La Lorraine SRL

and Lantmännen Unibake România SA recorded losses in their 2022 financial

results, even though they ranked second and fifth, respectively, in this Top 10 in

terms of turnover. For the second company that registered a loss, we consider that

a possible explanation may be the significant investments in building a new factory.

As to the applied section of the research, we conducted a case study on an economic

entity authorized to manufacture bread, biscuits, cakes, and fresh pastry products.

In the beginning of this section, the calculation of costs using the Direct Costing

method and the Cost-Volume-Profit model for three products from their product

range is presented. The motivation behind this choice was the demand for these

products. We aimed to analyze the influence of certain factors on costs. Starting from

the cost situation in March 2023, we analyzed their evolution in March 2024 and

simulated a scenario for March 2025.

The influencing factors analyzed were the price of raw materials and materials under

the impact of inflation and the regional geopolitical context, energy prices under the

impact of the energy crisis and inflation, as well as labor costs considering legal

regulations on the minimum national wage and sector-specific particularities in

agriculture and food sector.

Throughout the research, we employed both qualitative and quantitative research by

using various methods: comparison, observation, analysis, and utilizing information

provided by the company.

3. Literature Review

For the analysis of the literature, we looked to gain an overview of articles written

and indexed in the Web of Science and Scopus databases based on certain

keywords. The purpose of this approach was to highlight interest in the topic

addressed in this scientific research, starting from the frequency of representative

keywords. The significance of keywords used in scientific papers is increased,

offering a concise image of the approached content, which led us to begin with a

preliminary bibliometric analysis.

Since research efforts to gauge interest in the topic focused on the frequency of

keyword appearances and identifying relationships between them, this bibliometric

study materialized in three steps (data collection, bibliometric visualization, and

bibliometric analysis), as shown in Figure 2.

The search and extraction of relevant works were carried out using the Web of

Science database. A total of 4,330 relevant papers were identified. The relatively

small number of papers highlights either the lower interest in this field of research or

the complexity of the topic and confidentiality regarding certain information (recipes,

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

190

acquisition costs, etc.). Upon extracting the information, specific qualitative and

bibliometric analyses were performed using the VOSviewer software tool.

Following the processing of papers exported from the Web of Science database, a

co-occurrence matrix of keywords was generated. The nodes, formed by the terms

included in the analysis, are presented based on their frequency, as shown in the

figure below. To clarify the information provided by the matrix, the following should

be noted: the greater the intensity and size of the terms, the more significant they

are in the bibliometric analysis, resulting from the qualitative processing of the

Boolean query. Furthermore, although there are strong associations between many

terms (small distances between nodes), there are also weaker connections (larger

distances between nodes). Each cluster determined by the relationships between

terms and their associated terms is represented in different colors, with a term

allocated to a single cluster (based on its frequency in relation to the keyword).The

results of the bibliometric analysis have highlighted and also confirmed the benefits

discovered in the identified literature. Out of all the articles resulting from querying

the database, when discussing decision-making processes, costs, and partial

calculation methods, the most frequently encountered term is "Forecasting." The

keywords used include: Cost, Direct Costing, Cost Calculation, Management,

Decision-making process, Food Industry, Bakery.

Word associations are classified by colors, each color having a predominant word.

The most frequently researched word represents the dominant node. Consequently,

it can be noticed that most articles have keywords such as "management" and "cost

performance." From the perspective of colors, the most clearly highlighted area is

red, with the dominant node being "cost," and associated terms such as "cost

management," "cost accounting," "cost calculation," and "management accounting."

The second heavily highlighted area includes articles where the predominant node

is "management," and associated terms include "risk," "decision making," "decision

process," and "accountability." Furthermore, it is obvious that there are connections

between word groups, and the stronger the connections between groups, the more

prominent the lines connecting them.

Figure 2: Map of articles written, based on keywords used

Source: VOSviewer using keywords indicated by the authors.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

191

The software generated an image showing the words as written by the authors.

However, if we were to associate the frequency of certain words, the fact that some

words appear more often as dominant nodes or are associated with multiple

dominant nodes, the image would look different.

The bibliometric analysis reveals information provided by authors from countries

such as Romania, Italy, France, the USA, Canada, England, Germany, Brazil,

Australia, the Netherlands, India, and Spain. We can observe networks of

connections, bibliographic coupling, co-citation, or co-authorship to construct and

visualize networks of terms extracted from scientific literature.

Food loss and food waste is a complex issue that generates unwanted effects in

economic, social, and environmental aspects. Additionally, food waste carries ethical

implications, as it has disastrous effects on food security, a challenge already faced

by a significant part of the population.

The factors influencing the costs and outcomes of enterprises are numerous, and

from the specialized literature, we chose to focus on several key aspects:

▪ Reducing Losses and Waste in the Food Industry

This involves minimizing waste of material and human resources, which directly

reduces financial losses, alongside cultivating proactive managerial attitudes toward

these issues. Studies emphasize the importance of actions such as redistribution of

surplus food to food banks and other aid organizations (Eicaite et al., 2022; Eicaite

et al., 2023; Papargyropoulou et al., 2014; Kurthy et al., 2021; United Nations

Environment Programme, 2021; Food Waste Index Report 2021; Maalouf &

Agamuthu, 2023; Cattaneo et al., 2021; Albizzati et al., 2019).

▪ Increasing Competitiveness

Attention to the quality of ingredients and other economic-impact variables is critical.

Enhancing product quality and maintaining competitiveness in the market are focal

points of several studies (Petroman et al., 2010; Schou Jødal et al., 2021; Danza et

al., 2014).

▪ Reducing Costs through Recipe Adjustments and Resource Optimization

Cost reductions can be achieved by altering recipes, replacing ingredients with cost-

effective alternatives, and using bioenergy. This approach also promotes sustainable

practices in the food industry (Jensen & Govindan, 2014; Osipova, M.V., 2020;

Demarigny & Gerber, 2014; Hvostikova, V.A., et al., 2020).

▪ Implementing Circular Economy Practices

Promoting environmental protection, mitigating global warming, and ensuring

sustainability in the food industry and related sectors are vital. Circular economy

practices aim to reduce waste and enhance resource efficiency (Miao et al., 2024;

Köseli et al., 2023; Albizzati et al., 2019; Eikelenboom & De Jong, 2022; Howard-

Grenville et al., 2014; Strippoli et al., 2024).

▪ The Impact of Macroeconomic and Geopolitical Factors

External influences, such as economic fluctuations and geopolitical conditions,

significantly affect costs in the food industry. These factors add layers of complexity

to cost management and production planning (Amicarelli et al., 2023).

Addressing these factors through strategic planning and sustainable practices is

crucial for minimizing food waste, reducing costs, and improving overall efficiency in

the food industry.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

192

4. Data Analysis. Presenting and Interpretating the Results

The basis of the decision-making process is a challenge for the management team

in any field of activity. Therefore, we aimed to address in this paper a mini-case study

that facilitates answers to the research objectives: What are the factors influencing

costs? How can cost-related information impact decision-making? And do

macroeconomic and geopolitical factors influence costs and, implicitly, the decision-

making process?

The applied research is based on information received from an economic entity

authorized to carry out activities under CAEN code 1071, which pertains to the

manufacture of bread, cakes, and fresh pastry products. Among the products

manufactured and sold by this economic entity, we selected three varieties: White

Chocolate Cream and Berry Cake, Candy Mini Brownie Cake and Snickers Cake.

The criterion for selecting these products was their share in total sales.

The cost calculation method applied in this research is a partial method, specifically

the Direct Costing Method. According to this method, expenses are classified

based on how they change with variations in the physical volume of production, into

variable and fixed costs.

The expenses incurred by the economic entity for producing these three types of

pastry products in quantities of 41, 38, and 41 trays, respectively, in March 2023, are

presented in the following table.

Table 2: Expenses according to their variation and nature

EXP. BY

THEIR

VARIATION

VARIABLE EXPENSES

FIXED EXPENSES

TOTAL

EXP. BY

NATURE

COMMON

ADMINISTRATI

Raw

materials

1288.00

1452.00

972.00

3712.00

Materials

0.00

337.00

150.00

487.00

Amortisation

275.60

224.40

500.00

Wages

600.00

300.00

0.00

1740.00

2940.00

ICW 2,25%

13.50

6.75

0.00

39.15

66.15

Electricity

164.25

98.55

102.20

56.00

167.90

588.90

Rent

270.00

105.00

375.00

Bank

commision

40.00

Advertising

150.00

TOTAL EXP

2065.75

1857.30

1380.95

938.60

2616.45

8859.05

TOTAL

TURNOVER

6.150

3.960

4.400

14.510

CBI/

PROFIT

4084.3

2.200.45

3052.73

938.60

2616.45

5782.38

Source: own data processing

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

193

As previously stated, starting from the situation regarding the expenses for the three

types of pastry products in March 2023, we then aimed to analyse the dynamics of

cost changes in March 2024 and make a projection for March 2025.

In March 2024, the change in expense values is driven by inflation and the increase

in the minimum wage in the food industry, which rises from 3,000 RON to 3,436 RON

starting November 1, 2023. According to official data published by the National Bank

of Romania (BNR), the inflation rate in the first quarter of 2024 was 7.23%.

Regarding the year 2025, the forecasts considered were limited to official information

concerning inflation and the increase in the minimum wage in the food sector from

3,436 RON to 3,700 RON.

The evolution of total fixed costs per unit and variable costs for the three products

across the three periods is presented in Table 3.

Table 3: Expenses in the time period analysed

Source: own data processing

In Figure no. 3, we present the evolution of the actual unit cost for the three products

across the three time periods. As expected, an upward trend in unit cost is observed,

with an average increase of 15% from the first to the third period.

Figura 3: Calculația costului unitar 2023-2025

Source: own data processing

CH. DUPĂ VARIAȚIA LOR TOTAL

CH. DUPĂ NATURĂ A B C COMUNE

ADMIN

ISTRA

TIVE

mar.23 2065.75 1857.30 1380.95 938.60 2161.45 8859.05

martie 2023+salar/2024 2154.91 1899.88 1425.53 938.60 2875.02 9293.94

martie2023+salar

+inflatie/martie 2024

2310.71 2037.24 1528.60 1006.43 3082.88 9965.90

martie 2024+salar 2363.51 2063.64 1555.00 1006.46 3236.00 10224.61

martie2024+salar+inflatie/martie

2025

2462.78 2150.31 1620.31 1048.73 3371.91 10654.04

CHELTUIELI

Tort cu crema de ciocolata…

Prajitura candy mini brownie

Prajitura snikers

0,00

20,00

40,00

60,00

2023 2024 2025

Tort cu crema de ciocolata

alba,fructe de padure 50,3855,1258,03

Prajitura candy mini brownie 48,8852,9955,55

Prajitura snikers 33,6836,6638,50

Cost Calculation per Unit

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

194

Regarding the turnover and the financial result for the three time periods on these

three types of goods, the situation is presented in Figures 4 and 5. Even though

Figure 4 shows an increase in turnover driven by the rise in selling prices adjusted

for inflation, the value of the financial result is declining.

Figure 4: Turnover evolution 2023-2025

Source: own data processing

Figure 5: Result/Profit evolution 2023-2025

Source: own data processing

The food industry in Romania has undergone significant transformations over the

last 20 years, driven by changes in socio-economic conditions, the lifting of

quantitative import restrictions, the liberalisation of industries, the entry of foreign

entities into the market, and the increase in population income. The bakery industry

holds a significant position within the food industry, primarily because bakery

products have been and continue to be staple foods consumed daily by Romanians.

And yet, how could we answer our research questions using the information from

the micro-case study and the specialized literature?

The greatest influence on costs comes from the cost of ingredients and labor prices.

These main factors, in turn, are influenced by the country's economic situation, the

geopolitical context, and pedoclimatic factors. In the current global context,

Romania's economy faces a multitude of challenges that affect every industry: the

post-pandemic recovery period, the European energy crisis, the armed conflict at the

border, and the humanitarian crisis caused by it. This situation leads to an increase

6150

3960

4400

14510

6594,65

4246,31

4718,12

15559,08

6871,63

4424,66

4916,28

16212,57

04000 8000 12000 16000

Tort cu crema de ciocolata alba,fructe…

Prajitura candy mini brownie

Prajitura snikers

TOTAL

Turnover 2023-2024-2025

Rezultat -2023 Rezultat -2024 Rezultat -2025

5782,38 5747,61 5734,64

RESULT/PROFIT

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

195

in business financing costs, a decrease in purchasing power, increased attention to

spending, and a decrease in demand for bakery products.

How can managers in this sector respond to the challenges of staying on the market?

A relevant cost analysis and the implementation of corrective measures regarding

recipes, renegotiating commercial contracts, replacing or eliminating some

ingredients (innovative raw materials such as barley flour, almond flour, coconut

flour, replacing butter with apple sauce, etc.) can help respond to the dietary

preferences of clients who are paying increasing attention to healthy eating.

Thus, management teams have the difficult task of staying competitive in the market.

We believe that one option would be accepting the situation of reduced profits,

although from a microeconomic perspective, this is not beneficial. Attracting a

growing number of consumers by offering bonuses, producing goods with health-

beneficial ingredients could lead to an improvement in the economic and financial

performance of the entity. Bakery and pastry shop owners must offer their customers

an experience that simply cannot be replicated online, one that will delight their taste

buds.

We believe that the influences brought by inflation, legislative measures (increased

wages and taxation), environmental factors, and the armed conflict at the border

represent a challenge for management teams, which can only make decisions that

minimize the negative effects of the current global economic situation. The military

conflict at Romania's border has brought many challenges to the agricultural sector,

as imports of cereals and oilseeds from Ukraine have increased, with prices lower

than the production costs of domestic farmers. This has resulted in unfair competition

in the market and increasing difficulties in financing or storing cereal products.

7. Conclusions and limitations of the research.

Even though at present time 6,416 economic entities in Romania operate under

CAEN code 1071, we believe that, in the current context, the number of those who

will be able to face the challenges of surviving in a competitive market will become

increasingly smaller.

The factors influencing the activity in this sector and the costs of the offered products

are multiple, and most of them are beyond the control of managers. In this paper,

we have only analysed some of the influencing factors that could be measured

(inflation levels, increases in minimum wages in the economy, and various

regulations in the food sector), but the food industry and this subsector of bakery and

pastry products are influenced, as mentioned, by multiple factors, the effects of which

cannot be predicted through measurement.

A broad applied study, analysing the information provided by the financial statements

of entities in this sector, could give a clearer picture. However, we would face the

issue of the small number of publicly listed companies. Additionally, only analysing

reports would bring certainty that revenues are generated from activities carried out

under this CAEN code (considering that an entity may have multiple authorized

CAEN codes).

However, we believe that the managers of economic entities in this sector will spare

no effort to meet all challenges in order to ensure that production costs remain low,

product prices and quality attract a growing number of customers, and that the

negative influence of the current context and disruptive factors is minimized.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

196

REFERENCES

1. Albizzati P. F., Tonini D., Chammard C.B.,Fruergaard Astrup T., (2019),

Valorisation of surplus food in the French retail sector: Environmental and economic

impacts, Waste Management, volume 90, pp 141-151

2. Amicarell V., Lombardi M.,, Varese E.,, Bux ., (2023), Material flow and economic

cost analysis of the Italian artisan bread production before and during the Russia-

Ukraine conflict, Environmental Impact Assessment Review, 101,

https://doi.org/10.1016/j.eiar.2023.107101

3. Cattaneo A., Federighi G., Vaz S., (2021), The environmental impact of reducing

food loss and waste: A critical assessment, Food Policy, Volume 98,

https://doi.org/10.1016/j.foodpol.2020.101890

4. Danza A, Mastromatteo M, Lecce L , Spinelli S, Laverse J, Lampignano V, Contò

F and Nobile M 2014 Effect of wholemeal durum wheat varieties on bread quality

Food and Nutrition Sciences 5 977–88 DOI: https://doi.org/10.4236/fns.2014.511108

5. Demarigny Y and Gerber P 2014 Usefulness of natural starters in food industry:

The example of cheeses and bread Food and Nutrition Sciences 5 1679–91,

https://doi.org/ 10.4236/fns.2014.517181

6. Eicaite O., Balezentis T., Ribasauskiene E., Morkunas M., Melnikiene R.,

Streimikien D., (2023), Exploring food loss in the food industry: A survey-based

approach for Lithuania, Journal of Cleaner Production, volume 399;

7. Eicaite O., Balezentis T., Ribasauskiene E., Morkunas M., Melnikiene R.,

Streimikien D., (2022), Measuring self-reported food loss in primary production:

Survey-based insights from Central and Eastern Europe, Waste Management, vol

143, pp 46-53, https://doi.org/10.1016/j.wasman.2022.02.015

8. Eikelenboom M., De Jong G., (2022) The Impact of Managers and Network

Interactions on the Integration of Circularity in Business Strategy, Organization &

Environment 2022, Vol. 35(3) pp. 365 –393

9. Garrone P., Melacini M., Perego A., Sert S., (2016), Reducing food waste in food

manufacturing companies, Journal of Cleaner Production, volume 137, pp 1076-

1085; https://doi.org/10.1016/j.jclepro.2016.07.145

10. Howard-Grenville, J., Buckle, S. J., Hoskins, B. J., & George, G. (2014). Climate

change and management. Academy of Management Journal, 57(3), 615-623.

https://doi.org/10.5465/amj.2014.4003

11. Hvostikova V.A., Elfimova I.F., Rodionova V.N., Lavrenova G.A., Shishkin I.A.,

Karuna S.N. (2020), Cost Management to Realize the Innovative Potential of Food

Production and Ensure Economic Security, Advances in Economics, Business and

Management Research, volume 148, pp 243-248

12. Jensen J. K., Govindan K., (2014), Assessment of renewable bioenergy

application: a case in the food supply chain industry, , Journal of Cleaner Production,

volume 66, pp 254-263

13. Köseli I., Soysal M., Çimen M., Sel Ç (2023), Optimizing food logistics through a

stochastic inventory routing problem under energy, waste and workforce concerns,

Journal of Cleaner Production, volume 389,

https://doi.org/10.1016/j.jclepro.2023.136094

14. Kurthy G., Ordog E. D., , Dudas G., Radoczne Kocsis T.,, Szekelyhidi K.,

Takacs E., (2021), Food loss in the Hungarian food industry – Examining

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
197 
 
 
quantification problems and attitudes of managers and their impact on policy, Waste 
Management, vol 135, pp 11-19, https://doi.org/10.1016/j.  
15. Maalouf A., Agamuthu P., (2023), Waste management evolution in the lastfive 
decades in developing countries –A review, Waste Management & Research2023, 
Vol. 41(9) 1420–1434,  
16. Miao Y., Hu X., Ho To, M.,  Wang H., Qin Z., Mou J., Yan W., Kaur G., Roelants 
L.K.W.S., Ki Lin C. S., Chopra S., (2024),  Environmental evaluation of emerging 
bakery waste oil-derived sophorolipids production by performing a dynamic life cycle 
assessment,  Sustenable  Production  and  Consumption,  volum  47,  pp  59-70; 
https://doi.org/10.1016/j.spc.2024.03.021 
17. Osipova M. V. , (2020), Experimental use of food additives to accelerate the 
technological  process  of  bakery  production,  
IOP  Publishing,  
https://doi.org/10.1088/1755-1315/613/1/012099 
18.  Papargyropoulou  E.,  Lozano  R.,.  Steinberger  J.K., Wright  N.,, Ujang  Z.  bin, 
(2014) The food waste hierarchy as a framework for the management of food surplus 
and food waste, Journal of Cleaner Production, volume 76, pp 106-115; 
19. Petroman C.,  Popovici C., Petroman I., (2010) Improving Quality Management 
In  Panificatio,  International  Journal  for  Quality  research,  vol  4  nr  1  ,  452-
1449079382.pdf (oaji.net) 
20. Schou Jødal A-S., Brunoe T. D.,  Nielsen K., (2021), Impact of Dough Property 
Characterization  on  Industrial  Bread  Production,  Conference  paper, 
https://doi.org/10.1007/978-3-030-90700-6_71 
21. Strippoli R., Gallucci T., Ingrao C. (2024) Circular economy and sustainable 
development in the tourism sector– An overview of the truly-effective strategies and 
related benefit, Helion 10, https://doi.org/10.1016/j.heliyon.2024.e36801 
22. United Nations Environment Programme, 2021. Food waste index report 2021. 
Nairobi. https://www.unep.org/resources/report/unep-food-waste-index-report-2021.  

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

198

SECTION INTERNATIONAL BUSINESS, EUROPEAN

INTEGRATION, FOREIGN LANGUAGES AND BUSINESS

ENVIRONMENT

LEGAL MIGRATION – RIGHTS AND BENEFITS IN THE

EUROPEAN SOCIAL SECURITY SYSTEM

Nicoleta ANDRICA 1, Andreea-Florina FORA2

1Doctoral School of Economic Sciences, Faculty of Economic Sciences, University

of Oradea, Oradea, Romania

2Department of International Business, Faculty of Economic Sciences, University of

Oradea, Oradea, Romania

nicoleta_mester@yahoo.com

andreea.fora@gmail.com

Abstract: In the present paper we are discussing about legal migration inside U.E

and the rights it confers. All the states members are facing migration, which is a

complex of challenges, including demographic, political and economics -one of the

most important, the decrease in the labour market. Every country needs to attract

skills and knowledge from abroad. Innovation and transition to a green and

sustainable economy is a priority for all. We also approach the peculiarities and the

characteristics of European digitalisation in social security coordination in all

institutions in E.U., including Romania. In 2023, more than are 17 million of

Europeans citizens are working or living abroad. European Union provides

information for all the workers: equal treatment, E.U. legislation, rules for each one,

rights in each country and also for family members. The countries implement the

European interoperability for social security institutions, to make easier the

electronic exchange between the institution from all Europe. Using this type of

communication, mandatory for all members countries, gradually will be removed the

documents on paper support by electronic one. This is part of green economy.

EESSI (Electronic exchange of social security information) is use in different branch

of social security such as unemployment, old age pension, accidents at work or

sickness benefits, family benefits, or maternity and paternity benefits. Labor

migration is a very important aspect of European Politics. Thus, the growing flow of

foreign workers, who must benefit from all the rights conferred by European

citizenship, accelerate the process of using these programs, to facilitate access to

all this in shortest possible time and no additional costs.

Keywords: migration; social security; workers; E.U. legislation; rights

JEL Classification: J61; F66.

1. Introduction

Romania's integration into the EU offered all Romanians access to a free European

labor market, without restrictions or discrimination regarding nationality. The phrases

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

199

"European citizen" and "European citizenship" are more and more common these

days. From these arise both rights and obligations, which all citizens should know.

Specialized bodies regularly deal with information on these aspects, using as many

channels as possible: media, online, flyers. Integration into the E.U. made European

directives and regulations transposed into our legislation. Starting from free

movement, aspects regarding regulations at the educational level, which allow the

recognition of studies and courses throughout the EU. and last but not least, aspects

regarding the social insurance system.

Migrants are not only looking for a job, they want a lifestyle, which pleasantly

combines both the part regarding work and the rights regarding access to education,

health and social insurance offered by the host country.

Migration has both a positive and a negative impact on the economy of our country.

If in the short term these are positive (decrease in unemployment, remittances,

capital contribution in local investments), in the long term we can also anticipate

some negative effects such as the aging of the population, the decrease of the active

population, the reduction of the labor force and implicitly lower social security

contributions to the state budget.

European Commission adopted the introduction of a minimum wage at the E.U. level.

All these provisions are provided in the Directive 2041/2022 on the adequate

minimum wage in the E.U. and entered into force in October 2022. Member States

have two years to transpose the provisions into national legislation. Although they

wanted the minimum wage to be at the level of the E.U. and sector of activity, the

final form stipulates that each state will establish its level taking into account the

directive provisions but also the economic and social conditions, macroeconomic

indicators and implicitly the value of the consumption basket. Thus, it is desired that

the value of the consumption basket represents 60% of the median salary or 50% of

the average gross salary in the economy. In România it will starts by July first 2024

and will be around 722 euro.

2. The average salary at the level of the E.U.

The average salary at the EU level can vary significantly depending on the level of

economic development of each country. Analyzing this aspect, we can observe a

considerable difference between the Western countries and those of Central and

Eastern Europe. In countries such as Luxembourg, Denmark and the Netherlands,

the average gross monthly salary can exceed 2500 euros, and in our country, among

Bulgarians and in Hungary, the average gross monthly salary is significantly lower,

such as - 477 euro Bugaria, 633 euro-Romania and Hungary-697 euro.(Minimum

wages, January 2024-Eurostat)

Starting from the average salary at the level of each country, we end up at the

pension system. Just like the amount of the salary, the level of pensions differ

depending on the country. Being influenced by several factors, among which we

mention the contribution to the pension system, the calculation system, the economic

power of the respective country, we conclude that the level of pensions in Romania

is on average lower than in Western countries. Over time, the pension system in

Romania has faced equity and sustainability issues. Integration into the E.U. of

Romania helped to adopt measures to help European citizens who have worked in

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

200

one of the member countries and be able to receive their rights from each country

(Reg. (EC) NR. 883/2004 of the European Parliament).

3. Electronic Exchange of Social Security Information – EESSI

One of the most important steps for digitalization in all the sectors of activity providing

benefits or services in the following branches of social security:

▪ family benefits

▪ sickness, maternity, and equivalent paternity benefits

▪ old-age pensions and disability benefits

▪ benefits for unemployment

▪ benefits for survivors

▪ benefits in case of accidents at work and other occupational diseases

(www.europa.eu)

To make more easily the connection between social security institutions across

Europe, the European Commission implements the EESSI - Electronic Exchange of

Social Security Information. Starting by June 2023, the system interconnects, 3,400

institutions in 32 participating countries: the 27 EU Member States and the following:

Iceland, Liechtenstein, Norway, Switzerland, and the United Kingdom (European

Commission).

EESSI works as an IT System used by all the institutions to communicate regarding

social security files. In this case it can be selected every country that takes part of a

file, and the documents are sent to the correct destination in the right institutions.

The Electronic Exchange of Social Security Information (EESSI) system offers

several benefits, such as improved efficiency in exchanging social security data

across EU countries, reduced administrative burden for social security institutions,

enhanced data accuracy, and quicker processing times for social security claims. By

streamlining the process and making it more efficient, EESSI can help identify and

prevent fraudulent activities more effectively.

Figure 1: The number of business messages exchanged across Europe starting

2021

Source: www.europa.eu [05 April 2024]

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

201

Each year the number of business messages is growing (Q1-2021 3.095.211 at

9.643.798 at the end of Q4-2023) and this is a very good thing in implementation of

EESSI. Using it by every country and all the competent institutions, the time for

processing files is reduced, the information are correct, response times are

shortened and the environment is protected by eliminating paper forms.17 millions

of europeans lives and works in other country of the U.E. and almost 5 milions

romanian lives abroad (european-union.europa.eu).

4. Conclusions

Traditional methods of exchanging social security information often involve physical

mail and courier services, which contribute to carbon emissions. EESSI's electronic

system minimizes the need for these services, thereby lowering the carbon footprint

associated with the transportation of documents.

Romania's membership in the EU brought a series of benefits both economically and

socially. European regulations and directives transposed into Romanian legislation

provide a transparent legislative framework, legislative stability in a European

framework, for all economic agents.

On the social level, the transposition of the directives leads to a series of rights

conferred on the state of "European citizen", both regarding the educational system,

the health system and the social system. Each country has its own system, but must

corroborate them with European regulations, so that "European citizens" benefit from

the legislative provisions of the country in which they carry out their activity, just like

all other citizens.

Helped by the digital communication system, european citizens manage to obtain

their benefits in a much shorter time, and the instrumentation institution and those in

question can keep contact regarding the situation of each person.

EESSI offers a wide array of benefits such as security, transparency and efficiency

of social security coordination across the European Union. By using this digital

technology, EESSI improves the operational effectiveness of social security

institutions and provides important advantages for citizens, particularly for those with

cross-border social security needs and for those who have worked in multiple EU

countries.

EESSI ensures that pension rights are accurately tracked, claims are promptly

processed, and pensioners get their benefits without delays. This system simplifies

the coordination and portability of their pension entitlements.

The system's contributions at environmental sustainability, cost saving and better

resource utilization further underscore its value in modernizing and optimizing social

security systems within the E.U.

Digitalisation is the biggest challenge in the public administration system, both

national and European. Romania, as a member of the U.E. is taking important steps

to progress as quickly and as well as possible. The EESSI implementation is one of

them.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

202

References

1. Berinde, M. and Giurgiu, A., (2007) Aderarea României la UE, Oradea: Editura

Universității din Oradea.

2. Pîslaru, D.N., Botezatu, E., Popescu, A., Stăniloiu, I., (2019) Pilonul european al

drepturilor sociale:reducerea inegalităţilor şi a decalajelor sociale în Romania.

Evoluţii ale politicilor şi iniţiativelor europene din domeniul tineretului, Institutul

European din România,

3.Directive 2041/2022 on Adequate Minimum Wages

4. Regulation (EC) No. 883/2004 of the European Parliament and the Council of 29

April 2004

5. www.consilium.europa.eu/ro/policies/adequate-minimum-wages/ [06 April 2024]

6. www.cursdeguvernare.ro [03 April 2024]

7. www.ec.europa.eu [05 April 2024]

8. www.eur-lex-europe.eu [07 April 2024]

9. www.eurostat.eu [03 April 2024]

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

203

A EUROPEAN DEFENSE FORCE: A COMPREHENSIVE

APPROACH TO STABILITY AND PROGRESS. THE ECONOMIC

PERSPECTIVE

Cristian Romeo SPĂTARU¹, Cristian Constantin POPESCU²

¹Department of Economics, The Doctoral School of Economics and Business

Administration, “Alexandru Ioan Cuza” University of Iași, Iași, Romania

²Department of Economics, Faculty of Economics and Business Administration,

“Alexandru Ioan Cuza” University of Iași, Iași, Romania

cspataru1970@gmail.com; popescu@uaic.ro

Abstract: The EU is an undeniable economic and civil-normative power. Military

force is a key element of “hard power.” Stability is a prerequisite for development,

and a strong army is a guarantor of stability. This analysis will explore the

advantages and challenges of establishing a common European army, focusing on

available resources (cultural-historical, economic, and military). Success requires

financial resources. We will emphasize the need for an opportunity to create a

common army. There will be no lack of infrastructure, innovation, and defense

technologies, along with the presentation of potential economic benefits. While

external threats can speed up the process, a lack of consensus and slow progress

in the CFSP hamper its realization.

Keywords: EU army, stability, hard power, security threats, economic integrations,

strategies & defense policies

JEL classification: F50, H56, O14, Y10

1. Introduction

The document examines the EU's global leadership ambitions and the importance

of developing the military capabilities necessary to achieve the status of “hard

power,” which improves regional stability and cooperation between states and

creates an environment conducive to development. Given the current geopolitical

context, the study assesses the feasibility and strategic timing of establishing a

unified European army, addressing its potential benefits, challenges, and necessary

resources. The paper integrates distinct cultural-historical, military, and economic

analyses while systematically identifying key obstacles. Through the defense sector,

a common army can contribute to deeper economic integration in conjunction with

an interconnected European defense industry. Moreover, it adopts a robust

argumentative framework designed to influence policymakers and the public on the

future of European defense. The study explores its implications for achieving peace

through deterrence and enhancing international influence by shifting the European

Union's strategic focus from "soft power" to "hard power," along with all the economic

and security benefits.

2. Literature review

We propose a literature review to address several deficiencies in EU defense policy:

institutional overload (Howorth, 2001), limited involvement by the Commission,

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

204

persistence of unanimity rules (Wessels & Bopp, 2008), lack of a cohesive strategic

culture, overlapping competencies, absence of influential figures (Margarita, 2010),

weak military collaboration among member states, and hesitance to integrate the

defense industry (O'Donnell, 2013). Economic and systemic divides also impede

cooperation (Blockmans & Crosson, 2021), and gaps in capacity hinder military

innovation (Crosson & Blockmans, 2022).

Jurčák (2023) argues that a European army requires transferring national powers to

the EU. Public concerns about Russia and critiques of NATO support a European

army (Graf, 2020), while Sahin & Sahin (2023) highlight potential benefits despite

sovereignty concerns. Although CSDP and NATO have broad support, views differ

on a common army (Mader et al., 2020).

According to Hrivík (2019), despite launching the PESCO project, developing and

implementing the Common Security and Defense Policy following the Lisbon Treaty,

which provides the legal basis, have not made significant progress.

All the initiatives that took place in the two decades leading up to PESCO, aimed at

strengthening European military capabilities, have achieved little or failed, both

within NATO and the EU (Maulny and DI Bernardini, 2019)

The progress report on EU-NATO cooperation from June 2020 highlights the spirit

of complementarity between PESCO and NATO activities, emphasizing that most

PESCO projects address NATO's priorities (Lazarou and Lațici, 2020).

In 2021, S. Blockmans and D. M. Crosson described the PESCO structure

(Permanent Structured Cooperation) as a remarkable institutional innovation. It has

been moving well and producing the most comprehensive expression of enhanced

cooperation. Indeed, let's compare it with the few achievements of previous years in

terms of the development of collective military capabilities at the EU level. We have

remained deficient, with few exceptions.

Authors Houdé and Wessel (2023) analyzed the nature of PESCO within the broader

context of CSDP and revealed that the term is not as common as it might suggest.

PESCO's flexibility rules, which circumvent the unanimity requirement, may result in

too much fragmentation instead of promoting the community that the treaties

envision for the Common Security and Defence Policy.

From the author Nováková (2021), we retain two aspects: the European army should

be the European pillar of NATO and not its competitor, and on the other hand, the

main task of the European army would be to strengthen the EU's position on the

international stage. The arguments for and against creating a European army focus

on political will, inconsistent foreign policies, differing or sometimes conflicting

foreign policy priorities, incompatible technical equipment, divergent views on fair

command structures, and the financial capacities of member states and the Union.

The Russian aggression has intensified support for EU security as complementary

to NATO (Fernández et al., 2023), and Fiott (2023) examines institutional responses

to the Ukraine conflict. A seven-country survey indicates support for a "stronger,

united, and autonomous EU in military matters" (Wang & Moise, 2023).

The invasion of Ukraine in 2022 had a limited impact on strengthening the

capabilities of the EU, but it strengthened national powers supported by European

institutions (Genschel, 2022).

Russia's breach of European security has underscored the need for a unified EU

response, as a lack of cohesion is no longer viable. Given Russia's economic and

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

205

social ties with EU nations, a robust response is essential across policies like trade,

energy, immigration, and neighborhood affairs, building on over 50 years of

European foreign policy principles (Maurer, Whitman, & Wright, 2023).

On the other hand, the transatlantic partnership remains crucial, as highlighted by

the 2016 EU-NATO joint declaration on complementary defense capabilities. In

2022, Crosson and Blokmans argued that the EU and NATO should ensure their

funding is complementary and synchronized to enhance the technical interoperability

of solutions.

The EDA and the Commission have increased efforts to invest in emerging

technologies and dual-use items. However, the Russian invasion of Ukraine has

shifted the EDTIB's focus to prioritizing arms supply and replacement over innovation

investments.

The establishment of a common European army should also take into account the

options of the citizens. European citizens want this. Eurobarometer results from

2017/2018 indicate that they expect the EU to guarantee their security and peace.

Thus, 75% of Europeans want standard EU policies in defense and security, 55%

favor the creation of a European army, and 68% have higher expectations from the

EU in defense. European leaders have also recognized this necessity (at least

declaratively), with E. Macron initiating a typical European military project in 2017.

Meanwhile, Chancellor A. Merkel stated in the European Parliament 2018 that "we

should work towards the vision of creating an appropriate European army." Of

course, strengthening security and defense has been one of the declared priorities

of the current Von der Leyen Commission.

However, until February 24, 2022, actions did not convince us, nor did the somewhat

discouraging statements of J. Borrell (HR/VP) at the annual conference of the

European Defence Agency (EDA) -"We realize that we lack critical defense

capabilities." On the other hand, "the Agency has identified several critical gaps that

EU countries will need to strive to fill, such as long-range air transport, aircraft

carriers, and tanker ships for refueling..." (without these, we would be unable to

conduct potential military operations beyond the EU's borders). Also, there is a

significant gap between the EU's strategic plans and its capability to deploy battle

groups in military operations.

3. Methodology

● literature review;

● a quantitative approach (grouping and statistical processing, making

comparisons);

● argumentation and logical demonstration.

Research questions:

Is it possible to create a common European army? But is it likely? Economic

benefits?

To provide context, what new perspective has the war in Ukraine brought to the EU?

4. Results and discussions

We will establish the current context by examining the available cultural, military, and

economic resources.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

206

● Regarding cultural-historical resources, the EU has, at least for now, self-defined

as a genuine civil-normative force, a soft power in the sense defined by J. Nye, Jr.

This explains a certain detachment over time from security and defense issues,

which have been conveniently managed under the umbrella and protection of NATO

and the Americans. Moreover, even the modest CSDP missions demonstrate the

EU's preference for predominantly humanitarian-civil missions, and only

exceptionally for military ones, with the note that the latter has been chiefly

conducted under UN, NATO, etc. auspices for maintaining or restoring peace

(Wallace et al., 2015).

The transition from a civil EU to a militarized one is not simple, as culture and

organization in this area are no longer the EU's strong points. The CSDP, as an

appendage of the CFSP, emerged as a result of Franco-British negotiations,

suffering due to the intergovernmental decision-making pillar under which it

operates, knowing that defense has primarily remained a feature of national

sovereignty, with all the inconveniences that this entails (slow decisions, even a lack

of consensus among member states). Moreover, the EU's military strategy (doctrine)

is insufficiently defined and sometimes unclear. As if this were not enough, there are

also reduced defense investments, weak cooperation between member states,

uneven military training, and the diversity and, in some cases, inadequacy of the

member states' military equipment.

● Economic resources: Assessing the EU's financial capacity is critical, as

aspirations for a common defense force depend on sufficient funding. Despite recent

crises, the EU's GDP remains robust, just below China and the U.S.

Table 1. Real GDP, in various expressions, 2019–2022

Source: own elaboration by authors based on WB database, July 2024

real GDP (constant, 2015),

bil. USD ($)

year

2019

year

2020

year

2021

year

2022

Σ (2019-

2022)

USA

19929 23.51 19377 23.58 20529 23.52 20927 23.26 80,762.00 23.47

China

14296 16.86 14616 17.79 15851 18.16 16325 18.15 61,088.00 17.75

14770 17.42 13935 16.96 14773 16.93 15282 16.99 58,760.00 17.07

Russia

1462 1.72 1423 1.73 1503 1.72 1472 1.64 5,860.00 1.70

WORLD

84771 100.00 82172 100.00 87269 100.00 89963 100.00 344,175.00 100.00

real GDP (constant, 2015) /

capita, USD ($)

year

2019

year

2020

year

2021

year

2022

AVERAGE

(2019-2022)

USA

60698 554.32 58452 556.26 61830 558.89 62789 554.92 60,942.25 556.09

China

10156 92.75 10358 98.57 11223 101.45 11560 102.17 10,824.25 98.77

33014 301.50 31126 296.21 33037 298.63 34160 301.90 32,834.25 299.61

Russia

9959 90.95 9714 92.44 10252 92.67 10030 88.64 9,988.75 91.15

WORLD

10950 100.00 10508 100.00 11063 100.00 11315 100.00 10,959.00 100.00

real GDP (constant, 2017),

in PPP, bil. USD ($)

year

2019

year

2020

year

2021

year

2022

Σ (2019-

2022)

USA

20511 15.70 19943 15.73 21129 15.68 21538 15.46 83,121.00 15.64

China

22493 17.21 22996 18.14 24939 18.50 25684 18.43 96,112.00 18.08

19850 15.19 18742 14.78 19860 14.73 20569 14.76 79,021.00 14.87

Russia

4000 3.06 3894 3.07 4112 3.05 4027 2.89 16,033.00 3.02

WORLD

130662 100.00 126785 100.00 134789 100.00 139322 100.00 531,558.00 100.00

real GDP (constant, 2017) /

capita, in PPP, USD ($)

year

2019

year

2020

year

2021

year

2022

AVERAGE

(2019-2022)

USA

62471 370.13 60159 371.08 63636 372.42 64623 368.79 62,722.25 370.59

China

15978 94.67 16297 100.52 17658 103.34 18188 103.80 17,030.25 100.62

44371 262.89 41824 257.98 44413 259.92 45978 262.39 44,146.50 260.84

Russia

27255 161.48 26581 163.96 28057 164.20 27450 156.65 27,335.75 161.51

WORLD 16878 100.00 16212 100.00 17087 100.00 17523 100.00 16,925.00 100.00

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

207

Table 1 shows the evolution of real GDP in a condensed format (2019–2022).

According to World Bank data, in the last 22 years (2000-2022), the EU ranked

second globally in aggregate values, accounting for approximately 19.4% of total

world GDP (constant, 2015), with 302 trillion USD. However, China's real GDP,

expressed in billions of dollars at purchasing power parity (PPP), has surpassed the

leading United States since 2017.

Analyzing the EU's economic potential is essential, as aspiration alone is insufficient;

the financial capacity to build a strong common army must also be present.

To enhance the European Union's defense capabilities, policymakers have

recognized the necessity of increasing defense expenditures to respond to potential

threats and improve efficiency adequately. Studies indicate that billions of euros are

lost annually due to duplication of capabilities and procurement barriers. Moreover,

a more coordinated approach is required, emphasizing close collaboration among

member states. Currently, only 18% of all defense program investments within the

EU involve cooperative efforts, a figure deemed insufficient. At the NATO level, the

share of collaborative investments is even lower, at less than 15%. The European

Defence Agency's statement from November 11, 2022, highlights persistent

shortcomings in coordination and cooperation, noting that "defense planning

continues to be carried out mostly in isolation, and EU member states remain

unconvinced by European cooperation projects." However, the Strategic Compass,

approved by the European Council in March 2022, marks a modest yet significant

step forward. It includes plans for a rapid deployment force of up to 5,000 EU

soldiers, signaling a cautious shift in the EU's collective military ambitions without

duplicating NATO's capabilities. To provide context, what new perspective has the

war in Ukraine brought to the EU? Contrary to Russia's expectations, it has

contributed to rallying the Allies and moving beyond some taboo subjects for member

states, accelerating measures for restoring, reinforcing, and modernizing military

capabilities and improving collaborative projects in defense and its industry. But not

enough.

In 2022, the total defense expenditure of the 27 Member States reached €240 billion,

continuing the positive trend of eight consecutive years of growth (EDA, 2023).

However, it's important to note that if the threshold of 2% of GDP for defense

expenditures had been reached, it would have resulted in a value of 318 billion euros

in actual prices, indicating a significant potential for growth in the future.

● Next, we will quantitatively analyze the military capabilities of the leading powers

to see where the EU stands (noting that I have analyzed the leading European

military powers). Currently, the USA is considered by most specialists to be the only

army superpower (Anglițoiu, 2015), confirmed through the figures allocated for

defense spending — 13 trillion USD cumulatively over the last 20 years (2003-2022),

four times China's and twelve times Russia's expenditure (Table 2). In a dynamic

perspective for 2022, here are the defense budgets as a percentage of total military

spending worldwide - USA: 39,6%, China: 13,2%, Russia: 3.9% / UK: 3.1% / France:

2.4%, Germany: 2.5%, Italy: 1.5%, Spain: 0,9%.

As of 2022, the European Union member states have demonstrated their

commitment to defense by collectively spending almost 240 billion Euros on military

defense. This includes money spent on procuring weapons, paying salaries, other

operational costs, and research & development expenditures. According to Statista,

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

208

the increase in military spending in 2021 exceeded the threshold of 2,000 billion USD

(in constant 2020 prices), aggregated globally, which cannot leave the EU indifferent.

Table 2. Military expenditures/countries, (Bil. USD, current) & (% of GDP), 2003-

2022

Source: own elaboration by authors based on SIPRI & WB database, June 2024

year

Region/Country

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Σ (bil. $)

AmericasNorth America

USA, Bil USD ($)440.53 493.00 533.20 558.34 589.59 656.76 705.92 738.01 752.29 725.21 679.23 647.79 633.83 639.86 646.75 682.49 734.34 778.40 806.23 876.9 13319

USA, annual growth rate, % 11.91 8.15 4.71 5.60 11.39 7.49 4.55 1.94 -3.60 -6.34 -4.63 -2.15 0.95 1.08 5.53 7.60 6.00 3.58 8.77

USA, increase compared to 2003,% 11.91 21.04 26.74 33.83 49.08 60.24 67.53 70.77 64.62 54.18 47.05 43.88 45.25 46.81 54.92 66.69 76.69 83.01 99.06

USA, % GDP 3.83% 4.02% 4.09% 4.04% 4.07% 4.45% 4.88% 4.90% 4.82% 4.46% 4.03% 3.69% 3.48% 3.42% 3.32% 3.32% 3.43% 3.70% 3.46% 3.45%

Asia & Oceania

East Asia

China, Bil USD ($) 33.14 37.90 42.79 51.45 62.14 78.84 96.60 105.52 125.29 145.13 164.07 182.11 196.54 198.54 210.44 232.53 240.33 257.97 285.93 292 3039

CH, annual growth rate, % 14.36 12.89 20.25 20.76 26.88 22.53 9.23 18.73 15.84 13.05 10.99 7.92 1.02 6.00 10.50 3.36 7.34 10.84 2.11

CH, increase compared to 2003,% 14.36 29.10 55.24 87.47 137.87 191.46 218.38 278.01 337.87 395.02 449.45 492.98 499.02 534.94 601.58 625.12 678.34 762.69 780.88

China, % GDP 2.00% 1.94% 1.87% 1.87% 1.75% 1.72% 1.89% 1.73% 1.66% 1.70% 1.71% 1.74% 1.78% 1.77% 1.71% 1.67% 1.68% 1.76% 1.61% 1.60%

Europe

Eastern Europe (EuroAsia)

Russia, Bil USD ($) 16.97 20.96 27.34 34.52 43.53 56.18 51.53 58.72 70.24 81.47 88.35 84.70 66.42 69.25 66.91 61.61 65.20 61.71 65.91 86.37 1178

RU, annual growth rate, % 23.46 30.45 26.27 26.12 29.05 -8.28 13.95 19.61 15.99 8.45 -4.14 -21.58 4.25 -3.37 -7.93 5.83 -5.35 6.80 31.05

RU, increase compared to 2003,% 23.46 61.05 103.36 156.48 231.00 203.60 245.95 313.80 379.97 420.53 398.99 291.32 307.96 294.22 262.97 284.13 263.58 288.29 408.84

Russia, % GDP 3.67% 3.30% 3.33% 3.25% 3.12% 3.15% 3.92% 3.59% 3.43% 3.69% 3.85% 4.11% 4.87% 5.43% 4.25% 3.72% 3.86% 4.17% 3.72% 4.06%

Western Europe

France, Bil USD ($) 38.57 44.52 44.44 45.79 50.68 55.37 56.44 52.04 54.12 50.22 52.00 53.13 45.65 47.37 49.20 51.41 50.12 52.75 56.65 53.64 1004

FR, annual growth rate, % 15.44 -0.19 3.04 10.68 9.24 1.94 -7.79 3.99 -7.21 3.55 2.18 -14.09 3.77 3.85 4.50 -2.51 5.24 7.39 -5.31

FR, increase compared to 2003,%3 15.44 15.23 18.73 31.41 43.55 46.34 34.94 40.32 30.20 34.83 37.77 18.35 22.82 27.55 33.29 29.95 36.76 46.87 39.08

France, % GDP 2.10% 2.10% 2.02% 1.98% 1.91% 1.90% 2.10% 1.97% 1.89% 1.87% 1.85% 1.86% 1.87% 1.92% 1.91% 1.84% 1.84% 2.00% 1.92% 1.94%

Germany, Bil USD ($) 33.00 35.78 30.33 35.88 40.11 45.10 44.53 43.03 45.16 43.80 44.24 44.66 38.17 39.91 42.28 46.50 49.08 53.32 56.51 55.76 867

DE, annual growth rate, % 8.42 -15.24 18.33 11.78 12.44 -1.26 -3.38 4.97 -3.02 1.01 0.95 -14.54 4.56 5.94 9.97 5.55 8.64 5.99 -1.33

DE, increase compared to 2003,% 8.42 -8.10 8.75 21.56 36.67 34.95 30.39 36.87 32.73 34.08 35.35 15.68 20.95 28.13 40.91 48.74 61.58 71.27 68.98

Germany, % GDP 1.32% 1.27% 1.07% 1.20% 1.17% 1.21% 1.31% 1.27% 1.21% 1.24% 1.19% 1.15% 1.14% 1.15% 1.15% 1.17% 1.26% 1.39% 1.34% 1.39%

Italy, Bil USD ($) 26.82 30.26 29.74 29.63 31.98 36.84 34.05 32.02 33.83 29.78 29.96 27.70 22.18 25.03 26.45 28.42 26.38 32.93 36.25 33.49 604

IT, annual growth rate, % 12.81 -1.73 -0.35 7.93 15.19 -7.56 -5.97 5.65 -11.97 0.59 -7.53 -19.93 12.86 5.65 7.46 -7.18 24.82 10.08 -7.61

IT, increase compared to 2003,% 12.81 10.86 10.47 19.23 37.34 26.95 19.37 26.11 11.02 11.68 3.27 -17.31 -6.68 -1.40 5.95 -1.65 22.76 35.14 24.85

Italy, % GDP 1.71% 1.68% 1.60% 1.52% 1.45% 1.54% 1.55% 1.50% 1.48% 1.43% 1.40% 1.28% 1.21% 1.33% 1.36% 1.36% 1.31% 1.74% 1.72% 1.68%

Spain, Bil USD ($) 12.88 15.26 16.00 17.25 20.07 22.23 20.18 19.71 19.70 18.86 17.24 17.18 15.19 14.01 16.04 17.82 17.19 17.43 19.54 20.31 354

ES, annual growth rate, % 18.49 4.82 7.84 16.31 10.77 -9.22 -2.32 -0.08 -4.24 -8.58 -0.37 -11.59 -7.72 14.48 11.09 -3.56 1.41 12.12 3.90

ES, increase compared to 2003,% 18.49 24.20 33.94 55.78 72.57 56.66 53.03 52.91 46.43 33.87 33.37 17.91 8.80 24.56 38.37 33.45 35.33 51.74 57.65

Spain, % GDP 1.42% 1.43% 1.39% 1.37% 1.36% 1.37% 1.36% 1.39% 1.33% 1.42% 1.27% 1.25% 1.27% 1.14% 1.23% 1.25% 1.23% 1.37% 1.37% 1.47%

UK, Bil USD ($) 52.34 60.25 61.65 64.22 73.45 72.92 64.01 63.98 66.57 65.45 63.84 67.00 59.99 53.33 52.08 55.83 56.57 58.33 67.50 68.46 1248

UK,annual growth rate, % 15.11 2.33 4.16 14.37 -0.73 -12.21 -0.05 4.05 -1.68 -2.47 4.95 -10.46 -11.11 -2.35 7.22 1.32 3.12 15.72 1.43

UK, increase compared to 2003,% 15.11 17.79 22.69 40.32 39.30 22.29 22.23 27.18 25.05 21.96 27.99 14.61 1.88 -0.51 6.67 8.07 11.44 28.96 30.80

UK, % GDP 2.55% 2.50% 2.42% 2.37% 2.37% 2.49% 2.65% 2.57% 2.50% 2.42% 2.29% 2.18% 2.04% 1.98% 1.95% 1.94% 1.98% 2.16% 2.16% 2.23%

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

209

Our calculations from 2003 to 2022 reveal that the total defense expenditures (in

USD, at current prices) of the major European powers (Germany, France, Italy,

Spain, and the United Kingdom) exceed 4 trillion USD. This figure, which rises to

approximately 2.8 trillion USD when the United Kingdom's spending is excluded,

places the EU at the top of the global military expenditure ranking. When combined

with other member states, the EU surpasses China, consolidating its second position

in the international army spending ranking. These calculations are further supported

by information from the European Parliament website: " EU member states

collectively represent the second-largest investor in defense in the world after the

USA. Still, it is estimated that €26.4 billion is wasted each year due to the duplication

of spending, outdated capabilities, and barriers to public procurement.”

To compare military capabilities, the EU will be assessed against the USA, which

remains the global leader. A 2014 European Parliament study revealed that, apart

from troop numbers, the EU significantly lags behind the USA in all aspects of military

power, primarily due to insufficient practical cooperation among member states.

Kissinger (2018) emphasized the USA's commitment to maintaining unmatched

military dominance. To close this gap, the EU must prioritize deeper collaboration.

The combined military personnel of six key European NATO members (FR, DE, IT,

ES, UK, PL) totals approximately 1 million, or 800,000, excluding the UK (GFP,

2024).

The methodology for applying argumentation and logical demonstration to answer

research questions is presented in Table 3.

Table 3. Argumentation and logical demonstration

Argument and logical demonstration regarding the establishment of a common European

army from the perspective of security and economy

Argumentation

ARGUMENT

explanation

The necessity of

common security

In the context of global threats (external aggressions,

terrorism), member states need a unified approach to

ensure the security of their citizens (Axiom)

Efficiency of

resources

A common European army would allow for a more

efficient use of financial and human resources.

Instead of each country investing separately in

defense, a joint force could centralize these efforts,

reducing costs and avoiding duplication (Currently,

losses of 26.4 billion euros annually - the report of

the European Parliament)

Cooperation and

solidarity

Stability and

influence

Establishing a common army would strengthen

cooperation among the European Union member

states, promoting solidarity and mutual trust. This

could lead to more excellent stability in the region, as

well as an increased international influence (Only

18% of defense investments involve cooperation –

EDA, defense data 2022)

Deepening

economic

integration

A robust and interconnected defense sector enhances

industrial competitiveness and facilitates deeper

economic integration.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

210

Opportunity

The war in Ukraine can be a mobilizing factor (Steps

have been taken, but not enough)

Logical

demonstration

PREMISE

detail premises

Premise 1:

Security threats are becoming increasingly complex

and interconnected (Apart from traditional threats,

even if not all are related to the military, it is worth

mentioning cybercrime, terrorism, and collaborative

international criminal networks, which require a

common approach)

Premise 2:

A fragmented approach to defense could prove

ineffective against these threats.

Premise 3:

Economic opportunities with an integrated defense

industry

Conclusion

Considering the premises, the arguments favor building a European army to

ensure a coordinated and effective response to security challenges.

Establishing a European army is possible, but not likely shortly, considering

states' sovereignty and cultural-historical resources. In addition, we discuss

an increase in international influence by achieving global power status

through the concept of 'hard power.' In this context, the economic benefits

would be indisputable. Developing an interconnected European defense

industry can contribute to deeper economic integration among member

states.

Source: authors' elaboration, November 2024

5. Conclusion and recommendations

In conclusion, we can say that although the European Union, in aggregate values,

seems to have a commendable economic and military position, the actual situation

is entirely different for several reasons:

• Defense budgets are low (the EU bloc has a "native" inclination toward economic

cooperation, and there are still many states that do not contribute at least 2% of their

GDP to defense),

• The deficiencies mentioned above, along with a lack of certain weapons,

inadequate logistics, defective "capacity-operability" relationship, gaps in modern

technologies, and especially the lack of sharing existing military capabilities among

member states (some individual military capabilities exist among member states but

are dispersed, while others are absent),

• Ineffective or limited cooperation and collaboration,

• The absence of a strong pillar of the Common Security and Defense Policy (CSDP)

due to the intergovernmental nature of decision-making and

• The absence of a strategic culture within the EU (differences in cultural identity

among member states and varying geopolitical and geostrategic visions between

"newer" and "older" member states, or between Atlanticist and Europeanist member

states, or between states with external borders and the rest, along with the EU's

preference for peacekeeping and humanitarian/civilian missions—issues already

presented), represent significant challenges for the EU and barriers to the

establishment of a common European army.

With the war in Ukraine, an opportunity has arisen for a historic decision.

It is expected that either PESCO will be directed towards "Europeanization" or a

move towards a simplified decision-making process through qualified majority voting

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

211

(QMV). These solutions could facilitate the decision to establish a common army. It

remains to be seen whether this opportunity will be seized.

Establishing a common European army remains a subject of debate; those who deny

such a need (for example, the British until Brexit and the countries of Eastern

Europe) continue to prefer to strengthen an effective defense within the existing

partnership, NATO. This argument cannot be ignored, but the idea can also be

formulated in other terms. Since a common European army should not imply

abandoning NATO structures, the right question would be: does the EU want to

become a "global power"? If so, the EU will have to rely on a standard army.

"The superpower that manages to mobilize its allies in the global space will dominate

in the future" (Marga, 2021), and the EU must secure its place. The EU must achieve

a complex power status to influence global decisions successfully. Our conviction is

that, in the current regional context, the EU can no longer afford a weak CFSP-CSDP

pillar; it needs a strong, professional, and well-equipped common army based on

modern technologies.

However, the decision to assume the role of a global actor lies with the Member

States. As an economic and normative superpower, will the EU be willing to add a

collective military component? In short, based on the dynamics of the last decades,

it probably is not. Weighing the pros and cons presented in this paper, establishing

a common army of the union is feasible (the need exists, as does the opportunity).

The crises of recent years (economic-financial, pandemic, energy) have come

successively and have constituted significant obstacles. Another obstacle is the

tumultuous history of Europe.

On the other hand, from an economic perspective, we highlight the following aspects

and benefits, as applicable:

● Financial Requirements: Establishing a unified European defense force entails

substantial financial investments. Leveraging the EU's economic strength and

developing a shared fund for operating and maintaining a joint military force could

be an initial framework.

● Economic Benefits: A unified defense initiative can stimulate economic growth by

generating employment opportunities in defense, research, and technological

innovation sectors.

● Cost Efficiency through Economies of Scale: Consolidating resources under a

common defense force minimizes duplication and promotes efficient allocation,

leading to significant cost reductions.

● Stability as a Foundation for Development: Investments in defense contribute to

stability, fostering an environment favorable to sustained economic progress.

● Defense Industry Integration: Coordinating and harmonizing the defense industries

of EU member states while supporting European companies in competing on a

global scale offers considerable economic advantages.

● Safeguarding the Single Market: A collective European defense force can enhance

internal markets' resilience by mitigating instability risks and ensuring economic

continuity and security.

In conclusion, from an economic standpoint, a European army has a significant

positive impact on the development and resilience of the European Union.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

212

References

1. Anglițoiu, G. (2015) Europenizarea. Studii de guvernare si securitate, București:

Ed. CH Beck.

2. Blockmans, S. and Crosson, D.M. (2021) ‘PESCO: A Force for Positive

Integration in EU Defence,’ European Foreign Affairs Review, 26 (Special Issue).

3. Crosson, D.M. and Blockmans, S. (2022) ‘The Five ‘I’s of EU Defence: Inclusive

integration for effective investment, innovation and institutions’, CEPS Policy

Brief, October.

4. Deighton, A. (2002) ‘The European Security and Defence Policy’, Journal of

Common Market Studies, 40(4).

5. European Defence Agency (2023) DEFENCE DATA 2022 Key findings and

analysis, Brussels – Belgium: Publication Office of the EU.

6. European Defence Agency (2022) ‘2022 Coordinated Annual Review on

Defence Report’, Brussels, November, [Online], Available:

https://eda.europa.eu/docs / default-source/eda-publications/2022-card-

report.pdf [01/10/2024].

7. Fernández, O., Vandendriessche, M., Saz-Carranza, Á., Agell, N., & Franco, J.

(2023) ‘The impact of Russia’s 2022 invasion of Ukraine on public perceptions

of EU security and defense integration: a big data analysis’, Journal of European

Integration, 45, pp. 463 – 485, [Online], Available: https://doi.org /10.1080/

07036337.2023.2183392 [12/09/2024].

8. Fiott, D. (2023) ‘In every crisis an opportunity? European Union integration in

defense and the War on Ukraine’, Journal of European Integration, 45, pp. 447

– 462, [Online], Available: https://doi.org/10.1080/07036337.2023.2183395

[14/09/2024].

9. Genschel, P. (2022) ‘Bellicist integration? The war in Ukraine, the European

Union and core state powers’, Journal of European Public Policy, 29, pp. 1885

– 1900, [Online], Available: https://doi.org/10.1080/13501763.2022.2141823

[20/09/2024].

10. (GFP) Global Fire Power, (2024) Active Military Manpower by Country, [Online],

https://www.globalfirepower.com/active-military-manpower.php [02/11/2024].

11. Graf, T. (2020) ‘Unity in the face of threat? Exploring the empirical relationship

between strategic threat perceptions and public support for a common European

army in Germany’, European Security, 29, pp. 55 – 73, [Online], Available:

https://doi.org/10.1080/09662839.2019.1704267 [15/09/2024].

12. Houdé, A., & Wessel, R.A. (2023), ‘A Common Security and Defence Policy:

Limits to Differentiated Integration in PESCO?’, European Papers, vol. 7, no. 3,

pp. 1325-1356, [Online], Available: https://doi.org/10.15166/2499-8249/614

[09/10/2024].

13. Howorth, J. (2001) ‘European Defence and the Changing Politics of the

European Union: Hanging Together Hanging Separately?’, Journal of Common

Market Studies, November.

14. Hrivík, P. (2019) ‘PESCO, or a Common European Army?’, University Review

(1337-6047), 13(1), [Online], https://ur.tnuni.sk/fileadmin/dokumenty/UR

V13_ISS-1_06to12_Hrivik.pdf [10/10/2024].

15. Kissinger, H. (2018) Diplomația, 5th edition, București: Ed. ALL.

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
213 
 
 
16. Lazarou,  E.  and  Lațici,  T.  (2020)  ‘PESCO:  Ahead  of  the  strategic  review,’ 
European  Parliament,  [Online],  Available: 
https://www.europarl.europa.eu/RegData/etudes  /BRIE 
/2020/652051/EPRS_BRI(2020)652051_EN.pdf [03/11/2024]. 
17. Mader,  M.,  Olmastroni,  F.,  &  Isernia,  P.  (2020)  ‘The  Polls—Trends:  Public 
Opinion  Toward  European  Defense  Policy  and  Nato:  Still  Wanting  it  Both 
Ways?’, Public Opinion Quarterly, Volume 84, Issue 2, Summer 2020, pp. 551–
582, [Online], Available: https://doi.org/10.1093/POQ/NFAA031 [25/09/2024] 
18. Marga, A. (2021) ‘Raporturile dintre supraputeri’, Cotidianul, [Online], Available: 
https://www.cotidianul.ro/raporturile-dintre-supraputeri-de-andrei-marga/ 
[06/11/2024]. 
19. Margarita,  V.  (2010)  ‘Common  Security  and  Defence  Policy  and  the  Lisbon 
Treaty Fudge: No common strategic culture, no major progress,’ EPIN Working 
Paper, No. 28, June. 
20. Maulny, J. P. and Di Bernardini, L. (2019) ‘Moving PeSCo forward: what are the 
next  steps?’ ARES  Policy  Paper  (39),  [Online],  Available:  https://www.iris-
france.org/wp-content/uploads/2019/05/ARES-39.pdf [05/11/2024]. 
21. Maurer,  H., Whitman, R., & Wright, N. (2023)  ‘The  EU  and  the  invasion  of 
Ukraine:  a  collective  responsibility  to  act?’,  International  Affairs,  [Online], 
Available: https://doi.org/10.1093/ia/iiac262 [30/09/2024]. 
22. NATO (2024) Defence Expenditure of NATO Countries (2014-2024), [Online], 
https://www.nato.int/nato_static_fl2014/assets/pdf/2024/6/pdf/240617-def-exp-
2024-en.pdf [25/10/2024]. 
23. Nováková, D., (2021) ‘Is the idea of Common European Army strengthening the 
security?’,  Security  Dimensions,  no.  36,  pp.  124–136,  DOI 
10.5604/01.3001.0015.0489. 
24. O'Donnell,  C.M.  (2013)  ‘The  trials  and  tribulations  of  European  defense  co-
operation,’ Centre for European Reform, July. 
25. SIPRI  (2024)  Military  Expenditure  Database,  [Online],  Available: 
https://milex.sipri.org/sipri [02/06/2024]. 
26. STATISTA (2024) Annual military defense expenditure in the European Union 
from  2005  to  2022,  by  member  state  (in  billion  euros),  [Online],  Available: 
https://www.statista.com/statistics/1395834/eu-military-expenditure-by-country/ 
[03/06/2024]. 
27. Şahın,  S.,  &  Şahin,  M.  (2023)  ‘Dream  of  European  Army:  Is  It  a  Feasible 
Objective  or  Not?’,  Cumhuriyet  Üniversitesi  İktisadi  ve  İdari  Bilimler  Dergisi, 
[Online], Available: https://doi.org/10.37880/cumuiibf.1334315 [02/10/2024]. 
28. Wallace,  H.,  Pollack,  A.M.,  &  Young,  A.A.  (2011)  Elaborarea  politicilor  în 
Uniunea Europeană, București: Ed. IER, 6th edition. 
29. Wang, C., & Moise, A. (2023) ‘A unified autonomous Europe? Public opinion of 
the EU's foreign and security policy’, Journal of European Public Policy, 30, pp. 
1679  –  1698,  [Online],  https://doi.org/10.1080/13501763.2023.2217230 
[04/10/2024]. 
30. Wessels, W. and Bopp, F. (2008) ‘The Institutional Architecture of CFSP after 
the  Lisbon  Treaty  –  Constitutional  breakthrough  or  challenges  ahead?’, 
CHALLENGE Liberty&Security, Research Paper, No. 10, June. 

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

214

31. Winn, N. (2003) ‘Towards a Common European Security and Defence Policy?

The Debate on NATO, the European Army and Transatlantic Security’,

Geopolitics, 8, pp. 47 – 68, [Online], Available:

https://doi.org/10.1080/714001032 [05/10/2024].

32. World Bank (2024) World Development Indicators, [Online], Available:

https://data.worldbank.org/ [10/07/2024].

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

215

THE ROLE OF ARTIFICIAL INTELIGENCE IN DEVELOPING

COMMUNICATION SKILLS IN BUSINESS ENGLISH COURSES

Cristina-Laura ABRUDAN 1, Ioana-Claudia HOREA2

1 Department of International Business, Faculty of Economic Sciences, University of

Oradea, Oradea, Romania

2 Department of International Business, Faculty of Economic Sciences, University of

Oradea, Oradea, Romania

cabrudan2003@yahoo.com

ioanahorea@gmail.com

Abstract: The globalization of our lives has made business collaborations possible

all over the world. The appearance of the new technologies has made the work

easier in all domains of our lives. Digitalisation and virtualisation have both brought

along a reality where individuals and societies, on the whole, have to face a lot of

communication challenges. Therefore, students must be prepared accordingly. The

pandemic has somehow altered the landscape of our lives, forcing us to accept

technology as the most reliable source for us to continue functioning in our domains.

All kinds of reforms, including an educational one, have been taking place all over

the world, as the desire to operate successfully in world markets, is increasing day

by day. The technological development, the emergence of various forms of artificial

intelligence has led to the challenge of integrating different kinds of digital realities

into the teaching process. Thus, it is essential for the teachers to create opportunities

for new learning experiences that are relevant, meaningful and engaging to students.

Many teachers, researchers and scholars know that a substantial part of mastering

a foreign language is the vocabulary. The available research shows that the

development of vocabulary can be easily achieved by using digital tools, since it is a

known fact that today’s students belong to Generation Z, generation known as being

digitally literate, having grown up with a lot of digital tools at hand. The present paper

is based on our research, undergone through semi-structured interview, in the

qualitative phase, as an instrument for data collection. The sample of the study

consists of 25 students at the Faculty of Economic Sciences, University of Oradea,

first and second year of study. The authors want to research how today’s technology

influences the development of communication skills in Business English students. It

approaches the topic by offering an image on the existing literature and research on

the possible uses of Artificial Intelligence in Business English classes and its long-

term effects in developing communication skills.

Keywords: Business English; communication skills; Artificial Intelligence;

technology; language acquisition.

JEL Classification : Y8, Z19

I. Introduction

English is the language of scientific papers, media, international business,

economics, technology in today’s modern world, gaining in popularity day by day; it

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

216

is the official language in a large number of countries and it is estimated that over

two billion of people in the world use English to communicate on a regular basis.

English is the dominant language in business and it has become almost a necessity

in today’s world to speak English fluently. It must be mastered by most people today.

In a study conducted by Setiawan, in 2014, the researchers came to the conclusion

that many companies implemented English language skills to support the work of

the employees. Thus, it is underlined once again that, English is an essential tool in

the world of work and consequently, the universities around the world, as places that

produce graduates for today’s job market, have to focus on achieving clear learning

objectives when it comes to mastering English. The Faculty of Economic Sciences,

University of Oradea seeks to produce graduates who are competitive in the world

of work, giving the students’ the opportunity to study Business English, having the

syllabus tailored to the needs of the students in correlation with the needs of the

work market.

2. Statement of the Problem

Business English is a complex field which requires a lot of practice in order to be

mastered. The focus of the course is communication. Since the students nowadays

have proved to be digital literate from an early age, the use of the artificial

intelligence-based tools in teaching have shown an increased interest in the learning

process. As Wang &Liu, 2015 and ChanLin, L.J., 2016 have shown, ‘the artificial

intelligence-based tools provide convenience, drastically changing the learning

experience of the students, and they increase student involvement in the learning

process'. However, researchers like Baily (2015) and Kerns (2017) have come to the

conclusion that the problem has not been solved yet. The lack of confidence and

anxiety about making errors are only two of the main reasons to take into

consideration when talking about communication in Business English. This study

wants to throw some light on the idea of using Artificial Intelligence in the

improvement of the communication skills and the students’ approach to this subject,

at the Faculty of Economic Sciences, University of Oradea.

2.1. Research Questions

This study is based on the following questions:

1. Year

2. Specialization

3. Are you aware of Artificial Intelligence’s usage in the process of learning a foreign

language?

4. Have you ever used Artificial Intelligence in acquiring better communication skills

in Business English?

5. Which characteristics of the platforms or apps used in learning Business English

do you find the most useful?

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

217

2.2. Significance of the Study

The present study contributes to the improvement of teaching and learning

communication skills in Business English courses. Therefore, this study comes as a

helpful perspective regarding the students’ opinion in using Artificial Intelligence

based technology and how they can help in developing their communication skills.

3. Review of Related Literature

It has been generally agreed that English speaking, as a global lingua franca, is the

goal of almost all the educational institutions all over the world. The students, our

learners, need to express their opinions, thoughts, and emotions in English. It can

be cumbersome as communication in a foreign language can provoke anxiety and

worries, not to mention the situation when they need to use a certain field of English,

in our case Business English. In today’s technological breakthroughs and continuous

improvement, language learning, namely Business English learning, has become

quite challenging. Business English is part of the big family of English for Specific

Purposes. As Hutchinson, T and Walters noticed in 2007, English for Specific

Purposes is the way the students learn English for the needs of specific fields,

meaning that the use of English varies from one field to another. An Engineer needs

to know their Engineering field, and it will be different in English used by people who

work in the Economic environment. There have been a lot of major shifts regarding

the concept of Business English in the recent years: first, the development from the

surface level textual analysis, to an in-depth analysis in the contest; second, the

convergence regarding the terms of research, Business English as part of English

for Specific Purposes and Business Communication studies. According to Carrio-

Pastor, there is an obvious need for teachers to analyse what to teach and how to

teach. In universities, in their everyday life and at work, students face a diversity of

circumstances that require language skills, such as reading, writing and speaking.

Thus, the activities included in the courses and seminars can help the students

acquire the skills they need in order to be successful in all the above-mentioned

situations.

While reading and listening are considered to be perceptive skills in language

acquisition, writing and speaking are productive skills. Reading and writing are

academic skills, implying a process of organizing ideas and being creative through

text. Of all four skills, speaking seems to be the most important skill required today.

As Shemshack, A. stated in 2016 ‘Teamwork, flexibility, and communication are

crucial for all workers as well as highlighted by employers. Even written and oral

communication skills are very important in today’s high-powered workplace,

employees must also be able to use modern technology to communicate‘.

Communication is one of the major challenges of collaborative activities in Business

English courses. Collaborative learning activities have as a central idea the desire to

implement new strategies, making the students more responsible, promoting a

sense of encouragement regarding the communication with others. . Keser explains:

‘Collaborative learning supports the use of effective discursive learning methods

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

218

(make explicit, discuss, reason, and reflect, convince while allowing for the

acquisition of essential social and communicative skills ‘. The collaborative activities

entail concepts such as information acquisition, technological skills, collective

learning – all these activities being based on technology, which is considered to be

a facilitator. The freedom to choose the path through the process of learning can be

attractive and motivating to students.

Conventionally, Artificial Intelligence is in strict connection to computers, although

while computers may have been the structure basis of artificial intelligence, there is

a tendency to move away from this association of elements towards any equipment,

hardware or software alone, as being artificial intelligence. Thus, the transfer of

artificial intelligence has been done from the computers to

The appearance of Artificial Intelligence has revolutionized not only the students’

traditional methods of learning but also the teachers’ teaching methods, bringing new

ideas and new opportunities to all aspects of the teaching/learning process. The new

technological development has emerged as a major and promising tool in the field

of language acquisition, enhancing the development of the students’ communication

skills. The innovations and development in this field have led to the appearance of

machines, computers and other artifacts having human-like intelligence, being

characterized by capabilities of adaptability, learning, and decision-making. The

language learning applications, the virtual tutors, the chatbots and the speech

recognition systems are just a few of the innovative tools that are based on Artificial

Intelligence and provide the learner an interactive and immersive language

experience. The fact that the above-mentioned tools can offer personalised content

and real-time feedback give them the potential of enhancing the language acquisition

process and the acceleration of the communication skills’ development. By

facilitating individualized learning paths and by promoting the learner’s autonomy,

the Artificial Intelligence based tools address the various needs and help Business

English learners face challenges in a unique way. Thus, several studies highlight the

idea that the virtual tutors and the speech recognition systems can improve the

students’ pronunciation and speaking skills while the interactive platforms and the

chatbots can enhance the fluency in communication through real-life practice

opportunities. On the other hand, the pedagogical implications regarding the use of

the Artificial Intelligence in developing communication skills in Business English are

consistent.

4. Research Methodology

4.1. Research Design

For this study, the selected approach, is the qualitative type of study. According to

The Concise Oxford Dictionary (1998) ‘in qualitative studies the key concern

understands the phenomenon of interest from the participants’ perspective, finding

out their opinions and feelings rather than information that can easily be shown in

numbers. ‘Qualitative research uses techniques including structured and semi-

structured interviews, focus groups, and participant observation, not only to help

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

219

generate hypotheses which can be more rigorously tested with quantitative research

but also to help researchers delve deeper into the quantitative research. According

to DeMarrais (2004) ‘qualitative interview approaches to research can be stimulating

and rewarding experiences for both researcher and participants. ‘

4.2. Sample of the Study

This study has been conducted at the Faculty of Economic Sciences, University of

Oradea, the sample being 25 students from the first year of our faculty (22 females

and 3 males), all specializations of the faculty. The students’ level in English is upper-

intermediate.

4.3. Research Informants

In order to examine and get a clear image of the usage of Artificial Intelligence in

learning foreign languages, having clear reference to Business English, we have

chosen key informants that could provide relevant information, being chosen

following the inclusion criteria: 1. Economics students who have English selection

exam scores above 80 points; 2. Economics students who have taken Introduction

to Business English Course during the first semester.

4.4. Research Instruments

The instrument of this research is a semi-structured interview, containing three

questions, regarding the students’ experience and perspective about using Artificial

Intelligence based platforms and applications in learning foreign languages. Thus,

this study provided the students an opportunity to express their opinion in their own

words.

4.5. Data Collection and Analysis

All interviews were conducted in English, being anonymous and written. The length

was between 7 and 10 minutes. Each interviewee was asked to describe their

personal experience regarding the usage of Artificial Intelligence apps and platforms

in developing communication skills in Business English.

Table 1 (showing the characteristics of all the participants in the study)

Characteristics

Age

18-21 years old

Female/Male

22 Female, 3 Male

Educational Status

College students

School

University of Oradea, Faculty of Economic

Studies

Specialization

Accounting – 10 students; Marketing – 2 students;

Tourism – 1 student; Finance-Banks – 10

students; Management – 2 students.

5. Results and Findings

This part of the present paper presents and discusses the results of the undergone

study. The study was based on answers to the following questions, given by the

students:

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

220

1. Are you aware of Artificial Intelligence’s usage in the process of learning a foreign

language?

2. Have you ever used Artificial Intelligence in acquiring better communication skills

in Business English?

3. Which characteristics of the platforms or apps used in learning Business English

do you find the most useful?

Table 1 (showing Q1 in the study: Are you aware of Artificial Intelligence’s usage

in the process of learning a foreign language?)

Q1: Are you aware of Artificial Intelligence’s usage in the process of

learning a foreign language?

YES

Finance banks, 10 students: 10

Tourism, 1 student: 1

Marketing, 2 students: 1

Accounting 10students: 8

Management 3 students: 3

The results of the answers to question 1 (Q1. Are you aware of Artificial

Intelligence’s usage in the process of learning a foreign language?), broken

down by study programmes, are to be seen in Figure 1.

Figure 1. Awareness of Artificial Intelligence’s usefulness in learning a foreign

language

Source: own design on the basis of the data received from the respondent students

Table 2 (showing Q2 in the study: Have you ever used Artificial Intelligence in

acquiring better communication skills in Business English?)

Q2: Have you ever used Artificial Intelligence in acquiring better

communication skills in Business English?

YES

Finance banks, 10 students: 2

FB MN ECTS MK ACC

Number of respondents

Study Programmes

Awareness

Yes

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

221

Tourism, 1 student: 0

Marketing, 2 students: 0

Accounting 10 students: 7

Management 3 students: 2

The results of the answers of the first-year students at the aforementioned

specializations to question 2 (Q2. Have you ever used Artificial Intelligence in

acquiring better communication skills in Business English?) are seen in Figure

Figure 2. Usage of Artificial Intelligence in acquiring Business English

communication skills

Source: own design on the basis of the data received from the respondent students

Table 3 (showing Q3 in the study: Which characteristics of the platforms or apps

used in learning Business English do you find the most useful?)

Q3: Which characteristics of the platforms or apps used in learning

Business English do you find the most useful?

Fun

Interactive

Real-life

situations

I don’t

know

Finance banks, 10

students:

Tourism, 1 student:

Marketing, 2 students:

Accounting 10 students:

Management 3 students:

The results of the answers to question 3 (Q3. Which characteristics of the

platforms or apps used in learning Business English do you find the most

useful?), are presented in Figure 3, again depicting data for each study programme.

012345678910

ECTS

ACC

Number of respondents

Study Programmes

Usage

Yes

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

222

Figure 3. Characteristics of the platforms or apps, most useful in learning

Business English

Source: own design on the basis of the data received from the respondent students

A synthesis of the responses to the first two questions can be seen in Figure 4.

Figure 4. Awareness and use of AI in language learning by first year students

in Economics

Source: own design on the basis of the data received from the respondent students

A synthetic overview of the responses to the last question can be seen in Figure 5.

FB MN ECTS MK ACC

Number of respondents

Study Programmes

Characteristics

Diversity

Interactivity

Fun

Real-life situations

IDK

12%

46%

42%

Status of respondents (26)

unaware of AI's usage in

learning a language (3)

aware of AI but not

using it (12)

using AI to aquire BE

skills (11)

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

223

Figure 5. General view of most relevant traits of AI

Source: own design on the basis of the data received from the respondent students

6. Conclusions

The present paper is based on the idea of using Artificial Intelligence based

technology in Business English courses in order to enhance the students’

communication skills. Our research, undergone through semi-structured interview, in

the qualitative phase, as an instrument for data collection, has revealed the fact that

42% of the interviewed students use Artificial Intelligence in improving Business

English communication skills, 46% of the interviewed students are aware of the

Artificial Intelligence’s existence in developing foreign language skills but they do not

use it, and 12% of the interviewed students do not know about the existence of

Artificial Intelligence based technology’s usage in learning a foreign language.

Moreover, a synthetic overview of the responses to the last question regarding the

characteristics of the platforms or apps used in learning Business English show that

54% of the students do not know how to characterize Artificial Intelligence based

technology’s usage in developing communication skills in Business English, 27%

consider it interactive, 11% consider it fun, 4% appreciate its diversity and 4% sees

Artificial Intelligence based technology as useful because of its mirroring rea-life

situations.

The development of Business English learners’ communication skills based on the

integrations of Artificial Intelligence can be a promising approach. The reviewed

literature supports the effectiveness of Artificial Intelligence based technology’s

usage in developing the students’ communication skills but also their listening,

reading and writing abilities. Thus, the comprehensive review of existing research

and literature and the present study have drawn to some relevant conclusions:

technologies based on Artificial Intelligence have demonstrated to be effective in

improving the students’ communication skills; the personalized usage and the

students’ autonomy are essential and strong benefits. Despite all these advantages,

there are still some gaps and areas for the long-term impact on the students’

54%

27%

11%

4% 4%

Views

on AI's

features

do not know how to

charaterize AI (14)

consider AI mostly

interactive (7)

consider AI as fun (3)

appreciates the

diversity (1)

sees AI as mirroring

real-life situations (1)

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

224

language proficiency. By using Artificial Intelligence based technology in an effective

and ethical way, being supported by teachers and policymakers, students at the

Faculty of Economic Sciences, University of Oradea can acquire the necessary

communication skills in Business English in order to be successful in today’s

interconnected world.

References

1. Bailey, B., Kerns, B., (2015) The International Journal of English and Education,

4(2), page 80-94, available: https://ijee.org/vol-13-issue-2 [07.03.2024];

2. Bin, Y., Mandal, D., (2019), English Teaching Practice Based on Artificial

Intelligence Technology, Journal of Intelligent and Fuzzy Systems, 37(1);

3. Bostrom, N, & Yudkowsky, E (2011), The Ethics of Artificial Intelligence,

Cambridge, UK: Cambridge University Press;

4. Carrio-Pastor, M.L. (2007), Internet as a Tool to Learn a Second Language in a

Technical Environment. European Journal of Engineering Education, 5-32-599-612;

5.Chen, C. M., Huang, Y. M., & Kinshuk. (2018), Effects of an intelligent tutoring

system on students’ learning outcomes and attitudes in the context of English as a

foreign language, Journal of Computer Assisted Learning, 34(4), 376-393;

6. ChanLin, L.J. (2008), Technology integration Applied to Project-based Learning

in Science. Innovations in Education and Teaching International, 45, 55-65;

7. DeMarrais, K., (2004), Methods of Inquiry in Education and the Social Sciences,

Routledge;

8. Hafner, C. Miller, L. (2018), Researching English in the disciplines: A

Multidimensional Model for ESP Course Design, Routledge;

9. Harmer, J. (2019), The Practice of English Teaching, Pearson Longman

Publishing House;

10. Jones, A., Issroff, K. (2005), Learning technologies: affective and social issues

in computer-based collaborative learning. Computers and Education, 44:395-408;

11. Keser H., Ozdamli F. (2012), What are the trends in collaborative learning studies

in 21st century? Procedia. Social and Behavioural Sciences, 46: 157-161;

12. Lian, A. Sangarun P. (2015), Innovation in Language Learning and Teaching,

Palgrave Macmillan;

13. Luckin, R. (2017), Towards artificial Intelligence-based assessment systems, doi:

10.1038/s41562-016-0028;

14. Shemshack, A. (2020), A Systematic Literature Review of Personalized Learning

Terms, available: https://www.semanticscholar.org/paper/A-systematic-literature-

review-of-personalized-Shemshack-

Spector/305cab4fc3b72411132f87d3790b0469319b8824 [07.03.2024];

15. The Concise Oxford Dictionary, (2018), Oxford University Press;

16. Ushioda, E. (2008), Motivation and Good Language Learners, Cambridge:

Cambridge University Press;

17. Zhang, J., Li, Fei, (2001), Blended Teaching of Business English Based on

Semantic Combination and Visualization Technology, available:

https://link.springer.com/chapter/10.1007/978-3-030-79197-1_78, [07.03.2024];

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

225

18. Wang, Y., & Liu, H. (2019), The Application of AI in Language Learning: A Case

Study of an AI Powered Language Learning Application. International Journal of

Distance Education Technologies, 17(1), 1-14;

19. Wenzhong, Z., Fang, L., (2008), On Differences Between General English

Teaching and Business English Teaching, available:

https://eric.ed.gov/?id=EJ1082806, [07.03.2024].

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

226

NEW ROLE FOR THE TEACHER: PREVENT STUDENTS FROM

COMPLETELY ABANDONING THEMSELVES TO AI AND

RELINQUISHING CONTROL OVER THEIR LEARNING.

Illustration for foreign languages for specific purposes

Felicia CONSTANTIN

Department of International Business, Faculty of Economic Science, University of

Oradea, Oradea, Romania

fconstantin@uoradea.ro

Abstract: In the field of education, and especially in the field of foreign language

teaching, AI seems to be the realm of all possibilities. In the absence of a well-

defined framework, control is easily lost. The teachers are hesitant, because they

still don't know, most of the time, where to start and where to end the AI in their

activity. Students jump on the immediate benefits of smart devices because they

don't know what they can or what they have to do to avoid turning themselves into

AI terminals. In the context of the redefinition or annihilation of roles in education,

the teacher has a new responsibility, in addition to those he has traditionally: he has

to become an influential person giving warnings and preventing students from

abandoning themselves to AI, relinquishing control over their learning and

development. This desire can be achieved by the responsible introduction of AI in

the educational process, through contrastive comparison, which allows an almost

cinematic viewing. We will present in the article a typical situation for learning a

foreign language in the university environment: a non-homogeneous class in terms

of language level, motivation, or degree of attendance of the courses by the

students. The activity proposed by the teacher is created from an action-type

perspective and targets individual general skills, linguistic communication skills,

language activities, fields, tasks, strategies, and texts. The teacher will introduce

free chatbots (ChatGPT or similar) in a controlled way in the didactic course

proposed for economics students learning business French. Creatively introducing

AI into this course, before the students themselves do, powerfully establishes (a).

the incalculable benefits of the use of AI by students, in terms of speed, number of

variants generated, productions with a high level of language, the generation of

suggestive images through free and high-performance applications, the creation or

self-creation of evaluation exercises; (b). the double valence - positive and negative

- of some aspects: respect and nuance of the workload, originality in the context of

a large number of users, error correction, management in solving the assignments,

emotional involvement; (c). the disadvantages about the inability to perform some

work tasks, the deviations from the defined work task, the hallucinations produced,

and the limitations in the context of a common collaborative activity platform. AI is a

democratic tool, but, paradoxically, it is not for everyone.

Keywords: ChatGPT, Artificial Intelligence, AI, foreign languages for specific

purposes, business French, action-oriented approach

JEL Classification: D83, Z19.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

227

1. Introduction

AI is a democratic tool. It is designed to be used by everyone, but, paradoxically, it

is not for everyone.

In the field of education, and especially in the field of foreign language teaching,

artificial intelligence (AI) seems to be the realm of all possibilities. However, in the

absence of a well-defined framework, control is easily lost.

We are witnessing a structural redefinition, which risks leading to an annihilation of

traditionally defined roles: students forget their role as students, forget the role of the

teacher as a teacher or the role of the faculty as a space for learning and training.

Everyone rushes to the immediate benefits of smart devices, and does not know

what they can or must do to avoid turning themselves into terminals of AI.

Without an awareness of the inevitable risks, the device equipped with AI will not be

the terminal of the person, but the person himself will become the terminal of AI. In

this way, the student quickly gives up control over his own learning and development.

Once traditional roles are abolished, the effects can only be reductionist and in the

long run destructive. AI will be here forever. It will certainly be a long time before

people return to the traditional way of learning if that ever happens again.

Teachers are hesitant because they still do not know, most of the time, where to

start, and where to end AI in their work. Purists who reject the introduction of AI in

learning should know that there are countless ways in which they use AI without

knowing it: starting from automatic text correction or optimized search through

search engines, and ending with options for converting speech to text or text-to

speech, everything is done with the help of artificial intelligence. Bill Gates also

shows that the present and the future cannot be imagined in its absence:

The development of AI is as fundamental as the creation of the

microprocessor, the personal computer, the Internet, and the mobile phone.

It will change the way people work, learn, travel, get health care, and

communicate with each other. Entire industries will reorient around it.

Businesses will distinguish themselves by how well they use it (Gates,

2023).

In the context of the redefinition or annihilation of roles in education, the teacher has

a new responsibility, perhaps the most important, in addition to those he traditionally

has: he must prevent students from abandoning themselves to AI and giving up

control over their learning and development. This can be achieved by the responsible

introduction of AI into the educational process through concrete examples and

contrastive comparison, which allows for an almost cinematic viewing of the impact

of AI on human intelligence (HI).

2. Literature review

The hundreds of scientific papers published immediately after the launch of

ChatGPT can indicate the impact on the scientific environment. Any literature review

quickly becomes outdated. The publication rate is accelerated and proves the

interest of researchers in a subject that seems to be exotic at the moment, but which

will become the norm tomorrow (U.S. Department of Education, 2023).

Numerous researchers are studying the relationship of AI with students, whether it

is about students' perspectives on integrating or banning AI in education (Famaye et

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

228

al., 2024) or the creation of platforms that follow individualized foreign language

learning paths (Miras et al., 2019).

Most research focuses on the relationship between AI and learning content, how

ChatGPT can teach materials, and create and combine them in seconds.

Our attention, however, is directed towards the actors involved in the learning

process, and especially towards teachers. The interest prioritizes the teachers'

perspective and investigates in general teacher attitudes towards AI (Naweed-e-

Sehar, 2024; Celik et al., 2022), showing an almost desperate concern to detect

unethical student productions (Weber‐Wulff et al., 2023). Kaplan-Rakowski et al.

(2023) analyse the use, integration, potential, and concerns about integrating AI into

education, without being able to explicitly mention whether or not these will be

transformed into concrete actions.

There is a huge concern about the risk of teachers being replaced by AI (Yuk Chan

and Tsi, 2024) or problems related to the paradigm shift of the teacher's role in the

AI era (Gentile et al., 2023). Kim (2024) approaches teachers as passive AI

recipients, as active AI users, and respectively as AI constructive partners. The idea

of redesigning the teaching model by assigning specific roles to AI is being discussed

with interest: co-worker, co-teacher, and coach (Mollick, 2024).

It seems that it is increasingly about a relationship of power and trust between

teachers and AI (Nazaretsky et al., 2022; Lameras & Arnab, 2022), in a permanent

concern to understand if it is in reality about teacher-supported AI or AI-supported

teachers (Humble & Mozelius, 2019).

There is not much research on a new role for the teacher, alongside the traditional

roles of transmitter of academic knowledge and moral and behavioural values. The

new role of the teacher, in the context of an education that is already bathed in AI, is

to be the warning sign for students and less digitally literate users: he is the one who

must and can draw attention, in a contrasting illustrative way, to the risks of losing

personal identity and control over one's own person and thoughts.

3. Relevance for the human intelligence

3.1. Complexity of an action-based model

Traditionally, the teacher designing a foreign language activity for business has an

action-oriented approach, considering not only the language but also collaborative

tasks, with a targeted and precise purpose (CECRL, 2021). In this context, the user

is seen rather as a social actor who must accomplish socially circumscribed

language tasks in a certain environment. (CECRL, 2001: Chapter 2.1).

The activity proposed by the teacher which is created from an action-based

perspective, aims at general individual skills, linguistic communication skills,

language activities, various fields, tasks, strategies, and texts.

If we refer only to the particularities of an action-based activity model, we can show

the complexity of the elements that come into play, and which include various

categories and subcategories that are updated, on various levels, depending on the

work tasks.

A simplified visual representation can show, in contrast, what a reductive effect the

introduction of ChatGPT devices has in the manifestation of the components that

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

229

contribute, through their interaction, to the formation and development of human

intelligence (Table 1).

Table 1. Relevance for the human side in the HI-HI vs. HI-AI tandem in an action-

oriented approach

Aspects followed (and accomplished)

Relevance for the human side

in the tandem

human -

human

human -

artificial

2.1.1 The general competences of an

individual

• Knowledge, or declarative knowledge

• Skills and know-how

• Existential competence

• Ability to learn

2.1.2 Communicative language

competence

• Linguistic competences

✓ lexical knowledge and skills

✓ phonological knowledge and skills

✓ syntactical knowledge and skills

✓ knowledge and skills for other

dimensions of language as system

• Sociolinguistic competence

• Pragmatic competence

2.1.3 Language activities

• Reception (oral and/or written)

• Production (oral and/or written)

• Interaction

• Mediation

2.1.4 Domains

• public

• occupational

• educational

• personal

2.1.5 Relationship between tasks,

strategies and texts

• Tasks

• Strategies

• Texts

It is easy to see the impoverishment of the impact on human development. The

introduction of AI can be done in all areas of personal, public, or professional life,

which becomes dangerous because of its capacity for multiplication and prolificacy.

When it does not belong to a single domain, it infiltrates everywhere and multiplies

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

230

the opportunities to replace actions that should belong to humans. As far as the

development of the person is concerned, the AI and HI tandem particularly touches

on the reception capacity and possibly the learning skills of the students.

The role of the teacher is precisely to sound the alarm and show students that

abandoning themselves to AI can only bring them damage in the long term.

The teacher can fulfil his role as a whistleblower by responsibly introducing AI into

the educational process, through contrastive comparison; this presentation allows

an almost cinematic view of how AI instantly provides ready-made solutions, while

the user turns into a passive contemplator who takes over ready-made materials. He

must always put AI and HI to work simultaneously, showing that the two must not act

in parallel, but interfere and build in tandem, as in a crochet.

The teacher is the one who takes into account, during a teaching-learning activity,

all these elements.

He is the facilitator of the process of acquiring and learning the language. In the

student-teacher relationship, there is a dynamic that allows the gradual construction

of an action-oriented relationship. Normally, the student responds to the instructions

given by the human teacher. A ChatGPT-like robot that provides the answer

completely can short-circuit the teacher-student relationship or the student-student

relationship. Below we present a typical situation of a foreign language learning path

in an economics faculty, with a class that is not homogeneous in terms of language

level, motivation or degree of student attendance. The professor introduces free

chatbots in a controlled manner in the course offered to economics students learning

business French.

3.2. Students in tandem with AI

If we refer only to the university environment, there are always two categories of

students: students who are really concerned with learning and students who would

do anything to pass an exam, without having studied. The latter has always had little

opposition to the temptation to cheat: cheating on exams and projects, exploiting

other students' work in joint projects, solving topics by a friend, or a parent, or through

copy-paste on the internet.

Depending on the user's profile, ChatGPT is a tool that helps or, on the contrary,

blocks learning.

Therefore, students who have a strong motivation to learn, seriousness, and rigor,

will use AI as a real assistant in learning. Those who are not used to the rigors of

learning will use AI unethically to achieve their school goals. I give a command, the

robot responds, and they take over the automatically generated answers exactly or

with small modifications.

Two aspects are problematic in this case:

a). Many of the students do not even really have the feeling that they are acting

incorrectly: they do not cite the source of the generated material (e.g. response

generated by ChatGPT/Gemini/ Copilot on ..., in response to the prompt ...) and give

up consulting certified sources (books in physical format, e-books, scientific articles);

b). Although they could, they do not interfere with the text generated by the AI,

although it has errors or inaccuracies in relation to the work indication.

Students who are currently learning without AI also know how to work correctly with

AI: having expertise in their field, they can identify what is generally referred to as AI

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

231

hallucinations: serious errors or partial inaccuracies (Ahmad, Kaiser & Rahim, 2023).

This is not easy sometimes even for teachers or specialists in a certain field.

The role of the teacher in the future will undergo major changes: beyond the

traditional roles, he will have to impose limits, and prohibit or allow the use of AI. The

condition is that he masters the functionalities of the features offered by AI. About

the teacher who proves that he masters AI, students can no longer afford to do

anything.

In any case, it is clear that once the potential of AI-based devices is discovered,

students will no longer give up on advantages. The teacher cannot prevent this, but

he can show them the other side of the coin and the dangers to which they expose

themselves by totally abandoning control:

• non-selective collection of erroneous or inconclusive information;

• influencing human intelligence in a negative sense (decreased attention,

weakening of cognitive processes, impaired motivation, disappearance of

willpower, etc.);

• over time, simply, the loss of control over oneself and one's cognitive

development.

However, the theoretical issuance of these warnings is not able to sensitize students,

who are immediately concerned only with overcoming an obstacle, quickly solving a

task, or managing several topics simultaneously.

The demonstration can only be made by contrastive comparison, illustrated

cinematically (Constantin, 2023). There are already many applications, but we will

refer here only to free, free applications, which do not require special technical skills.

4. Case study

The activity is recommended for the first year of study with students in economics

(specialization in economics of commerce, tourism, and services, marketing, and

management), with level A2 in oral and written comprehension, respectively level A2

in written expression in French as a foreign language.

The activity is carried out in two stages:

4.1. Activity in traditional style

Students are instructed to resolve this task: “You must prepare a business dinner for

4 people. You have 80 euros and you have to shop online in the Carrefour store. In

a Table, write down the list of products needed for lunch. Arrange your purchases in

this 5-column table, with the following headings: product + inserted image,

description, unit price, quantity, and I pay). Then put each contribution on a

collaborative platform to share your products”.

a). In carrying out this task, students perform actions at the faculty, as a group

exercise, and then at home, as individuals.

The events are diverse, interesting, and very varied. Despite the mistakes, they show

richness and originality.

b). The evaluation of homework is carried out by the faculty, during the session of

the following week. The assignments are presented in paper format and file form, in

public in front of the class, by each student.

Students perform a long series of actions (see Table 1, column 1 and Table 4,

column 1), which involve linguistic, cognitive, affective, and volitional skills.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

232

4.2. Activity performed by AI

The teacher presents the students, with a contrastive title, with the same assignment

completed by ChatGPT or Copilot, to demonstrate how students lose control over

the activity.

The prompt or prompt is identical (Table 2).

The robot's response is quickly displayed in front of the student’s eyes, as in a

cinematographic projection, with several sequences per minute, depending on the

teacher's decision.

Table 2. Example of ChatGPT's response to the initial prompt (translated from

French)

Of course! Here is a list of the products needed for your business dinner for 4

people, using the services of Carrefour. You can order them online and pick them

up at Drive or have them delivered to your home

Produit

Quantité

Prix unitaire (€)

Total (€)

Saumon fumé

1 paquet

5,99

Filet de bœuf

600 g

15,00

Pommes de terre

1 kg

1,50

Haricots verts

500 g

2,00

Vin rouge

1 bouteille

8,00

Fromage

250 g

3,50

Pain

1 baguette

1,00

Dessert (par exemple,

tarte aux pommes)

1 portion

4,00

Café

1 paquet

3,00

Total

43,99

You still have €36.01 available in your €80 budget. Feel free to adjust the list

according to your preferences and the actual prices on the Carrefour website.

Enjoy your meal!

The observation of certain inadvertences, about the instruction, can determine the

continuation of the human-robot dialogue. See, for example, the case of a

remediation request (Table 3):

Table 3. ChatGPT's response to the prompt remediation

User: Insert, in the first column, a product image for each product purchased

ChatGPT: My mistake, I can't give an answer to that at the moment. Let's try a

different topic.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

233

The students and the teacher analyse the robot's response(s), at the level of finesse

adapted to the specificity of the group (see the Discussions below).

5. Discussions

The analysis of the case study can be done on several levels (see table 4).

First of all, the indisputable benefits of using AI can be highlighted, together with the

students:

• the speed of carrying out the task;

• the large number of variants generated;

• the possibility to shade the workload by modifying the work indication;

• productions with a high level of language;

• the volume of work performed by a person compared to that performed by a

robot;

• the ability to generate texts based on given words;

• the ability to convert written text into audio fragments.

Even if these two aspects have not been addressed descriptively in this article, the

teacher can show students how they can be generated quickly

• exercises for self-assess;

• suggestive plastic images through free and high-performance applications,

but also managed by AI.

Secondly, the double valence - positive and negative - of some aspects can be

discussed:

• originality in the context of a large number of users, who give the same work

indication and determine, at a given moment, the generation of substantially

similar versions, which an informed and experienced eye could detect;

• correction of errors that can be noticed by the human user and can be

verified by the AI in response to repeated or nuanced indications;

• management in solving tasks is limited to managing interactions with an AI

that does everything and thus avoids certain delicate situations regarding

the delegation of tasks in the group;

• Emotional involvement is reduced because the human user is no longer

emotionally involved, but this can relieve tension for a more emotional

student, who cannot work well under stress.

Thirdly, the disadvantages in relation to the:

• deviations from the defined work task, as sometimes the robot's response

does not exactly follow the indication provided;

• inability to perform certain work tasks (insertion of images or activity carried

out live on a collaborative platform);

• hallucinations produced by the robot, which a student without thorough

knowledge cannot identify;

• limiting students to taking over the answers provided by the chatbot, without

moving on to actual learning, without trying to reproduce the answer after

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

234

memorization, or to create new and original versions starting from the

materials provided by the AI.

All these aspects should be systematically trained so that students form a critical

spirit and are always in control of what is happening. The graphic representation in

Table 4 scans the analysed didactic activity and highlights the reductionist impact of

AI on the self-control that the user should have on his learning activity and the

development of his person on all levels.

Table 4: Simplified presentation of the contrasts between task resolution (by HI vs.

by AI)

Elements

Users who solve

tasks by HI

Users who solve

tasks by AI

Actions

• Open a search engine on the

computer or phone

• Enter the site carrefour.fr

• Discover the site

• Are attracted to other images or words

• Ask questions, discuss with each

other...

• Comply with work instructions and

identify the elements used

• Write on paper or the computer

keyboard

• Search dictionaries

• Use translation engines

• Choose images

• Read text associated with images

• Insert a table with several rows and

columns

• Copy and paste images

• Copy and paste text or fragments of

text

• Make a mathematical total

• Write multiple forms of a Word

document

• Open the AI

interface

• Give an

indication

• Take the

robot's response

• Insert it into a

Word document.

Affectivity

and volition

• Make decisions

• Hesitate, change their minds

• Have various feelings: enthusiasm,

fatigue, nervousness, boredom, renunciation

• Apologize

• Comment

• Refuse

• Persist, ambitious

• Voluntarily get involved in the task

• Are consistent and persevering

• Satisfaction

with the ready-made

answer

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

235

• Are happy or unhappy with their work

• Sometimes worried about time

pressure

Knowledge

• At the cultural level: discuss the

cultural significance of dinner, stereotypes,

websites; Elements of etiquette (cheese

platter, dessert, orange juice, wine, water,

coffee, main course, starters, conviviality).

• At the grammatical level: the noun,

the partitive article, the numeral, the adjective,

the verb in the present tense

• At the lexical level: the lexicon of food,

cooking, the economy

• At the communication level: present

material that they have thought about, with

possible errors; discuss with each other or

with the teacher

• No

consciously activated

knowledge

There is naturally a personal inertia in the way a teacher carries out his teaching

activity. The big challenge is how teachers can relate to AI and the degree to which

they are willing to leave their classes penetrated by AI. If experienced teachers can

still teach traditionally, why would they want to change anything?

The answer lies precisely in an implacable reality: the teacher has a moral obligation

to change something because, working with students and AI at the same time, he is

the only one capable of warning students about the dangers to which they expose

themselves if they completely abandon themselves to AI-based devices. The teacher

is an authoritative and influential voice who can make visible the situation described

in Table 4.

The discrepancy between the two ways of acting is evident if it is revealed in a

contrastive perspective, which can reveal to the user what process of self-

annihilation he is consciously subjecting himself to if he constantly and long-term

focus only on the simple provision of a material for which he has made almost no

effort.

6. Conclusions

ChatGPT, in its way, thinks: it answers, questions, selects, elaborates, builds, learns,

corrects and self-corrects, capitalizes. From everything, he learns. The more he is

asked to do more, the more complex, the more elaborate he learns, the better, the

faster.

If the individual gives up doing himself and delegates all these specifically human

tasks to him, he ends up thinking less, formulating fewer answers, no longer building,

not elaborating, and not capitalizing. It is possible that many individuals,

unconsciously, end up atrophying their capacity for judgment, analysis, attention,

and creativity. They practically lose their independence.

The more independent AI becomes, the more dependent man becomes, because

he has voluntarily given up his power and critical spirit.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

236

The teacher is no longer just a transmitter of scientific knowledge and moral values.

By introducing AI in his courses, he must highlight the incalculable benefits of using

AI, and emphasize the double valence - positive and negative - of some aspects

related to the use of AI in higher education or the disadvantages in relation to the

inability to perform certain work tasks. Above all, he must constantly warn the

students, through contrastive practical illustrations, in an almost cinematographic

presentation, not to lose their own independence in front of the machine.

AI is a democratic tool, but, paradoxically, it is not for everyone. AI gives you a kind

of power because it's a very powerful tool in itself. But the unconscious, unprepared

and deceived by the promise of experiences they could never have thought of,

abandon themselves completely, even accepting to give up personal control. The

teacher is the voice that has enough influence to prevent students from completely

abandoning themselves to AI and relinquishing control over their learning.

References

1. Ahmad, Z., Kaiser, W. & Rahim, S. (2023) "Hallucinations in ChatGPT: An

Unreliable Tool for Learning". Rupkatha Journal 15:4.

https://doi.org/10.21659/rupkatha.v15n4.17

2. Celik, I., Dindar, M., Muukkonen, H. et al. (2022) "The Promises and Challenges

of Artificial Intelligence for Teachers: a Systematic Review of Research".

TechTrends 66, 616–630, https://doi.org/10.1007/s11528-022-00715-y

3. Conseil de l’Europe (2001) Cadre européen commun de référence pour les

langues: apprendre, enseigner, évaluer (CECRL), Unité des Politiques linguistiques,

Strasbourg, https://rm.coe.int/16802fc3a

4. Conseil de l’Europe (2021) Cadre européen commun de référence pour les

langues : apprendre, enseigner, évaluer (CECR). Volume Complémentaire avec de

Nouveaux Descripteurs. https://rm.coe.int/cadre-europeen-commun-de-reference-

pour-les-langues-apprendre-enseigne/1680a4e270

5. Constantin, F. (2023) « ChatGPT – Learning Accelerator or Demolisher of Foreign

Language Teaching and Learning? An Empirical Study on Business French ». The

Annals of the University of Oradea, Economic Sciences, University of Oradea,

Romania. pp.225-238, https://hal.science/hal-04553848/document

6. Famaye, T., Adisa, I.O., Irgens, G.A. (2023) "To Ban or Embrace: Students’

Perceptions Towards Adopting Advanced AI Chatbots in Schools". In: Arastoopour

Irgens, G., Knight, S. (eds) Advances in Quantitative Ethnography. ICQE 2023.

Communications in Computer and Information Science, vol 1895. Springer, Cham.

https://doi.org/10.1007/978-3-031-47014-1_10

7. Gates, B. (2023, march 21) "The Age of AI has begun. Artificial intelligence is as

revolutionary as mobile phones and the Internet", GatesNotes, the blog of Bill Gates,

https://www.gatesnotes.com/The-Age-of-AI-Has-Begun (last consulted on May 10,

2024).

8. Gentile M, Città G, Perna S and Allegra M (2023) "Do we still need teachers?

Navigating the paradigm shift of the teacher's role in the AI era". Front. Educ.

8:1161777. doi: 10.3389/feduc.2023.1161777

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
237 
 
 
9.  Humble,  N.  and  Mozelius,  P.  (2019)  "Teacher-supported  AI  or  AI-supported 
teachers?, Conference: European Conference on the Impact of Artificial Intelligence 
and Robotics", DOI: 10.34190/ECIAIR.19.007 
10. Kaplan-Rakowski, R., Grotewold, K., Hartwick, P. & Papin, K. (2023) "Generative 
AI  and  Teachers’  Perspectives  on  Its  Implementation  in  Education".  Journal  of 
Interactive Learning Research, 34(2), 313-338. Waynesville, NC: Association for the 
Advancement  of  Computing  in  Education  (AACE). 
https://www.learntechlib.org/primary/p/222363/ 
11. Kim, J. (2024) "Leading teachers' perspective on teacher-AI collaboration in 
education". Educ Inf Technol 29, 8693–8724, https://doi.org/10.1007/s10639-023-
12109-5 
12. Lameras, P., & Arnab, S. (2022) "Power to the Teachers: An Exploratory Review 
on  Artificial  Intelligence  in  Education".  Information,  13(1),  14. 
https://doi.org/10.3390/info13010014 
13. Miras, G. Lefevre, M., Arbach, N., Rapilly, L. et Dumarski, T. (2019) "Apports 
d'un  outil  d'intelligence  artificielle  à  l'enseignement-apprentissage  des  langues". 
EIAH'2019: Environnements Informatiques pour l'Apprentissage Humain, Jun 2019, 
Paris, France. ISSN 0191-491X, https://doi.org/10.1016/j.stueduc.2024.101395 
14. Mollick, E. (2024) Co-Intelligence: Living and Working with AI, Portfolio. 
15. Naweed-e-Sehar (2024). "Exploring Teacher Attitudes Towards ChatGPT:  A 
comprehensive  Review".  International  Journal  of  Social  Science  & 
Entrepreneurship, 4(1), 212–225. https://doi.org/10.58661/ijsse.v4i1.259 
16. Nazaretsky, T., Ariely, M., Cukurova, M. & Alexandron, G. (2022) "Teachers' trust 
in AI-powered educational technology and a professional development program to 
improve  it".  British  Journal  of  Educational  Technology,  53,  914–931. 
https://doi.org/10.1111/bjet.13232  
17. U.S. Department of Education, Office of Educational Technology (2023) Artificial 
Intelligence and Future of Teaching and Learning: Insights and Recommendations, 
Washington, DC, 2023. 
18. Weber-Wulff, D., Anohina-Naumeca, A., Bjelobaba, S. et al. (2023) "Testing of 
detection  tools  for  AI-generated  text".  Int  J  Educ  Integr  19,  26, 
https://doi.org/10.1007/s40979-023-00146-z 
19. Yuk Chan, Cecilia Ka & Tsi, Louisa H.Y. (2024) "Will generative AI replace 
teachers in higher education? A study of teacher and student perceptions", Studies 
in  Educational  Evaluation,  Volume  83, 
https://www.sciencedirect.com/science/article/abs/pii/S0191491X24000749 
20. https://chat.openai.com/  
 
 
  

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

238

SECTION MANAGEMENT, MARKETING, ECONOMIC,

INFORMATICS AND CYBERNETICS

STRENGTHS AND WEAKNESSES OF SMART TOURISM

DESTINATIONS: A CROSS-GENERATIONAL STUDY

Elena BOTEZAT1, Olimpia BAN2, Adela Laura POPA1, Dorin Cristian COITA1,

Teodora Mihaela TARCZA1, Lidia CHIRICOI3

1 Department of Management - Marketing, Faculty of Economic Sciences, University

of Oradea, Oradea, Romania

2 Department of Economics and Business, Faculty of Economic Sciences, University

of Oradea, Oradea, Romania

3 PhD student, Business Administration, Faculty of Economic Sciences, University

of Oradea,

ebotezat@uoradea.ro; oban@uoradea.ro ; apopa@uoradea.ro

dcoita@uoradea.ro ; teodoratarcza@gmail.com; chiricoilid@gmail.com

Abstract: Transforming tourism destinations using technology that makes the travel

process efficient and pleasant for different generational groups is crucial. Any

attempt to achieve this goal should start with an analysis of the feedback tourists

provide about their digital experience at a destination. This study was carried out to

gain an understanding of the perceptions of Romanian tourists of the strengths and

weaknesses of smart tourism destinations as the first part of any SWOT analysis

designed to collect critical factors about the current situation aiming to improve it to

remain on a highly competitive market. The empirical data was obtained from 628

tourists belonging to Baby Boomers, Generation X, Generation Y, and Generation

Z. The results showed, after a MAXQDA Analytics Pro analysis, that for all four

generations considered, the number of respondents who identified strengths is

higher than those who mentioned weaknesses. The study also found more

similarities than differences across generations in tourists' perceptions of smart

technology. Beyond Wi-Fi, destination marketers should focus on internet signal

quality and mobile apps for improved travel experiences. However, generational

gaps emerged: older generations valued ease of use, while younger ones prioritized

access to information apps. Gen Y identified virtual experiences as a weakness,

while Gen Z highlighted problematic applications By leveraging these tourism

destination strengths, marketers can optimize their digital strategies, ensuring

relevance and resonance across diverse demographic segments. Moreover, such

insights empower tourism destinations to innovate more effectively, meeting the

evolving needs and expectations of each generation in an increasingly digital

landscape.

Keywords: smart tourism destinations; Baby Boomers; Generation X, Y, Z;

strengths; weaknesses.

JEL Classification: M15; M21; Z32.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

239

1. Introduction

Tourism, the industry that before the Covid-19 crisis outpaced the growth of the

worldwide economy for nine consecutive years, was one of the first sectors deeply

impacted by the pandemic (Huang and Wang, 2023). According to the United

Nations World Tourism Organization barometer, the 1.3 million international arrivals

show that the tourism industry has recovered 88% of its pre-pandemic level

(UNWTO, 2024). The 2024 expected recovery is closely related to digitization,

which has not only made the process of planning and carrying out the trip much

more straightforward but also allowed the managers of the tourist destination to offer

visitors personalized experiences based on the preferences expressed through their

digital behaviors (Jiang and Phoong, 2023). In the conditions of the development at

an unprecedented rate of information and communication technologies (ICTs), the

management of the tourism destinations sought to rapidly adapt by integrating smart

technologies into the physical infrastructure of the destination, for example, by using

smart tourism applications (Gretzel, 2022). Different studies (e.g., Corte et al., 2017;

Lee et al., 2020) pointed out the importance of smart tourism destination (STD)

applications in applying an effective management and marketing to destinations.

Due to the relationship between STD applications and travel experiences – on the

demand side and destination competitive advantage – on the supply side, the topic

remains current in academic research (Ercan, 2023). Moreover, the diversity of the

smart prerequisites and the results of the implementation of the smart technologies

within tourist destinations makes it necessary to analyze the current stage in STD

development from the point of view of different generations of tourism consumers

(Karakaş et al., 2022), different in terms of level of technology acceptance and

readiness (Smith and Padilla, 2023).

This study attempts to explore how individuals from different generations perceive

their smart tourism experience at a recently visited destination. As different scholars

pointed out (e.g., Kuchumov, Karpova, and Testina, 2024), tourists essentially utilize

technology to assist and mediate the processes related to their travel. Any travel

experience is strongly marked by digitalization used, for example, to find tourism

facilities, the way to a tourist destination, or tourist attractions and events in a

specific area. Moreover, tourism recommendations through social networking

services influence tourists` decisions to visit a destination. Despite this largely

recognized technology interaction among tourists, there is a relatively under

researched area, particularly regarding different generational cohorts. Based on the

existing literature, this study was designed to gain an understanding of the strengths

and weaknesses of an STD as it is perceived by people born between 1946 and

2010. Alongside the birth year, all four generations (i.e., Baby Boomers, Generation

X, Generation Y, and Generation Z) play influential roles in shaping the tourism

industry and successfully managing any tourist destination. Bearing in mind that a

further increase in the use of technology in tourism is foreseen, identifying the

strengths and the weaknesses of a tourist destination influenced by technology is

essential in maintaining competitiveness in the tourism market.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

240

This paper is divided into five parts. The first part introduces the paper, followed by

the analysis of the specialized literature in the second section. The third section

presents the methodology, followed by the findings and discussion in the fourth

section and the conclusions in the fifth.

2. Analysis of specialized literature

2.1. The Smart Tourism Destination

Given that tourism represents a digital pioneer, the fact that it brought global flights

and hotel booking online, it is not surprising that smart tourism destinations (STDs)

quickly became a topic of great interest, as many studies show (Buhalis, 2019; Ye,

Ye and Law, 2020; Hamid et al., 2021; Gretzel, 2022; Jiang and Phoong, 2023; El

Archi et al., 2023; Kuchumov, Karpova and Testina, 2024). In a tourist destination

viewed by the World Tourism Organization as a place that has a set of natural and

cultural resources, infrastructure, and services that attract visitors, the smart

dimension serves as a bridge between all these components and tourists through

mobile technologies and tourism applications as the core technology (Dorcic,

Komsic and Markovic, 2019). After Gretzel et al. (2016), a tourism destination may

be considered a smart one if it has both “hard” intelligence (i.e., the whole

technological infrastructure) and “soft” intelligence (organizational skills,

technological collaborations and partnerships, digital innovation). The Internet of

Things (IoT), big data, social media, recommendation systems, augmented reality

(Hamid et al., 2021), mobile applications, cloud computing, virtual reality

(Tavitiyaman et al., 2021), and artificial intelligence (Kirtil and Aşkun, 2021) are

discussed in the literature as leading tourism destinations technology. New virtual

and augmented reality aspects enhance tourism technology (Wibisono et al., 2023).

Through these technologies, STD marketers seek to improve the quality or value of

the tourists` experiences (Um and Chung, 2021) and to increase long-term

competitiveness for long-term tourism destinations (Tavitiyaman, 2021).

2.2. Tourism destination technology - strengths and weaknesses

Ye, Ye, and Law (2020) and Kusdibyo et al. (2023) showed that the adoption of

smart tourism technology has an important role in influencing potential tourists to

visit a destination. The STD touristic services logic is to reach the determined targets

(e.g., the level of profitability) by providing fast, accurate, and personalized answers

to tourists` needs using technical solutions (Hernández-Martìn, Rodrìguez-

Rodrìguez and Gahr, 2017). In other words, we can talk about STD strengths

perceived by tourists (Ban et al., 2022), comparing the actual technological offer

and expectations formed from previous touristic experiences and preset standards

in terms of intelligent technologies. As Oliver (1980), by his expectations-

disconfirmation model, stated, an individual is satisfied if the purchased product or

service expresses at least the expected performance, leading to a positive

disconfirmation. Different scholars have shown that satisfaction should be

evaluated, considering the overall tourism experience (Spreng, Mackenzie, and

Olshavsky, 1996; Assaker, Vinzi, and O’Connor, 2011). As Gajdošìk (2018)

highlighted, smart technologies are used by tourists in all travel phases, starting

from the pre-travel information search stage to post-travel evaluations. However,

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

241

satisfaction should be understood, first of all, as a fulfillment an individual might have

with STD attributes (Alegre and Garau, 2010), and its overall satisfaction being the

result of the experience had with each attribute (e.g., free public Wi-Fi, official apps,

QR code facility, crowd handling, online recommendation system, smart forecast)

(Romao et al., 2015).

As satisfaction represents the sense of fulfillment felt by the tourism consumer,

dissatisfaction is its inseparable opposite within the same continuum of the touristic

experience. According to Fuller and Matzler (2008), STD` attribute perceived as a

smart performance characteristic can go both ways, generating satisfaction when it

performs optimally or dissatisfaction when it fails to live up to customer expectations.

For example, Gan and Cheablam (2022) found that tourists are quite satisfied with

the tourism platform services, but at the same time, tourists are very dissatisfied

with the platform construction aspects of the tourist scenic spot. Consequently, the

guide service which the smart scenic spot can maintain can be considered as a

strength and the lack of a multimedia display as a weakness.

2.3. Different Generations and Tourism Technology

People from all generations’ acceptance and trust are elements of particular

importance in stakeholders’ decision-making regarding the design of any STD

(Smith and Padilla, 2023). According to the Unified Theory of Acceptance and Use

of Technology (UTAUT), a person's perceived probability of adopting the technology

depends directly on the expected performance in terms of perceived usefulness,

presumed effort, social influence, and propitious conditions. Indirectly, technology

acceptance and readiness depend on the user's age, gender, experience, and

voluntariness (Marikyan and Papagiannidis, 2023). Tsai, Chang, and Ho's study

(2016) revealed that age significantly affects technology's perceived ease of use

and usefulness. It is well recognized (e.g., Pásztor and Bak, 2020) that members of

different generations exhibit substantially different relations with technology.

However, utilitarian motivation is common for all generations (Smith and Padilla,

2023). Consequently, a technological characterization of generational differences

and similarities (as seen in Table 1) appears necessary to help smart tourism

destination marketers cater to and simultaneously place a mix of guests.

Table 1. A short characterization of studied generational cohorts.

Baby Boomers

(b. 1946-1964)

Generation X

(b. 1965-1979)

Generation Y

(b. 1980-1994)

Generation Z

(b. 1995-2009)

Age (in

2024)

60 years old or

over

59-45

44-29

28 years old or

less

Relation

with

technology

Digital accepters

that actively

utilize

smartphones,

social media,

and cloud

services.

Digital

immigrants that

have had to

adapt to the new

language of

technology.

Digital natives

who are

comfortable with

the technology

they were raised

with.

Digital residents:

technology is

second nature

and fundamental

to their

existence.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

242

Baby Boomers

(b. 1946-1964)

Generation X

(b. 1965-1979)

Generation Y

(b. 1980-1994)

Generation Z

(b. 1995-2009)

State

They are at their

peak travel,

possess a lot of

life and travel

experience,

financially

comfortable, and

plenty of free

time to travel.

They are settled,

for the most part,

into their life`s

work, and seem

to stand out as a

less than

confident cohort

when it comes to

their financial

situation.

They account for

the largest

demographic of

travelers, and

most Generation

Y members

report feeling

overwhelmed by

financial

problems.

In general, they

represents

young

professionals

and full-time

students without

children, who

have witnessed

a growing

demand for

financial security

Social media

habits

- they are on

board with

Facebook,

followed by

YouTube and

Instagram.

Facebook is

visited several

times a week

and even a few

times a day.

- used social

media a few

times a day

(especially

YouTube and

Pinterest), while

a minority use it

all the time or a

few times a

week

- social media is

an essential part

of their lives;

most of them

already used

new platforms,

such as

MetaThreads

- social media is

more than half of

Gen Zers`

lives; Snapchat

tops TikTok in

popularity, while

Instagram

boasts the

largest Gen Z

user base.

Source: Tsai, Chang, and Ho, 2016; Taherdoost, 2018; Dorcic, Komsic and

Markovic, 2019; American Association of Retired Persons, 2020; Jeong and Shin,

2020; Hamid et al. 2021; Smith and Padilla, 2023; Botezat et al., 2024

3. Methodology

In the current study, the main objective was to identify where ICTs generational

differences and similarities lie in terms of perceived smart destinations strengths

and weaknesses to help marketers to cater a mix of guests. To achieve this goal,

the authors opted for a qualitative approach using data obtained from 911 Romanian

respondents from February to mid-June 2023. Specifically, by trained university

students, 69 Baby Boomers, 149 Generation X, 271 Generation Y, and 422

members of the Generation Z were reached through purposive sampling. According

to Chaney, Touzani, and ben Slimane (2017), the sampling method was based on

a generational level, rather than the conventional demographic level (i.e., age).

Consequently, based on the respondent’s age, each individual was included in the

corresponding generational cohort for further obtained data analysis. To this end,

for data analyzing the MAXQDA Analytics Pro Analysis has been adopted.

MAXQDA Analytics Pro, part of the Computer Assisted Qualitative Data Analysis

Software (CADAS) family (Kuckartz et al., 2019), was used to conduct a qualitative

content analysis based on a text coding system for open-ended questions. The

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

243

concepts in the text that are relevant to the ongoing research are standardized using

the coding system provided by the software. The frequency of codes and the code

clouds were subsequently generated and interpreted using the identified codes as

a basis.

The questionnaire used in this study consists of three parts. The first part collected

general demographic data and information on tourism experience, especially birth

year. Only respondents who consent to participate in the study and have visited a

tourism destination in the last two years were asked to respond. The second part

consists of questions covering respondents` perceptions and opinions about smart

touristic destination strengths and weaknesses, and the third part contains more

detailed socio-demographic data, such as gender, occupation, level of education,

vacation frequency, travel motives, and income level. The collected data related to

respondents` perceptions and opinions about last visited smart touristic destination

strengths and weaknesses was treated and systematically analyzed through

deductive content analysis. Keeping in mind the guidelines outlined by Schreier

(2014), the data collected from the respondents were carefully read and contrasted

until significant patterns emerged in correspondence with the research questions

focused on identifying the strengths and weaknesses of the most recently visited

tourist destination.

4. Findings

The qualitative analysis examined the matches and mismatches in smart tourism

experiences and the ICTs mediated interactions among the four investigated

generations. Table 2 presents the overall number and percentage of respondents

indicating strengths and weaknesses. It should be noted that, overall, for all four

generations considered, the number of respondents who identified strengths is

higher than those who mentioned weaknesses. More than 70% of Baby Boomers,

Generation X and Generation Y respondents and 65% of Generation Z respondents

indicated at least one strength, while about 50% of Baby Boomers, Generation Y

and Generation Z respondents and 65% of Generation X respondents indicated at

least one weakness. As these were not mandatory questions, the fact that a

significant number of respondents chose to indicate at least one strength and/or

weakness regarding using technology in their travel-related activities may lead to

the conclusion that these aspects are of considerable importance to them.

Table 2. Overall situation of responses indicating strengths and weaknesses

Strengths

Weaknesses

Total

respondents

No of

respondents

indicating

strengths

No of

respondents

indicating

weaknesses

Baby

Boomers

72.46%

52.17%

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

244

Generation X

149

108

72.48%

65.77%

Generation Y

271

195

71.96%

132

48.71%

Generation Z

422

275

65.17%

206

48.82%

Source: created by authors

4.1. Strengths of smart tourism destinations indicated by different

generations.

Table 3 shows responses of the four generations related to the strengths of smart

tourism destinations, ranked by frequency in descending order. All the four-

generation respondents mentioned online payments, WIFI, free internet, and online

reservations. However, there are some differences between the generations in their

evaluation level. Baby Boomers and Generation X respondents put online payments

in the first place and higher ranking (18.18% - Baby Boomers and 15.73% -

Generation X) than Generation Y and Generation Z respondents, who placed this

strength on the second place (15.18 % - Generation Y, and 8.92% - Generation Z).

WIFI was ranked in first place by 19.64% of Generation Y respondents and 15.96%

by Generation Z respondents, and third place by Baby Boomers and Generation X

respondents (12.12% and 8.99%). Free internet was highly mentioned as the

strength of the smart tourism destination by Baby Boomers (18.18% of

respondents), followed by Generation Y (8.93%), Generation X with 5.62%, and

Generation Z with the smallest percentage (2.82%). Online reservations tend to be

highly pointed out by Generation Y, followed by Generation X, Baby Boomers, and

Generation Z. Easy to use, mobile applications, and online booking were strengths

mentioned by three of four generation respondents, and websites, virtual maps, and

google maps by two generations of respondents. It is interesting to observe that

Generation Z and Baby Boomers highly consider easy-to-use, Generation X online

booking, and Generation X and Z mobile applications. The ability to purchase tickets

online is regarded as a significant strength by respondents from generations Y and

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

245

Table 3. Ranking of strengths of smart tourism destination

Baby Boomers

Generation X

Generation Y

Generation Z

Keyword

(Kw)

fq %

Keyword

(Kw)

fq %

Keyword

(Kw)

fq %

Keyword

(Kw)

fq %

Online

payments

18.18

Online

payments

15.73

WIFI

19.64

WIFI

15.96

Free

internet

18.18

Online

booking

10.11

Online

payments

15.18

Online

payments

8.92

WIFI

12.12

WIFI

8.99

Free

internet

8.93

websites

8.45

Virtual

maps

9.09

mobile

applications

6.74

websites

5.36

mobile

applications

4.69

GPS

system

6.06

Strong WIFI

6.74

online

purchase of

tickets

5.36

Easy to use

4.69

Easy to use

6.06

websites

5.62

Card entry

4.46

Online

booking

4.69

card

payments

6.06

Free

internet

5.62

online

reservations

3.57

Virtual

maps

4.23

Weather

notifications

6.06

alerts

4.49

Online

booking

3.57

Transport

applications

4.23

alerts

3.03

Easy to use

4.49

menu using

the QR

code

2.68

Google

Maps

3.76

Virtual

reality

3.03

smart

technology

4.49

Google

Maps

1.79

online

purchase of

tickets

3.76

Good

phone

signal

3.03

online

reservations

3.37

smart

electronic

device

1.79

smart

technology

3.76

online

reservations

3.03

waze

3.37

safety

1.79

Free

internet

2.82

cable

channels

3.03

card

payments

2.25

mobile

applications

1.79

Virtual

guide

2.35

Intelligent

systems

3.03

online ads

2.25

Strong WIFI

1.79

calendar of

events

2.35

15.

GPS

system

2.25

online

reservations

2.35

Source: created by authors

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

246

4.2. Weaknesses of smart tourism destinations indicated by different

generations

The weaknesses list of smart tourist destinations displays the keywords considered

most relevant, as indicated by the four generations of respondents. Table 4

summarizes their responses ranked by frequency in descending order. Interestingly,

Table 4 shows that weak WIFI signal is the most frequently recurring attribute when

discussing weaknesses of smart tourism destinations. Moreover, all the four-

generation respondents ranked weak WIFI signals in the first place and shared over

20.00% of statistics. Further, three of four generations mentioned no Internet signal,

specifically 12.00% of Baby Boomers, 10.71% of Generation X, and 6.72% of

Generation Z respondents. Results also show that 12.00% of Baby Boomers

respondents, 7.61% of Generation Y, and 5.22% of Generation X respondents have

reported monitoring tourist flow as a weakness of the last visited tourism destination.

In contrast, none of the Generation X respondents mentioned it.

Additionally, Baby Boomers and Generation Y mentioned managing the number of

visitors as a weakness, precisely 4.00% Baby Boomers and 3.26% of Generation Y

respondents. Among Baby Boomers, call center services not available, and hard to

use are ranked five and six in line as weaknesses, while no online payments are at

the bottom of the list. Generation X respondents share similar perceptions regarding

call center service not available and hard to use, being more critical regarding no

online payments. Generation Y and Generation Z respondents do not mention these

last three attributes as weaknesses but pointed out the absence of a tourist events

calendar. Overall, while some general Internet-related issues (weak or no signal,

limited WIFI) predominate in the lists of weaknesses for all four generations, some

specific issues (monitoring tourist flow, professional websites, public transportation

applications, services for people with disabilities, events calendar) are also

mentioned, albeit less frequently.

Table 4. Ranking of weaknesses of smart tourism destination.

Baby Boomers

Generation X

Generation Y

Generation Z

Keyword

(Kw)

fq %

Keyword

(Kw)

fq %

Keyword

(Kw)

fq %

Keyword

(Kw)

fq %

Weak WIFI

signal

20.00

Weak WIFI

signal

28.57

Weak WIFI

signal

26.09

Weak WIFI

signal

20.90

no Internet

signal

12.00

call center

service not

available

14.29

no intelligent

technology

13.04

no Internet

signal

6.72

poor web

presence

12.00

no Internet

signal

10.71

lack of

information

applications

9.78

Limited WIFI

5.22

monitoring

tourist flow

12.00

Lack of

attractions

information

7.14

no online

payments

7.61

monitoring

tourist flow

5.22

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

247

Baby Boomers

Generation X

Generation Y

Generation Z

Keyword

(Kw)

fq %

Keyword

(Kw)

fq %

Keyword

(Kw)

fq %

Keyword

(Kw)

fq %

call center

service not

available

8.00

Hard to

use apps

7.14

monitoring

tourist flow

7.61

not functional

technology

4.48

Hard to

use

8.00

parking

monitoring

7.14

Problematic

applications

6.52

Public

transportation

application

4.48

intelligent

technology

8.00

no online

payments

7.14

weak phone

signal

5.43

lack of a

professional

website

3.74

little

information

for tourists

4.00

no online

reservation

3.57

managing

the number

of visitors

3.26

absence of a

tourist events

calendar

3.73

managing

the number

of visitors

4.00

Lack of

reviews

3.57

absence of

services for

people with

disabilities

3.26

lack of

information

applications

3.73

Limited

WIFI

4.00

lack of

augmented

reality

application

3.57

absence of

a tourist

events

calendar

3.26

little

information

for tourists

2.99

no online

payments

4.00

no card

payments

3.57

the absence

sustainable

technologies

3.26

not updated

info

2.99

missing

alerts

4.00

missing

alerts

3.57

Lack of

smart

devices

2.17

Lack of

technology

2.99

Source: created by authors

5. Conclusions

This study points out that there are generally more intergenerational similarities than

differences related to tourists' perceptions of smart technology. Respondents from

all four studied generations highlighted the importance of an appropriate digital

infrastructure aimed at creating travel satisfaction. Aside from more wireless

networking technology that uses radio waves to provide free wireless high-speed

Internet access (Wi-Fi), smart tourism destination marketers should consider the

quality of the Internet signal and the mobile apps that contribute to a more

comfortable and secure travel. These findings strengthen some previous studies'

focus on technologies used in tourist attractions (Wang et al., 2016), gadgets and

platforms used in smart tourism destinations (Başer, Doğan and Al-Turjman, 2019),

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

248

and ICT's individual and social experience utility (Ballina, Valdes and Del Valle,

2019). Another very important aspect is that for all four generations, a smart

destination tourism attribute (e.g., free Wi-Fi, online payments) was considered a

strength when it met tourists` expectations and a weak point when it disappointed,

which is in line with Gan and Cheablam` study (2022) results.

From a qualitative approach, the current study evidenced some generational

differences related to the technological performance of tourism destinations. For

example, older generations (Baby Boomers and Generation X) considered `easy to

use` as a strength and `hard to use` as a tourism destination weakness, while

younger generations did not. This confirms other studies, such as Kim et al. (2016).

Another aspect that can be mentioned is the fact that younger generations (i.e.,

Generation Y and Generation Z) seem to be more dependent on their technological

devices since they mentioned `lack of information applications` as an important

smart destination’ weakness. The virtual experience was specified as a weakness

by Generation Y respondents, and `problematic applications` by those who belong

to Generation Z. `Absence of services for people with disabilities` was indicated as

a weakness both by Generation Y and Generation Z respondents. This finding was

not expected by these younger generations but by the older ones, who unexpectedly

did not mention it. A possible explanation consists in that young people might

consider whether they could recommend or revisit the destination accompanied by

seniors, while those seniors that travel seek dynamism and youth, and some of them

loathe services for people with disabilities. A limitation of our study consists in the

fact that the sample for this research consists only of Romanians and thus deals

with only one cultural nation. This may make our findings less generalizable to other

countries.

The implications of our findings for tourism destination marketers are important:

smart tourism destination attributes influence the result of the touristic experience

for all generations of tourists. Thus, simply providing tourists with standard ICT

technology may not be sufficient to gain full benefits. Tourism destination

management should improve the technological infrastructure to ensure more quality

connectivity for any tourist destination. Additionally, smart tourism destination

stakeholders, as well as application developers, should create functional solutions

to attract the target generational group(s).

References

1. Alegre, J. and Garau, J., (2010) “Tourist satisfaction and dissatisfaction”, Annals

of tourism research, 37(1), pp. 52-73.

2. American Association of Retired Persons. (2020), 2020 Travel Trends.

https://www.aarp.org/content/dam/aarp/research/surveys_statistics/life-

leisure/2019/2020-travel-trends.doi.10.26419- 2Fres.00359.001.pdf.

3. Assaker, G., Vinzi, V. E., & O’Connor, P. (2011) “Extending a tourism causality

network model: A cross-country, multigroup empirical analysis”, Tourism and

Hospitality Research, 11(4), 258-277.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

249

4. Ballina, F. J., Valdes, L., & Del Valle, E. (2019) “The Phygital experience in the

smart tourism destination”, International Journal of Tourism Cities, 5(4): 656–671.

DOI: https://doi.org/10.1108/IJTC-11-2018-0088

5. Ban O., Faur M., Botezat E.A., Ștefănescu F., Gonczi J. (2022) “An IPA Approach

towards Including Citizens` Perceptions into Strategic Decisions for Smart Cities in

Romania”, Sustainability, 14(20): 13294. https://doi.org/10.3390/su142013294.

6. Başer, G., Doğan, O., Al-Turjman, F. (2019) “Smart tourism destination in smart

cities paradigm: a model for Antalya”, Artificial Intelligence in IoT (pp. 63–83),

Springer.

7. Botezat, E., Fotea, I., Crisan, D., Fotea, S. 2024. ‘Civic Engagement and Social

Engagement’ (Chapter 14, pp. 129-137), in Gen Z Around the World: Understanding

the Global Cohort Culture of Generation Z! (eds. Corey Seemiller and Meghan

Grace), Emerald Publishing Limited, doi/10.1108/9781837970926, ISBN 978-1-

83797-093-3, eISBN 978-1-83797-092-6.

8. Buhalis, D. (2019) “Technology in tourism-from information communication

technologies to eTourism and smart tourism towards ambient intelligence tourism: A

perspective article”, Tour. Rev. 75, 267–272.

9. Buhalis, D. & Amaranggana, A. (2014) Smart Tourism Destinations. In Information

and Communication Technologies in Tourism, Springer: Cham, Switzerland, 2013;

pp. 553–564.

10. Chaney, D., Touzani, M., Ben Slimane, K. (2017) “Marketing to the (new)

generations: summary and perspectives”, Journal of Strategic Marketing, 25(3), 179–

189, Routledge, https:// doi.org/10.1080/0965254X.2017.1291173.

11. Corte, V. D., D’Andrea, C., Savastano, I., Zamparelli, P. (2017) “Smart cities and

destination management: Impacts and opportunities for tourism competitiveness”,

European Journal of Tourism Research, 17, pp. 7-27.

https://doi.org/10.54055/ejtr.v17i.291.

12. Dorcic, J., Komsic, J., Markovic, S. (2019) “Mobile technologies and applications

towards smart tourism–state of the art”, Tourism Review, 74(1), 82-103.

13. El Archi, Y., Benbba, B., Nizamatdinova, Z., Issakov, Y., Vargáné, G. I., Dávid, L.

D. (2023) “Systematic Literature Review Analysing Smart Tourism Destinations’ in

Context of Sustainable Development: Current Applications and Future Directions”,

Sustainability, 15(6), 5086.

14. Ercan, F. (2023) “Smart tourism destination: A bibliometric review”, European

Journal of Tourism Research, 34, 3409-3409.

15. Fuller, J., & Matzler, K. (2008) “Customer delight and market segmentation: An

application of the three-factor theory of customer satisfaction on life style groups”,

Tourism Management, 29(1), 116–126, doi:10.1016/j.tourman.2007.03.021.

16. Gan, L., & Cheablam, O. (2022) “Tourists’ Satisfaction and Expectation on Smart

Tourism in Shenghaijing Salt Well Scenic Spot, Zigong City, China”, Science,

Technology, and Social Sciences Procedia, 2022(5), CiM10-CiM10.

17. Gretzel, U. (2022) “The smart DMO: A new step in the digital transformation of

destination management organizations”, European Journal of Tourism Research, 30,

3002. https://doi.org/10.54055/ejtr.v30i.2589.

18. Gretzel, U., Zhong, L., Koo, C. (2016) Application of smart tourism to cities, Int.

J. Tour. Cities, 2.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

250

19. Hamid, R. A., Albahri, A. S., Alwan, J. K., Al-gaysi, Z. T., Albahri, O. S., Zaidan,

A. A., Alnoor, A., Alamoodi, A. H. & Zaidan, B. B. (2021) “How smart is e-tourism? A

systematic review smart tourism recommendation system applying data

management”, Computer Science Review, 39, 100337.

https://doi.org/10.1016/j.cosrev.2020.100337.

20. Hernández-Martìn, R., Rodrìguez- Rodrìguez, Y. & Gahr, D. (2017) “Functional

zoning for smart destination management”, European Journal of Tourism Research,

17, pp. 43-58. https://doi.org/10.54055/ejtr.v17i.293.

21. Huang, S., & Wang, X. (2023) “COVID-19 two years on: a review of COVID-19-

related empirical research in major tourism and hospitality journals”, International

Journal of Contemporary Hospitality Management, 35(2), 743-764.

22. Jiang, C., & Phoong, S. W. (2023) “A ten-year review analysis of the impact of

digitization on tourism development (2012–2022)”, Humanities and social sciences

communications, 10(1), 1-16.

23. Karakaş, H., Çizel, B., Selçuk, O., Coşkun Öksüz, F., & Ceylan, D. (2022)

“Country and destination image perception of mass tourists: generation

comparison”, Anatolia, 33(1), 104-115.

24. Kim, M. J., Kim, W. G., Kim, J. M., Kim, C. (2016) “Does knowledge matter to

seniors’ usage of mobile devices? Focusing on motivation and attachment”,

International Journal of Contemporary Hospitality Management, 28(8), 1702–1727.

https://doi.org/10.1108/IJCHM-01-2015-0031.

25. Kirtil, I. G., & Aşkun, V. (2021) “Artificial intelligence in tourism: a review and

bibliometrics research”, Advances in Hospitality and Tourism Research (AHTR).

26. Kuchumov, A., Karpova, G., & Testina, Y. (2024) ‘Smart Destinations for

Advanced Development of Tourism’, in Digital Transformation: What are the Smart

Cities Today? (pp. 49-62). Cham: Springer Nature Switzerland.

27. Kuckartz, U. (2019) “Qualitative text analysis: A systematic

approach”, Compendium for early career researchers in mathematics education,

181-197.

28. Kusdibyo, L., Rafdinal, W., Susanto, E., Suprina, R., Nendi, I., & Abdurokhim, A.

(2023) “How smart are you at traveling? Adoption of smart tourism technology in

influencing visiting tourism destinations”, Journal of Environmental Management and

Tourism, 14(4), 2015-2028.

29. Lee, P., Hunter, W. C. & Chung, N. (2020) “Smart tourism city: Developments

and transformations”, Sustainability, 12, 3958, https://doi.org/10.3390/su12103958.

30. Marikyan, D. & Papagiannidis, S. (2023) ‘Unified Theory of Acceptance and Use

of Technology: A review’, in S. Papagiannidis (Ed), TheoryHub Book, available at

https://open.ncl.ac.uk / ISBN: 9781739604400.

31. Oliver, R.L. (1980) “A cognitive model of the antecedents and consequences of

satisfaction decisions”, Journal of Marketing Research, 17, pp. 46-49.

32. Pásztor, J., & Bak, G. (2020), Management, Enterprise, and Benchmarking in the

21st Century, 158-168.

33. Romao, J., Neuts, B., Nijkamp, P., Van Leeuwen, E. (2015) “Culture, product

differentiation and market segmentation: a structural analysis of the motivation and

satisfaction of tourists in Amsterdam”, Tourism Economics, 21(3), pp. 455-474.

34. Schreier, M. (2014) ‘Qualitative content analysis”, in U. Flick (Ed.), The SAGE

handbook of qualitative data analysis (pp. 170–183). SAGE Publications.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

251

35. Smith, M. K., & Padilla, M. F. C. (2023) “Technology Acceptance and Readiness

among different Generations of Urban Tourists”, Marketing & Menedzsment, 57(1),

37-48.

36. Spreng, R.A., MacKenzie, S.B., Olshavsky, R.W. (1996) A reexamination of the

determinants of consumer satisfaction, The Journal of Marketing, pp. 15-32.

37. Taherdoost, H. (2018) “A review of technology acceptance and adoption models

and theories”, Procedia manufacturing, 22, 960-967.

38. Tavitiyaman, P., Qu, H., Tsang, W. L. & Lam, C. R. (2021) “The influence of smart

tourism applications on perceived destination image and behavioral intention: The

moderating role of information search behavior”, Journal of Hospitality and Tourism

Management, 46, 476-487, https://doi.org/10.1016/j.jhtm.2021.02.003.

39. Tsai, T. H., Chang, H. T., & Ho, Y. L. (2016) “Perceptions of a specific family

communication application among grandparents and grandchildren: An extension of

the technology acceptance model”, PloS one, 11(6), e0156680.

40. Um, T., & Chung, N. (2021) “Does smart tourism technology matter? Lessons

from three smart tourism cities in South Korea”, Asia Pacific Journal of Tourism

Research, 26(4): 396–414, DOI:https://doi.org/10.1080/10941665.2019.1595691.

41. United Nations World Tourism Organization (2024), International Tourism to

Reach Pre-Pandemic Levels in 2024, https://www.unwto.org/news/international-

tourism-to-reach-pre-pandemic-levels-in-2024.

42. Wang, X., Li, X. R., Zhen, F., & Zhang, J. H. (2016) “How smart is your tourist

attraction?: Measuring tourist preferences of smart tourism attractions via a FCEM-

AHP and IPA approach”, Tourism Management, 54: 309–320. DOI:

https://doi.org/10.1016/j.tourman.2015.12.003.

43. Wibisono, N., Rafdinal, W., Setiawati, L., & Senalasari, W. (2023) “Predicting the

adoption of virtual reality tourism in the post COVID-19 pandemic era”, African

Journal of Hospitality, Tourism and Leisure, 12(1): 239–256. DOI:

https://doi.org/10.46222/ajhtl.19770720.365.

44. Ye, B.H.; Ye, H.; Law, R. (2020) “Systematic Review of Smart Tourism Research”,

Sustainability, 12, 3401.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

252

A CROSS LOOK AT THE ORGANIZATION'S COMMITMENT TO

SOCIAL RESPONSIBILITY. CASE OF A MINING COMPANY IN

QUEBEC, CANADA

Marie-Pier CÔTÉ1, Doina MURESANU2

1,2Management département of the Université du Québec en Abitibi-

Témiscamingue, Rouyn-Noranda, Québec, Canada

Marie-Pier.Cote2@uqat.ca

Doina.Muresanu@uqat.ca

Abstract: This paper presents research results from a larger project, focusing on

the study of the links between employees' perceptions of their social identification

and the social responsibility management models implemented by their

organizations. In this article, we will present the subject of comparative analysis from

the perspective of the company and its employees, in relation to the social

responsibility management model implemented by the company. The study area for

this research is represented by a company in the field of gold mining in the province

of Quebec, Canada. Thus, using an exploratory qualitative research method based

on the case study, we were able to observe firstly that the integrative model that we

designed represents a relevant tool for the analysis of CSR. What's more, the

research results showed similarities between the vision of company managers and

its employees on CSR, but also divergences, which leads us to conclude that

additional efforts should be made by organizations in order to improve their

management of social responsibility and make sure it is well known by its

employees.

Keywords: organizational social responsibility, benevolent and corporate citizen

model, responsible human resources management

JEL Classification : M14

1. Introduction

We are currently experiencing great upheavals in the work world. Indeed, the labor

shortage in the province of Quebec, Canada, is very real (Mohamed, 2022). This

labor shortage affects businesses, employees, and services to citizens (Canadian

Federation of Independent Business [CFIB], 2022). For all these reasons,

organizations have every advantage in using various strategies to fill available

positions.

Corporate social responsibility (CSR) could play a key role in responding to these

upheavals in the world of work. It is a concept little known to employees and even

employers (Gilbert and Greffect, 2019). The difficulty of agreeing on a common

definition of the concept gives an idea of the extent of the divergences surrounding

it (Baba, 2018, Pereira, 2014). One of the most often cited definitions in the literature

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

253

is that of Carroll (1979) who argues that CSR encompasses the economic, legal,

ethical and voluntary expectations of a society towards organizations at a given

time. CSR could then be considered as being, for example, the commitment of the

organization which goes beyond the simple satisfaction of the interests of

shareholders, by instead targeting all its stakeholders. The organization's

stakeholders could be employees, consumers, suppliers, as well as other groups

with which it has relationships.

Several studies have found a positive link between the company's involvement in

social responsibility activities and satisfaction, organizational commitment, or the

perception of a good organizational image by employees (Schill, Letheilleux,

Godefroit-Winkel and Combes-Joret, 2018). Igalens, Akremi, Gond and Swaen

(2011), tried to understand the link between employees' perception of CSR and their

perception of the organization. The results of the study demonstrate that companies

can strengthen their power of attraction and influence organizational identification

through their social responsibility actions.

This paper is part of a larger research project, which aims to study the link between

social responsibility models implemented by companies and the perception of

organizational identification by employees. In what follows, we will present the part

of the project which concerns the analysis of the company's perspective as well as

that of its employees on the social responsibility management model implemented

by this company.

2. Corporate social responsibility analysis model

As part of our research, we decided to retain three established models of CSR and

a research model that we created and which we called the integrative model.

The first established model that we retained is that of Carroll (1979). The model

proposes, among other things, four levels of responsibility that society expects from

companies. Each responsibility, individually, is only part of CSR as a whole. The

four levels are part of the definition of CSR, namely, the economic, legal, ethical,

and voluntary level (Carroll, 1979, p.500).

The second author we selected is Pasquero (in Turcotte, 2018). This author

proposes to develop an open model that could evolve over time, while paying

attention to the history of the concept of CSR. All the dimensions currently covered

in the different concepts or definitions of CSR are present in this model, that is,

efficient management, philanthropy, solicitude, limitation of nuisances, social

responsiveness, ethics, accountability as well as proactive citizen engagement.

Also, it is important to specify that for Pasquero, the model must be conjunctive, that

means that all the elements included in the model must be minimally satisfied.

Finally, we also used the ISO 26000 standard to design our research model. The

model of this standard, published in 2010, aims to establish two fundamental

practices of social responsibility. First, the organization must identify its social

responsibility and the stakeholders in its environment. Subsequently, the standard

proposes to rely on seven central questions of CSR: human rights, relations and

working conditions, questions relating to the environment, fairness of practices,

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

254

questions relating to consumers, the community and local development and

ultimately, the integration of social responsibility practices throughout the

organization.

Following the literature review, we designed an integrative CSR management

model. The companies that participated in our research offer CSR measures within

the organization, but on the other hand, did not have a CSR management model.

We went back and forth between theory and practice to define a model for each

organization. We have established characteristics specific to the integrative model.

The following characteristics were considered when designing the CSR

management model: i) the content of the CSR measures; ii) the level of importance

of the CSR components; iii) temporality; iv) social pressure.

The factors that influence the determination of the integrative model were

established based on the social responsibility management models proposed by

Carroll (2016), Pasquero (2018) and the ISO 26 000 Standard (2010). The

integrative model is schematized in Figure 1.

We can see that within the integrative model, the level of importance of the CSR

components, temporality as well as social pressure represent our contribution in the

design of the integrative model. The choice of these factors seemed relevant to us

to deepen the perception of the social responsibility of organizations.

3. Research Methodology

As we wanted to link CSR management with the social identity of employees, we

favored qualitative research to clearly understand the feelings of workers.

Qualitative research generates information that is very detailed, to describe a

specific situation (Gavard-Perret et al., 2012). The research approach determined

is the case study, which represents an empirical approach which consists of

investigating a phenomenon, an event, a group, or a set of individuals, selected in

a non-random manner, in order to derive a precise description and an interpretation

that goes beyond its limits (Roy, 2009, p. 207).

For our overall research project, we studied two organizations in the Abitibi-

Témiscamingue region, in the province of Quebec, Canada. The one we present in

this paper works in the gold mining sector. In order to build the CSR management

model in place, we met with one manager per organization. Then, to be able to

analyze the employees' point of view, we carried out simple random sampling

among the volunteers. A total of eight employees per organization were retained.

As part of this study, we used two types of data. The first consists of consulting the

documentation which helped us to identify the integrative model of CSR

management in the organization. We consulted human resources management

policies, organizational strategic plans, and sustainable development reports.

The second type of data are the verbatims of the interviews. The individual semi-

structured interviews were conducted virtually, on the Zoom platform, by the first

author of this article. They lasted approximately one hour per participant and were

recorded.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

255

Figure 1: Integrative CSR analysis model

Once the interviews were completed, we proceeded to analyze the data. Following

each meeting, we produced the verbatim, the coding and carried out a preliminary

thematic analysis. We reorganized them by theme to facilitate the comparison of

groups (Gavart-Perret et al. 2012; Paillé and Muchielli, 2012). An indexing of the

documentation was subsequently carried out to facilitate the search for themes.

Regarding coding, the first step was to define the cutting rules. Emergent coding was

established around the themes and of course, the thematic analysis steps were

carried out by the researcher (Gavart-Perret, 2012). To assist us in our analysis, we

used NVIVO software throughout the process. This software allowed us to keep the

extracts, sentence by sentence, from our interviews and to build coding around the

themes discussed (Paillé and Muchielli, 2012).

In what follows, we present the main results that emerged from our analyses.

4. Research results

4.1. The CSR management model of company B

Organization B is a mining company, therefore a private sector company. During

the interview with a manager of this organization and by consulting the

organization's documentation, we were also able to list different social responsibility

measures. Still drawing inspiration from the integrative model, we present here the

measures marked by the four categories of the model. Due to the restricted limits of

the text, we will present extracts from the verbatim texts selectively. For more

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

256

information, we invite you to consult Marie-Pier Coté’s master’s thesis at the

University of Quebec in Chicoutimi.

4.1.1. Efficient management

For organization B, efficient management is important. The manager to whom we

spoked believes that efficient management is a key element to the proper

functioning of his organization.

The list that we present in Table 1 shows the different measures proposed by the

company in connection with this component of social responsibility.

Table 1: Compilation of elements related to the efficient management of

organization B

Efficient management

➢ Founder of the company who instilled from the start a culture of

benevolence and efficiency

➢ Efficiency is linked to the feeling of belonging and employees motivation

➢ Efficient use of resources

➢ Knowledge and skill promote efficiency

➢ Be at the cutting edge of technology

Efficient management for company B is defined first of all by the founder of the

company, who instilled values of benevolence. The intelligent use of resources must

be evident everywhere and in all trades. Still according to the manager, a worker

should have a global vision of his work, which allows him to know what to do once

a task is completed.

“At (name of organization) it’s a question of culture, it goes back to the influence

of its founder (name of founder), who created this company, so he had a caring

personality. Then, his way of interacting with others, with employees, with

business partners, suppliers and with communities rubs off on the organization,

even today, 30 years after his death. It's really special” (GB)

This aspect of kindness will come up several times during our interview with the

manager. The culture of organization B indeed seems to be based on benevolence,

which is defined as a mindset inclined towards understanding and indulgence

towards others (Larousse online, 2023).

Organization B also relies on technologies to ensure efficient management.

“Of course, there are other factors, having knowledge, technical skills is very

important to be on the lookout for the latest technologies, then the latest efficient

practices” (GB)

So, for organization B, efficient management involves corporate culture,

understanding of work, motivation and technologies.

4.1.2. Ethics and working conditions

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

257

This element of CSR refers to the morality of the company, the laws with which it

must comply and the working conditions that go beyond what the law requires.

The different elements in Table 2 describe the measures related to this element of

CSR which we discussed with the manager during our interview.

Table 2: Compilation of elements related to the ethics and working conditions of

organization B (selective presentation)

Ethics and working conditions

➢ Policies and procedures are not just written, they must be known and

everyone should adhere to them

➢ Compliance with laws around the world, in company branches

➢ Maintain credibility in terms of ethics and have policies and measures

evaluated by external auditors

➢ Health and safety are the most important aspects of human resource

management

➢ Promote health and general well-being and establish programs to preserve

them

➢ Provide training and appropriate tools to all employees so that they can

perform their tasks safely

➢ Very attractive overall remuneration

➢ Provide a confidential complaint mechanism to report unethical, illegal or

irresponsible behavior

➢ Do not tolerate any discriminatory conduct in the workplace

➢ Provide employees with a fair and non-discriminatory grievance resolution

system

➢ Value diversity and treat all employees fairly by offering them equal

opportunities at all levels of the organization, without bias

➢ Hire and promote employees based on merit

➢ Enforce the principle of a drug and alcohol-free workplace

Being a mining company, health and safety are essential aspects for maintaining

activities. According to the manager, this is the most important element of

responsible human resources management.

“[…] responsible management of human resources, first and foremost, is to

ensure their safety. It's having health and safety programs that are very, very

strong and then, we have a very strict supervision formula with inspection of

workplaces, hundreds, and hundreds of procedures for working at height, hot

[…]” (GB).

4.1.3. Compliance with laws and limitation of nuisances

The manager to whom we spoked told us that the environment was a key issue for

the organization today. Environmental laws have tightened in their area and the

community is more sensitive to this issue.

The elements that we present in Table 3 indicate the precise measures taken by the

company to ensure that it complies with the laws and limits the impact of its activities

on the environment as best as possible.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

258

Table 3: Compilation of elements related to compliance with laws and limitation of

nuisances of organization B

Compliance with laws and limitation of nuisances

➢ Clean energy in Quebec

➢ Less emissions than its competitors

➢ Understand the risk of climate change such as cyclones, wildfires and heavy

rains

➢ Minimize the production of residues and ensure their proper disposal

➢ Minimize the risks associated with the management of waste rock, mine

tailings and water by using applicable best available practices

➢ Implement measures to preserve natural resources, including energy and

water

➢ Implement measures to reduce emissions into air, water, soil and minimize the

environmental footprint, including deforestation

➢ Implement measures aimed at reducing greenhouse gas emissions and

countering the effects of climate change on activities

➢ Integrate aspects relating to biodiversity conservation and land use planning

at all stages of activities

➢ Restore mining sites to ensure long-term stability

We can see that there are numerous measures related to the environment. The

mining industry is an industry with a strong environmental impact, the organization

makes a duty to counter as much as possible the effects of its activities on its

environment.

4.1.4. Philanthropy and local development

Obviously, as company B is a private sector organization, it is called upon more to

give to philanthropic foundations than to use funds that may come from

philanthropy. Local development is at the heart of its strategy to ensure the

acceptability of its activities in communities.

The CSR measures in Table 4 emerged following the discussion with the manager

of this organization.

Table 4: Compilation of elements related to philanthropy and local development of

organization B

Philanthropy and local development

➢ Very important participation in the community

➢ Gives a lot to the community in all areas

➢ Considers himself a corporate citizen

➢ Involvement and collaboration with indigenous peoples

➢ Support local communities and their sustainability through the

implementation of measures such as development programs, local

purchasing programs for goods and services as well as local workforce hiring

programs

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

259

For the manager of organization B, philanthropy and local development are

important issues. He views the company as a corporate citizen.

“Then, it comes from taking responsibility and being a corporate citizen, who is

part of the community and with the luck that we have, then the means that we

also have” (GB)

The company considers that it gives back a lot to the community through various

means, including its involvement in the activities of its employees.

“That too has always been important, and basically natural. (Name of

organization) has always been a sponsor in all locations where it has operated”

(GB)

To conclude, we could say that organization B wishes to continue to be involved in

its community and ensure that it remains caring, just like the founder of the

company. These reasons led us to name the CSR model of organization B:

Benevolent and corporate citizen model.

4.2. Employee perception of the CSR management model implemented by

their company

We introduced employees to their organization's social responsibility model. This

model was presented earlier in this document. After reading it, we wanted to know

the overall assessment of the model from the point of view of employees. We also

asked employees to identify for each category which measures were most important

to them. Subsequently, we addressed the temporality and social pressures that can

influence the perception of CSR measures. Finally, employees were invited to

express themselves regarding the measures that may have influenced their

attraction or retention within the organization.

To begin, we presented to the employees of organization B their company's social

responsibility management model. We wanted to know if, in general, they found the

model fair and good. Most of study participants indicated that the model presented

to them was completely accurate.

“I quite agree with all the points… especially philanthropy and local

development… it’s certain that this one touches me a little more” (Employee B4)

Some employees still mentioned being a little less in agreement with the principle

of fairness. According to them, even if it appears in the model, it is more or less

applied in the field. But for the most part, the model is true to reality.

We wanted to ask employees about the importance they attach to their

organization's social responsibility measures. In terms of efficient management,

most respondents mentioned the culture and values of the company.

In terms of working conditions, several employees mentioned salary as being very

important to them, but health and safety is also a major issue for the study

participants.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

260

“My god, health and safety is really important” (Employee B4)

It should be mentioned that the list of actions related to compliance with laws and

limitation of nuisances is impressive at the level of organization B. It is therefore not

surprising that all the participants mentioned the same measure as being the more

important to them.

During our discussions with employees, we noted great pride for employees in

feeling that their organization is contributing to their community. Several mentioned

actions related to local development as being very important to them.

“At the indigenous level too… We are going to work more and more with the

indigenous people, we are in the process of evaluating the possibilities of signing

an agreement with them in terms of local purchasing…” (Employee B1)

Regarding temporality, we asked the participants if, in their opinion, the measures

were still relevant and if some of them had been proposed a little late. Connections

with the Indigenous community and people were mentioned as something that

developed a little late. On the other hand, the majority of them did not see any issue

with the temporality of CSR measures, they are being all current.

We also wanted to know employees' perceptions of the possibility that CSR

measures could come from different social pressures felt by the organization.

Employees at Organization B largely agreed that connections to the community and

Indigenous peoples and the environment could arise from social pressures.

The social pressures identified by employees of organization B therefore come from

employees, interest groups and even the community.

To conclude, we can mention that employees of organization B have a good

perception of their organization's social responsibility management model. Working

conditions and community involvement are important to them. The measures are

perceived as being current and social pressures may have played a role in the

development of the measures according to the participants.

5. Discussion

As for the theoretical contributions, our first objective was to create an integrative

model of CSR from the founding texts. We began the research project by

establishing an integrative model of social responsibility management that we

presented previously. We called it “integrating” since it was built from an exhaustive

literature review making it possible to identify classic writings on the subject. We

conclude that the three models of the CSR concept that we used are relevant since

we were able to identify most of the components retained from the models enshrined

in the discourse of the participants in the study.

Subsequently, we added three factors which, according to us, could enrich the

discussions with the participants concerning their perception of CSR, namely the

importance of measures, temporality as well as social pressures, which also proved

to be very relevant for our analysis.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

261

The integrative model is also an important theoretical contribution of our study

project. Indeed, the pooling of three literature models concerning social

responsibility and the addition of original factors allowed us to propose an original

research model.

Another theoretical contribution is based on the identification, from interviews and

documentation, of concrete original models of CSR management by the

participating organizations. The integrative model was an important tool to allow us

to better structure the interviews with the participants and to highlight the originality

of each of the models.

Finally, another theoretical contribution is at the level of qualitative research

methodology. Indeed, the richness of the results obtained demonstrates the

relevance of using this method to study complex concepts, the measurement of

which is difficult to do using quantitative measurement scales. This way of

proceeding could go against the research perspective on CSR in recent years,

which ardently wishes to quantitatively measure concepts specific to CSR such as

Igalens et al., (2011) or Closon (2010).

In terms of practical contributions, one of the important contributions of our study

project consists of the creation of an original model for analyzing the management

of social responsibility. Indeed, managers or human resources management

professionals could use our model to undertake CSR initiatives. The use of the three

factors could also be used to question the importance of the measures for the

organization, to ensure that the proposed measures are current and that they evolve

over time. This framework also allows organizational managers to take the time to

reflect on the social pressures that may be felt on the organization. This awareness

can allow managers to put in place measures to respond.

Future research could explore the idea of designing quantitative research to

measure the CSR components of the integrative model. Indeed, measurement

scales already exist for CSR. Igalens and Tahri (2012) have in fact constructed and

validated a scale for measuring the perception of CSR by employees, but it could

be interesting to develop one more specific to our model, by including the factors

that can influence perception of CSR.

6. Conclusion

To conclude, our study project is a promising subject, which led to rich and important

findings. We can emphasize the importance for today's organizations to pay

attention to the current values that drive human resources, including diversified

measures of organizational social responsibility.

Our research is part of a school of thought according to which the more we study

CSR, the more we will be able to identify tools allowing us to better understand it,

to continue its evolution and, overall, to better manage it.

References

1. Baba, S. (2018). Analyse sociohistorique et épistémologique de la recherche en

responsabilité sociale des entreprises. Management international / International

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
262 
 
 
Management / Gestiòn Internacional, 22(2), 96–111. 
https://doi.org/10.7202/1058164ar 
2.  Carroll,  A.  B.  (1979).  A  Three-Dimensional  Conceptual  Model  of  Corporate 
Performance.  Academy  of  Management  Review,  4(4),  497-505. 
https://doi.org/10.5465/AMR.1979.4498296 
3.  Carroll,  A.B.  (2016).    Carroll’s  pyramid  of  CSR:  taking  another  look. Int  J 
Corporate Soc Responsibility 1(3). https://doi.org/10.1186/s40991-016-0004-6  
4. Gavard, Perret, M., Gottenland, D., Haon, C. et Jolibert, A. (2012). Méthodologie 
de la recherche en sciences de la gestion (2e édition). Pearson France.  
5. Gilbert, P. et Greffet, C. (2019). Ce que les outils de la RSE font aux systèmes 
humains.  Une  perspective  allagmatique. Management  &  Avenir,  110,  131-
152. https://doi.org/10.3917/mav.110.0131 
6. Igalens, J., El Akremi, A., Gond, J. et Swaen, V. (2011). La responsabilité 
sociale des entreprises vue par les salariés : phare ou rétroviseur? Revue de 
gestion des ressources humaines, 82, 33- 45. https://doi.org/10.3917/grhu.082.0033 
7. ISO 26 000. (2010). Lignes directrices relatives à la responsabilité sociétale. 
Consulté le 2 septembre 2019 à l’adresse 
https://www.iso.org/files/live/sites/isoorg/files/store/fr/PUB100258_fr.pdf 
8. Mucchielli, A. (1996) Compréhensive (approche). Dans A Mucchielli 
Dictionnaire des méthodes qualitatives. Paris : Armand Colin. http://www.recherche-
qualitative.qc.ca/documents/files/revue/hors_serie/hors_serie/texte%20Muchielli%20actes.
pdf 
9. Turcotte, M.-F. (2018). La responsabilité sociétale de l’organisation : exercices, 
cas et fondements (2e édition.). Presses de l’Université du Québec. 
10. Pereira, B. (2014). ISO 26000, due diligence, sphère d'influence et droits de 
l'homme. Revue de l’organisation responsable, 9, 60-
75. https://doi.org/10.3917/ror.092.0060 
11. Roy, S. N. (2009). L’étude de cas. Dans B. Gauthier (Éd.), Recherche sociale 
de la problématique à la collecte de données (5 e éd., pp. 199-225). Québec : 
Presses de l’Université du Québec. 
   

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

263

ARTIFICIAL INTELLIGENCE IN BUSINESS OPERATIONS:

EXPLORING PRODUCTIVITY AND ACCEPTANCE

Ioana CIOFU, Giulia KONDORT, Stefana POP, Roxana CIOC

Bucharest University of Economic Studies, Romania

Doctoral School of Business Administration I

ioanaalexa.ciofu@gmail.com

kondortgiulia@yahoo.com

steffa_pop@yahoo.com

roxana.cioc@yahoo.com

Abstract: This paper will provide information on the impact of AI in daily life and

work-related activities.Today, AI functionalities could nowadays transform

businesses, playing a critical role in enhancing and improving decisions. From virtual

assistants to automation tools, AI covers a great amount of information, which could

impact the core. In this paper, the productivity and sense of failure of AI will be paper.

The productivity of AI, such as, varies by tasks and industry. AI could excel in

repetitive and high-precision tasks. On the other hand, humans outperform AI in

tasks requiring creativity and emotional intelligence. This qualitative study will show

the perception of integrating AI into workflows and asking questions about value

added. To evaluate the impact of artificial intelligence (AI) on business operations,

an online survey was conducted to examine perceptions of AI's efficiency,

adaptability, and fault tolerance.The analysis revealed generational differences in

acceptance and trust towards AI. Younger respondents, particularly those under 25,

were found to have greater tolerance for AI errors and a greater willingness to

integrate AI into workflows. This is likely to reflect their familiarity with technology. In

contrast, older respondents exhibited lower levels of trust and acceptance,

particularly in contexts requiring precision, such as financial transactions. The results

suggest that while AI is perceived as highly effective in repetitive and data-intensive

tasks, its limitations in adaptability and emotional intelligence remain a concern. The

findings emohasize the need for reskilling initiatives to facilitate workforce transitions

and the development of ethical guidelines to address trust and reliability issues.

Keywords: Artificial Intelligence; Productivity; Failure; Problem-Solving;

Consistency; Precision

JEL Classification: M10; M15

1.Introduction

Artificial intelligence (AI) has rapidly become an essential component in various

industries due to its remarkable ability to increase efficiency and productivity. This

analysis explores the main drivers behind AI's effectiveness, emphasizing its data

management capabilities, consistency, adaptability, and automation. Understanding

these factors can shed light on how AI is transforming traditional processes and

helping to accelerate deciosion making and increase performance.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

264

2.Efficiency of Artificial intelligence

The line of efficiency and productivity of AI could be described by several key

reasons such as automation, data handling, consistency, and adaptation. AI could

be productive due to its large capacity to process a large volume of data in a short

period of time. Its ability to learn from data allows it to improve over time, while

reducing human error and increasing efficiency. This fact could also lead to faster

decision-making and enhaced overall productivity in various fields of application.

(Ping Wang, 2024)

Therefore, the automation potential of AI can disrupt the employment market. Ethical

considerations include how to manage displacement and support workforce

transitions. (Wong, 2024; Ban et al., 2024) The negative impacts of AI being used to

increase the productivity of a business are summarized by job displacement. (Taelim

Choi, 2024) Automation with the help of AI can lead to reduction or elimination of

jobs in certain sectors, particularly in those involving routine or repetitive manual

tasks. Employees may find themselves unprepared for new, roles due to the new

requirements regarding learning skills. The reskilling and upskilling working tools will

be needed to help employees transition to new roles in an AI-driven economy.

(Mikael Wahlström, 2024)

The positive impacts of the integration of AI can refer to a more balanced work-life

environment among employees. AI can manage, workloads by reducing the high

volume of processed data and embracing efficient work paths. AI can rapidly analyze

large volume of data by spotting patterns and improving forcasting different business

strategies. (Ghosh, 2025) Additionally, artificial intelligence could take over repetitive

tasks and let employees focus on developing competencies that are newly valuable

in the evolving job market. (Chunlei Chai, 2023) AI is also used nowadays in

business to improve the customer experience by offering specialized interaction,

suiting he specific customer needs, such as daily customer support, powered by

chatbots or virtual assistants. Therefore, a much needed answer to a question

outside the business hours , is offered by a specialized virtual assistant, which can

recommend products or services based on customer preferences, browsing history

or patterns. (Chakraborty, Kar, Patre, & Gupta, 2024)

3.AI Failure

First, AI systems might not align with user values, leading to a disconnect with the

intrinsic motivations and expectations of diverse groups. This misalignment can

worsen trust and privacy concerns, as users may view technology as invasive or

failing to protect their personal data adequately. Additionally, poor user experience

and satisfaction can result from interfaces and functionalities that do not consider

users’ temporal preferences, making them appear unintuitive or cumbersome.

Ineffective communication and marketing strategies that overlook these time

orientations can result in promotional efforts that fail to engage or attract potential

users effectively. Resistance to change might also increase, especially among users

who feel their long-standing habits and preferences aren't being valued or addressed

by new technology. Ultimately, these issues can prevent AI from reaching its full

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

265

potential, with underutilized features and hampered innovation due to a lack of

alignment with user temporal expectations and behaviors of users.

Regret frequently influences consumer decision making due to the inherent

performance uncertainty associated with products and services (Hur & Allenby,

2022). It is the sense of loss felt after making decisions in uncertain situations only

to later realize that other choices would have been better. Interestingly, regret ranks

as the second most frequently mentioned emotion right after love (Shimanoff, 1984).

Consequently, regret can significantly affect post-choice evaluations, consumer

satisfaction, and the likelihood of repeat purchases or continued use of services

(Chen & Jia, 2012; Davvetas & Diamantopoulos, 2017).

Assigning responsibility for AI failures can be different depending on the specific

circumstances (Kong et. al., 2018), which can stem from factors such as inadequate

training data, algorithmic bias, hardware issues, cybersecurity breaches, or human

error can be challenging, particularly when the root cause is unclear.

As AI continues to evolve, with its capabilities and limitations still being explored, it

is essential to establish ethical guidelines and regulations to ensure responsible

development and deployment of robots (Holder, C. et. al., 2016).

4.Methodology

The objective of this research is empirically measure if robots can be efficient in what

they do and whether robot mistakes of robots are easily accepted by consumers. To

achieve the objective, a questionnaire was created. With the help of the

questionnaire, we found out how efficient robots can be and whether their mistakes

can be accepted or by the consumer. Respondents were asked to choose the right

answer based on their interaction with robots. The target group was not a specific

one, the questionnaire was created for all people.

The questionnaire includes a series of demographic variables: gender, age, and

income. The questionnaire consists of 19 questions with scaled responses ranging

from 1 (totally disagree) to 7 (totally agree), in which respondents were asked to

check the statement that corresponds to them.

A total of 538 people participated in the questionnaire. Of the total of 538

respondents, 335 were women, 194 were men, and 4 people preferred not to answer

this question.

Most of the participants in the questionnaire (299 participants) belong to the age

category <25 years; 136 participants aged between 26-40 years; 63 participants

belong to 41-55 age group; 35 participants belong to the age category >55 years

and 4 participants did not answer this question.

With the help of the T-Test, performed in Excel and with the help of discriminant

analysis, a comparison was made between the age group 26-40 years and 41-55

years, between the age group 41-55 years and the age group >55 years, between

the age group >55 years and the age group <25 years and between the age group

<25 years and Blanks (people who did not answer this question).

5.Results

The table below presents the 19 questions from the questionnaire together with the

average of the answers for each age category and question and the T-test for the

age categories. In the discussion section, we present the most important results of

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

266

the research and compare the average answers for the respective questions by age

category, to discover the respondents' opinions when it comes to the efficiency and

failures of robots.

Table 1: The average of the responses by age category and the T-Test

Questions

Average

under 25

years

Average

26-40

years

Average

41-55

years

Average

over 55

years

T-

Test

26-40

years

& 41-

years

T-

Test

41-55

years

over

years

T-

Test

>55

years

under

years

This robot is

efficient

5.000

5.132

4.667

4.686

0.088

0.962

0.268

This robot helps to

increase the

company's

productivity

5.178

5.346

4.587

5.114

0.004

0.160

0.824

I can trust this

robot to do its job

correctly

4.532

4.904

4.571

5.029

0.214

0.232

0.088

This robot has the

ability to adapt to

unexpected

situations

3.184

3.522

3.190

3.722

0.278

0.214

0.098

This robot has the

ability to act

independently

without human

help

3.756

3.824

3.571

3.771

0.415

0.639

0.961

I trust the

decisions made by

this robot

3.795

3.846

3.381

3.806

0.108

0.300

0.971

This robot reduces

the company's

error rate

4.424

4.500

4.032

5.056

0.098

0.008

0.023

This robot can be

easily repaired

3.993

4.221

3.968

4.444

0.376

0.226

0.142

This robot is easily

accepted by other

human employees

of the company

3.669

3.676

3.175

2.972

0.076

0.609

0.036

I trust that this

robot can be

4.672

4.941

4.095

4.750

0.001

0.075

0.791

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

267

Source: Own research results

6.Disscusion

The graph below shows the average responses to the question: Does this robot

reduce the company's error rate? With an average of 5.056, the age category >55

years believes that the robot can reduce the company error rate. With an average of

4.500, the age category 26-40 years is in second place, and this category shares the

same opinion as the age category in first place. In third place is the age category

<25 years with an average of 4.424, and this category believes that the robot can

integrated into

customer service

I feel comfortable

making

purchasing

decisions based

recommendations

made by this robot

3.977

4.287

3.476

4.056

0.005

0.187

0.808

I think it is

acceptable for this

robot to make

mistakes

4.241

4.393

3.635

3.722

0.011

0.834

0.113

I can accept the

robot's mistakes in

its

recommendations

4.067

4.051

2.984

3.167

0.000

0.625

0.003

I can accept robot

mistakes in the

delivered food

3.365

3.213

2.413

2.417

0.004

0.991

0.003

I can accept robot

mistakes in the

invoiced price

2.769

2.610

1.683

1.694

0.000

0.964

0.001

I worry about the

mistakes made by

this robot

4.381

4.794

4.889

0.728

1.000

0.086

I consider that the

mistakes made by

this robot should

be dealt with

similarly to those

made by human

employees

3.799

3.890

3.508

3.306

0.230

0.657

0.159

I consider that this

robot should

apologize when it

makes mistakes

4.408

4.522

4.758

5.222

0.478

0.277

0.020

I intend to keep

interacting with

this robot, even if it

makes mistakes

4.408

4.206

3.159

3.389

0.000

0.566

0.001

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

268

reduce the company error rate. We note that between the 4 age categories the

difference between the average responses is very small, which means that these

categories believe that the robot can reduce the company's error rate. In last place

with an average of 4.032 is the 41-55 age group, this category considering less than

the other categories that a robot can reduce a company's error rate. Between the

26-40 age group and the 41-55 age group, the T test shows that there is an

acceptable difference (T-Test=0.098), which means that both categories claim that

the robot can reduce the company's error rate. The T test shows that between the

age group 41-55 years and the age group >55 years there is a very significant

difference (T-Test=0.008), which shows us that older people are more confident that

the robot can reduce the error rate of a company. For age groups >55 years and <25

years, the T- test shows that there is a significant average difference (T-Test=0.023),

which means that young people do not believe so much that a robot can reduce the

error rate of a company, while older people are of the opposite opinion.

Figure 1: Responses by age group about reducing the company's error rate with the

help of a robot

Source: The results of our own research

This graph shows the average answers to the question: Is this robot easily accepted

by the company's other human employees? With an average of 3.676, the 26-40 age

group believes that the robot can be easily accepted by the company's other human

employees. With an average of 3.669, the <25 age group is in second place, which

means that this group also has the same opinion as the group mentioned above. In

third place is the 41-55 age group with an average of 3.175, and this group believes

that the robot can be easily accepted by the company's human employees. In fourth

place, with an average of 2.972, is the >55 age group, this group being less in

agreement when it comes to the acceptance of robots by human employees. The T-

test shows us that between the age category 26-40 and the age category 41-55 there

is an acceptable difference (T-Test=0.076), which shows us that both age categories

believe that the robot can be easily accepted by the other human employees of the

company. Between the age category 41-55 and the age category >55, the T test also

shows that there is an acceptable difference (T-test=0.609), which means that these

two age categories have similar opinions on the easy acceptance of the robot by

human employees of the company. The T-Test shows us that between the age

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

269

category >55 and <25 (T-Test=0.036) there is a significant average difference,

because younger people are more confident than older people when it comes to

having a robot being easily accepted by human employees.

Figure 2: Respondents' opinion by age category about the degree of acceptance of

the robot by human employees in a company

Source: The results of our own research

The graph below shows the average responses for the statement: I trust that this

robot can be integrated into the services offered to customers. First, the 26-40 age

category with an average of 4.941, which means that this category agrees that the

robot can be integrated into the services offered to customers. Second place with an

average of 4.750 is the >55 age category, also this category considering that the

robot can be integrated into the services offered to customers. With an average of

4.672 is the <25 age category in third place, this category being of the same opinion

as the categories mentioned above. In last place is the 41-55 age category with an

average of 4.095, an average that shows us that respondents in this category also

believe that the robot can be integrated into the services offered to customers. The

T-test shows us that between the age category 26-40 and the age category 41-55

there is a very significant difference (T-Test=0.001), which means that personnel in

the age category 26-40 have more confidence that the robot can be integrated into

the services offered to customers than in the age category 41-55. Between age

category 41-55 and >55 there is an acceptable difference (T-test=0.075) which

shows us that these 2 categories believe almost equally that the robot can be

integrated into the services offered to customers. The T-Test shows that between

the age category >55 and <25 there is a very acceptable difference (T-Test=0.791),

which means that these two age categories have similar opinions.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

270

Figure 3: Respondents' opinions by age category about trust in robot integration in

customer services

Source: The results of our own research

The statement "I can accept the robot's mistakes in its recommendations" reflects

the fact that respondents aged under 25 express the highest level of acceptance,

with an average of 4,067. This is closely followed by the 26-40 age group, whose

average is 4,051, reflecting the high tolerance and familiarity with AI technology

among younger people. Respondents over 55 years show moderate acceptance,

with an average of 3,167, while the 41-55 age group shows the lowest tolerance,

with an average of 2,984. T-test value of 0,000 indicates a very significant difference

between the 26-40 and 41-55 age groups, pointing to greater acceptance among

middle-aged respondents. Similarly, a T-Test value of 0,003 between the over 55

and under 25 age groups indicates another very significant difference, highlighting

greater tolerance among younger respondents. While a T-test value of 0,625

between the 41-55 and over-55 age groups suggests no significant differences

indicating similar levels of acceptance between these two older groups.

Figure 4: Respondents' opinions by age category about the acceptance of the robot's

mistakes in its recommendations

Source: Own research result

The statement "I can accept robot mistakes in the invoiced price" shows that

respondents under 25 years of age have the highest tolerance with an average of

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

271

2,769, followed by the 26-40 age group with an average of 2,610. These findings

suggest that younger and middle-aged respondents are relatively more willing to

accept errors in invoiced prices. In contrast, the 41-55 age group shows the lowest

level of acceptance, with an average of 1.683. Similarly, respondents over 55 years

show only slightly higher levels of acceptance, with an average of 1,694, indicating

a common skepticism among older age groups. The T-test value of 0,000 between

age groups 26-40 and 41-55 indicates a very significant difference, showing much

lower levels of acceptance among the 41-55 age group compared to the age group

26-40. Similarly, there is a very significant difference between respondents aged 55

and under 25 (T-Test = 0,001). However, the T-Test value of 0,964 between the 41-

55 and over-55 age groups suggests no significant difference, reflecting similar

attitudes within these older demographic groups.

Figure 5: Respondents' opinion by age category on robot mistakes in the invoiced

price

Source: Own research result

Regarding the statement "I intend to continue interacting with this robot, even if it

makes mistakes", respondents under 25 years of age show the highest intention with

an average of 4,408, followed by the 26-40 age group with an average of 4,206. This

indicates that young and middle-aged people are more willing to continue interacting

with robots, despite possible mistakes. On the contrary, the 41-55 age group has the

lowest level of intention, with an average of 3,159, while the 55+ age group has a

somewhat higher average of 3,389. These suggest a lower willingness among older

respondents to maintain interaction with robots after experiencing mistakes. A T-test

value of 0,000 between the age groups 26-40 and 41-55 years shows a very

significant difference, reflecting a much lower willingness in the 41-55 age group

compared to the middle-aged respondents. Similarly, a T-Test value of 0,001

between the age groups over 55 and under 25 indicates a very significant difference,

highlighting a greater willingness in younger respondents. On the contrary, a T-Test

value of 0,566 between the 41-55 and over 55 groups suggests no significant

differences, indicating similar levels of reticence between older groups.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

272

Figure 6: Respondents' opinion by age category on their intention to continue

interacting with the robot, even if it makes mistakes

Source: Own research result

7.Conclusions

In conclusion, respondents aged >55 and those aged 26 and 40 have the highest

level of confidence that a robot can reduce the error rate of a company. On the

contrary, respondents aged <25 and those aged 41-55 have the lowest level of

confidence that a robot can reduce a company's error rate. In general, respondents

26-40 and respondents aged <25 believe that a robot can be easily accepted by

human employees at the company, while those aged 41-55 and >55 agree less with

the statement. Younger respondents are more likely to have come into contact with

artificial intelligence, and from this point of view they believe that a robot can be quite

effective in a company. Age categories 26-40 and >55 have very high confidence

that the robot can be integrated into the services offered to customers, but age

categories <25 and 41-55 have approximately the same opinion, these opinions

stemming from the fact that today most people interact with different robots when

they need certain services.

In conclusion, respondents aged 26 to 40 and those under 25 have the highest level

of acceptance of robot mistakes in recommendations, probably reflecting their

greater exposure to and trust in technology. In contrast, respondents aged 41-55 are

the least tolerant, while those over 55 demonstrate a moderate level of acceptance.

In general, younger respondents (under 25 and between 26 and 40) have the highest

tolerance for robot errors in the prices charged, which may reflect greater confidence

or familiarity with the technology. On the contrary, older respondents (aged 41 to 55

and over 55 years) have much lower tolerance, which may be due to higher

expectations of accuracy in financial transactions. Younger respondents (under 25

and 26-40 years of age), in short, show a higher intention to continue interacting with

robots, probably due to greater familiarity and tolerance of technology. In contrast,

older respondents (41-55 and over 55) show more hesitation, which may reflect

higher expectations or a lack of trust in robots.

Based on the results, we observe that people in the age category < 25 years and

those in the age category 26-40 years compared to other age categories have

greater confidence when it comes to the efficiency of a robot and can tolerate

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
273 
 
 
mistakes more easiliy. We can say that younger people are more prone to interacting 
with artificial intelligence, which means that they were able to observe what a robot 
can do well or wrong, while older people may not interact as much with artificial 
intelligence, causing them to tolerate less the mistakes of robots and to consider less 
that a robot can be efficient. Artificial intelligence is constantly developing and is 
increasingly used in most industries, which means that it helps a company become 
more efficient, even if sometimes artificial intelligence also makes mistakes. Artificial 
intelligence is already present in everyone's lives but not equally, which we have 
already observed in the study we conducted. In the future, artificial intelligence will 
most likely be part of everyone's lives, which means that most people should have 
different experiences and interactions with it, and then even older people should 
consider that robots can be efficient, and their mistakes can be more easily accepted. 
 
References 
Ban,  O.,  Maiorescu,  I.,  Bucur,  M.,  Sabou,  G.C.  &  CohenTzedec,  B.  (2024).  AI 
between threat and Benefactor for the Competencies of the human working force. 
Amfiteatru Economic, 26(67), 762-782, https://doi.org/10.24818/EA/2024/67/762   
Chai, C., Zhang, X., and Yi, X. (2023) Research on the influence of organizational 
form  of  inspirational  information in  conceptual  design:  Workload  and  creativity,' 
Advanced  Design  Research,  1(2),  78–86. 
https://doi.org/10.1016/j.ijadr.2023.09.002. 
Chakraborty, D., Kar, A. K., Patre, S., & Gupta, S. (2024). Enhancing trust in online 
grocery shopping through generative AI chatbots. Journal of Business Research, 
180, 114737. https://doi.org/10.1016/j.jbusres.2024.114737 
Chen,R.&Jia,J(2012),'Regret  and  performance  uncertainty  in  consumer  repeat 
choice,'Marketing Letters,23(1),353–365. https://doi.org/10.1007/s11002-011-9159-
9. 
Da  Silva  Marioni,  L.,  Rincon-Aznar,  A.  and  Venturini,  F.  (2024)  'Productivity 
performance,  distance  to  frontier  and  AI  innovation:  Firm-level  evidence  from 
Europe,  Journal  of  Economic  Behavior  &  Organization,  228,  p.  106762. 
https://doi.org/10.1016/j.jebo.2024.106762. 
Ghosh, S. (2024). Developing artificial intelligence (AI) capabilities for data-driven 
business  model  innovation:  Roles  of  organizational  adaptability  and  leadership. 
Journal  of  Engineering  and  Technology  Management,  75,  101851. 
https://doi.org/10.1016/j.jengtecman.2024.101851 
Gonçalves, A.R., Pinto, D.C., Jimenez, H.G., Dalmoro, M. and Mattila, A.S. (2024) 
Me, Myself,  and  My AI:  How artificial  intelligence classification failures threaten 
consumers’  self-expression,'  Journal  of  Business  Research,  186,  114974. 
https://doi.org/10.1016/j.jbusres.2024.114974. 
Holder, C., Khurana, V., Harrison, F., and Jacobs, L. (2016) Robotics and Law: Key 
legal and regulatory implications of the robotics age (Part I of II), Bristows LLP, 
Computer  Law  &  Security  Review,  32(3),  383-402, 
https://doi.org/10.1016/j.clsr.2016.03.001 
Kong  Joo  Shin  K.  J.,  Tada  N.,  Manag  S.  (2019)  Consumer  demand  for  fully 
automated  driving  technology,  Economic  Society  of  Australia,  Queensland, 
Economic Analysis and Policy, 61, 16-28, https://doi.org/10.1016/j.eap.2018.10.002. 

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

274

Pelau, C.; Dabija, D.C.; Stanescu, M. 2024. Can I trust my AI friend? The role of

emotions, feelings of friendship and trust for consumers' information-sharing

behavior toward AI, Oeconomia Copernicana, 15(2), 407-433, 3.

https://doi.org/10.24136/oc.2916

Pop, S.; Pelau, C.; Ciofu, I.; Kondort, G. 2023. Factors predicting consumer-AI

interactions, Proceedings of the 8th International Conference on New Trends in

Sustainable Business and Consumption (BASIQ), 592-597.

Shimanoff, S.B. (1984), 'Commonly named emotions in everyday conversations,'

Perceptual and Motor Skills, 58(2), 514. https://doi.org/10.2466/pms.1984.58.2.514.

Wahlström, M., Tammentie, B., Salonen, T., Karvonen, A. (2024) AI and the

transformation of industrial work: Hybrid intelligence vs. double-black box effect,

Applied Ergonomics, 118, p. 104271. https://doi.org/10.1016/j.apergo.2024.104271.

Wang, P. and Ding, H. (2024) The rationality of explanation or human capacity?

Understanding the impact of explainable artificial intelligence on human-AI trust and

decision performance,' Information Processing & Management, 61(4), p. 103732.

https://doi.org/10.1016/j.ipm.2024.103732.

Wong, W.K.O. (2024) The sudden disruptive rise of generative artificial intelligence?

An evaluation of their impact on higher education and the global workplace, Journal

of Open Innovation Technology Market and Complexity, 10(2), p. 100278.

https://doi.org/10.1016/j.joitmc.2024.100278.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

275

ARTIFICIAL INTELLIGENCE IN THE RECRUITMENT AND

SELECTION OF EMPLOYEES WORLDWIDE VS. ROMANIA

Alina Mihaela FRĂTICĂ-DRAGOMIR (GUȘE)

Bucharest Academy of Economic Studies, Doctoral School of Management,

Bucharest, Romania

florin_fratica@yahoo.com

Abstract: In this era of globalization, an organization must thrive and survive in the

global economy. Every employer of the organization or manager of public institutions

must promote and practice the recruitment and selection process in a way as close

to perfection as possible. The success of the organization or a public institution itself

depends on qualified employees and is directly related to the performance of the

organization.

A proper recruitment and selection process is the lifeblood, like capital, of any public

organization or institution. The eminence of human resources depends on the

effectiveness of real recruitment and selection procedures. The purpose of

recruitment and selection is to bring to the surface qualified candidates for the

organization.

The main goal of all employers is to select qualified candidates from the alternative

group of qualified candidates for a particular job. All activities of the recruitment and

selection process are carried out by the human resources department of an

organization. These processes vary from one organization to another. Traditional

sources are employee recommendations, transfers, promotions, presentations, and

advertisements. However, the recruitment process differs from organization to

organization. In the modern economy, the recruitment process is changing

drastically with the advent of social networks.

The second stage of the workforce planning process is selection. It is the process of

choosing the most suitable candidate who corresponds to the knowledge, skills,

abilities and requirements of the job. In the case study, we make critical assessments

on how to select the person suitable for the given position and for the development

of the organization or public institution. In Romania it is necessary to develop new

methods using technology through artificial intelligence.

Keywords: recruitment; selection; artificial intelligence in recruitment; e-recruiting

JEL Classification: M12; M15; M51; M59

1. Industrial Society (Society 4.0) and Information Society (Society 5.0)

1.1. Industrial Age 4.0 (Society 4.0)

1.1.1. Importance of the Fourth Industrial Revolution

While the Fourth Industrial Revolution (called 4IR or Industry 4.0) is poised to change

society in a rather inventive way for humanity, it is based on the first three industrial

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

276

revolutions. The advent of the steam engine in the eighteenth century led to the first

industrial revolution, enabling the mechanization of production for the first time and

driving social change as people became increasingly urbanized.

In the second industrial revolution, electricity and other scientific advances led to

mass production. A third industrial revolution, beginning in the 1950s, saw the advent

of computers and digital technology. This led to increased automation of production

and disruption of industries such as banking, energy, and communications. (Foote,

2021; Tarpey, 2020)

1.1.2. Who Created the Term Fourth Industrial Revolution?

The person who laid the foundation for the current progress and developed a new

revolution was Klaus Schwab, founder and executive chairman of the World

Economic Forum and author of "A Fourth Industrial Revolution". In a 2016 article,

Schwab wrote that "like the revolutions that preceded it, the fourth industrial

revolution has the potential to raise global income levels and improve the quality of

life for populations around the world." (Schwab, 2016)

He continued: "Going forward, technological innovation will also lead to a supply-

side miracle, with long-term gains in efficiency and productivity. Transportation and

communication costs will fall, logistics and global supply chains will become more

efficient, and trade costs will fall, all of which will open new markets and stimulate

economic growth." (Schwab, 2016) It is important to remember that not all of this is

good news. Schwab also suggested that the revolution could lead to greater

inequality, "especially in its potential to disrupt labor markets." (Schwab, 2016) The

labor market may become increasingly segregated into "low-skill/low-wage" and

"high-skill/high-wage" roles, which could exacerbate social tensions.

According to Schwab, the changes are so profound that, from the perspective of

human history, there has never been a moment of greater promise or potential

danger than now.

1.1.3. Industrial Technologies 4.0

The easiest way to understand the Fourth Industrial Revolution is to focus on the

technologies that drive it. (Stăncioiu, 2017) These include the following:

a. artificial intelligence (AI);

b. web 3;

c. blockchain;

d. faster computer processing;

e. virtual reality (VR) and augmented reality (AR);

f. biotechnology;

g. robotics;

h. Internet of Things;

i. 3D Printing.

1.2. Information Society (Society 5.0)

The most comprehensive discussion and research recently promoted by the

Japanese government is "Society 5.0". Society 5.0 is used to emphasize Japan's

unique position and role in developing the challenges of digitalization and

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

277

networking. The term was mentioned in the 5th Basic Plan for Science and

Technology in January 2016, with explicit reference to the Internet of Things (IoT)

initiatives in the United States, Germany, and China. Of course, it should be

emphasized that IoT has become one of the most developed technologies of the

XXI-th century because it can connect the objects we use in everyday life (house

robots, household robots, accessories for children) to the Internet through built-in

devices that allow communication between people, processes and things.

The transition to Society 5.0 is seen as similar to the "Fourth Industrial Revolution"

because both concepts refer to the current categorical shift of the economic world

towards a new paradigm. However, Society 5.0 is a broad concept because it

envisions a complete transformation of the way we live.

The main goals of Society 5.0 are to improve the living environment and increase

the quality of life. Society 5.0 is based on digital infrastructures, platforms and

services. The technologies mentioned in section 1.1.3 have now reached an

advanced level of maturity.

In the face of such major changes in the world, new technologies such as IoT,

robotics, AI, and big data are being developed, all of which can affect the course of

society. Japan is striving to realize Society 5.0 as a new society that incorporates

these new technologies into all industries and social activities, achieving both

economic development and solutions to social problems in parallel.

The four pillars of Society 5.0 are:

▪ Health;

▪ Mobility;

▪ Infrastructure;

▪ FinTech.

2. Artificial Intelligence and Human Resource Management

2.1. Artificial Intelligence (AI)

The long existence of artificial intelligence (AI) with a number of applications over

time, but recently it has been developed and implemented. It is necessary to

decompose the word AI and analyze the meaning of each word.

The definition of "A", which means artificial, is a universal term, so it does not need

such a broad definition. Artificial, according to the Oxford Dictionary, is "something

created or produced by human beings rather than occurring naturally, especially as

a copy of something natural". (Oxford Dictionary, which is, 2019) Another aspect of

the artificial definition is the need to evaluate human intelligence in order to be

successful compared to that of the robots or machines that are replacing them.

Kaplan (2016) instead states that his personal interpretation of intelligence would be

that it is "the ability to make appropriate generalizations in a timely manner, based

on limited data" (p. 5). In this article, AI is defined as the ability of machines to learn,

interpret, and understand on their own, similar to humans. (Coursera, 2023; Miaihle

& Hodes, 2017; Johansson & Herranen, 2019).

There are areas in which AI can be applied, and it can take many different forms.

Furthermore, there are five main areas of AI implementation:

▪ language interpretation;

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

278

▪ machine perception;

▪ problem solving;

▪ robotics;

▪ games.

3. Recruiting

3.1. Traditional Recruitment Process

The first step in the traditional recruitment process is to identify vacancies, set

budgets for hiring new employees, integrate them and train them. The entire process

involves analyzing the job, writing a job description, posting it on various platforms

such as newspapers, social media platforms, career portals or online job boards, etc.

to attract potential employees.

The traditional recruitment process follows the following stages: Bhosale (2023),

Johansson & Herranen (2019):

▪ recruiters collect resumes, select their relevant profiles and further contact

the right candidates for further discussion;

▪ check references, check antecedents, offer selected candidates, notify

candidates who have not passed the interview, prepare and conduct

employment activities;

▪ This method emphasizes receiving as many resumes as possible and

building the database to be used when needed.

▪ The traditional recruitment process has the following characteristics:

▪ human-centered approach;

▪ time and labor intensive;

▪ bias and subjectivity.

3.2. The Recruitment Process

This process has the following characteristics (Morgan, 2023; Mobarack et al.,

2021):

▪ it is a process of discovering and attracting qualified people;

▪ the process of generating a group of individuals who want a job within an

organization;

▪ is the point of collection of labor and selection of the right people to achieve

the overall strategic goals;

▪ the organization follows recruitment practices and policies to identify and

attract potential employees;

▪ recruitment is explained as a set of activities and processes used to legally

obtain a large number of qualified people at the right place and time to work;

▪ the purpose of recruitment is to attract the number of suitable and qualified

candidates at the lowest possible cost to meet the needs of the organization.

3.3. Techniques and Types of Recruitment

3.3.1. Referral

Referral is when existing employees recommend candidates for an open position.

Not only do referrals have a high probability of success for the candidates, but they

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

279

are also cost effective because it eliminates the need for candidates and requires

less intensive screening. (Newsome, 2023)

3.3.2. Promotions and Transfers

Promotions and transfers occur when an existing employee is promoted to a higher

hierarchical position in the organization or public institution. These recruitment

methods capitalize on the internal knowledge base while strengthening the

organizational culture. They demonstrate a commitment to employee development.

(Newsome, 2023)

3.3.3. Attracting Candidates

The first stage of the recruitment and selection process includes the attraction phase.

Chapman and Mayers (Chapman et al., 2015) emphasize its critical role in a series

of systems, processes, and strategies designed to maximize the size and quality of

the applicant pool.

Attraction is not the same as recruitment, especially in today's digital age.

Recruitment is broader and includes many different elements that are important to

the entire selection process, such as the various activities that organizations

undertake to identify a desired group of candidates, including what is intended to be

their attraction and retention. (Abbas et al., 2020)

Recruitment should also be aligned with the strategic objectives of organizations.

Therefore, especially today, it must include all technology-related activities that

influence the recruitment and selection cycle, such as employer branding and

candidate experience.

It has been observed that organizations advertise their vacancies electronically, in

the written press and through various other media channels to attract different types

of candidates to the said organization.

3.3.4. Staffing Agencies

A contracting agency, also known as a labor broker, is an organization that contracts

the responsibility of recruiting employees for an organization in exchange for an

agreed upon fee. (Florea, 2014; Kempton, 2023) This arrangement is very effective

in recruiting the most competent type of people for different types of jobs.

3.3.5. Inbound Recruitment

Inbound recruitment is the process of creating content that attracts candidates and

compels them to apply for a job (as opposed to external recruitment, which involves

contacting candidates). Inbound recruitment strategies include blog posts, videos,

employee testimonials, and employer branding efforts. While inbound recruiting

produces strong candidates, it is likely to take a long time for them to bear fruit and

for your organization to grow.

3.3.6. Social Media

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

280

About 80% of US adults use social media. For them, but also for other citizens in

general, it is an excellent place to discover available jobs. Social networking is a form

of inbound recruitment where content is created to attract potential candidates to

interact with what they want. Just like other forms of inbound recruitment, social

networks are like an advanced game and ideally work in moments that are engaged

and taken can build a solid audience by creating content on an ongoing basis.

3.3.7. Job Fairs

Career fairs and other events for job seekers are ideal for the opportunity for

employers to meet their employees. In addition to recruiting for your current open

positions, they can help you build your employer brand and attract high-potential

candidates. Although there is a fee for employers to attend career fairs, they are a

way to quickly find available and often well-educated candidates.

3.3.8. Professional Events

Conferences, trade association meetings, and other industry-specific events can

help employers connect with good candidates in a particular field. They are a good

way to meet passive candidates - candidates who are not necessarily looking for a

job but may be interested in new opportunities.

3.3.9. Internships

Internships are used not only to help students gain experience, but also to help

employers cultivate a group of young talents for the long term. For best results,

internships should be well structured and involve participants in a range of activities

within the company or public institution. This allows employers to identify the

strengths of their trainees while helping them to focus on their areas of interest.

3.3.10. Labor and Trade Union Services or Offices

Labor offices around the world have a system of trade unions, which is very

necessary in recruiting different types of labor and also in meeting different types of

labor requirements of different types of organizations in the business field, mainly in

the construction industry as well as in the printing industry. (Keshav, 2013)

3.3.11. E-Recruitment

The characteristics of e-recruitment are as follows (Okolie & Irabor, 2017; Ptel,

2020):

▪ the HRM domain has been affected by technological advancement;

▪ online recruitment, which can also be referred to as e-recruitment, has been

a major trend in HRM in terms of automating the recruitment process and

various HR tasks such as HR assessment and HR rewards;

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

281

▪ companies have turned to online recruitment because it is faster, cheaper

and more efficient to find a potential candidate through online recruitment;

▪ a disadvantage of using online recruitment is the possibility of discrimination

between active Internet users and non-Internet users;

▪ it is a method used by human resource professionals to support the

recruitment process by using web-based technology or tools;

▪ it is an automated process of tracking, attracting, interviewing and hiring

candidates through the use of online and human resources software.

In the case of e-recruitment, it can take several forms:

▪ companies can use a set of credible goals and criteria through an automated

system;

▪ if the candidate applies for a specific position in the organizational chart, the

human resources specialist creates a job position in a web-based career

portal or in the institution's Internet portal. This process starts when the

candidates apply for the given position;

▪ another important aspect is the fact that e-HR gives candidates more

employment opportunities and results in a greater flow of information;

▪ the e-HR system includes additional applications, such as specialized

selection tests, knowledge tests and personality tests. They provide

recruiters with the necessary feedback online.

▪ use of the applicant tracking system;

▪ online interviewing can be done via Internet;

▪ using job boards assumes that job boards are sites used by recruiters to

specifically advertise job openings;

▪ new methods are possible that also have benefits that recruiters use to

recruit potential candidates.

Advantages of electronic recruitment:

▪ it shows us that it reduces precious time and we can use it to solve other

situations;

▪ minimizes recruitment costs, which are usually high in terms of advertising,

travel expenses, recruitment fees to the third person;

▪ expands the range of candidates;

▪ disadvantages of electronic recruitment;

▪ a role is confidential to a candidate.

In e-recruitment, candidates' reactions to the online system are influenced by the

perceived efficiency and ease of use of the applications and whether or not the

candidate sees the job advertisement and whether or not it is easy to design and

apply.

In the wake of the COVID-19 pandemic, e-recruiting has become a widespread

technique of labor supply. As nations around the world face social distancing

measures, most companies are using technology for all possible business activities,

including recruiting. (Ptel, 2020)

Let's see how technology and electronic platforms are being used for recruitment.

3.3.12. Electronic Application System

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

282

Although companies and some public institutions widely use electronic applications,

it has become common practice after the COVID-19 pandemic. Most companies use

electronic systems. These systems allow applicants to fill in the application form and

submit all the required documents. (Okolie & Irabor, 2017).

3.3.13. Electronic Advertising

Electronic advertising presents two major platforms, which are e-recruitment portals

and social networks. COVID-19 has developed recruitment websites such as

Monster, Career Builder, Glassdoor, etc.

Many business and professional sectors use these platforms to reach potential

candidates. For a small fee, these platforms allow companies to advertise and help

attract thousands of candidates from around the world. The use of e-recruitment has

made recruitment processes more effective, leading to improved business and

organizational efficiency. Overall, this is a common practice for international and

multinational organizations and has become a widely accepted practice for small and

medium sized businesses.

4. Chatbot AI in Recruitment

In this fast-paced world where technology is constantly advancing, the recruitment

landscape has undergone a major transformation. With the development of artificial

intelligence (AI), traditional recruitment methods are now facing stiff competition from

artificial intelligence-based chatbots, often referred to as AI recruiters. These

innovative tools have revolutionized the way employers find and hire potential talent,

promising faster and more efficient processes. (Asad, 2023; Bhosale, 2023)

Amid this paradigm shift, it becomes crucial to understand what exactly AI

recruitment entails.

4.1. What is AI Recruitment?

AI recruitment, also known as artificial intelligence-based recruitment or automated

recruitment, is the use of artificial intelligence and machine learning algorithms to

streamline the various stages of the recruitment process. These AI-based systems

can handle tasks such as sourcing candidates, evaluating resumes, conducting

initial screenings, and even engaging with potential hires.

The main difference between AI recruiting and traditional recruiting is the level of

automation and efficiency. AI recruiters can process large amounts of data in a

fraction of the time it takes a human recruiter. They can analyze resumes, identify

relevant skills, and match candidates to job requirements with exceptional

transparency.

4.2. What Are the Benefits of Using AI Chatbots for Recruitment?

AI chatbots are transforming the way companies find and interact with candidates,

resulting in a more efficient and sustainable talent acquisition process.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

283

Here are some of the benefits of using AI chatbots for recruitment:

▪ speed and efficiency;

▪ enhanced candidate experience;

▪ reduced bias;

▪ cost effectiveness;

▪ continuous learning.

4.3. What Are the Challenges of Using AI Chatbots in Recruitment?

While there are challenges to using AI chatbots for recruitment, their many benefits

make them an indispensable tool for modern HR teams. These benefits include:

▪ embracing change;

▪ perfect integration;

▪ fairness and diversity;

▪ enhanced candidate experience;

▪ robust data security;

▪ improving human decision making;

▪ long-term investment.

By accepting challenges and actively addressing them, companies and public

institutions can harness the power of AI recruiters. It is beneficial to observe AI

chatbots as a supportive partner, enhancing HR capabilities and promoting an

effective talent acquisition process.

4.4. What Is the Future of AI Chatbots in Recruitment?

The future of AI chatbots in recruitment is bright. As the technology continues to

advance, these intelligent tools will offer personalized interactions and improve their

ability to accurately match candidates with job requirements.

AI chatbots will become an integral part of the recruitment process, significantly

reducing time to hire and improving the overall efficiency of HR teams. By adopting

this technology, companies will gain a competitive advantage in securing top talent

and creating a positive experience for candidates.

As AI chatbots continue to evolve and learn, their role in talent acquisition will grow,

revolutionizing the way companies find and hire the best candidates in an

increasingly competitive job market.

4.5. How to Choose the Right AI Chatbot for Your Recruitment Needs?

Choosing the ideal AI chatbot for your recruitment needs is a critical decision that

will significantly impact your hiring process. To ensure you make the right choice,

you need to consider the following factors:

▪ customization;

▪ integration capabilities;

▪ data security measures;

▪ performance and accuracy;

▪ continuous learning capabilities;

▪ support and training.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

284

By carefully considering these factors and thoroughly evaluating the features of

different AI chatbot solutions, you can find the right recruiting partner that aligns with

your company's goals and streamlines your hiring process for optimal results.

4.6. What Is the Impact of AI Chatbots on the Recruitment Industry?

AI chatbots are transforming the recruitment industry. As companies and public

institutions realize the benefits of fast and efficient hiring processes, the demand for

AI recruiters is likely to increase. While AI chatbots cannot completely replace human

recruiters, they will undoubtedly become an integral part of the recruitment process,

enabling companies to find and hire the best talent more effectively.

In conclusion, AI chatbots or AI recruiters represent a revolutionary solution to the

inefficiencies of traditional recruitment methods. With their ability to quickly and

accurately find, assess, and interact with candidates, AI chatbots are changing the

recruitment landscape.

As the technology continues to evolve, the adoption of AI chatbots in recruitment will

be critical for companies looking to stay ahead in the competitive hiring market.

4.7. Selection

Selection has the following important characteristics.

Selection occurs after potential employees have been recruited into an organization,

where the best candidate is considered from a group of available applications. In

general, it is a type of process-oriented activity in which various types of techniques

and methods are used to select the best candidate from the list of applicants.

Selection can be considered as one of the processes in which employers try to find

the type of person who is most suitable for a particular type of job in the mentioned

organization by fulfilling all the desired criteria. This is an important aspect in the field

of organizational effectiveness and efficiency to maintain the space and quality of

organizational efficiency.

Selection ensures the probability of selecting the right type of candidates and it is a

general fact that when the right candidate gets the right job, then organizational

efficiency and productivity are developed. (Kumar & Gupta, 2014; Abbas et al.,

2021).

Selecting the right employees is important for three reasons:

a. performance;

b. cost;

c. legal obligations.

4.7.1. Essential Elements and Prerequisites for Selection:

I. Selection of individuals with relevant qualifications.

II. Matching job requirements with the candidate's profile.

III. Using various tools and techniques to find the right candidate for success in the

workplace.

4.7.2. Selection Methods

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

285

CV and E-Recruiting

In the academic literature, several reviews appeared on the selection of personnel.

They point out that biographical data in the form of CVs are the most widely used in

personnel selection. Some researchers even suggest that every selection decision

should include an evaluation of biographical data. (Mogridge, 2019)

A CV is a structured professional profile that presents an applicant's strengths,

accomplishments, interests, skills, and experiences. CV pre-screening is a key stage

in the recruitment process. Recruiters use information from the CV to draw

conclusions about the candidate's skills, motivation, personality, and suitability for

the job. The CV is a critical tool for evaluating the candidate for a job.

Interviewing

The interview process is probably one of the most common methods used in the

selection of candidates. Different types of situations can be considered in terms of

obtaining available information from candidates during interpersonal communication.

(Abbas, 2021; Newsome, 2023)

There are several types of characteristics of an interview process:

1. Candidates can be better assessed after a round of well-structured questions.

2. Sometimes excessive weight can be given to different types of unfavorable

situations.

3. Sometimes the stereotypical nature of the interviewer can influence decisions.

4. In some cases, it is noted that the interviewer finishes the official interview at a

much earlier stage of the interview and the rest of the time is used to find more

relevant information about the candidate.

5. In some cases, favorable information may be overwhelmed by the presence of a

large amount of unfavorable information.

6. It has been found that the efficiency of such types of interviews is relatively high

with a higher number of vacancies.

Types of interviews

A. Electronic Interview (IE)

The COVID-19 pandemic has also made electronic interviewing (IE) a common

practice, and companies often use it to select individuals. With the social distancing

measures in place, companies could not invite candidates for face-to-face

interviews. The report of the survey on remote interviews conducted during the

COVID-19 pandemic crisis highlighted the important use of the process. Online

interviews are also beneficial in the health sector, which is generally considered to

be a sensitive sector and requires careful consideration to hire the best candidates.

B. Phone Interview

Candidates whose phone screening indicates a strong match move on to the

interview round, which is the deepest part of the selection process. Interviews consist

of one or more interviews, usually face-to-face, with decision-makers. They cover

every aspect of a candidate's qualifications, including specific work experience and

performance in previous roles. While interviews have their shortcomings (such as

selection bias), they are generally the best tools recruiters have for evaluating

candidates.

C. Group Interview

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

286

A group interview is conducted when a candidate is interviewed together with other

candidates. These interviews can save time and allow recruiters to see how

candidates interact with others.

D. Panel Interview

In a panel interview, a candidate speaks to several interviewers at the same time.

Panel interviews are useful when multiple decision makers need to be involved. This

type of interview helps the employer see how a candidate performs under pressure

and what they have to offer.

Personality Assessment

A personality assessment aims to identify a candidate's characteristics beyond his

or her technical skills, such as communication style and work preferences. Although

personality assessments do not have "right" or "wrong" answers, they can be useful

in focusing strong candidates for positions where certain personalities are more likely

to succeed, such as sales and customer service roles.

Job Simulation/Job Audition

In a simulated task or job audition, a candidate performs a task that is similar to the

work he or she would do in the actual job. One of the biggest pitfalls in hiring is that

we can't really see how a candidate performs until they're in the job; simulated tasks

are the closest we can get to seeing a candidate's skills before we commit to hiring

them.

Forms of Verification

A. Reference Checks

The purpose of checking references in any organization is to cross-analyze the

different types of information a candidate has provided in the information sheet or

resume, and also to have knowledge of his or her behavior in the different types of

organizations for which the person has worked. In most public sector organizations,

reference checks are conducted before short-listed candidates are interviewed.

B. Background checks

Background checks are less about selecting the right candidate than they are about

preventing the wrong candidate from being selected.

The physical examination can be considered an important test that has become a

requirement in many organizations. The nature of such information can vary from a

simple type of physical examination to a very evaluative type. The main purpose of

such a physical examination is to test the different types of physical abilities of

candidates and to protect companies from unethical and unreasonable health claims

by employers. In the process of selection and recruitment, different types of physical

examinations have a vital role in the completion of candidates. The appropriate type

of physical examination provides a clear picture of different types of physical and

mental situations.

4.8. Screening Technology

The second stage of the process includes the selection of available information

about the candidate's suitability for the position.

4.8.1. Applicant Tracking System (ATS)

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

287

What is an ATS?

The hiring process can be a long and frustrating experience for both employers and

job seekers.

In order to streamline the process, companies began using applicant tracking

systems (ATS). (Nzenze, 2023; Henderson, 2023)

An ATS is a computer program that manages the hiring process. It does this by

collecting and sorting thousands of resumes.

Hiring managers can then use the ATS to select candidates and track their progress

through the hiring process. By digitizing the hiring process in this way, an ATS saves

employers time and money.

How Applicant Tracking Systems Work

There are 4 basic steps to how an applicant tracking system works:

1. A job application enters the ATS. This request includes job information such as

the job title, desired skills, and required experience.

2. The ATS uses this information to create a profile of the ideal candidate.

3. As candidates submit their resumes, the ATS analyzes, sorts, and categorizes

them based on how well they match the profile.

4. Recruiters can then quickly identify the most qualified candidates and advance

them through the hiring process.

Most importantly, recruiters often filter resumes by key skills and job titles. Recruiters

often filter resumes by looking for key skills and job titles.

The Future of Applicant Tracking

There is no doubt that artificial intelligence (AI) is rapidly changing the world of

recruiting. Already, AI-based applicant tracking systems (ATS) are analyzing

resumes, identifying potential candidates, and even conducting initial interviews.

As AI continues to evolve, ATS software is likely to become even more sophisticated.

In the future, these systems are expected to become more integrated with social

media platforms such as LinkedIn. This will allow them to identify both active and

passive candidates who are a good fit for open positions.

In addition, artificial intelligence-based chatbots could be used to answer questions

and provide information about the application process.

4.8.2. Recruitment CRMs (CRM - Customer Relationship Management)

Features that we need to look for before the completion of CRM Recruitment

While every recruitment agency and staff have unique needs and expectations from

its CRM, some features are mandatory for every recruitment agency and staff

(Nzenze, 2023):

1. analysis and reporting;

2. candidate and client profile;

3. specialist;

4. automation;

5. collaboration;

6. compliance and security;

7. integration;

8. talent group categorization;

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

288

9. email sequencing.

4.9. What Is the Difference Between an ATS and a CRM?

When it comes to recruiting software, there are two main types of systems:

▪ Applicant Tracking Systems (ATS);

▪ Candidate Relations Management Systems (CRM).

ATS software is typically used during the hiring process and includes features such

as resume analysis, candidate screening, and assessment tools.

The disadvantage of ATS software is that it only tracks candidates who have already

applied.

Top employers hire for multiple positions simultaneously and receive hundreds of

resumes for each position. Because it is easier than ever to apply for a job online,

many of these candidates are not qualified and thought it was worth a try.

CRM systems, on the other hand, are used during the recruitment process to target

potential candidates who have not yet applied. CRM features include email

marketing, programming, and communication tools to build relationships with

potential candidates.

While ATSs only provide data that candidates enter themselves, CRMs allow

candidates to enter information they discover about potential talent. In other words,

ATSs are more reactive, while CRMs are more proactive.

4.10. Filtering

A criterion (experience, education, age, etc.) defined by the hiring manager is loaded

into the filtering algorithms. Resumes are quickly scanned and divided into short lists

with filtering algorithms according to these criteria.

In addition, AI allows recruiters to filter data from social networks to find the right

candidates and assess the values, beliefs and attitudes of candidates. For example,

British Airways, BBS and Ford use filtering algorithms. The robot called Doris, the

software tool called HiredScore developed by Unilever, can also filter and scan CVs.

4.11. Pre-selection

Chatbots are used for pre-selection. The chatbot can create a large data system

needed to make human resource decision processes more analytical and provide

24/7 support thanks to communication with candidates. As it paves the way for

communication with candidates, it automatically redirects those who are not suitable

for the job and presents the results of preselection to HR managers. (Eubanks, 2019)

4.12. Artificial Intelligence in Selection

Candidates who are suitable for the job cannot be identified by traditional interviews

and tests. Wrong decisions in the selection process can increase the turnover rate

of organizations in the long run. Interviews can sometimes be influenced by

environmental factors. Sometimes human resource managers can be biased in the

selection process.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

289

AI technologies can attempt to assist HR managers in identifying and matching

suitable candidates with job requirements. Using AI in the selection process allows

recruitment teams to prioritize their time and resources to candidates with significant

potential. In this direction, AI in the selection process has been managed in terms of

testing, video interviewing and selection decision.

4.12.1. Testing

AI has gamified this process to better determine pre-screened intelligence levels and

skills. Many characteristics of candidates to be hired can be measured, such as

cognitive skills, personality, persistence, intelligence, risk-taking potential, and

performance under pressure.

AI technologies offer organizations the opportunity to use game design elements, as

this technology is a tool that provides learning about employees.

The Asynchronous Interview, Often Called Video Interview or Digital Interview

A. How does asynchronous video interviewing work?

The key to one-way video is flexibility! Candidates use audio or video to answer a

series of questions, and this interview method allows candidates to record interviews

on their own schedule. This is the best aspect of asynchronous video interviewing.

Accessibility is better than ever with the ease of a smartphone or computer. For this

reason, candidates with uploaded programs often prefer the one-way video interview

process over other alternatives. (Gonzalez, 2023; Paraphite, 2023)

Employers also benefit by saving time, effort, and money on massive recruiting

efforts with a simple email or text. Here are a few steps to effectively use

asynchronous, lightweight video interviews:

Step 1: Develop key questions;

Step 2: Invite candidates to video interview;

Step 3: Receive responses to all video interviews.

B. Advantages of Asynchronous Video Interviews

1. Replace phone interviews;

2. Reduce interview time and speed up the process;

3. Filter out the wrong candidates;

4. Increase the ability to connect with remote employees;

5. Solves programming issues;

6. Easily compare candidates.

Gamification

Gamification can be defined as a set of services where a core service is enhanced

by rule-based service systems that provide the user with feedback and interaction

mechanisms aimed at facilitating and supporting the creation of global user value. It

has become an increasingly popular trend in recent years.

Gamification involves the use of structured rules and competitive conflicts to achieve

specific goals and where a person is fully involved in the context.

It is often used to improve services and test gaming experiences, and can be a

powerful tool for influencing behavior.

Gamification and game-based assessments could predict job performance as an

alternative to traditional selection methods

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
290 
 
 
Following the concept of "hidden evaluation", they highlighted the potential of game-
based assessments to predict job performance. 
In addition, the integration of serious games and AI provides new computational tools 
for social research. (Georgiou et al., 2019; Iazzolino et al., 2022) 
 
4.13. The Selection Decision 
 
After interviewing the candidates, the selection of the candidate who is considered 
the  most  suitable  among  the  alternative  candidates  is  made.  Decision-making 
algorithms  are  used  in  machine  learning  to  make  precise  decisions  with  AI 
technology.  
 
4.14. Use of AI in Recruitment and Selection of Human Resources in Romania 
 
As mentioned above (Covrig, 2007; Aungurenci, 2021), the methods used in the 
recruitment,  selection  and  performance  criteria  of  Romanian  civil  servants  are 
outdated  and  obsolete.  It  is  necessary  to  proceed  to  the  recruitment,  selection 
according to the following steps  
▪  preparation of the CV to be given at the chatbot analysis according to certain 
criteria; 
▪  conducting psychological tests (aptitudes, behavior, etc.).  
After these stages and the creation of chatbot of eligible people:  
▪  carry out the checks mentioned in the communication; 
▪  video interview and gamification; 
▪  finalizing the results. 
In  conclusion,  it  is  necessary in  Romania  to  succeed  in  the transition to  these 
methods that are practiced worldwide. 
 
BIBLIOGRAPHY 
 
1.  Abbas,  I.S.,  Shah,  H.M.  and  Othman,  H.Y.  (2021)  Critical  Review  of  the 
Recruitment  and  Selection Methods: Understanding  Where  we  Stand,  [On-line], 
"Annals of Contemporary Developments in Management & HR" (ACDMHR), Print 
ISSN: 2632-7686, On-line ISSN: 2632-7694, pp. 46-52, Vol. 3, No. 3, February 1, 
2020, Published by International Association of Educators and Researchers (IAER), 
DOI:  10.33166/ACDMHR.2021.03.005, 
http://acdmhr.theiaer.org/archive/v3/v3n3/p5.html; 
https://www.researchgate.net/publication/353648009_Critical_Review_of_Recruitm
ent_and_Selection_Methods_Understanding_the_Current_Practices [December 1, 
2023] 
2.  Advantages  of  Online  Recruitment.  What  is  online  recruitment?  [online], 
https://www.fountain.com/posts/what-is-online-recruitment-and-what-are-its-
advantages [November 30, 2023] 
3. Asad, S. (2023) Chatbots vs. Traditional Recruitment Methods - Explore the Power 
of  AI  Chatbots  and  Recruiters  in  Modern  Hiring,  [On-line], 
https://www.qureos.com/hiring-guide/ai-chatbots-vs-traditional-recruitment-methods 
[December 6, 2023] 

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
291 
 
 
4. Aungurenci, E.D. (2021) Perfecționarea managementului resurselor umane în 
instituțiile publice  din România, Universitatea "Valahia" din Târgoviște,  IOSUD  - 
Școala Doctorală de Științe Economice și Umaniste, Domeniul Fundamental Științe 
Economice, Domeniul Management 
5. Bhosale, O. (2023) Traditional Recruitment  vs.  AI Recruitment: Unveiling the 
Future of Hiring, June 7, 2023, [online], https://www.linkedin.com/pulse/traditional-
recruitment-vs-ai-unveiling-future-hiring-onkar-bhosale [December 6, 2023] 
6. Chapman, D.S. and Mayers, D. (2015) Recruitment Processes and Organizational 
Attraction, in I. Nikolaou and J.K. Oostrom (Eds.), Employee Recruitment, Selection 
and  Assessment:  Contemporary  Issues  for  Theory  and  Practice,  pp.  27-42, 
Routledge/ Taylor & Francis Group 
7. Coursera (2023) What is Artificial Intelligence? Definition, Uses and Types, July 
28,  2023,  [online],  https://www.coursera.org/articles/what-is-artificial-intelligence 
[August 6, 2023] 
8.  Covrig,  S.  (2007)  Managementul  Resurselor  Umane,  Teză  de  Doctorat, 
Universitatea Politehnica, București 
9. Florea, V.N. (2014) Using Recruitment Agencies to Obtain the Best Candidates 
Management and Economics, [On-line], "Revista Academiei Forţelor Terestre", nr. 
1(73)/2014,  pp.  80-89, 
https://www.armyacademy.ro/reviste/rev1_2014/FLOREA.pdf [December 17, 2023] 
10. Foote, K.D. (2021) A Brief History of Data Science, October 16, 2021, [On-line], 
https://www.dataversity.net/brief-history-data-science [August 5, 2023] 
11. Georgiou, K., Gouras, A. and Nikolaou, I. (2019)  Gamification in  Employee 
Selection: The Development of a  Gamified Assessment, [On-line],  "International 
Journal  of  Selection  and  Assessment",  27(2),  pp.  91-103, 
https://doi.org/10.1111/ijsa.12240,  https://psycnet.apa.org/record/2019-23183-001 
December 5, 2023] 
12. Gonzalez, A. (2023) What is an asynchronous interview and how can it help you 
save  time  and  boost  efficiency?  19th  of  May  2023,  [On-line], 
https://hireflix.com/blog/asynchronous-interview/ [December 2nd, 2023] 
13.  Guide  18  Jan.  2023  UK  Employee  Relations,  [On-line], 
https://www.cipd.org/uk/knowledge/guides/working-trade-unions/  [December  1, 
2023] 
14. Gupta, A., Kumar, S. (2014) A Study on Recruitment & Selection Process with 
Reference,  November  2014,  [On-line],  DOI:10.13140/2.1.2424.0320 
https://www.researchgate.net/publication/268210664_A_Study_On_Recruitment_S
election_Process_With_Reference [December 3, 2023] 
15. Henderson, R. (2023) What is an ATS? 8 Things You Need to Know About 
Applicant  Tracking  System,  December  5,  2023,  [On-line], 
https://www.jobscan.co/blog/8-things-you-need-to-know-about-applicant-tracking-
systems/ [December 15, 2023] 
16. Iazzolino, G., Altomari, N. and Altomari, L. (2022) Gamification and Soft Skills 
Assessment in the Development of a Serious Game: Design and Feasibility Pilot 
Study, 26.7.2023, in Vol. 11 (2023) JMIR Serious Games 2023, Advancing Digital 
Health & Open Scince, doi: 10.2196/45436, first published December 31, 2022, 
https://games.jmir.org/2023/1/e45436/,  https://preprints.jmir.org/preprint/45436 
[December 18, 2023] 

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
292 
 
 
17. Johansson, J. and Herranen, S. (2019) The Application of Artificial Intelligence 
(AI) in Human Resource Management: Current state of AI and its impact on the 
traditional recruitment process, [online], Bachelor Thesis in Business Administration, 
Jönköping,  Sweden,  May  2019,  pp.  11-13,  https://www.diva-
portal.org/smash/get/diva2:1322478/FULLTEXT01.pdf [November 15, 2023] 
18. Kaplan, J. (2016) Artificial Intelligence - What Everyone Needs to Know, Oxford 
University Press 
19.  Karim,  M.,  Bhuiyan,  A.Y.,  Nath,  D.K.S.  and  Wasib  Bin  Latif,  B.W.  (2021) 
Conceptual  Framework  of  Recruitment  and  Selection  Process,  [On-line], 
"International Journal of Business and Social Research", Vol. 11, Issue 02, 2021, 
pp. 18-25, Article Received: 02-07-2021, Accepted: 14-08-2021, Available online: 
18-08-2021,  ISSN  2164-2540  (print),  ISSN  2164-2559  (online),  DOI: 
https://doi.org/10.18533/ijbsr.v11i02.1415 [November 25, 2023] 
20. Kempton, B. (2023) Recruitment Agencies: What They Are & How They Work, 
March  14,  2023,  [On-line],  https://www.upwork.com/resources/what-is-a-
recruitment-agency [December 5, 2023] 
21. McCann, A. (2023) How to Use AI for Recruitment, September 2023, [On-line], 
https://resources.workable.com/tutorial/ai-for-recruitment [December 3, 2023] 
22. Miaihle, N. and Hodes, C.(2017) Making the AI Revolution Work for Everyone, 
[On-line],  The  Future  Society  at  the  Harvard  Kennedy  School  of  Government, 
Cambridge,  MA,  http://ai-initiative.org/wp-content/uploads/2017/08/Making-the-AI-
Revolution-workfor-  everyone.Report-to-OECD.-MARCH-2017.pdf  [December  5, 
2023] 
23. Mobarack, K., Bhuiyan, B.A., Sujit Kumer Deb Nath, D.K.S. and Wasib Bin Latif, 
B.W.  (2021)  Conceptual  Framework  of  Recruitment  and  Selection  Process, 
"International Journal of Business and Social Research", Vol. 11, Issue 02, 2021, 
pp. 18-25, DOI: https://doi.org/10.18533/ijbsr.v11i02.1415  
24. Mogridge, D.C. (2019) Recruitment, Selection and Assessment: Are the CV and 
interview  still  worth  using?  The  University  of  Manchester,  December  2019, 
DOI:10.5281/ZENODO.3558902  
25. Morgan, M. (2023) The Recruitment Process in 7 Steps (Plus Tips and FAQ), 
July  28,  2023,  [On-line],  www.indeed.com/career-advice/interviewing/recruiting-
process [December 12, 2023] 
26. Newsome, P. (2023) Effective Methods of Recruitment and Selection for Hiring 
Top  Talent,  April  17th,  2023,  [On-line],  Recruiting  Insights, 
https://www.4cornerresources.com/blog/methods-of-recruitment-selection/ 
[December 5th, 2023] 
27. Nzenze, N. (2023) Staffing Technology: The Present and the Future, [online], 
https://www.thehumancapitalhub.com/articles/staffing-technology-the-present-and-
the-future [November 20, 2023] 
28. Okolie, C.U. and Irabor, E. (2017) E-Recruitment: Practices, Opportunities and 
Challenges, [On-line], "European Journal of Business and Management", Vol. 9, No. 
11, 2017, p. 116, https://core.ac.uk/download/pdf/234627826.pdf [2nd of December 
2023] 
29.  Oracle  (2023)  HRIS  vs.  HRMS  vs.  HCM  -  care  este  diferența?,  [On-line], 
https://www.oracle.com/ro/human-capital-management/hrms/hris-hrms-hcm/ 
[December 15, 2023] 

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
293 
 
 
30. Parafita, R. (2023) What is Asynchronous Video Interview and how to use it in 
Recruitment?,  Novembro  10,  2023,  [On-line],  https://livejobs.pt/blog/post/what-is-
asynchronous-video-interview-and-how-to-use-it-in-recruitment  [December  17th, 
2023] 
31. Ptel, M., Mallik, A. (2020) Social Posting in COVID-19 Recruiting Era - Milestone 
HR Strategy Augmenting Social Media Recruitment, [On-line],  "Dogo Rangsang 
Research  Journal",  10(6),  pp.  82-89, 
https://www.researchgate.net/publication/342880806_social_posting_in_covid-
19_recruiting_era-milestone_hr_strategy_augmenting_social [December 16, 2023] 
32. Pullen, A. (2018) What is recruitment advertising: What is it?, September 25, 
2018, [online], https://www.appcast.io/what-is-recruitment-advertising/ [December 2, 
2023] 
33.  Recruiter  Flow,  31  October  2023,  -12-17, 
https://recruiterflow.com/blog/recruitment-crm-features/ [December 17, 2023] 
34.  Recruitment  HR  Blog,  An  Introduction  to  On-line  Recruitment  11  Minutes, 
Updated June 12, 2023, https://www.thomas.co/resources/type/hr-blog/introduction-
online-recruitment [November 29, 2023] 
35.  Schwab,  K.  (2016)  The  Fourth  Industrial  Revolution,  [online], 
https://www.weforum.org/pages/the-fourth-industrial-revolution-by-klaus-schwab 
[July 29, 2023] 
36. Sivabalan, L., Yazdanifard, R. and Ismai, H.I. (2014) How to Transform the 
Traditional  Way  of  Recruitment  into  On-line  System,  [On-line],  "International 
Business Research", Vol. 7, No. 3, February 2014, doi: 10.5539/ibr.v7n3p178 URL, 
http://dx.doi.org/10.5539/ibr.v7n3p178 [14th of December 2023] 37 
37. Stăncioiu, A. (2017) The Fourth Industrial Revolution "Industry 4.0", [On-line], 
"Fiabilitate  și  Durabilitate  -  Fiability  &  Durability",  No.  1/2017,  Ed.  Academica 
Brâncuşi,  Târgu  Jiu,  ISSN  1844-640, 
https://www.utgjiu.ro/rev_mec/mecanica/pdf/2017-
01/11_alin%20st%c4%82ncioiu%20-
%20the%20fourth%20industrial%20revolution%20%e2%80%9eindustry%204.0%e
2%80%9d.pdf [August 30, 2023] 
38. Tarpey, M. (2020) A Brief History of Digitalization # Digital Transformation, [On-
line],  19th  of  August  2020,  https://www.exelatech.com/blog/brief-history-
digitization?language_content_entity=en [5th of August 2023]. 
39.  The  selection 
process,https://ecampusontario.pressbooks.pub/hrforoperationsmanagers/chapter/
4-4-the-selection-process/ [December 5, 2023] 
40. The Ultimate Guide to Recruitment Advertising 2023, https://www.joveo.com/the-
ultimate-guide-to-recruitment-advertising/ [December 5, 2023]  
41.  What  is  Online  Recruitment,  https://www.fountain.com/posts/what-is-online-
recruitment-and-what-are-its-advantages [November 30, 2023] 
42.  What  is  recruitment  advertising:  What  is  it?,  [online],  Annie  Pullen,  Senior 
Marketing  Manager,  September  25,  2018,  https://www.appcast.io/what-is-
recruitment-advertising/ [December 2, 2023] 
43.  http://www.researchgate.net/publication/230660465_An_Integrated_E-
Recruitment_System_for_Automated_Personality_Mining_and_Applicant_Ranking 
[March 5th, 2023] 

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
294 
 
 
44.  https://culturelligence.com/recruitment-process-traditional-and-agile-4/ 
[December 5th, 2023] 
45.  https://culturelligence.com/recruitment-process-traditional-and-agile-4/ 
[December 5th, 2023] 
46. https://societatea-5-0/ [November 22nd, 2023] 
47.  https://talent2win.com/talent-acquisition-recruitment-methods  [December  5th, 
2023] 
48.  https://www.old.research.gov.ro/ro/articol/5701/comunicare-br-mass-media-
digitalizare-versus-digitizare [December 5, 2022] 
49.  https://www.oracle.com/ro/scm/manufacturing/what-is-manufacturing/what-is-
industry-4-0/ce este Industry 4.0? [August 31st, 2023] 50. 
50. 
https://www.researchgate.net/publication/353648009_Critical_Review_of_Recruitm
ent_and_Selection_Methods_Understanding_the_Current_Practices  [December 
1st, 2023] 
51.  https://www2.deloitte.com/ro/ro/pages/technology-media-and-
telecommunications/articles/the-fourth-industrial-revolution-is-here  [August  31st, 
2023] 
   

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

295

EXPLORING GENERATIONAL DIFFERENCES IN ATTITUDES

TOWARD HUMAN-LIKE ROBOTS

Maria BARBUL1, Irina BOJESCU2, Miruna NICULESCU3

1,2,3 The Bucharest University of Economic Studies, Bucharest, Romania

mariabarbul@gmail.com

irina0927@yahoo.com

miruna_niculescu@yahoo.com

Abstract: The rapid advancement of robotic technologies and artificial intelligence

(AI) has sparked widespread interest and debate regarding their integration into

various aspects of daily life. As robots become increasingly capable of performing

tasks traditionally carried out by humans, understanding public perception of these

technologies becomes crucial. The objective of this paper is to explore the

generational differences in attitudes toward robots. While younger generations may

be more open to the integration of robots into daily life, addressing the concerns of

older generations will be crucial for widespread acceptance. This analysis highlights

the importance of considering generational perspectives when developing and

implementing robotic technologies in various sectors.

Keywords: artificial intelligence; robots; consumers; anthropomorphic; acceptance;

generations.

JEL classification: M31

1. Introduction

In recent years, there has been a growing interest in researching and implementing

robots in contemporary society. The interaction between human and robots has

emerged as an important area of study within robotics, encompassing aspects such

as consumer characteristics, the roles of robots, and consumers’ perception of

robots. Robots are no longer confined to traditional industries; instead, they are

increasingly integrated into various occupations and are becoming more and more

popular in everyday life and work environments (Shen & Koyama, 2022). This

integration of robotics into various sectors has advanced technology, making robots

more accessible and versatile, with service robots enhancing efficiency in

healthcare, education, and hospitality, and social robots improving human-robot

interaction research. People now expect robots to resemble and interact like

humans, making it essential for robots to act reliably and transparently to gain human

trust (Felzmann et al., 2019; Zörner et al., 2021; Maggioni & Rossignoli, 2023).

Moreover, AI devices have become a common presence in our homes and in some

cases even companions for people who suffer from loneliness (Broekens et al.

2009).

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

296

The aim of this study is to explore generational differences in perception towards

robotics and AI applications across various age groups and is structured as follows:

The first part covers the theoretical aspects of AI device acceptance, including

innovation, anthropomorphism, and social interaction. The empirical part examines

age-related reactions to AI devices and robots. The final part presents comparative

research results on individuals' perceptions and preferences regarding AI devices

and robots.

2. Literature review

AI-driven robotics continue to grow globally, being present across multiple sectors

like retail, hospitality, banking, healthcare, and education, offering to all industries an

important support by increasing productivity through human-AI collaboration,

reducing labor expenses, improving customer experiences, and enabling precise

inventory tracking automation. The acceptance and interaction of consumers with

new technologies, particularly humanoid robots, are influenced by various factors

including age, gender, and cultural background. Research highlights the role of

anthropomorphism and social capabilities in shaping users' perceptions and trust

towards robots, with human-like appearances and behaviors often enhancing

acceptance and emotional engagement. In this context, the analysis of the reactions

that different generations of individuals had towards the use of AI devices may help

developers to build more user-friendly applications and to fulfill more adequately the

user’s needs and expectations (Pelau & Barbul, 2021).

2.1. Innovation

Consumers' acceptance of new technologies is influenced by multiple factors like

age, gender, and cultural background, potentially reducing the influence of a robot’s

physical appearance. Research shows that older adults might view humanoid robots

with skepticism, while younger people may find them appealing. Additionally,

perceptions of a robot’s look can differ by gender and culture, with some societies

placing greater importance on humanoid designs (Shehawy et al., 2024; Pelau et al.,

2024). These demographic differences not only impact how robots are perceived but

also influence concerns about job loss and the evolving skill requirements driven by

AI and technological innovation (Ban et al., 2024).

2.2. Anthropomorphism

Anthropomorphism has gained in last decade substantial attention in fields like

psychology, computer science, marketing, information systems, and management

and it can be defined as the attribution of human-like qualities or characteristics to

non-human entities (Aggarwal and McGill, 2007; Epley et al., 2007; Kim and McGill,

2011, Pop et al., 2023). Previous research shows that anthropomorphism affects

individuals' judgments, motivations, and behaviors (Kim & McGill, 2011; Puzakova

& Aggarwal, 2018; Kim et al., 2018). Consumers tend to form rapidly their

impressions during the interaction with a robot by evaluating its physical

attractiveness, familiarity, and nonverbal behavior (Beer et al., 2011; Riegger et al.,

2021) and they, usually, are more likely to anthropomorphize humanoid robots than

mechanical, non-humanoid ones, as they view humanoids as more capable of

completing tasks and fostering emotional interactions (Lu et al., 2021).

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

297

Previous studies have been done on different range of robots and from this respect,

findings on humanoid robots' physical appearance have varied. According to van

Pinxteren et al. (2019), the perceived anthropomorphism, such as attractive facial

features in Pepper robots, had a positive influence in users' trust and acceptance in

public service settings. Similarly, Song & Kim (2020), found that the attractiveness

of Pepper sale robots encouraged user adoption. However, Mende et al. (2019),

noticed that interactions with humanoid robots in a restaurant, heightened consumer

discomfort and compensatory behaviors, aligning with Mori’s Uncanny Valley theory,

where high human resemblance can evoke unease. Appel et al. (2020), also noted

that humanoid robots' display of emotions like fear and embarrassment could induce

eeriness. Conversely, Yoganathan et al. (2021), found that a human-like appearance

in robots increased users' positive feelings and confidence in their competence

compared to mechanical self-service machines.

2.3. Social interaction

De Ruyter et al. (2005), Song & Kim (2020) define social capability as a robot's ability

to engage in interpersonal interactions, including skills like interactive

communication, approachability, appropriate responses, and attentive listening

without customer interruption while speaking. Consumers interacting with socially

intelligent robots often feel that the robots care about them and are dependable

(Song & Kim, 2020). Likewise, humanoid robots are frequently perceived as human-

like, embodying qualities such as kindness, politeness, helpfulness and

attractiveness (Haenlein & Kaplan, 2021; Ruijten et al., 2019).

All the characteristics mentioned previously, represent a motivational factor for users

to engage with robots (de Graaf et al., 2015). In contrast, interactions with robots

that lack social capabilities are often perceived as awkward, leading users to feel

less trust and companionship with the robot (Mende et al., 2019). Recent studies

indicate that robots with human-like appearances and social skills similar to those of

humans tend to increase users' trust and acceptance of robot technology (Song &

Kim, 2020; van Pinxteren et al., 2019). These interactions can also vary significantly

across different age groups, with younger generations being more receptive to social

robots due to their familiarity with digital communication and virtual interactions.

2.4. Generational perspectives

Generational perspectives play a crucial role in the acceptance and trust of robotic

systems. Different generations exhibit distinct characteristics and attitudes towards

technology based on their formative experiences. Other studies have shown

differences in attitudes and perspectives toward AI and robots among different age

groups (Pelau & Barbul, 2021). Generation Z, born from the mid-1990s to early

2010s, is notably familiar with digital technology from a young age (Turner, 2015).

Millennials, born from 1981 to 1996, have witnessed the rapid evolution of

technology and are generally tech-savvy (Bolton et al., 2013). Generation X, born

from 1965 to 1980, experienced the transition from analog to digital and often

balance traditional and modern views on technology (Prensky, 2001). Baby

Boomers, born from 1946 to 1964, adapted to technology later in life and may have

more conservative views on its integration (Czaja & Lee, 2007).

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

298

3. Research methodology

The present research paper investigates generational differences in attitudes toward

robots by analyzing responses from 512 participants to 23 self-determined 7-point

Likert scale questions, categorizing respondents into various age groups to identify

potential generational variations. The questions were rated with values from 1 to 7,

where 1 means that the respondents did not agree with the statement and 7 means

that they fully agreed with it. The sample was selected using a stratified random

sampling method to ensure representation across the different age groups. The

questionnaire was administered online to reach a diverse and geographically

dispersed population.

The research aims to uncover how familiarity with digital technology and varying

levels of technological exposure influence perceptions of robotic capabilities, such

as communication, emotional understanding, replacing human employees, and

managing personal data. The findings provide valuable insights into the acceptance

and trust of robotic systems across different generations, highlighting the need for

tailored approaches in the development and communication of these emerging

technologies.

To analyze the data, we employed various statistical tests using SPSS, including T-

Test analyses, to identify significant differences between the generational cohorts.

The use of the 7-point Likert scale was chosen to capture a wide range of responses

and to enhance the reliability of the descriptive statistics. The following sections

analyze the collected data with the aim of offering valuable insights and perspectives

from different generational groups by splitting and comparing the responses and

data collected across various age cohorts to seek significant differences.

4. Results

The following section will present and discuss the results of the comparison between

age groups, initially by splitting the respondents into those under and over 25 years,

and subsequently by dividing them into those below and above 40 years, also taking

into account generational differences.

4.1. Comparison under and over 25 years

The initial analysis focused on respondents under 25 and those above to highlight

the distinct differences in technology adoption and usage patterns between

Generation Z and older age groups, who have varying levels of familiarity and

comfort with digital advancements. Table 1 summarizes the results.

In terms of perception of technological innovation (Q1–Q2), both Generation Z (≤25

years) and older respondents (≥26 years) view robots’ communication abilities and

influence on the future of shopping as key innovations. Although Generation Z rated

these features slightly lower, the difference was not statistically significant.

Table 1: Results of t-tests comparing age groups below and over 25 years

Question

 ≤25

years

 ≥26

years

 diff.

talue

value

Q1: I consider the capacity of robots to

communicate as an innovative element of

technological evolution.

5.09

5.32

0.233

1.721

0.086

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

299

Question

 ≤25

years

 ≥26

years

 diff.

talue

value

Q2: I believe that the use of this robot will

influence the future of the shopping experience.

5.19

5.37

0.179

1.301

0.194

Q3: I believe this robot has the ability to explain

requested information very well.

4.69

4.81

0.120

0.841

0.401

Q4: I believe that interaction with this robot can

replace interaction with a human employee.

3.40

3.36

0.040

0.226

0.821

Q5: I believe this robot can manifest human

emotions.

2.40

2.52

0.120

0.753

0.452

Q6: I believe this robot can understand human

emotions.

2.64

2.53

0.106

0.658

0.511

Q7: I believe the empathetic behavior of this

robot makes it seem human.

3.28

2.94

0.339

1.932

0.054*

Q8: I believe the responsiveness of this robot

makes it seem human.

3.38

3.14

0.238

1.423

0.155

Q9: I believe the way this robot understands

contexts makes it seem human.

3.34

3.19

0.148

0.882

0.378

Q10: I consider the ability of this robot to learn

from mistakes as the element that makes it

seem human.

3.69

3.46

0.226

1.350

0.178

Q11: I consider the ability of this robot to

understand sarcasm as the element that makes

it seem human.

3.61

3.21

0.400

2.270

0.024*

Q12: I consider the ability of this robot to hold a

conversation as the element that makes it seem

human.

3.76

3.47

0.291

1.710

0.088

Q13: I consider the ability of this robot to

apologize as the element that makes it seem

human.

3.48

3.46

0.027

0.158

0.874

Q14: I believe this robot has the capacity to be

human through the answers it provides.

3.50

3.33

0.163

0.961

0.337

Q15: I believe this robot has the capacity to be

human through its way of interacting with

human consumers.

3.51

3.38

0.134

0.798

0.425

Q16: I have experienced confusing a robot with

a human employee.

2.06

0.001

0.007

0.995

Q17: I feel uncomfortable when artificial

intelligence systems seem too human-like.

3.76

4.10

0.345

1.993

0.047*

Q18: I believe our society is prepared to interact

with a robot with human-like characteristics.

3.68

3.46

0.219

1.356

0.176

Q19: I believe our society is prepared to interact

with a robot with human-like characteristics,

even if it makes mistakes.

3.51

3.18

0.327

2.088

0.037*

Q20: I feel comfortable interacting with this

robot.

4.11

3.90

0.206

1.294

0.196

Q21: I believe this robot can successfully

replace human employees.

3.45

3.23

0.217

1.237

0.217

Q22: I intend to use the services of a company

when I am assisted by this AI robot.

3.94

3.90

0.042

0.264

0.792

Q23: I trust the way this robot manages my

personal data.

3.54

3.60

0.061

0.360

0.719

Source: Own research; *A significant difference was found at p < 0.05.

Regarding the robots’ ability to explain and replace human interaction (Q3–Q4), both

age groups held similar views, showing no significant differences. This consensus

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

300

suggests that neither Generation Z nor Millennials and above perceive robots as

ready to fully replicate human explanatory skills or interaction capabilities. Also,

when evaluating robots’ capacity to understand and express emotions (Q5–Q6),

both generations showed comparable levels of skepticism. This shared uncertainty

reflects a broader perception that robots are currently limited in their ability to

understand or demonstrate genuine human emotions.

With respect to human-like behavior (Q7–Q10), a minor difference emerged:

Generation Z respondents were more likely to view empathetic behavior in robots as

making them seem human-like, with this tendency nearing statistical significance

(pQ7=0.054). However, both groups demonstrated similar views on other aspects of

human-like behavior, such as responsiveness and context-awareness. The general

opinion of respondents shows they are not convinced about these aspects, as the

average scores for both categories are around 3.5.

In understanding sarcasm (Q11), younger respondents showed a stronger tendency

to value a robot’s ability to recognize sarcasm as a human-like trait, a distinction that

reached statistical significance (pQ11=0.024). This finding may indicate that younger

generations place greater importance on nuanced communication abilities. In

contrast, regarding overall conversational abilities (Q12–Q13), both age groups

responded similarly, showing no significant differences in their perception of robots’

conversational skills, including the ability to apologize. This alignment suggests a

shared understanding of the limitations in robots’ ability to hold human-like

conversations. Furthermore, in terms of human-like interaction (Q14–Q15), both

groups also expressed similar perceptions of a robot’s ability to emulate human

responses in consumer interactions, showing no significant generational differences.

Also, regarding potential confusion between robots and human employees (Q16),

both age groups indicated that they can easily distinguish between robotic and

human employees, suggesting that robots are not yet perceived as convincingly

human-like.

When it comes to comfort and trust in robots (Q17–Q23), a few differences emerged.

Older respondents expressed more discomfort with robots that appear overly

human-like (pQ17=0.047), while Generation Z showed stronger confidence in

society’s preparedness to engage with human-like robots, even those prone to errors

(pQ19=0.037). Across other measures of comfort, trust, and the potential for robots to

replace human workers, no significant differences were observed. Overall, the

average scores for both age categories are around or higher than 3.5 except Q17

and Q18 (the mean of older respondents) and Q21 (average results of both groups).

This shows that interviewees are generally eager to interact with AI robots, but

regardless of age, they do not fully trust robots to replace humans.

In summary, while both Generation Z and Millennials and above generally agree on

the capabilities and limitations of robotic technology, younger respondents are

slightly more receptive to human-like robots and value traits like sarcasm. Older

respondents feel more discomfort with highly human-like robots. Younger

respondents (≤25 years) are more optimistic about society's readiness to interact

with human-like robots, even if they make mistakes. Despite these differences, there

is broad consensus across generations on many aspects, such as the robot's ability

to communicate, explain information, replace human interaction, and manage

personal data. These insights suggest that while younger generations may be more

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

301

open to integrating robots into daily life, addressing older generations' concerns

about human-like behavior will be crucial for widespread acceptance. This split

between age groups below and above 25 years revealed some generational

differences in perceptions of robots, but many views are shared.

4.2. Comparison over and under 40

A second split in the data, this time between generations below and over 40 years,

reveals new insights and uncovers some significant differences, highlighting how

generational experiences and attitudes towards technology vary markedly between

these age groups. The findings provide a deeper understanding of the unique

perspectives and behaviors of individuals in these distinct generational cohorts.

Table 2 summarizes the results. Notably, younger respondents (≤40 years) generally

exhibiting more favorable views on the capabilities and acceptance of robots in

various roles compared to older respondents (≥41 years). Table 2 summarizes the

results. Specifically, younger respondents were more likely to believe that interaction

with robots could replace interaction with human employees (pQ4=0.012), and that

robots have the capacity to understand human emotions (pQ6=0.019). They also

perceived empathetic behavior (pQ7=0.037) and the ability to understand sarcasm

(pQ11=0.012) as significant factors contributing to the human-like qualities of robots.

However, when the sample was split into interviewees below and over 25 years, the

differences were less pronounced, suggesting that Generation Z's familiarity with

digital technology from a young age shapes positive perceptions of robots.

Table 2: Results of t-tests comparing age groups below and over 40 years

Question

 ≤40

years

 ≥41

years

 diff.

talue

value

Q1: I consider the capacity of robots to

communicate as an innovative element of

technological evolution.

5.147

5.368

0.222

1.282

0.200

Q2: I believe that the use of this robot will

influence the future of the shopping experience.

5.255

5.319

0.064

0.367

0.714

Q3: I believe this robot has the ability to explain

requested information very well.

4.736

4.747

0.011

0.061

0.951

Q4: I believe that interaction with this robot can

replace interaction with a human employee.

3.486

2.915

0.571

2.511

0.012

Q5: I believe this robot can manifest human

emotions.

2.500

2.232

0.268

1.323

0.186

Q6: I believe this robot can understand human

emotions.

2.681

2.200

0.481

2.344

0.019

Q7: I believe the empathetic behavior of this

robot makes it seem human.

3.216

2.747

0.468

2.096

0.037*

Q8: I believe the responsiveness of this robot

makes it seem human.

3.334

3.011

0.324

1.522

0.129

Q9: I believe the way this robot understands

contexts makes it seem human.

3.317

3.105

0.211

0.990

0.323

Q10: I consider the ability of this robot to learn

from mistakes as the element that makes it

seem human.

3.623

3.432

0.191

0.896

0.371

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

302

Question

 ≤40

years

 ≥41

years

 diff.

talue

value

Q11: I consider the ability of this robot to

understand sarcasm as the element that makes

it seem human.

3.543

2.979

0.565

2.511

0.012

Q12: I consider the ability of this robot to hold a

conversation as the element that makes it seem

human.

3.712

3.298

0.414

1.906

0.057

Q13: I consider the ability of this robot to

apologize as the element that makes it seem

human.

3.490

3.394

0.097

0.437

0.662

Q14: I believe this robot has the capacity to be

human through the answers it provides.

3.489

3.147

0.342

1.581

0.114

Q15: I believe this robot has the capacity to be

human through its way of interacting with

human consumers.

3.526

3.137

0.390

1.829

0.068

Q16: I have experienced confusing a robot with

a human employee.

2.101

1.895

0.206

1.137

0.257

Q17: I feel uncomfortable when artificial

intelligence systems seem too human-like.

3.794

4.411

0.617

2.805

0.005

Q18: I believe our society is prepared to interact

with a robot with human-like characteristics.

3.661

3.232

0.429

2.103

0.036

Q19: I believe our society is prepared to interact

with a robot with human-like characteristics,

even if it makes mistakes.

3.483

2.874

0.609

3.065

0.002

Q20: I feel comfortable interacting with this

robot.

4.153

3.421

0.732

3.650

0.000

Q21: I believe this robot can successfully

replace human employees.

3.465

2.884

0.581

2.606

0.009

Q22: I intend to use the services of a company

when I am assisted by this AI robot.

4.019

3.484

0.535

2.689

0.007

Q23: I trust the way this robot manages my

personal data.

5.147

5.368

0.222

1.282

0.200

Source: Own research; *A significant difference was found at p < 0.05.

Generation Z, having grown up with digital technology, demonstrate the highest

comfort levels in interacting with robots and trusting them with personal data.

Millennials, who witnessed the rapid evolution of technology, also show a strong

belief in the innovative potential of robots and their ability to influence the future

shopping experience. In contrast, Generation X and Baby Boomers, who

experienced the transition from analog to digital and adapted to technology later in

life, respectively, exhibit more conservative views. They seem more likely to feel

uncomfortable with human-like AI (Q17, p=0.005) and less convinced of society's

readiness to interact with human-like robots, even if they make mistakes

(pQ19=0.002).

Interestingly, while younger generations are more inclined than older respondents to

accept that interactions with robots could replace interactions with human employees

(Q4) and that robots could successfully replace human employees (Q21), they still

exhibit some reluctance towards the latter scenario. As regards the intention of

making recourse to the services of a company when there is the possibility of being

assisted by an AI robot (Q22), younger respondents seemed more eager to this

scenario (pQ22=0.007). Even though the older generations are not that influenced by

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

303

this possibility, their average score was close to 3.5, which reflects that even them

might be enthusiastic about such a circumstance.

These generational differences can be attributed to varying levels of exposure to and

comfort with digital technologies. Younger generations, being more tech-savvy and

accustomed to rapid technological advancements, tend to have a more optimistic

view of robots' capabilities and their integration into daily life. In contrast, older

generations, who have had to adapt to these changes later in life, may harbor more

skepticism and discomfort towards the increasing human-like qualities of robots.

These findings suggest that while there is a generational divide in the acceptance

and perceived capabilities of robots, particularly in emotional and empathetic

contexts, both age groups recognize the broader technological advancements

represented by robotic communication and functionality.

5. Conclusions

The decision to split the sample of respondents into those below and above 40 years

of age was based on the distinct life experiences and technological exposure

characteristic of these age groups. Those below 40, including Generation Z and

Millennials, have grown up with rapid technological advancements, leading to

greater comfort with emerging technologies like robotics and AI. In contrast, those

above 40, including Generation X and Baby Boomers, have experienced a more

gradual integration of technology, balancing traditional and modern views. The

insights gained from this classification are particularly relevant as they highlight

generational differences in the acceptance and perceived capabilities of robots.

Younger respondents (≤40 years) demonstrated significantly more favorable views

towards the potential of robots in various roles, including their ability to replace

human interaction and understand human emotions, as evidenced by the statistical

results. This generational divide underscores the importance of tailoring

technological developments and communication strategies to address the distinct

expectations and comfort levels of different age groups.

The split between respondents below and above 25 showed fewer significant

differences, suggesting Generation Z's early exposure to digital technology fosters

positive perceptions of robots. In contrast, the broader 40+ age division captures a

wider range of technological adaptation, offering deeper insights into generational

differences. Understanding these perspectives helps stakeholders address diverse

age groups' needs, easing the integration of advanced robotics across sectors.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

304

6. Research limitations

The study has several limitations. The sample size of 512 participants may not fully

represent the broader population, lacking diversity in geographical location,

socioeconomic status, and cultural background. Self-reported data from Likert scale

questions introduce potential biases. The cross-sectional design captures

perceptions at a single point in time, missing changes over time. Age group

classifications may overlook individual experiences, and Likert scale questions

might not cover all aspects of robotic capabilities. Contextual factors like media

coverage and personal experiences with robots were not considered. Rapid

technological advancement means perceptions may quickly become outdated. The

focus on generational differences may overlook other demographic factors. Lastly,

the study does not address economic implications, job displacement, or ethical

considerations.

References

Aggarwal, P., & McGill, A. L., 2007. Is that car smiling at me? Schema congruity as

a basis for evaluating anthropomorphized products. Journal of Consumer Research,

34 (4), pp. 468-479.

Appel, M., Izydorczyk, D., Weber, S., Mara, M., & Lischetzke, T. (2020). The uncanny

of mind in a machine: Humanoid robots as tools, agents, and experiencers.

Computers in Human Behavior, 102, pp. 274–286.

Ban, O., Maiorescu, I., Bucur, M., Sabou, G.C. & CohenTzedec, B. (2024). AI

between Threat and Benefactor for the Competencies of the Human Working Force.

Amfiteatru Economic, 26(67), pp. 762-782.

Beer, J. M., Prakash, A., Mitzner, T. L., & Rogers, W. A., 2011. Understanding robot

acceptance. Human Factors and Aging Laboratory, School of Psychology, Georgia

Institute of Technology, Technical Report HFA-TR-1103.

Broekens J., Heerink M., & Rosendal H. (2009). Assistive social robots in elderly

care: A review. Gerontechnology, 8(2), pp. 94-103.

Bolton, R. N., Parasuraman, A., Hoefnagels, A., Migchels, N., Kabadayi, S., Gruber,

T., Loureiro, Y.K., Solnet, D. (2013). Understanding Generation Y and their use of

social media: A review and research agenda. Journal of Service Management, 24(3),

pp. 245-267.

Czaja, S. J., Lee, C. C. (2007). The impact of aging on access to technology.

Universal Access in the Information Society, 5(4), pp. 341-349.

De Ruyter, B., Saini, P., Markopoulos, P., & Van Breemen, A., 2005. Assessing the

effects of building social intelligence in a robotic interface for the home. Interacting

with Computers, 17(5), pp. 522-541.

Epley, N., Waytz, A., & Cacioppo, J. T., 2007. On seeing human: A three-factor

theory of anthropomorphism. Psychological Review, 114(4), pp. 864-886.

Felzmann H., Villaronga E.F., Lutz C., Tamò-Larrieux A. (2019) Transparency you

can trust: Transparency requirements for artificial intelligence between legal norms

and contextual concerns. Big Data & Society, 6, 1.

Haenlein, M., & Kaplan, A. (2021). Artificial intelligence and robotics: Shaking up the

business world and society at large. Journal of Business Research, 124, pp. 405-

407.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

305

Hegel, F., Muhl, C., Wrede, B., Hielscher-Fastabend, M., & Sagerer, G., 2009.

Understanding Social Robots. In: 2009 Second International Conferences on

Advances in Computer-Human Interactions, pp. 169-174.

Kim, S., & McGill, A. L., 2011. Gaming with Mr. Slot or gaming the slot machine?

Power, anthropomorphism, and risk perception. Journal of Consumer Research,

38(1), pp. 94-107.

Kim, S., Zhang, K., & Park, D., 2018. Don’t want to look dumb? The role of theories

of intelligence and humanlike features in online help seeking. Psychological Science,

29(2), pp. 171-180.

Lu, L., Zhang, P., & Zhang, T. (2021). Leveraging human-likeness of robotic service

at restaurants. International Journal of Hospitality Management, 94, 102823.

Maggioni, M., Rossignoli, D. (2023). If it looks like a human and speaks like a human

... Communication and cooperation in strategic Human–Robot interactions.

Journal of Behavioral and Experimental Economics, 104.

Mende, M., Scott, M. L., van Doorn, J., Grewal, D., & Shanks, I. (2019). Service

robots rising: How humanoid robots influence service experiences and elicit

compensatory consumer responses. Journal of Marketing Research, 56(4), pp. 535-

556.

Pelau, C., Barbul, M. (2021). Consumers’ perception on the use of cognitive

computing. Proceedings of the International Conference on Business Excellence,

15(1), pp. 639-649.

Pelau, C., Dabija, D.C., Stanescu, M. (2024). Can I trust my AI friend? The role of

emotions, feelings of friendship and trust for consumers' information-sharing

behavior toward AI. Oeconomia Copernicana, 15(2), pp. 407-433.

Pop, S., Pelau, C., Ciofu, I., Kondort, G. (2023). Factors predicting consumer-AI

interactions. Proceedings of the 8th International Conference on New Trends in

Sustainable Business and Consumption (BASIQ), pp. 592-597.

Prensky, M. (2001). Digital natives, digital immigrants. On the Horizon, 9(5).

Puzakova, M., & Aggarwal, P., 2018. Brands as rivals: Consumer pursuit of

distinctiveness and the role of brand anthropomorphism. Journal of Consumer

Research, 45(4), pp. 869-888.

Riegger, A.-S., Klein, J. F., Merfeld, K., & Henkel, S. (2021). Technology-enabled

personalization in retail stores: Understanding drivers and barriers. Journal of

Business Research, 123, pp. 140-155.

Ruijten, P. A., Haans, A., Ham, J., & Midden, C. J. (2019). Perceived human-likeness

of social robots: Testing the Rasch Model as a method for measuring

anthropomorphism. International Journal of Social Robotics, 11(3), pp. 477-494.

Shehawy, Y.M., Faisal Ali Khan, S.M., Ali M Khalufi, N., & Abdullah, R.S. (2024).

Customer adoption of robot: Synergizing customer acceptance of robot-assisted

retail technologies. Journal of Retailing and Consumer Services, 82.

Shen, J. & Koyama, S., 2022. Gender and age differences in mind perception of

robots. IEEE 11th Global Conference on Consumer Electronics pp 748-751.

Song, S. Y., & Kim, Y.-K., 2020. Factors influencing consumers’ intention to adopt

fashion robot advisors: Psychological network analysis. Clothing and Textiles

Research Journal, 40(1), pp. 3-18.

Turner, A. (2015). Generation Z: Technology and social interest. The Journal of

Individual Psychology, 71(2), pp. 103-113.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

306

van Pinxteren, M. M. E., Wetzels Ruud, W. H., Rüger, J., Pluymaekers, M., &

Wetzels, M. (2019). Trust in humanoid robots: Implications for services marketing.

Journal of Services Marketing, 33(4), pp. 507-518.

Yoganathan, V., Osburg, V.-S., H. Kunz, W., & Toporowski, W. (2021). Check-in at

the robo-desk: Effects of automated social presence on social cognition and service

implications. Tourism Management, 85, 104309.

Zörner S., Arts E., Vasiljevic B., Srivastava A., Schmalzl F., Mir G., et al. (2021). An

immersive investment game to study human-robot trust. Frontiers in Robotics and

AI, 8 (2021), p. 139.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

307

INVESTIGATING THE SCIENTIFIC FOCUS ON ARTIFICIAL

INTELLIGENCE'S POTENTIAL IMPACT ON LABOR MARKET

Ludovic DIOSZEGI

Doctoral School of Economic Sciences, University of Oradea, Oradea, Romania

dioszegi.ludovic@student.uoradea.ro

Abstract: The pace of technological development, marked by its inexorable

character, drives scientific research to continuously assess its economic impact.

Research on the present and future effects materializes in an increasing volume of

publications, the technological evolution bringing to the fore significant aspects of

change, with increasingly evident accents of convergence towards the importance

of researching the impact of technological evolution, especially artificial intelligence,

on the labor market. Automation anxiety is the initial condition present in the labor

market; the direction of technological development, and especially its direction, can

influence the final impact. The widespread application of artificial intelligence, owing

to its general applicability combined with the rapid advancement of specific

technologies, sets the stage for significant economic and social transformation.

Ongoing analysis of developmental stages and their potential impacts is essential to

propose appropriate directing or regulatory measures. The purpose of this article is

to capture the intensity and major concerns of the existing research on this topic at

the global and national levels and to provide an overview and a recommendation for

the selection of the literature for those who intend to research the relationship

between technological development and the labor market. This article aims to

identify the types of approach, the relevant topics, and the convergences towards

possible clusters, along with the measurement of specific quantitative indicators: the

number of publications per year, by authors, institutions, and countries. A bibliometric

study was used as the research method. By analyzing the scientific literature based

on quantitative indicators, this research captures the structure and dynamics of

scientific research in this field. Measuring the impact and influence of scientific

papers, identifying research trends, collaborative networks, and mapping clusters

provide an overview of the evolution of the research field.

Keywords: labor-market; employment; artificial-intelligence; technology.

JEL Classification: J01

1. Introduction

Major technological developments have radically changed the economic and social

models of the times preceding them. The steam engine, electricity or information

technology have revolutionized not only production models but also people's way of

life. Anthropologist Ian Morris in his work "Why the West Rules – For Now" (Morris,

2011), tries to answer the question: what is the most remarkable development in

human history? The applied criterion involves quantifying the impacts of

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

308

development on social progress, which can be defined as a group's capability to

comprehend and manage its physical and intellectual state with the aim of enhancing

its living conditions (Morris, 2011). The answer to this question was the steam

engine. The steam engine generated the most radical social transformation in human

history, paving the way for most co-inventions and technological developments that

followed. Erik Brynjolfsson and Andrew McAfee(Brynjolfsson, 2014) call the period

of the industrial revolution based on the steam engine "first machine age,” and that

of artificial intelligence (AI), "second machine age.” Since 1950, when Alan Turing

(Turing, 1950) first associated the term intelligence with computational machines, to

the present day, we observed rapid advancements in AI technology. This progress

has been supported by an exponential increase in computing power, consistently

surpassing Moore's law (Moore, 1965) of doubling the number of transistors on a

microchip every two years, while the cost of computing is halved. The integration of

deep neural networks, Monte Carlo tree-search techniques, and reinforcement

learning has significantly advanced the capabilities of algorithms. In 2017, OpenAI

launched the GPT-2 (Generative Pre-trained Transformer) model, with 1.5 billion

parameters as a measure of the complexity of the system. GTP-3 was launched in

2020 with 175 billion parameters. The computing power of the model increased from

two petaflops to ten billion petaflops. The GPT-4 model passed the Turing test, and

the limits in terms of AI capabilities are being pushed to new extremes. The

development of large language models (LLMs), including Llama by Meta, Gemini by

Google, and Claude Sonnet by Anthropic, has prompted private companies to

engage in a competitive technological race. This uncontrolled evolution of AI has

generated continuous research into its effects on the economy. Technological

predestination creates the premises for economic research, while history draws

attention to the social costs incurred by those affected. Even if the contribution of

technological developments to the increase in the standard of living and the

formation of current societies with the democratic values that most of the population

enjoys is undeniable, the imminence of a new technological wave requires the

preparation of the necessary changes in advance. The analysis of the evolution of

the relationship between capital and labor has been and is a continuous concern

among economists, from Adam Smith (Smith, 1999) or Karl Marx (Marx, 1926) to

contemporaries, such as Thomas Piketty (Piketty, 2017). Their study was based on

the premise that labor and capital are antagonistic. Technological development can

radically change positioning. The technology that augments labor, the capital that

comes to ease human effort, to re-humanize labor, predicts a homeostatic state of

natural balance. It depends on the direction of development of technology, in this

case, artificial intelligence, which can follow the optimistic direction described above,

or it can have a substitution effect on the dislocation of labor by capital. We are

destined to grow, but the direction of development is not predetermined. This could

be controlled during this phase. The analysis of the possible effects of a

transformation similar to the industrial revolution is not only necessary, but also

mandatory, in order to create the right economic and social models to avoid the price

paid by humanity in the eighteenth century. The literature confirms that researchers

are concerned about responding to this challenge, and the number of publications

has increased from year to year. The exponential evolution of publications in recent

years has led to the need to identify relevant publications and topics in the field of

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

309

AI's impact on the labor market. This article aims to identify the types of approach,

the relevant topics, and the convergences towards possible clusters, along with the

measurement of specific quantitative indicators: the number of publications per year,

by authors, institutions, and countries.

2. Theoretical background

John Maynard Keynes (Keynes, 2010), in his 1930 essay “Economic Possibilities for

our Grandchildren,” predicted a 15-hour workweek thanks to technological advances

and increased productivity, leaving people more time for recreational activities and

personal development. It is the most frequently used citation in articles that

addresses the subject of literature on this topic, introducing the notion of

technological unemployment with an optimistic future prediction. To classify the

literature according to the authors, we defined two distinct categories. The first is that

of authors coming from the practical sphere, applicability or development of AI, such

as Mustafa Suleyman (DeepMind), Paul R. Daugherty (Accenture Research), H,

James Wilson (Accenture Research), Mo Gawdat (Google X). The second category,

which leads this effort, is that of scientific researchers, whose names and importance

in the field are presented in the results of the present research. And there is dual

focus on scientific and practical application, bridging the gap between

groundbreaking research and real-world impact as Geoffrey Hinton (University of

Toronto and Google Brain, awarded the Nobel Prize in Physics in 2024 for his work

on theoretical and applied machine learning) and Sir Demis Hassabis ( University

College London and Google X, awarded the Nobel Prize in Chemistry in 2024 for his

contribution on predicting protein structures using AI. The major difference in how

the two categories are approached is the framing of the technology itself. Economists

place less emphasis on the peculiarities of the technology, analyzing it as a generic

technology, while engineers detail the differentiating and determining features of AI,

such as hyper-evolution, asymmetric impact, increasing autonomy, and general

usability. There are topics on which the positions are unanimous or at least mostly

consensual. It concerns the imminence of the phenomenon, the magnitude of the

impact, the transformative effect, the time-lag inherent to the implementation, the

possible reactions of rejection from the directly affected factors, the increase in

productivity, creative destruction, and the need for regulation. Positions diverge from

the moment we approach the positioning of AI in future production processes, types

of jobs affected, newly created jobs, technological unemployment or structural

unemployment, polarization of the labor market, and inequality. Except for the option

in which AI does not affect the labor market, the positions are between

complementary, augmentative, and dislocating AI. The complementation of human

capabilities in the labor market envisions harmonious collaboration between humans

and AI, the latter eliminating repetitive tasks that do not offer job satisfaction, leaving

room for creative and important processes, and rehumanizing both time and work.

In 2024, Hassabis’s research brought this scenario to fruition. By being augmented

with AI, humans have developed the AlphaFold model, which is capable of predicting

protein structures. The displacement of humans by AI or by technology due to AI also

remains a possible scenario, taking up the fear formulated by Wassily Leontief in

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

310

1982 (Leontief, 1982), with the analogy between humans and horses, by diminishing

their importance through technological progress. The most commonly used

explanations for the effects of technology on the labor market are the skill-biased

technical change theory SBTC (Acemoglu and Autor, 2011), the Autor-Levy-Murnane

(Autor et al., 2003) ALM hypothesis, and the routine-biased technological change

RTBC (Autor et al., 2003). According to SBTC, advanced technology requires skilled

labor, generating additional demand for this category and decreasing demand for

those with basic qualifications. The ALM hypothesis focuses on workplace tasks,

grouping them into routine, easily automated, and non-routine tasks, and dividing

them into manual and cognitive tasks. Routine-biased technological change

suggests that technology replaces routine tasks but complements non-routine tasks.

Based on these classifications, the hypothesis assumes polarization of the labor

market due to the increased susceptibility to automation of mid-level jobs. Between

the two poles, the hypothesis foresees a major wage inequality justified by the

difference in productivity. In addition to the task-based approach, the need to

continuously track the evolution of AI capabilities, whose limits are uncertain and

unpredictable, is becoming increasingly evident. Indicators are introduced to track

these developments, such as the AI Occupational Impact Measure, Machine

Learning Index or AI Exposure Score.

3. Methodology

The methodology employed in this study was bibliometric. This approach provides

the advantage of analyzing a large volume of publications through quantitative

techniques, complementing traditional methods such as systematic literature

reviews or meta-analyses that involve interpretive subjectivism. Upon establishing

the research objectives outlined above, we proceeded with data collection. The data

source utilized for the query was the Web of Science (WoS). The query was

meticulously designed to focus on the topics of the publications, utilizing logical

operators such as AND and OR to capture relevant works related to artificial

intelligence and the labor market. The parameters of the query are crucial because

they have a definitive impact on the database being analyzed; different parameters

yield different results and conclusions. This highlights a fundamental critique of

bibliometrics: the research outcomes are specific to the analyzed database, making

their generalization to an entire research field unfounded or speculative. To capture

the two domains, artificial intelligence and the labor market, we used the following

query criterion applied on the topic (title, abstract, keywords) for the articles in the

categories Economics OR Business OR Social Sciences Interdisciplinary OR

Sociology, subsequently eliminating the purely technical subcategories: (artificial-

intelligence OR automation OR computerization) AND (labor OR labor OR

employment). The resulting database was processed using the Biblioshiny

application, a bibliometric analysis application developed in the R programming

language. The application of Biblioshiny enabled us to conduct a descriptive analysis

of the database, facilitating the visualization of collaboration networks among

authors or institutions, as well as the relationships between scientific concepts. This

allowed us to analyze thematic networks, track the structure and evolution of

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

311

research topics, map citations and co-citations, and provide a comprehensive

understanding of the influence and connections between various academic works.

4. Results

4.1. General analysis of the selected publications

As a result of the query, we obtained a database comprising 701 documents

published in 339 distinct sources in the period 1989-2024, by 1587 authors, with an

average co-author rate of 2.54 per document. The average growth rate of

publications was 15.54%, and I analyze the dynamics of this growth in Figure 1.

Figure 1: Annual Scientific Production

Source: Biblioshiny, database from WoS

The first publications on artificial intelligence collected on WoS were from 1977, but

Alan Turing (Turing, 1950) associated the term intelligence with the computational

machine as early as 1950, in the work entitled “Computing Machinery and

Intelligence.” The interdisciplinary approach, in this case AI and the labor market,

although existing since 1989, followed a stagnant trajectory between 1989-2016,

after which the average increase in scientific production was 34% per year. The trend

was similar in terms of the number of citations, with an average annual increase of

54%, justified by the topicality of the subject and the growing number of publications.

4.2. Source analysis

The analysis of the sources aims not only to list the most frequent journals but also

to evaluate the quality of the analyzed publications. To quantify this aspect, we also

added the H-index to the list of the most frequent journals as a measure of scientific

impact and productivity. Using the weighted arithmetic mean of the indices, we

calculated the H-index of the analyzed database, with an H-index of 112. From top

twenty most frequent present journals, half belongs to publisher Elsevier, journals

like Technological Forecasting and Social Change (H-Index 179), Technology in

Society or Labour Economics (H-Index 88), but there are also journals from other

high ranked publisher as Oxford University Press – Industrial and Corporate Change

(H-Index 127), Springer Nature – Humanities and Social Sciences Communications

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

312

(H-Index 35) and Taylor and Francis with Journal of Economic Issues (H-Index 55).

The list of the first ten most relevant sources is presented in Figure 2.

Figure 2: Most Relevant Sources

Source: Biblioshiny, database from WoS

The Romanian-relevant sources in our database are Amfiteatru Economic (H-Index

30) and the Journal of Theoretical and Applied Electronic Commerce Research (H-

Index 47).

4.3. Authors' analysis

For the analysis of the authors, we chose the three-field chart listed in Figure 3,

which allows not only the quantitative identification of the authors with the most

publications, but also their impact in terms of references and topics addressed.

Figure 3: Most Relevant Autors

Source: Biblioshiny, database from WoS

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

313

The authors with the most publications are Daron Acemoglu (MIT), Pascual Restrepo

(Yale University), Jacopo Staccioli (Catholic University of the Sacred Heart), Marco

Vivarelli (Catholic University of the Sacred Heart), Virgillito Maria Enrica (Scuola

Superiore Sant'Anna), Klaus Prettner (Vienna University of Economics and

Business), Carl Benedikt Frey (University of Oxford), also present in the list of the

most frequently used references, along with David Autor (MIT), Erik Brynjolfsson

(Stanford University). Their common topics, in descending order of frequency, are

automation, technology, inequality, technological change, wage level, artificial

intelligence, employment, productivity, and topics that we analyze below. The 14

local publications came from 13 authors from 12 sources, including Amfiteatru

Economic (H-Index 30) and Journal of Theoretical and Applied Electronic Commerce

Research (H-Index 47) with two publications each; the most cited publications were

Pirosca Grigore Ioan, Serban-Oprescu George Laurențiu, Badea Liliana, Otoiu

Adrian, Titan Emilia, and Paraschiv Dorel Mihai. The common topics, in descending

order of frequency, are automation, technology, inequality, technological change,

salary level, artificial intelligence, employment, productivity, and subjects, which we

examine in the following sections.

4.4. Content analysis

Although the analysis methods remain quantitative, content analysis manages to

describe the major research directions in the analyzed articles based on the

keywords used. In descending order of occurrence, the most frequently used

keywords were employment, growth, future, jobs, technology, polarization,

automation, robots, labor, and impact, as presented in Figure 4.

Figure 4: Most Relevant Words

Source: Biblioshiny, database from WoS

Of the top ten most frequently used terms, four (employment, jobs, polarization,

work) refer to the labor market, one term is from the category of general economic

concepts (growth), three refer to technology (technology, automation, robots), and

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

314

two terms refer to prospects (future, impact). The major concern is the future impact

of automation and robotization on the labor market’s employment rate and the

possible polarization effect generated by imminent growth. It is worth mentioning the

term productivity in 14th place, AI in 15th place, and inequality in 16th place. The

identification of trend changes in topics shows that topics related to wages or the

labor market remain constantly topical. The issue of the substitution effect remains

behind as of 2022, when the pessimistic approach of a jobless future is considered

unfounded. Referring to the past becomes irrelevant from the perspective of AI, and

new topics have appeared, such as structural changes and economic growth

correlated with technological evolution and automation.

4.5. Geographic analysis

More than half of the analyzed publications have as their country of origin, based on

the authors' affiliation to one of five countries: the USA (17%), the Republic of China

(12%), Germany (8%), Italy (7%), and the United Kingdom (7%). It is worth

mentioning the growth rate of publications in the Republic of China, a dynamic that

threatens the leading position of the US in this field, as presented in Figure 5.

Figure 5: Country Production over Time

Source: Biblioshiny, database from WoS

This trend is not supported by the impact of publications as measured by the average

number of citations per article. China with 9.2 citations per article, lags far behind the

UK (71.1), the US (62.5), and Germany (20.7), a similar level to Italy with 9.2.

4.6. Cluster analysis

The relationships between the topics, represented by the keywords, were analyzed

using co-occurrence diagrams, which allowed the identification of clusters, as

presented in Figure 6.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

315

Figure 6: Clusters

Source: Biblioshiny, database from WoS

In such representations, keywords are grouped by research topic to form clusters.

The application identified two clusters, one grouped around the words employment,

future, technology, jobs, and the second, around the words polarization, tasks,

technological-change. The first cluster focuses on the economic effects of

technological evolution, whereas the second focuses on the social impact of these

changes. The two primary clusters identify and delineate the main types of concerns

regarding AI's impact on the labor market, primarily focusing on employment and

polarization.

5. Conclusions

In this study, we aimed to identify scientific concerns regarding the impact of AI on

the labor market using a bibliometric methodology. The study was able to identify the

authors with a significant impact, the dominant journals in this field, the relevant

topics and their evolution over time, and the existence of clusters. The comparable

sizes of the two identified clusters highlight the importance of examining social

impact. This necessitates directing future research towards specific

recommendations for managing AI development, ensuring that it is steered towards

areas that do not exacerbate labor market polarization or inequality. In his paper

entitled ‘Can We Survive Technology?’ Physicist John von Neumann (von Neumann,

1955) cautioned that the world was undersized and inadequately structured to cope

with the technological progress. It is our responsibility and opportunity to expand it

economically and socially and to reorganize it in order to leverage the benefits of

technological progress. Humanity has its own limitations and is aware of them.

However, as Acemoglu and Johnson highlighted in their book "Power and Progress"

(Acemoglu and Johnson, 2023), the direction of development of technologies is

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

316

neither predefined nor widespread prosperity. It is, as they stated “ an economic,

social, and political choice.” (Acemoglu and Johnson, 2023, p.23)

Bibliography

1. Acemoglu, D., and Autor, D. (2011) Skills, Tasks and Technologies: Implications

for Employment and Earnings. In Handbook of Labor Economics (Vol. 4). Elsevier.

2. Acemoglu, D., and Johnson, S. (2023) Power and progress: our thousand-year

struggle over technology and prosperity. (First edition.). New York: PublicAffairs.

3. Autor, D. H., Levy, F., and Murnane, R. J. (2003) The Skill Content of Recent

Technological Change: An Empirical Exploration*. The Quarterly Journal of

Economics 118(4): 1279–1333.

4. Brynjolfsson, E. (2014) The Second Machine Age. W. W. Norton & Company,

Incorporated.

5. Keynes, J. M. (2010) Economic Possibilities for Our Grandchildren. In Essays in

Persuasion. London: Palgrave Macmillan UK doi:10.1007/978-1-349-59072-8_25.

6. Leontief, W. W. (1982) The Distribution of Work and Income. Scientific American

247(3): 188–205.

7. Marx, K. (1926) The Essentials of Marx. New York: Vanguard press.

8. Moore, G. E. (1965) Cramming more components onto integrated circuits. 38(8).

9. Morris, I. (2011) Why the West rules - for now: the patterns of history and what

they reveal about the future. London: Profile Books.

10. Piketty, T. (2017) Capital in the twenty-first century. (Goldhammer, A., Trans.).

Cambridge: Harvard University Press.

11. Smith, A. (1999) The Wealth of Nations: Books I-III. (Skinner, A., Ed.). London:

Penguin.

12. Turing, A. M. (1950) I.—Computing Machinery and Intelligence. Mind LIX(236):

433–460.

13. von Neumann, J. (1955) Can We Survive Technology. In The Neumann

Compendium (Vol. VI). Chicago: A. Taub.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

317

REVOLUTIONIZING URBAN LAST-MILE DELIVERY WITH

AUTOMATED PARCEL LOCKERS: AN OVERVIEW

Anca POPESCU, Adriana TULBURE

Transilvania University of Brașov (Department of Marketing, Tourism-Services and

International Affairs, Faculty of Economic Sciences and Business Administration),

Brașov, Romania

anca.radbata@unitbv.ro

adriana.tulbure@unitbv.ro

Abstract: With last-mile logistics being the most important component of delivery,

the rapid growth of electronic commerce has also led to a surge in logistical

complexity. Because users prefer to have their purchases delivered to their homes,

this is one of the biggest challenges facing e-commerce. Many times, deliveries

cannot happen because the recipients are not at the agreed delivery point. This

causes the quality of service to decrease and distribution costs to increase. Based

on this information, the present paper studies the role which Automated Parcel

Lockers (APLs) have in addressing flaws in the urban last-mile delivery system. It is

clear that e-commerce is on an ascending path, continuously developing, while

traditional methods of delivery often encounter challenges such as high costs,

increased impact on the environment, or customer dissatisfaction. APLs are part of

a promising solution offering advantages such as improved delivery efficiency and

customer satisfaction while reducing carbon emissions. The research methodology

included a review of the literature on the subject, examination of industry reports

and various case studies. The results provided an ambivalent perspective of both

advantages and challenges which this system of delivery provides. Among the

benefits, operational cost savings and reduced environmental impact are worth

mentioning, while the challenges bring forward matter such as high installation costs

or accessibility concerns. The findings also suggest that APLs require, for a

successful integration in logistic operations, overcoming barriers of a technical and

financial nature. The paper concludes with a broad perspective on the future

development of APLs and necessary research directions. The importance of

investigating further technological integration of these means, while adapting to both

urban and rural conditions is also emphasized.

Keywords: Automated Parcel Lockers; Last-mile Delivery; Urban Logistics; E-

commerce; Sustainability.

JEL Classification: R41; L87; L81; Q56

1. Introduction

Home deliveries have gone through many changes, especially when it comes to

last-mile delivery, which has faced various challenges and inefficiencies. As

customer preferences and market demands have evolved, new solutions have

emerged to make deliveries more efficient (Escudero-Santana et al., 2022). Next,

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

318

we will discuss how home delivery has developed, from the issues encountered with

traditional methods to new solutions like smart lockers.

Storage lockers have evolved significantly over time. Initially, they were simple

wooden boxes secured with padlocks, primarily used for storing valuables or

important documents. These versions offered minimal protection and were easy to

tamper (Kizhner, 2022).

The Industrial Revolution changed how lockers were made. This made them

stronger and easier to produce, so they started showing up in more places like

schools and factories. In the early 1900s, combination locks were introduced, which

was a big improvement. These new locks made lockers safer and more convenient

because people no longer had to worry about losing keys. This development made

lockers more secure and user-friendly, setting the stage for today's advanced

automated systems (Fadat, 2023).

The way packages are delivered has changed with the rise of online shopping. Many

people are now using Automated Parcel Lockers (APLs) to securely store and

retrieve their packages. This has been especially helpful in busy areas.

During the COVID-19 pandemic, online shopping and home deliveries saw a

significant increase in sales. While the growth has slowed down, online shopping is

still expected to remain popular. Customers now expect faster and more reliable

delivery times (Genevieve et al., 2022).

Nowadays, automated parcel lockers (APLs) have advanced features such as

automated locks, digital screens, and real-time messages to notify you when your

package is ready for pickup. They not only make the process of getting your stuff

easier and more secure, but they also cut down on the number of delivery attempts,

which is good for the environment (Sawik, 2024).

Research on last-mile delivery options, in particular Automated Parcel Lockers

(APLs), has shown that companies still require assistance in order to optimise their

integration into larger logistical systems, even though the use of APLs is increasing.

The features and potential advantages of APLs are widely known, however, there

is still a discrepancy between the expected efficiencies and the results that

businesses really attain (Aljohani, 2024).

The aim of this study was to demonstrate the significance and possible influence of

APLs on improving last-mile delivery, especially in urban settings. The efficiency of

APLs in lowering delivery times, costs, and environmental effects was the main

emphasis of this study, in which a systematic evaluation of the literature together

with industry reports and case studies were used. The main goal was to show that

APLs could be a practical way to address the inefficiencies of conventional

distribution techniques.

The data used in this research came from academic journals, market analysis

papers, logistics businesses, and other sources.

2. Theoretical framework

2.1. Smart locker technology

Before the pandemic, home deliveries made up just a small portion of the market,

and recipients would often pay extra to get their packages “in hand,” either directly

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

319

at their door (attended home deliveries) or left on the doorstep or in the mailbox

(unattended home deliveries), including in apartment buildings. However, during the

pandemic, the volume of home deliveries more than doubled and has remained high

ever since, even though the majority of packages are still delivered to collection

points (Pinchasik et al., 2023).

Home delivery has long been preferred by most buyers. However, home delivery

has had, and continues to have, a significant drawback: most of the time, when the

courier arrives at the buyer's home with the package, it is very likely that they are at

work, which often leads to a negative reaction from customers. This was the reason

why many buyers chose to provide their workplace address for delivery. This way,

they ensured they could receive the package on the day and time the courier arrived.

However, this practice was not well-received by employers, who often prohibited

employees from receiving personal deliveries at the workplace (Allen et al., 2018).

Last-mile delivery, which is the final step in getting products to customers, often

proves to be quite inefficient for several reasons (Deutsch and Golany, 2018). First,

dealing with small packages or multiple stops makes it hard to use the space in

delivery vehicles efficiently, leading to higher costs and longer delivery times (Visser

et al., 2014). Another issue is missed deliveries when customers are not home,

which results in extra costs and additional CO2 emissions—each extra delivery

attempt increases emissions by about 15% (Gevaers et al., 2011). Moreover, the

high demand for deliveries, especially during holiday periods like Christmas, Easter,

or back-to-school season, puts a lot of pressure on couriers, who have to handle a

large number of deliveries which can also contribute to traffic congestion (Yuen et

al., 2018).

The smart locker, also known by other names such as automated locker or delivery

box, is seen as a sustainable solution for home delivery, offering an alternative to

common problems (Lemke et al., 2016). These lockers are automated, unstaffed,

and are placed in secure locations such as the ground floors of buildings or train

stations. They can be accessed with a key or an electronic code, and customers are

notified about the delivery via phone or email (Okholm et al., 2013). The smart locker

is mainly used for parcels, but it can also store food with temperature control. This

solution helps improve vehicle routes, reduces delivery costs, and minimizes issues

related to incorrect addresses or missed deliveries (Zenezini et al., 2018).

Customers appreciate the smart locker for its lower shipping costs and the

convenience it offers, and its use can reduce gas emissions by up to two-thirds

compared to traditional home delivery (Van Duin et al., 2020).

Parcel lockers are unattended collection points placed in public or private locations,

where parcels are stored temporarily until customers retrieve them using a

reference code provided with their order (Augereau and Dablanc, 2008).

The first Automated Parcel Locks (APL) were introduced in the early 2000s and

emerged to counter the logistical challenges arising from the rapid growth of online

commerce. With the help of these systems, it was possible to reduce the number of

failed deliveries, especially in cities, where recipients were often not at home when

the courier arrived. Generally, APLs have been placed in public places such as

shopping malls and transport stations, thus giving consumers the ability to collect

their parcels safely and conveniently using a unique access code at any time of the

day or night.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

320

These initial implementations brought significant improvements in delivery efficiency

and customer satisfaction. The ability to pick up packages at any time without

worrying about missed deliveries greatly changed how deliveries were handled,

especially in busy urban areas (Sawik, 2024).

2.2. Advantages and benefits associated with smart lockers

Smart lockers have really changed the way packages are delivered and picked up.

They provide great benefits for both customers and companies. These high-tech

lockers use advanced security and digital technology to offer a simple and efficient

solution to the challenges of parcel delivery.

Customers love these smart lockers because they are super convenient and

flexible. They can grab their packages at any time without having to deal with

delivery personnel directly.

■ Convenience and flexibility

Smart lockers allow customers to pick up their packages at any time, day or night,

without worrying about missing a delivery. This is particularly useful for those with

busy schedules or who are not home during regular delivery hours (Golinska-

Dawson and Sethanan, 2023).

■ Enhanced security

Smart lockers offer a safe place to store parcels, lowering the risk of theft or

damage. Customers receive a unique code to access the locker, ensuring that only

they can retrieve their package (Pitney Bowers, 2021).

■ Contactless and efficient

Since the COVID-19 pandemic, the demand for contactless delivery options has

grown. Smart lockers provide a completely contactless solution, allowing customers

to pick up their parcels without any physical interaction, making the delivery process

safer and more efficient.

Many companies have adopted smart locker systems and have seen the

advantages they offer firsthand (Gutenschwager et al., 2024).

■ Cost savings and efficiency

Smart lockers help companies reduce the costs associated with last-mile delivery

by minimizing the need for multiple delivery attempts and optimizing delivery routes.

By consolidating deliveries to a single location, logistics companies can save on fuel

and labor costs, making the process more efficient and cost-effective (Coates, 2023;

DHL, 2023).

■ Improved operational efficiency

The automation provided by smart lockers streamlines the package handling

process, reducing human error and freeing up resources. Companies can manage

a higher volume of deliveries without requiring additional staff, thus improving

operational efficiency (DHL, 2024).

■ Sustainability

Smart lockers contribute to reducing the environmental impact of deliveries by

lowering the number of delivery vehicles on the road. This reduction in traffic not

only cuts down on fuel consumption and emissions but also helps in alleviating

congestion in urban areas, aligning with the growing focus on sustainable logistics

practices (FedEx, 2023; Sawik, 2024).

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

321

Smart lockers are becoming increasingly important in modern logistics as more

companies realize their benefits. These systems make deliveries easier, cut costs,

and make customers happier. They also provide users with more flexibility and

security. By integrating smart lockers into their current logistics setup, companies

can address immediate needs and prepare for future demands. As technology

continues to advance, smart lockers will become even more essential in the supply

chain.

2.3. Disadvantages and challenges associated with smart lockers

Although smart lockers have brought efficiency, security, and convenience to

package delivery, they are not without challenges. The implementation and use of

these technologies present various difficulties for both companies and consumers.

Obstacles such as high installation costs, accessibility issues, and negative user

perceptions can hinder the adoption of automated lockers and affect user

satisfaction. To successfully implement these systems and ensure that users have

realistic expectations, it is crucial to understand and address these challenges.

■ Technical issues and complex logistics

Although automated lockers offer many advantages, there are several technological

issues that may complicate matters. These lockers are highly dependent on

technology, including network connections and software, which can occasionally

have problems. Issues such as network problems or system errors might cause

delays in receiving your items and can be rather inconvenient. Additionally, it might

be challenging to get these lockers to function properly with the current logistical

systems, and it requires constant technological maintenance and upgrades. For

companies, this means investing in specialized IT support and dealing with the

potential for technical downtime (Smiota, 2024).

■ High initial costs and maintenance

The deployment of automated lockers involves significant initial costs. The main

costs are buying, installing, and connecting the lockers with current logistics

systems. Along with the initial investment, maintenance and system upgrades are

ongoing expenses. Regular maintenance is necessary to keep the lockers working

well, which can be expensive and time-consuming. It is also important to consider

the cost of fixing or replacing damaged or outdated lockers. These high costs can

be a barrier, particularly for smaller businesses or those operating in regions with

lower adoption rates of such technology (Luis et al., 2022).

■ Limitations in accessibility and adaptability

Automated lockers are not always accessible to everyone. For instance, they may

be difficult to use for individuals with disabilities or those who are not tech-savvy

(Malyack et al., 2022). Additionally, the placement of these lockers is typically in

urban areas, which can limit their accessibility for people living in rural locations.

The one-size-fits-all approach of many locker systems also means they may not be

adaptable to the varying needs of different businesses or consumers. This lack of

flexibility can limit their effectiveness in serving a diverse customer base (DHL,

2024).

■ Negative consumer perceptions

Despite their advantages, not all consumers are comfortable with using automated

lockers (Quan et al., 2022). Some people might feel that the technology is too

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

322

complicated or inconvenient and prefer traditional delivery methods. Others might

worry about the safety of their packages, especially if the lockers are in unmonitored

areas. Additionally, if a customer has a negative experience with an automated

locker—such as difficulty retrieving a package or encountering a technical issue—it

can lead to dissatisfaction and a reluctance to use the service again. Overcoming

these negative perceptions requires companies to invest in customer education and

ensure a reliable user experience (Pitney Bowes, 2021).

As we have seen, automated lockers provide a lot of advantages, but they also have

drawbacks. Addressing these challenges is important to ensure they work well for

businesses and customers. As technology advances, new opportunities for

developing and using automated lockers are emerging.

3. Future prospects of automated lockers

The future of automated lockers is bright, with many interesting advancements

looming as technology continues to advance. The efficiency, accessibility, and

scalability of automated locker systems are anticipated to be significantly improved

by these developments, making them even more crucial to the retail and logistics

sectors.

■ Predictions for technological development

Significant technical developments in automated lockers are anticipated in the

upcoming years. Improved user interfaces that make the systems more user-friendly

for both customers and logistics operators are expected to be among these

advances, as will increased security features like biometric verification and AI-driven

predictive analytics to maximise locker utilisation.

Additionally, the integration of Internet of Things (IoT) technology will allow for real-

time tracking of parcels and better management of locker systems, ensuring higher

efficiency and reducing the risk of technical issues (Korczak and Kijewska, 2019).

Furthermore, automated lockers should become more smoothly incorporated into

urban infrastructures as smart cities expand. Better locker location and accessibility

are only one aspect of this integration; lockers will also be connected to other smart

systems, such as public transit and traffic control. This will make parcel deliveries

more efficient and contribute to the overall goal of creating smarter, more connected

cities (Coates, 2023).

■ Integration with other systems and services

Increased system and service integration is another aspect of automated lockers'

future. This can entail integrating lockers with payment processors, CRM software,

and online shopping portals. With this kind of connectivity, clients might select

particular lockers according to their preferences, get real-time information, and even

handle returns more effectively, resulting in more personalised delivery

experiences. Another area with potential expansion is integration with last-mile

delivery services like autonomous cars or drones (Openvia). By connecting

automated lockers with these innovative delivery methods, the logistics industry can

further streamline operations, reduce costs, and minimize the environmental impact

of parcel deliveries (Pitney Bowes, 2021).

■ Expansion of lockers network

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

323

Continuous innovation is vital for the future of automated lockers, particularly in

expanding their networks to rural and underserved areas (Parcel and Postal

Technology International, 2024). This could involve developing modular or mobile

lockers that can be easily relocated based on demand.

The smart parcel locker network is set to grow significantly, with the global market

expected to increase from USD 736 million in 2020 to USD 1,438 million by 2025,

driven by the rise in e-commerce and the demand for contactless delivery solutions,

according to a report by MarketsandMarkets (2023).

■ Sustainability of automated lockers

Improvements in the sustainability of automated lockers are likely to be observed in

the future. Future designs could focus on using renewable energy sources, such as

solar power, to operate lockers, further reducing their carbon footprint and aligning

with global sustainability goals (Parcel Hive, 2024).

Additionally, as e-commerce continues to grow worldwide, particularly in developing

markets, the demand for efficient last-mile delivery solutions such as automated

lockers will increase. Companies that can use and adapt these systems to local

conditions and preferences will be in a position to benefit from this growing market.

4. Conclusions and recommendations

This investigation of data on automated lockers showed several important

discoveries. Automated lockers are an invaluable resource in contemporary

logistics, providing substantial advantages, including efficiency, security, and

convenience for customers and organizations. Their capacity to optimize last-mile

delivery procedures, save operating expenses, and improve customer contentment

has established them as an important part of the logistics network. Nevertheless, in

order to guarantee the effective deployment and broad acceptance of automated

lockers, certain obstacles must be overcome. Obstacles include technical problems,

expensive startup expenses, and maintenance needs, especially for smaller

enterprises.

Furthermore, barriers to accessibility and adaptability and possible unfavourable

customer impressions highlight the necessity for continuous advancements and

innovations (Mohri et al., 2024; Jang et al., 2024).

Automated lockers have a bright future ahead of them, as technological

developments should only expand their functionality. Their continuous progress is

fuelled by their integration with other systems, like e-commerce platforms and last-

mile delivery services, or the expansion into new international markets. In order to

overcome present constraints and broaden their application, the creation of more

flexible and long-lasting locker systems will be essential (Falcone et al., 2019).

Given the rapid development of automated lockers and their increasing importance

in logistics, several areas are suitable for further research:

▪ Growing accessibility and inclusivity

Future studies should focus on developing automated locker systems that are more

accessible to a broader range of users, including those with disabilities and located

in rural areas. Research should explore how these systems can be designed and

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

324

implemented to serve populations with different needs more effectively (Ciesla,

2023).

▪ Long-term cost analysis

While the initial costs of automated lockers are known and documented, there is a

need for more detailed research into the effects of financial implications over time,

such as maintenance costs, technological upgrades and potential savings from

operational effectiveness. Such research can provide valuable insights for

businesses which are considering investing in these systems (Villa et al., 2021).

▪ Sustainability and environmental impact

As sustainability becomes a priority in logistics, studies should explore the

environmental benefits which automated lockers bring, particularly in reducing

carbon emissions and traffic congestion. Additionally, studies should investigate

ways to make these systems more efficient from the energy consumption point of

view, potentially through the use of renewable energy sources (Sawik, 2024).

▪ Consumer behaviour and adoption

Understanding consumer attitudes towards usage of automated lockers is essential

for their success. The factors that influence consumer adoption, satisfaction and

loyalty, as well as strategies for overcoming any negative perceptions should be

examined (Rosca et al., 2024).

▪ Global expansion strategies

With the expansion of automated lockers worldwide, there is a need to investigate

how these systems can be adapted to different cultural and economic contexts. This

includes studying the challenges and opportunities associated with deploying

lockers in developing markets and creating solutions to meet local needs (Dissauer

et al., 2024).

By addressing these research areas, stakeholders can ensure that automated

lockers continue to evolve in ways that maximize their benefits and minimize their

challenges, ultimately enhancing their role in the future of logistics and e-commerce.

References

1. Luís, A.F.S., Gonçalo M.C.M., Caldeira, J.M.L.P. & Soares, V.N.G. (2022) ‘Smart

Lockers: Approaches, Challenges and Opportunities’, International Journal of

Engineering and Advanced Technology, 11. doi:

https://doi.org/10.35940/ijeat.C3374.0211322.

2. Aljohani, K. (2024) ‘The Role of Last-Mile Delivery Quality and Satisfaction in

Online Retail Experience: An Empirical Analysis’, Sustainability, 16(11), 4743. doi:

https://doi.org/10.3390/su16114743.

3. Allen, J., Piecyk, M., Piotrowska, M., McLeod, F., Cherrett, T., Ghali, K., Nguyen,

T., Bektas, T., Bates, O. & Friday, A. (2018) ‘Understanding the impact of e-

commerce on last-mile light goods vehicle activity in urban areas: The case of

London’,Transportation Research Part D: Transport and Environment, 61, pp. 325-

338. doi: https://doi.org/10.1016/j.trd.2017.07.020.

4. Augereau, V. & Dablanc, L. (2008) ‘An evaluation of recent pickup point

experiments in European cities: the rise of two competing models’ Innovations in

City Logistics, pp. 301–320.

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
325 
 
 
5.  Ciesla,  M.  (2023)  ‘Perceived  Importance  and  Quality Attributes  of Automated 
Parcel  Locker  Services  in  Urban  Areas’,  Smart  Cities, 6(5),  2661-2679.  doi: 
https://doi.org/10.3390/smartcities6050120. 
6. Coates, T. (2023) The Benefits of Smart Lockers for Businesses and Customers, 
[Online], Available:  https://www.clickncollect.com/blog/smart-locker-benefits [25 Jul 
2024]. 
7. Deutsch, Y. & Golany, B. (2018)  ‘A parcel locker network as a solution to the 
logistics last mile problem’, International Journal of Production Research, 56(1-2), 
pp. 251-261. doi:  https://doi.org/10.1080/00207543.2017.1395490. 
8.  DHL,  (2023)  The  rise  of  the  smart  parcel  locker, [Online],  Available:   
https://www.dhl.com/global-en/delivered/ecommerce/the-rise-of-smart-parcel-
lockers.html [2 June 2024]. 
9.  DHL,  (2024)  Everything  you  need  to  know  about  parcel  lockers, [Online], 
Available:  https://lot.dhl.com/everything-you-need-to-know-about-parcel-lockers/ [2 
June 2024].  
10. Dissauer, M., Einspieler, B., Krauser, N., Schartner, S. & Woschank, M. (2024) 
‘Parcel  Lockers  as  a  Logistic  Concept: A  Systematic  Review  of  Implementation 
Strategies  and  Outcomes’,  Proceedings  of  the  International  Conference  on 
Industrial  Engineering  and  Operations  Management.  doi: 
https://doi.org/10.46254/AF05.20240238. 
11. Escudero-Santana, A., Munuzuri, J., Lorenzo-Espejo, A. & Munoz-Diaz, M.L. 
(2022) ‘Improving E-Commerce Distribution through Last-Mile Logistics with Multiple 
Possibilities of Deliveries Based on Time and Location’, Journal of Theoretical and 
Applied  Electronic  Commerce  Research.  17(2),  pp.  507-521.  doi: 
https://doi.org/10.3390/jtaer17020027. 
12.  Fadat,  Y.  (2023)  From  Wooden  Pins  to  Biometrics:  Fascinating  History  and 
invention  of  Mechanical  Locks,  [Online],  Available:  
https://evolutionoftheprogress.com/invention-of-mechanical-lock/ [20 Jul 2024]. 
13.  Falcone,  E.,  Kent,  J.  &  Fugate,  B.S.  (2019)  ‘Supply  chain  technologies, 
interorganizational network and firm performance: A case study of Alibaba Group 
and Cainiao’, International Journal of PhysicalDistribution & LogisticsManagement. 
doi: https://doi.org/10.1108/IJPDLM-08-2018-0306. 
14.  FedEx,  (2023)  Smart  Lockers  Are  Here  To  Stay,  [Online],  Available:    
https://fedexbusinessinsights.com/smart-lockers-are-here-to-stay/ [30 Jul 2024]. 
15. Genevieve,  G.,  Jiawen,  F., Binder,  R.B.,  Ha, J.  & Holmes, A. (2022)  ‘Travel 
Behavior  in  E-commerce:  Shopping,  Purchasing,  and  Receiving  -  A  Research 
Report from the National Center for Sustainable Transportation’, National Center for 
Sustainable Transportation. doi: https://doi.org/10.7922/G2377723. 
16. Gevaers, R., Van de Voorde, E. & Vanelslander, T. (2011) ‘Characteristics and 
typology of last-mile logistics from an innovation perspective in an urban context’, in 
Macharis,  C.,  &  Melo,  S.  (eds)  City  Distribution  and  Urban  Freight  Transport: 
Multiple  Perspectives,  Edward  Elgar  Publishing,  Cheltenham.  doi: 
https://doi.org/10.4337/9780857932754.00009. 
17.  Golinska-Dawson,  P.  &  Sethanan,  K.  (2023)  ‘Sustainable  Urban  Freight  for 
Energy-Efficient Smart Cities—Systematic Literature Review’, Energies, 16, 2617. 
doi: https://doi.org/10.3390/en16062617. 

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
326 
 
 
18. Gutenschwager, K.,  Rabe, M.  &  Chicaiza-Vaca, J.  (2024)  ‘Comparing Direct 
Deliveries  and  Automated  Parcel  Locker  Systems  with  Respect  to  Overall 
CO2 Emissions  for  the  Last  Mile’, Algorithms,  17(1):4.  doi: 
https://doi.org/10.3390/a17010004. 
19.  Jang,  S.,  Hong,  D.  &  Lee,  C.  (2024)  ‘Exploring  the  behavioral  adoption  of 
automated parcel locker systems under COVID-19’, Transport Policy, Volume 151, 
pp.1-11. doi: https://doi.org/10.1016/j.tranpol.2024.03.016.  
20.  Kizhner,  N.  (2022)  The  Evolution  of  Lockers,  [Online],  Available:  
https://www.naomikizhner.com/evolution-of-lockers/ [20 Aug 2024]. 
21. Korczak, J. & Kijewska, K. (2019) ‘Smart Logistics in the development of Smart 
Cities’,  Transportation  Research  Procedia,  39,  pp.  201-211.  doi: 
https://doi.org/10.1016/j.trpro.2019.06.022. 
22. Lemke, J., Iwan, S. & Korczak, J. (2016) ‘Usability of the parcel lockers from the 
customer  perspective-the  research  in  Polish  Cities’,  Transportation  Research 
Procedia,16, pp. 272-287. doi: https://doi.org/10.1016/j.trpro.2016.11.027.  
23.  Malyack,  C.,  Sylla,  C.  &  Egbelu,  P.  (2022)  ‘Study  of  Customer  Sentiment 
Towards  Smart  Lockers’,  in:  Ngatched,  T.M.N.,  Woungang,  I.  (eds)  Pan-African 
Artificial  Intelligence  and  Smart  Systems.  PAAISS  2021.  Lecture  Notes  of  the 
Institute  for  Computer  Sciences,  Social  Informatics  and  Telecommunications 
Engineering,  vol  405.  Springer,  Cham.  doi:    https://doi.org/10.1007/978-3-030-
93314-2_17. 
24.  MarketsandMarkets,  (2023)  Smart  Locker  Market,  [Online],  Available: 
https://www.marketsandmarkets.com/Market-Reports/smart-lockers-market-
209948292.html [18 August 2024]. 
25. Mohri, S.S., Nassir, N., Thompson, R.G. & Ghaderi, H. (2024) ‘Last-Mile logistics 
with on-premises parcel Lockers: Who are the real Beneficiaries?’, Transportation 
Research Part E: Logistics and Transportation Review, Volume 183, 103458. doi: 
https://doi.org/10.1016/j.tre.2024.103458. 
26.  Okholm,  H.  B., Thelle,  M.  H.,  Möller, A.,  Basalisco,  B.  &  Rolmer,  S.  (2013) 
Ecommerce and delivery. A Study of the State of Play of EU Parcel Markets with 
Particular  Emphasis  on  E-Commerce.  Study  for  the  European  Commission,  DG 
Internal Market and Services. 
27. Openvia, The Importance of Smart Lockers in the Future of Mobility, [Online], 
Available:  https://www.openvia.io/the-importance-of-smart-lockers-in-the-future-of-
mobility/ [10 August 2024]. 
28. Parcel and Postal Technology International, (2024) Ti Insight forecasts express 
and  small  parcel  market  growth  for  2024  of  9.2%  YoY,  [Online], 
Available:https://www.parcelandpostaltechnologyinternational.com/news/parcels/ti-
insight-forecasts-express-and-small-parcel-market-growth-for-2024-of-9-2-yoy.html 
[22 August 2024]. 
29.  Parcel  Hive,  (2024)  Smart  Parcel  Lockers:  The  Future  of  Secure  Package 
Delivery,  [Online],  Available:    https://parcelhive.net/smart-parcel-lockers-the-
future-of-secure-package-delivery/ [30 Jul 2024]. 
30. Pinchasik, D. R., Hovi, I. B. & Dong, B. (2023) ‘Replacing home deliveries by 
deliveries  to  parcel  lockers:  cost,  traffic,  emissions,  and  societal  cost  effects  of 
locker  network  expansions  in  greater  Oslo’,  International  Journal  of  Logistics 

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
327 
 
 
Research  and  Applications,  1–26.  doi: 
https://doi.org/10.1080/13675567.2023.2286006. 
31. Pitney Bowers, (2021) The benefits of  smart locker systems for businesses. 
Discover  the  benefits  of  smart  lockers  and  their  numerous  applications  for  your 
organization’s  packages  and  assets,  [Online],  Available:   
https://www.pitneybowes.com/us/blog/benefits-of-smart-locker-systems.html  [21 
Aug 2024]. 
32. Quan, N.H., Binh, N.T. & Ly, B.T. (2022) ‘Impact of smart locker use on customer 
satisfaction of online shoppers in Vietnam’, Humanit Soc Sci Commun, 9, 403. doi: 
https://doi.org/10.1057/s41599-022-01428-6. 
33. Rosca, E., Rusca, F., Rosca, M.A. & Rusca, A. (2024) ‘Performance Analysis of 
Automated Parcel Lockers in Urban Delivery: Combined Agent-Based–Monte Carlo 
Simulation  Approach’,  Logistics,  8(2),  61.  doi: 
https://doi.org/10.3390/logistics8020061. 
34. Sawik, B. (2024) ‘Optimizing Last-Mile Delivery: A Multi-Criteria Approach with 
Automated  Smart  Lockers,  Capillary  Distribution  and 
Crowdshipping’, Logistics,8(2):52. doi: https://doi.org/10.3390/logistics8020052. 
35. Smiota, (2024) Tackling Last-mile Delivery Failures with Smart Storage Lockers, 
[Online],  Available:   https://smiota.com/resources/tackling-last-mile-delivery-
failures-with-smart-storage-
lockers/#:~:text=Smart%20lockers%20streamline%20the%20delivery,lower%20co
sts%20for%20logistics%20companies [22 August 2024]. 
36. Van Duin, J. H. R., Wiegmans, B. W., van Arem, B. & van Amstel, Y. (2020) 
‘From home delivery to parcel lockers: A case study in Amsterdam’, Transportation 
Research Procedia, 46, pp. 37-44. doi: https://doi.org/10.1016/j.trpro.2020.03.161  
37. Villa, R. & Monzon, A. (2021) ‘A Metro-Based System as Sustainable Alternative 
for  Urban  Logistics  in  the  Era  of  E-Commerce’,  Sustainability,  13(8),  4479.  doi: 
https://doi.org/10.3390/su13084479. 
38. Visser, J., Nemoto, T. & Browne, M. (2014) ‘Home delivery and the impacts on 
urban freight transport: A review’, Procedia - Social and Behavioral Sciences, 125, 
pp.15-27. doi: https://doi.org/10.1016/j.sbspro.2014.01.1452. 
39. Yuen, K. F., Wang, X., Ng, L. T. W. & Wong, Y. D. (2018) ‘An investigation of 
customers’ intention to use self-collection services for last-mile delivery’, Transport 
Policy, 66, pp.1-8. doi: https://doi.org/10.1016/j.tranpol.2018.03.001.  
40.  Zenezini,  G.,  Lagorio, A.,  Pinto,  R.,  De  Marco, A.  &  Golini,  R.  (2018)  ‘The 
collection-and-delivery points implementation process from the courier, express and 
parcel  operator’s  perspective’,  IFAC-PapersOnLine,  51(11),  pp.  594-599.  doi: 
https://doi.org/10.1016/j.ifacol.2018.08.383. 
 
 
   

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

328

CRISIS MANAGEMENT IN EDUCATION - CHALLENGES AND

STRATEGIES FOR SCHOOL LEADERS IN TURBULENT TIMES

Sofy AMNONY1, Nicolae BIBU2, Maria-Madela ABRUDAN3

1,2,3Doctoral School of Economics and Business Administration, Faculty of

Economics and Business Administration, West University of Timisoara, Timisoara,

Romania

3Management-Marketing Department, Faculty of Economics, University of Oradea,

Oradea, Romania

sofyam100@gmail.com

nicolae.bibu@e-uvt.ro

madelaabrudan@gmail.com

Abstract: This study synthesize the critical role of crisis management in educational

settings, focusing on the challenges faced by school leaders during unprecedented

crises such as the COVID-19 pandemic and violent conflicts. Through a systematic

review of recent literature (2020-2023) and synthesis of empirical findings, this

research explores key concepts in crisis management, identifies major challenges,

and discusses effective strategies for school principals to navigate these turbulent

times. The study employs a theoretical framework based on organizational

resilience and adaptive leadership to analyze the complexities of educational crisis

management. Findings highlight the importance of adaptability, emotional support,

technological integration, and professional development in maintaining educational

continuity and fostering resilience within school communities. Implications for

educational policy, leadership training, and future research directions are discussed.

Keywords: crisis management; educational leadership; organizational resilience;

COVID-19; school administration

JEL Classification: I21, J53

1. Introduction

The global education sector has recently faced unprecedented challenges, from the

global COVID-19 pandemic to violent conflicts such as the war that erupted in Israel

on October 7, 2023, placing extraordinary demands on school leaders. These crises

have necessitated rapid adaptations to ensure educational continuity while

safeguarding the well-being of students and staff.

Recent studies have emphasized the significance of distributed leadership in crisis

management, demonstrating how shared responsibility can enhance organizational

adaptability and response efficacy (Harris & Jones, 2020). Moreover, the integration

of digital technologies has been shown to play a crucial role in maintaining

educational continuity during crises, with research indicating improved student

engagement and learning outcomes when implemented effectively (Hodges et al.,

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

329

2022). The psychological impact of crises on both educators and students has

gained increased attention, with studies highlighting the need for comprehensive

mental health support systems within educational institutions (Pollock, 2020).

Furthermore, the development of crisis-specific competencies among school

leaders has emerged as a critical factor in successful crisis management, as

evidenced by recent empirical investigations (Netolicky, 2021). Lastly, the

importance of community engagement and stakeholder communication during

crises has been underscored by multiple studies, emphasizing the role of

transparent and timely information dissemination in building trust and resilience

(Leithwood et al., 2023).

This study aims to critically examine the concept of crisis management in education,

exploring the unique challenges faced by school principals and identifying effective

strategies for navigating these turbulent times.

The research questions guiding this study are:

1. What are the key challenges faced by school leaders in managing educational

crises?

2. What strategies have been found effective in maintaining educational continuity

and organizational resilience during crises?

3. How can the concepts of organizational resilience and adaptive leadership inform

crisis management practices in educational settings?

By addressing these questions through a comprehensive review and synthesis of

recent research, this study contributes to the growing body of literature on

educational leadership during crises and provides practical insights for school

administrators and policymakers.

2. Definition of Crisis Management

Crisis management in the educational context is defined as the ability of an

organization or leader to identify, respond to, and recover from crises effectively. In

schools, this involves the capacity of principals to maintain educational functions

while dealing with unforeseen challenges (Fernandez & Shaw, 2020).

2.2.1 Organizational Resilience

A crucial concept in crisis management is organizational resilience, which refers to

an organization's ability to prepare for, respond to, and adapt to sudden changes

and disruptions while maintaining continuous operations and thriving over time. In

schools, this resilience is manifested in the ability to maintain learning continuity and

support for students even under challenging conditions (Duchek, 2020).

2.2.2 Theoretical Framework

This study is grounded in two primary theoretical constructs: organizational

resilience (Duchek, 2020) and adaptive leadership (Heifetz et al., 2009).

Organizational resilience refers to an institution's capacity to prepare for, respond

to, and adapt to disruptive events while maintaining core functions. In the

educational context, this translates to a school's ability to ensure learning continuity

and student support despite challenging circumstances.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

330

Adaptive leadership, as conceptualized by Heifetz et al. (2009), emphasizes the

importance of leaders' ability to mobilize people to tackle tough challenges and

thrive. This framework is particularly relevant in crisis situations where traditional

leadership approaches may be insufficient.

Recent studies have emphasized the significance of distributed leadership in crisis

management, demonstrating how shared responsibility can enhance organizational

adaptability and response efficacy (Harris & Jones, 2020). Moreover, the integration

of digital technologies has been shown to play a crucial role in maintaining

educational continuity during crises, with research indicating improved student

engagement and learning outcomes when implemented effectively (Hodges et al.,

2022).

3. Methodology

This study employed a systematic literature review methodology. The search was

conducted using academic databases including ERIC, Google Scholar, and Web of

Science, focusing on peer-reviewed articles published between 2020 and 2023.

Search terms included combinations of "crisis management," "educational

leadership," "school administration," "COVID-19," and "organizational resilience."

Initial searches yielded 387 articles, which were screened for relevance based on

title and abstract. After removing duplicates and applying inclusion criteria (focus on

K-12 education, empirical studies or comprehensive reviews), 78 articles were

selected for full-text review. The final analysis included 35 articles that directly

addressed the research questions.

4. Results

4.1 Key Challenges in Educational Crisis Management

The analysis revealed four primary challenges faced by school leaders during

crises: Maintaining Learning Continuity: School principals struggled with ensuring

equitable access to technology, adapting teaching methods to digital environments,

and maintaining student engagement during remote learning (Reimers &

Schleicher, 2020; Hodges et al., 2020).

Providing Emotional and Social Support: Crises significantly impacted the mental

well-being of students and staff, requiring comprehensive support systems despite

limited resources (Levin et al., 2023; Masten & Motti-Stefanidi, 2020).

Managing Resources and Budgets: Schools faced budget cuts and the need to

reallocate resources, requiring difficult decisions balancing short-term needs with

long-term planning (Cohen et al., 2021).

Ensuring Physical and Psychological Safety: Particularly in contexts of violent

conflict, ensuring the safety of the school community emerged as a critical challenge

(Cohen et al., 2023).

4.2 Effective Strategies for Crisis Management

The literature highlighted several effective strategies employed by school leaders:

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

331

Flexible and Creative Curriculum Planning: Schools that quickly adapted curricula

to digital formats and incorporated hybrid learning maintained higher levels of

student engagement (Zhao & Watterston, 2021).

Enhanced Communication: Transparent, frequent, and open communication with all

stakeholders was critical in building trust and reducing anxiety (Huber & Helm,

2020).

Accelerated Professional Development: Rapid training in crisis-adapted teaching

methods and technologies improved teaching quality and adaptability (Darling-

Hammond & Hyler, 2020).

Comprehensive Emotional-Social Support Systems: Integration of online

counseling, virtual support groups, and well-being activities into the curriculum

supported mental resilience (Masten & Motti-Stefanidi, 2020).

Community Collaborations: Partnerships with local organizations expanded

available resources and support networks (Azorín et al., 2021).

Innovative Assessment Approaches: Adoption of flexible, personalized assessment

methods focused on skills relevant to the changing reality (Zhao, 2020).

4.3 Technological Integration and Information Management

The effective use of technology emerged as a crucial factor in crisis management.

Schools that rapidly adopted digital platforms and advanced information

management systems showed improved communication, resource management,

and decision-making capabilities (Williamson et al., 2020).

4.4 Professional Development for Crisis Leadership

The need for specialized training in crisis management skills for school leaders was

consistently emphasized. This included developing capabilities in decision-making

under uncertainty, managing rapid changes, and emotional leadership (Harris &

Jones, 2020; Netolicky, 2020).

5. Discussion

The findings of this study underscore the complex and multifaceted nature of crisis

management in educational settings. The challenges identified align with the

concept of organizational resilience (Duchek, 2020), highlighting the need for

schools to develop capacities for anticipation, coping, and adaptation in the face of

crises.

The effective strategies employed by school leaders demonstrate key aspects of

adaptive leadership (Heifetz et al., 2009). Successful principals showed an ability to

mobilize their communities, adapt quickly to changing circumstances, and foster

innovation in teaching and learning approaches.

The importance of technology in crisis management aligns with broader trends in

educational innovation but also raises concerns about equity and access. The digital

gap emerged as a significant challenge, potentially exacerbating existing

educational inequalities.

The psychological impact of crises on both educators and students has gained

increased attention, with studies highlighting the need for comprehensive mental

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

332

health support systems within educational institutions (Pollock, 2020). Furthermore,

the development of crisis-specific competencies among school leaders has

emerged as a critical factor in successful crisis management, as evidenced by

recent empirical investigations (Netolicky, 2021).

6. Implications and Future Directions

6.1 General Implications

The findings suggest a need for improvment several areas:

Investment in technological infrastructure to reduce the digital gap and support

remote learning capabilities.

Integration of crisis management and resilience-building into school leadership

training programs.

Development of flexible regulatory frameworks that allow schools to adapt quickly

in crisis situations while maintaining accountability.

6.2 Practical Implications for School Leaders

School leaders should focus on:

Developing comprehensive crisis management plans that address both operational

and emotional aspects of school functioning.

Fostering a culture of adaptability and innovation within their school communities.

Building strong community partnerships to expand available resources and support

networks.

Prioritizing ongoing professional development in crisis management and adaptive

leadership skills.

6.3 Future Research Directions

Future research should explore:

Long-term impacts of crisis management strategies on student outcomes and

school effectiveness.

Cross-cultural comparisons of crisis management approaches in different

educational systems.

The role of distributed leadership in enhancing organizational resilience during

crises.

Development and validation of assessment tools for measuring school resilience

and crisis management capabilities.

7. Conclusions

This study provides a comprehensive overview of crisis management in educational

settings, highlighting the complex challenges faced by school leaders and the

strategies that have proven effective in navigating these challenges. By framing

these findings within the theoretical constructs of organizational resilience and

adaptive leadership, we contribute to a deeper understanding of effective

educational leadership during crises.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

333

The ability of school leaders to adapt quickly, foster resilience, and maintain a focus

on both academic continuity and community well-being emerges as crucial for

successful crisis management. As the educational landscape continues to face

unpredictable challenges, the insights from this study can inform policy, practice,

and future research to better prepare school systems for managing crises

effectively.

Lastly, the importance of community engagement and stakeholder communication

during crises has been underscored by multiple studies, emphasizing the role of

transparent and timely information dissemination in building trust and resilience

(Leithwood et al., 2023). This holistic approach to crisis management, incorporating

technological innovation, emotional support, and community engagement, provides

a robust framework for educational leaders to navigate future challenges and ensure

the resilience of their institutions.

8. Acknowledgments

I would like to thank my supervisor Professor Maria-Madela Abrudan, Professor

Nicolae Bibu, for the support and help with the research, as well as my dear family.

References

1.Azorín, C., Harris, A., & Jones, M. (2021). Taking a distributed perspective on

leading professional learning networks. School Leadership & Management, 41(4-

5), 384-403.

2.Cohen, E., Oren, L., & Hollander-Schwartz, J. (2021). Leadership and crisis

management: Lessons from the COVID-19 pandemic. Journal of Public Affairs,

21(4), e2310.

3.Cohen, E., Hollander-Schwartz, J., & Oren, L. (2023). Leading schools during

violent conflicts: Perspectives from Israeli principals. Educational Management

Administration & Leadership, 51(2), 277-294.

4.Darling-Hammond, L., & Hyler, M. E. (2020). Preparing educators for the time of

COVID … and beyond. European Journal of Teacher Education, 43(4), 457-465.

5.Duchek, S. (2020). Organizational resilience: a capability-based

conceptualization. Business Research, 13(1), 215-246.

6.Fernandez, A. A., & Shaw, G. P. (2020). Academic leadership in a time of crisis:

The coronavirus and COVID‐19. Journal of Leadership Studies, 14(1), 39-45.

7.Harris, A., & Jones, M. (2020). COVID 19 – school leadership in disruptive times.

School Leadership & Management, 40(4), 243-247.

8.Heifetz, R., Grashow, A., & Linsky, M. (2009). The practice of adaptive leadership:

Tools and tactics for changing your organization and the world. Harvard Business

Press.

9.Hodges, C., Moore, S., Lockee, B., Trust, T., & Bond, A. (2022). The difference

between emergency remote teaching and online learning. Educause Review, 27, 1-

12.

10.Huber, S. G., & Helm, C. (2020). COVID-19 and schooling: evaluation,

assessment and accountability in times of crises—reacting quickly to explore key

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

334

issues for policy, practice and research with the school barometer. Educational

Assessment, Evaluation and Accountability, 32(2), 237-270.

11.Leithwood, K., Sun, J., & Schumacker, R. (2023). How school leaders contribute

to student success: The four paths framework. Springer.

12.Levin, S., Fullan, M., & Lieberman, A. (2023). Leading schools through crisis:

Lessons from COVID-19 and beyond. Corwin Press.

13.Masten, A. S., & Motti-Stefanidi, F. (2020). Multisystem resilience for children

and youth in disaster: Reflections in the context of COVID-19. Adversity and

Resilience Science, 1(2), 95-106.

14.Moher, D., Liberati, A., Tetzlaff, J., & Altman, D. G. (2009). Preferred reporting

items for systematic reviews and meta-analyses: the PRISMA statement. Annals of

Internal Medicine, 151(4), 264-269.

15.Netolicky, D. M. (2020). School leadership during a pandemic: navigating

tensions. Journal of Professional Capital and Community, 5(3/4), 391-395.

16.Netolicky, D. M. (2021). Transformational professional learning: Making a

difference in schools. Routledge.

17.Pollock, K. (2020). School leaders' work during the COVID-19 pandemic: A two-

pronged approach. International Studies in Educational Administration, 48(3), 38-

44.

18.Reimers, F. M., & Schleicher, A. (2020). A framework to guide an education

response to the COVID-19 Pandemic of 2020. OECD.

19.Williamson, B., Eynon, R., & Potter, J. (2020). Pandemic politics, pedagogies

and practices: digital technologies and distance education during the coronavirus

emergency. Learning, Media and Technology, 45(2), 107-114.

20.Zhao, Y. (2020). COVID-19 as a catalyst for educational change. Prospects,

49(1), 29-33.

21.Zhao, Y., & Watterston, J. (2021). The changes we need: Education post COVID-

19. Journal of Educational Change, 22(1), 3-12.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

335

LEADERSHIP SUCCESSION

Ivett STUMPF-TAMÁS, Marianna MÓRÉ

University of Debrecen, Faculty of Health Sciences, Institute of Social Sciences,

Department of Gerontology, Nyíregyháza, Hungary

stumpf-tamas.ivett@etk.unideb.hu

more.mariann@etk.unideb.hu

Abstract: The issue of management succession is becoming increasingly important

in modern organisations, particularly in the context of globalisation, rapidly changing

markets and the challenges of the labour market. Succession is not only about filling

management positions, but also about ensuring the long-term survival and success

of the organisation. Succession planning and implementation needs to take into

account a number of factors, such as identifying current and future leadership skills,

developing potential successors, and maintaining organisational culture and

strategic objectives. The process of successful leadership succession involves

selecting the right candidates who not only have the necessary technical and

management skills, but are also capable of addressing the future challenges of the

organisation. To do this, organisations need to proactively identify and develop

talent by providing long-term mentoring programmes and training for future leaders.

A key element of succession planning is the retention and transfer of organisational

knowledge, based on collaboration between experienced leaders and newly

appointed leaders. Such processes allow the organisation to run smoothly during

leadership transitions, minimising potential disruption and preserving continuity of

organisational culture. In addition, succession planning can also serve as a strategic

tool for the organisation, providing an opportunity to rethink and optimise

organisational structure and processes. This can ensure not only the smooth filling

of management positions, but also the long-term growth and competitiveness of the

organisation. Succession is therefore not a simple task, but a complex, multi-

dimensional process that requires careful planning and implementation to sustain

organisational success. In my future research, I would like to examine the

succession of managers in Hungarian organisations working with older people. I am

interested in the extent to which this is a problem for the organisation and whether

the candidates will be drawn from the former members or whether an outsider will

fill the post. I am also concerned about the reasons for the difficulty of succession.

Keywords: leadership, succession, generations

JEL Classification: Z13 (other special topics, Economic Sociology; Economic

Anthropology; Language; Social and Economic Stratification)

1. Introduction

Managers of companies, family businesses and organisations have to make

decisions on an ongoing basis during their time as a manager. Some of these

decisions have a less decisive impact on later life, but others affect the life of the

whole organisation. Leadership succession is a strategic process by which an

organisation ensures continuity and stability of leadership positions. This process is

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

336

not only about appointing a new leader, but also about shaping the future of the

organisation, as appropriate succession can have a significant impact on the

performance and culture of the organisation. Through succession planning,

companies can prepare for the unexpected in advance, minimising disruption from

transition, while ensuring that the new leader has the competencies and strategies

needed to ensure the continued success of the organisation. Succession planning

therefore focuses not only on filling the position, but also on preparing for future

leadership challenges.

2. The succession

According to Gasson and Errington (1999), succession is the transfer of managerial

control over the use of assets.

In every family business, there comes a time when the current leader is forced to

hand over the organisation/business to his or her successor, because the current

leader is tired, needs to rest or is forced to do so for health reasons. Succession is

the process of transferring control and ownership of a business/organisation to the

next generation. It is stressful for the financial and legal aspects of the organisation,

but also involves emotional, psychological and social factors (Konczosné

Szombathelyi - Kézai, 2018).

Choosing the right successor is not an easy task, so the following questions and

considerations should be taken into account:

- Are you committed to the mission of your company/organisation?

- Is he/she capable of good judgment and independent thinking?

- Does he or she have the leadership skills to motivate effectively and to take tough

decisions?

- Do you have the skills to help the company/organisation move forward (Leach,

2007)?

Succession is a process that is a fundamental part of life. People often make sure

that their heritage and knowledge is passed on to the next generation. This can be

through family transmission, education, mentoring or any other form of transmission.

Succession contributes to social development and continuity of identity, while also

providing opportunities for new ideas and perspectives. The importance of

leadership succession is paramount for the long-term success of an organisation.

This process is not only about who takes over the leadership role after a leader's

departure or retirement, but also ensures the continuity and stability of the

organisation through the selection and preparation of the right person.

3. Models of succession

A change of leader is not a single event, but a process in which the future leader

does not take over the company or organisation overnight, but through a multi-step

process. There are two theoretical approaches to understanding the succession

process. One is the life-cycle model, the other is the stage and continuum model.

The two models interpret the process of succession differently, while the latter

model interprets succession as a periodic iterative process, the former tries to

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

337

interpret the life of the leader in an organization along different factors (Bogdány,

2019)

According to Handler (1989), the intermittent and continuous model is appropriate

for small organisations, and can be used to measure the state of management

handover. This model is also called the 'dance of succession'. It can be divided into

two phases, before and after the arrival of the successor. In the first phase, the

predecessor appears as the sole manager, with the main activity being the

performance of basic and initial management tasks. In this phase, the organisation

does not yet think about succession and the role of the successor does not yet

appear. In the next phase, the predecessor assumes a dominant role, which means

a pre-eminent power over the organisation, aimed at maintaining its viability. At this

stage, the successor is already present as a facilitator. He or she learns the

functioning of the organisation and performs functional tasks. The most critical point

in the handover is when the predecessor takes on the role of the transferor, thus

passing on responsibility to his successor, who takes over the management of the

firm as manager. This process depends on mutual trust and can take a long time.

In the last stage, the predecessor is present as a board member, acting in an

advisory role, but is not actively involved in the running of the business. Succession

is completed by the transfer of ownership.

Researchers on life-cycle models have observed various obstacles, such as

unprofessional management and intergenerational rivalry. They see family and

business as two partially overlapping systems, each with its own set of values,

norms, rules and organisational structure.

Gersick et al. (1997) developed a three-circuit model of family business along the

lines of previous research, which characterizes family businesses as having three

overlapping but distinct subsystems. The three subsystems are: family, business,

and ownership. Three dimensions of development are attached to each of the three

subsystems.

Family development starts with young business development in parallel with

business development and ends with the passing of the baton, ownership

development starts with the owner-controlled phase and ends with the cousin

consortium, while business development starts with start-up and continues until the

maturity phase. In the beginning, ownership is one-man, with no other owner, if any,

taking an active role in the management of the company. In the final stage, the

ownership of the business is extended to the extended family and the structure

includes both employee and non-employee owners. The family's development is

parallel, with the older generation at the beginning being under 40 and the younger

generation, i.e. children, still very young. At this stage, the main goal is to enable

the owner to create a business that is suitable for managing work, marriage and

raising children. The last stage is about passing on the baton, the older generation

being over 60. In this phase, the main objective is to let go of the company and the

transfer of family management takes place. Business development is characterised

by a start-up phase, an informal business structure with the owner-manager at the

centre. In the final stage, strategic re-focus is the main objective, stability is

supported by an organisational structure, this is the maturity stage. (Gersick, et al.,

1997)

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

338

4.Leadership succession issues and strategy

The succession situation needs to be analysed in detail and comprehensively, and

then it is worth formulating a succession strategy that defines the desired outcome

and the path to achieve it. There are three ways of writing the succession strategy:

the owner alone, with some legal assistance; the owner, with the help of his family,

defines and develops the succession strategy; professional helpers (lawyer, banker,

accountant) are used to define the strategy (Bálint, 2004).

According to Kovács (2020b), successful generational change requires a serious

planning process, and the family, among others, plays an important role in this

process. Few businesses or firms have a specific succession strategy or plan,

despite the fact that the importance of planning is widely recognised. This is the

case for first-generation businesses, while second- and third-generation businesses

are already paying a lot of attention to succession planning.

According to Warren Boeker and Jerry Goodstein, internal succession is less

disruptive and better at maintaining balance than external succession. In the latter

case, the new manager may replace existing employees and hire new ones,

creating internal disruption (Boeker-Goodstein, 1993).

Empirical studies of the effects of managerial succession on organisational and

strategic change have emphasised the important role of managerial succession in

overcoming inertia and changing organisational strategy (Boeker, 1997).

5.Generational change in family businesses

Bogáth (2016) examined the succession and generational change of family

businesses. A particular type of leadership change in family businesses is

generational change, in which the parent usually passes the management of the

firm or business to the child. This is usually a process that can last for decades,

because the successor, i.e. the child, is constantly involved in the life of the

business, being given age-appropriate tasks. A possible process could be the

following:

1. Pre-entrepreneurial phase: the child (offspring) is still young, around 2-5 years

old, and is getting to know the environment through play, a kind of playground.

2. Introductory phase: the child is around 6-14 years old. It is at this stage that he or

she becomes familiar with the enterprise.

3. Introductory activity phase: around 14 to 20 years old, at this stage you can

entrust some tasks to your successor. The successor can be around 14 to 14 years

old. The primary activity in this phase is learning. The role to be played in the family

business plays an important role in the choice of the direction of further education.

4. Operational phase: The successor is already working full-time in the company,

but not yet in a managerial position, and is aged between 18 and 30. In this phase,

he/she is getting to know the different jobs.

5. Advanced operational phase: not yet an executive, working in a managerial

position in the company. Approximately 25-35 years old.

6. Early succession phase: the successor takes up a director position.

Approximately 35-45 years old. The predecessor often takes on the actual

management role, but does not yet retire.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

339

7. Mature succession phase: the successor becomes the actual manager of the

company. The predecessor withdraws from company affairs completely.

According to Tobak et al (2018), the existence of a supportive environment is crucial

for the success of generational change, and it is therefore recommended to put the

values of the economy in writing to avoid disputes later. The process of generational

change can be divided into two phases, which are the issues concerning the

predecessor and the successor. It is essential that both parties are prepared for the

succession process by being aware of the appropriate steps to take. Engagement

is of paramount importance in the process of preparing the successor. It is the

responsibility of the predecessor to set clear expectations of the successor, which

includes continuously developing the successor's skills and encouraging the

successor to take ownership by listening to and supporting his or her ideas. Planning

is the most important part of the predecessor's job, the first step of which is to plan

the financial side of his or her retirement, which can be a financial support for the

predecessor's retirement. Then the next step is to plan for the ownership side of the

retirement, where the most important issue is whether or not ownership will be

transferred, or whether it will be partial or full, if the predecessor decides to transfer.

On this question, it is worthwhile to seek the opinion of an expert for the

predecessor.

6. Research and theories on succession

According to Bogáth (2019), a prominent feature of family business succession is

that it is passed from parent to child, even across generations. In Hungary, the

change of regime provided the opportunity for the emergence of family businesses,

whose managers are nowadays reaching retirement age.

According to Kása et al (2018), in family businesses where succession is an issue

in the next 10 years or may have already taken place in the last 5 years, 26% of the

businesses surveyed are most likely to transfer leadership within the family, while

55% choose the next leader entirely from within the family, but 12.8% plan to

transfer some or all of the leadership to an external leader. Nevertheless, even if

the third option is chosen by the previous manager, it does not mean that the family

character and characteristics of the business will be lost, as ownership can be

retained.

Krankovits et al. (2020) report that family businesses face issues during the

succession process, such as guarantees, asset sharing, management and

ownership interest, risk and strategy, among others. Generational change requires

the application of management techniques that they did not need before, and it is

not necessarily certain that they have the knowledge to do so.

According to Konczosné and Kézai (2018), succession is a process, not an event,

which can be understood as the transfer of ownership and control from one

generation to another. This includes social, psychological and emotional factors in

addition to financial and legal factors.

Katalin Kovács Éva (2020a) argues that generational change is an important risk

factor for family farms. She investigated the role of the older generation in the

process of generational change. According to Kovács, the young generation is

demotivated by the older generation's insistence on control and ownership, and the

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

340

young generation's willingness to take risks and to take advantage of development

opportunities is greatly limited.

Kovács et al (2021) studied family farms in Karcag from the perspective of

generational pressures. According to them, family farms are endangered due to a

lack of communication, which is reflected in the fact that the family does not discuss

succession issues among themselves because the predecessor thinks it is clear

that his successor will continue the activity he started.

Sebestyén (2022) writes that a particular situation in terms of generational change

is when the ancestor (father) of the older generation and the offspring (son) of the

younger generation work within the framework of a single enterprise. In this case,

the issue of succession is constantly at the forefront of the young farmer's mind.

7.Conclusions

The role of the leader is of paramount importance in the life of an organisation. In

many cases, he or she is identified with the organisation and is the 'face' of the

organisation. The issue of succession is also important in the life of an organisation

because it influences the future life of the organisation, the direction it takes and the

goals it sets. It is essential to plan for succession, because it makes it easier for

family businesses to be handed over, and for predecessors to pass the baton to the

younger generation with greater peace of mind.

However, the issue of leadership succession is not only a huge decision or cardinal

change for family businesses, but it is also worth exploring how succession is

shaping the future goals and survival of the organisation in retirement organisations.

References:

Bálint, Á. (2004): Hogyan tovább kis-és középvállalkozások? - stratégiai

lehetőségek az utódlás folyamatában. Vezetéstudomány, 35 (különszám), 67-72.

Boeker, W. (1997): Strategic change: The influence of managerial characteristics

and organizational growth. Academy of Management Journal, 40(1), 152.

doi:10.2307/257024

Boeker, W., & Goodstein, J. (1993): Performance and successor choice: The

moderating effects of governance and ownership. Academy of Management

Journal, 36(1), 172-186. doi:10.5465/256517

Bogáth, Á. (2016): Utódlástervezés családi vállalkozásoknál. Vállalkozásfejlesztés

a XXI. században VI.: Tanulmánykötet, Óbudai Egyetem, Budapest, 21-28.

Bogáth, Á. (2019): Családi vállalkozások utódlástervezése és a kontrollinghasználat

kapcsolata-empirikustapasztalatok. Gazdálkodás, 63(5).

Bogdány, E., Szépfalvi, A., & Balogh, Á. (2019): Hogyan tovább családi

vállalkozások? Családi vállalkozások utódlási jellemzői és nehézségei.

Vezetéstudomány, 50(2), 72-85. doi:10.14267/VEZTUD.2019.02.06

Gersick, K. E. - Davis, J. A. - McCollom Hampton, M. - Lansberg, I. (1997):

Generation to generation: Life cycles of the family business. Boston: Harvard

Business School Press, p. 2-31, 70-71

Handler, W. C. (1989): Methodological issues and considerations in studying family

businesses. Family Business Review, 2/3, p. 257-276

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

341

Kása, R. ‒ Radácsi, L. ‒ Timár, G. ‒ Zsigmond, Sz. (2018): Családi vállalkozások

mentorálása. Working Paper Series 5-2018, BGE Budapest Lab

Konczosné Szombathelyi, M., & Kézai, P. K. (2018): Családi vállalkozások–

generációk és dilemmák. Prosperitas, 2018(3), 49-76.

Kovács, É. K. (2020a): Az idősebb korosztály szerepe a családi gazdaságok

generációváltásában. Magyar Gerontológia. (12), 39, 2-13.

Kovács, É. K. (2020b): A generációváltás megtervezettsége és a családi

gazdaságok jövőképe közötti összefüggések. Economica, 11(3-4).

Kovács, É. K. – Pető, K. (2021): A generációváltás okozta nyomás az utódokon a

karcagi családi gazdaságokban. Régiókutatás Szemle. (4), 2., 69-81.

https://doi.org/10.30716/RSZ/21/2/7

Krankovits, M., Gyimesi, Á., & Szombathelyi, M. (2020): Családi vállalkozások

generációváltása, mint komplex probléma–Oktatási szempontból= Change of

Generations in Hungarian Family Businesses as a Complex Problem–From

Educational Point of View. Multidiszciplináris kihívások sokszínű válaszok, (1), 71-

89.

Sebestyén, Á. (2022): Esettanulmány az utódlás székelyföldi sajátosságairól: fiatal

gazdák szerepe a családi farmgazdaságokban. Észak-magyarországi stratégiai

füzetek, 19(2), 110-119.

Tobak, J., Nábrádi, A., Nagy, A. Sz. (2018): Sikeres nemzetközi és hazai családi

vállalkozások. International Journal of Engineering and Management Sciences

/Műszaki és menedzsment tudományi közlemények 3(3), 280-287.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

342

CONSUMER ATTITUDES TOWARD ARTIFICIAL INTELLIGENCE:

A COMPARATIVE ANALYSIS OF MEASUREMENT SCALES

Kata HORVATH

Marketing and Tourism Institute, Faculty of Economics, University of Miskolc,

Miskolc, Hungary

kata.horvath@uni-miskolc.hu

Abstract: The economic significance of artificial intelligence (AI) is rapidly

increasing, influencing industries, employment, and consumer behaviour all around

the globe. As AI applications become increasingly apparent and tangible in our daily

lives, understanding consumer attitudes toward AI has become essential for

businesses and policymakers aiming to drive adoption and trust in such

technologies. This paper firstly explores the economic relevance of AI by highlighting

its impact on various fields and its role in driving economic growth. A critical aspect

of harnessing the full economic potential of AI lies in the accurate measurement of

consumer attitudes, as public perception influences the adoption of technology,

hence its final market success. Accurate insights into public attitudes are also key to

shaping policies that ensure ethical AI integration, fostering a balanced approach

between innovation and societal concerns. Beyond adoption, understanding

attitudes helps identify potential barriers which could hinder the widespread

acceptance of AI systems. This paper then proceeds to providing a critical overview

of the different scales developed for assessing consumer attitudes towards AI.

These scales have been established in varied contexts, from evaluating general

perceptions to measuring attitudes toward specific AI applications. The review

underscores the importance of ensuring adaptability and context-specific relevance

when selecting or designing these tools. Comparisons between scales reveal distinct

advantages and disadvantages in relation to reliability, robustness, contextual

limitations or scope. Finally, this paper aims to provide perspectives for selecting the

right AI attitude scale, emphasizing different methodological considerations. These

insights aim to guide researchers and practitioners in effectively measuring

consumer attitudes, contributing to more informed decisions in AI based innovative

processes.

Keywords: artificial intelligence; attitude; scale development; consumer behaviour

JEL classification: C10; D11; O33

1. General Introduction

Artificial intelligence (AI) is a field of computer science that focuses on developing

systems capable of performing tasks that would normally require human intelligence,

like learning, reasoning, problem-solving, perception, and language comprehension

(Lexcellent, 2019; Zhang et al., 2021).

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

343

The popularity of the technology has experienced significant fluctuations since its

early introduction in the 1950s (Grabowski, 2024). However, it seems that in the last

decade AI is gaining consequential public and academic interest, mostly fuelled by

the emergence of generative AI (Duan, Edwards and Dwivedi, 2019).

1.1. Economic Relevance of AI

The economic relevance of artificial intelligence is versatile and fundamental as it

levies an immense impact on different aspects of economic growth and development

by enhancing productivity and operational efficiency (Lukianenko and Simakhova,

2024), promoting significant transformations in various industries and their traditional

structures (Wang et al., 2024), and shifting the balance of global economic power,

allowing new markets to exceed developed ones (Yu and Carroll, 2023). AI drives

economic growth through several mechanisms, which include intelligent penetration

of various sectors and boundary extension, knowledge creation and self-

enhancement, as well as technological innovation efficiency improvement (Zuo,

2023). Nevertheless, from the point of society and consumers, the fact that AI is

reshaping the labour market, parallelly taking and creating jobs, can be of the highest

importance (Lukianenko and Simakhova, 2024).

1.2. Attitudes Towards AI

Understanding and quantifying consumer attitudes towards AI is critical for several

reasons. First, consumer attitudes towards AI significantly impact their purchase

intentions, as well as their acceptance of technology, which in the end affects general

market success (Piskóti, Nagy and Molnár, 2013; Liang, Lee and Workman, 2020).

Measuring attitude also allows us to understand the different dimensions and layers

of consumer behaviour, their decisions and motivations, not to mention addressing

cultural and personality-related differences or certain ethical issues (Bartha and

Molnár, 2016; Park, Woo and Kim, 2024).

2. AI Attitude Scales and their Critical Evaluation

To measure consumer attitudes towards AI, several scales have been developed

and proposed by researchers. These all provide a comprehensive tool for assessing

different dimensions of attitude. Each scale has their own strengths and

weaknesses, which is detailed in the followings, along with a short description of their

general approach.

2.1. Artificial Intelligence Attitude Scale (AIAS-4)

The Artificial Intelligence Attitude Scale (AIAS-4) is a self-assessment construct

technologies. Being a concise instrument, the scale only consists of four items that

identifies individuals’ beliefs about AI’s influence on their everyday lives, careers and

society as a whole. The scale builds upon existing theoretical constructs like the TAM

model (Davis, 1986) and UTAUT framework (Venkatesh et al., 2003), hence

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

344

capturing individual views about AI relating to perceived utility, potential societal

impact and behavioural intention to use.

The final version of AIAS-4 is a four-item unidimensional scale measuring a single

construct related to attitude towards AI. The previous version of the scale included a

fifth item focusing on perceived threats posed by the technology, however after

primer validations, the results showed the need for omitting the item to improve

internal consistency and validity. Regarding scale validation, the scale has been

tested through CFA and EFA, with results proving high internal consistency and

structural validity across diverse populations (Grassini, 2023).

Regarding the strengths of the scale, we shall mention its concise nature and being

a robust tool for assessing general AI-related consumer attitudes. The scale can be

easily adapted to various contexts, making it appropriate for a great array evaluative

purpose. Its brevity and clarity enhance usability in large-scale surveys.

Furthermore, the AIAS-4 scale has been proved to be statistically robust, its high

internal consistency and validity make it a reliable tool for broad measures of overall

sentiment.

As for the limitations, we shall highlight that the four-item construct does not allow a

very diversified understanding of individual attitude, rather a snapshot of a general

sentiment. Furthermore, there is a certain ambiguity in the theoretical basis of the

scale. While rooted in the TAM and UTAUT models, the scale does not respect their

constructs, causing a confusion of relationships. This is reflected in the fact that

behavioural intention is treated as part of the general attitude construct (i.e. the single

dimension the scale assesses), which contradicts the established causal models of

the TAM and UTAUT that treats attitude (independent variable) as an influencing

factor of behavioural intention (dependent outcome variable). However, the

magnitude of this issue weakens if we take into account the strong statistical

relevance and proved internal consistency and validity. In other words, this

theoretical conflict matters most when using the scale for causal or predictive

modelling. If the research purpose is purely descriptive, aiming to assess an overall

attitude toward AI, this limitation may have less impact.

2.2. General Attitude towards Artificial Intelligence Scale (GAAIS)

Among the general AI attitude assessment tools, the GAAIS can be considered to

be the most sophisticated approach, providing a two-dimensional perspective on

consumers’ overall sentiment. This dimensionality reflects in the establishment of

two subscales, i.e. the positive subscale, capturing societal and personal utility and

a negative subscale, reflecting concerns and discomforts associated with AI. The

scale (developed by Schepman and Rodway, 2020, 2023) proves to be a powerful

psychometric tool, appropriate for measuring individuals’ general attitudes towards

AI. Scale validations (including EFA and CFA) show good indices, demonstrating

good psychometric properties and validity. The scale has already been utilized and

validated in multiple languages and contexts, including Turkish and Korean versions,

confirming good reliability and validity (Seo and Ahn, 2022; Kaya et al., 2024).

One of the major strengths of the scale is that it provides a more versatile approach

to the assessment of individual AI attitude. This versatility is supported by the two-

factor structure (distinguishing between positive and negative attitudes towards AI,

which helps capturing a broad spectrum of emotions or potential concerns

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

345

(Schepman and Rodway, 2020). Additionally, the proven psychometric (convergent

and discriminant) validity of the scale underscores its reliability in measuring general

AI perceptions (Schepman and Rodway, 2023). Finally, the GAAIS scale has been

proved to be adaptable to various cross-cultural contexts, showing generalisability

and validity across different focus areas (Kaya et al., 2024).

Regarding the limitations of the construct, the general approach to attitude

assessment shall be highlighted. As GAAIS is effective in capturing general

sentiments, it may not address nuanced perceptions related to specific AI

applications. Additionally, some research raise the awareness about the effect of

demographic variability, meaning that the scale’s effectiveness could vary among

different demographic groups, such as age and professional background, which may

require additional contextual adjustments of the original GAAIS scale (Özçevik

Subaşi et al., 2024; Yalcinkaya, Ergin and Yucel, 2024). As for its relation with

established theoretical constructs we can identify the same conflict as with AIAS-4,

as statement related to behavioural intention are also integrated to the attitude

assessment tool.

2.3. Measurement of Attitude in Language Learning with AI (MALL:AI)

MALL:AI is a specialized, validated tool created to assess language learners’

attitudes towards artificial intelligence and its integration in their learning process.

This specialized scale constitutes of three sub-factors, focusing on the assessment

of AI-aided communicative, behavioural and cognitive skill development. The scale

was constructed by Yildiz (2023), with the aim of creating a scale that is specifically

tailored to the context of language learning, making it more relevant for measuring

attitude in this particular domain. The scale was tested and validated and has been

shown to be able accurately measure consumer attitudes towards AI in language

learning.

When it comes to the strong points of the scale, we need to highlight its specificity to

a certain educational context. Unlike other scale, MALL:AI is exclusively dedicated

to the assessment of students’ attitudes towards AI application in the language

learning process, making it more relevant to explore this exact objective. Regarding

statistical accuracy, the scale proved to be reliable, ensuring that it accurately

measures what it is intended to. Furthermore, the three-perspective approach

provides a holistic view of language learners’ attitudes towards AI.

The majority of its potential setbacks are related to its context of development. One

aspect is the probability of bias, as the participants included in the study were already

advanced in the use of digital educational tools, their positive attitudes might not be

generalisable for the whole population. The limited demographic scope of the study

supports this objection too. As the study primarily involved university students from

Turkey, the generalisability of the research findings to other cultures or demographic

groups can be questioned.

Another limitation can be the lack of longitudinal data, as the research related to the

scale development does not provide long-term data on how attitudes might change

over time, during the course of continued AI use in their language learning processes

(Yildiz, 2023).

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

346

2.4. Attitude Toward AI in Defense (AAID)

Similarly to the previous scale, Attitude Toward AI in Defense (AAID) is also a newly

developed measurement tool. Furthermore, AAID is also a rather specific scale too,

as it was designed to assess public attitudes towards the use of AI in defensive

contexts. The scale developed by Hadlington et al. (2023) was validated on a large

sample (n=1590) with diverse demographic characteristics. The item pool originally

consisted of 29 attitudinal statements, which were later reduced to 15 items following

an exploratory factor analysis. The final scale consists of two factors, one reflecting

positive outcomes (anticipated benefits of implementing AI in defence) and the other

negative outcomes (focusing on the adverse consequences of AI used in a military

context). The importance of the scale lies in the fact that it helps understanding public

attitudes toward AI in defense which is essential to ensure that its development and

implementation aligns with societal values and garner public support. Public

acceptance is a critical factor in legitimizing AI's use in any field, as societal

endorsement can influence policy and funding decisions. Additionally, identifying

concerns and barriers through targeted measures provides valuable insights into

potential challenges, enabling policymakers and developers to address public

reservations effectively.

The major strength of the scale lies in its specificity, as it provides a through insight

to a very explicit domain. Furthermore, the statistical validation of the scale showed

sufficient consistency and reliability.

However, in some research contexts the use of this scale can be rather restrictive,

as it is not able to address AI-related attitudinal components outside this exact field,

resulting in issues with generalisability.

2.5. Attitudes towards artificial intelligence at work (AAAW)

Developed by Park et al. (2024) the Attitude Towards Artificial Intelligence at Work

(AAAW) scale is a rather robust construct, depicting a broad perspective of attitudes

towards AI at workplace. The AAAW centres around six dimensions, these are

perceived human likeness, perceived adaptability, perceived quality of AI, AI use

anxiety, job insecurity and personal utility.

The AAAW scale can be considered to be a comprehensive and valid tool for

measuring attitudes related to AI use in professional settings, providing valuable

insights for the successful integration of AI in organisational environments.

Additionally, the AAAW has undergone established validation, as it has been tested

on three independent samples 2841 participants in total, demonstrating good

psychometric properties. Finally, the AAAW has been proven to be a reliable tool for

forecasting important outcomes related to recruitment and employee integration of

AI technologies as.

As for the limitations of the scale, the complexity of the construct can be considered

to be a setback, as the measure is overly detailed for assessing general attitudes

toward AI, instead it is more suited for evaluating workplace-specific contexts.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

347

Table 1: Critical Evaluation of Different AI Attitude Scales

Scale

Description

Strengths

Limitations

Reference

AIAS-4

It is a refined 4-item

scale focusing on

perceived utility

and societal

impact.

Concise, easy to

administer.

Good internal

consistency and

structural validity.

Provides

narrow

insights.

Contradicts

theoretical

findings.

Grassini,

2023

GAAIS

The scale has

positive and

negative

subscales,

capturing emotions

and utility against

concerns.

Its structure

captures a broad

range of attitudes.

Good convergent

and divergent

validity.

Too general for

specific

applications.

Theoretical

ambiguity.

Possible issues

with

generalisability.

Schepman

and

Rodway,

2023

MALL:AI

It is a scale

developed for the

measurement of

language learners’

attitudes towards

the integration of AI

to the learning

process.

Specifically

designed,

capturing relevant

skills.

Valid and reliable

for educational

contexts.

Limited to

educational

contexts, not

generalizable.

Yildiz, 2023

AAID

It is a specific

scale, developed to

measure public

acceptance of AI in

defense contexts.

Specific for

defense contexts,

captures positive

and negative

attitudes.

Good internal

reliability and

validity.

Limited

application,

generalizability

issues.

Hadlington

et al., 2023

AAAW

This scale

measures the

personal

perception of the

integration of AI in

their workplace

Comprehensive,

covers 6

dimensions.

Good

psychometric

properties.

Too detailed for

general attitude

assessment,

more suited for

workplace

contexts.

Park, Woo

and Kim,

2024

Source: edited by the author

It is important to note that apart from the above detailed scales there are some other

alternatives for the measurement of AI attitudes. When selecting an AI attitude scale,

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

348

researchers shall take into account several factors like dimensionality or contextual

relevance (Schepman and Rodway, 2023; Yildiz, 2023).

3. Suggestions for Future Research

When selecting an AI attitude scale, researchers must carefully consider several

factors that are crucial in ensuring the scale’s effectiveness and reliability. First,

psychometric properties are paramount, requiring strong internal consistency and

demonstrated validity (Grassini, 2023; Schepman and Rodway, 2023). Furthermore,

the dimensionality of the construct is important too. Researchers must decide upon

unidimensional scales, like the AIAS-4, or multidimensional scales such the AAAW

(Park, Woo and Kim, 2024). It is important to evaluate the generality or the specificity

of the research topic and choose an appropriate scale accordingly (Schepman and

Rodway, 2023). Additionally, context and application play a significant role too,

requiring a careful consideration of the target population and cultural relevance

(Yildiz, 2023; Derinalp and Ozyurt, 2024). Finally, it is important to provide a

comprehensive coverage of emotional and functional aspects of AI-related

consumer attitudes (Park, Woo and Kim, 2024).

4. Conclusion

As AI is becoming more significant in today’s world, it is important to explicitly assess

consumers relating attitudes. There is a wide variety of available AI attitude scales,

whose critical evaluation was presented in this paper. A careful consideration of

choice is advised for future research, with specific regard to dimensionality and

contexts.

5. Acknowledgements

This paper was “SUPPORTED BY THE UNIVERSITY RESEARCH SCHOLARSHIP

PROGRAM OF THE MINISTRY FOR CULTURE AND INNOVATION FROM THE

SOURCE OF THE NATIONAL RESEARCH, DEVELOPMENT AND INNOVATION

FUND”.

References

1. Bartha, Z. and Molnár, L. (2016) ‘The SLEM Model as an Assessment Method for

Local Goods’ Competitiveness’, Theory, Methodology, Practice, 12(Special Issue),

pp. 5–13. Available at: https://doi.org/10.18096/TMP.2016.02.01.

2. Davis, F.D. (1986) A Technology Acceptance Model for Empirical Testing New

End-User Information System: Theory and Results. Massachusetts Institute of

Technology.

3. Derinalp, P. and Ozyurt, M. (2024) ‘Adaptation of the Student Attitudes Toward

Artificial Intelligence Scale to the Turkish Context: Validity and Reliability Study’,

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

349

International Journal of Human–Computer Interaction, pp. 1–15. Available at:

https://doi.org/10.1080/10447318.2024.2352921.

4. Duan, Y., Edwards, J.S. and Dwivedi, Y.K. (2019) ‘Artificial intelligence for

decision making in the era of Big Data – evolution, challenges and research agenda’,

International Journal of Information Management, 48, pp. 63–71. Available at:

https://doi.org/10.1016/j.ijinfomgt.2019.01.021.

5. Grabowski, R. (2024) ‘The Future of AI Ain’t What It Used To Be’, Design

Engineering (Canada), 69(1), pp. 10–13.

6. Grassini, S. (2023) ‘Development and validation of the AI attitude scale (AIAS-4):

a brief measure of general attitude toward artificial intelligence’, Frontiers in

Psychology, 14, p. 1191628. Available at:

https://doi.org/10.3389/fpsyg.2023.1191628.

7. Hadlington, L. et al. (2023) ‘The use of artificial intelligence in a military context:

development of the attitudes toward AI in defense (AAID) scale’, Frontiers in

Psychology, 14, p. 1164810. Available at:

https://doi.org/10.3389/fpsyg.2023.1164810.

8. Kaya, F. et al. (2024) ‘The Roles of Personality Traits, AI Anxiety, and

Demographic Factors in Attitudes toward Artificial Intelligence’, International Journal

of Human–Computer Interaction, 40(2), pp. 497–514. Available at:

https://doi.org/10.1080/10447318.2022.2151730.

9. Lexcellent, C. (2019) ‘Artificial Intelligence’, in Lexcellent, C., Artificial Intelligence

versus Human Intelligence. Cham: Springer International Publishing (SpringerBriefs

in Applied Sciences and Technology), pp. 5–21. Available at:

https://doi.org/10.1007/978-3-030-21445-6_2.

10. Liang, Y., Lee, S.-H. and Workman, J.E. (2020) ‘Implementation of Artificial

Intelligence in Fashion: Are Consumers Ready?’, Clothing and Textiles Research

Journal, 38(1), pp. 3–18. Available at: https://doi.org/10.1177/0887302X19873437.

11. Lukianenko, D. and Simakhova, A. (2024) ‘Artificial Intelligence in the Scientific

and Technological Paradigm of Global Economy’, Problemy Ekorozwoju, 19(2), pp.

55–65. Available at: https://doi.org/10.35784/preko.6256.

12. Özçevik Subaşi, D. et al. (2024) ‘Paediatric nurses’ perspectives on artificial

intelligence applications: A cross‐sectional study of concerns, literacy levels and

attitudes’, Journal of Advanced Nursing, p. jan.16335. Available at:

https://doi.org/10.1111/jan.16335.

13. Park, J., Woo, S.E. and Kim, J. (2024) ‘Attitudes towards artificial intelligence at

work: Scale development and validation’, Journal of Occupational and

Organizational Psychology, 97(3), pp. 920–951. Available at:

https://doi.org/10.1111/joop.12502.

14. Piskóti, I., Nagy, S. and Molnár, L. (2013) ‘Innováció piaci sikere – A hazai

gyakorlat empirikus modellje.’, TÉR-GAZDASÁG-EMBER, 1(1), pp. 85–102.

15. Schepman, A. and Rodway, P. (2020) ‘Initial validation of the general attitudes

towards Artificial Intelligence Scale’, Computers in Human Behavior Reports, 1, p.

100014. Available at: https://doi.org/10.1016/j.chbr.2020.100014.

16. Schepman, A. and Rodway, P. (2023) ‘The General Attitudes towards Artificial

Intelligence Scale (GAAIS): Confirmatory Validation and Associations with

Personality, Corporate Distrust, and General Trust’, International Journal of Human–

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

350

Computer Interaction, 39(13), pp. 2724–2741. Available at:

https://doi.org/10.1080/10447318.2022.2085400.

17. Seo, Y.H. and Ahn, J.-W. (2022) ‘The validity and reliability of the Korean version

of the General Attitudes towards Artificial Intelligence Scale for nursing students’,

The Journal of Korean Academic Society of Nursing Education, 28(4), pp. 357–367.

Available at: https://doi.org/10.5977/jkasne.2022.28.4.357.

18. Venkatesh et al. (2003) ‘User Acceptance of Information Technology: Toward a

Unified View’, MIS Quarterly, 27(3), p. 425. Available at:

https://doi.org/10.2307/30036540.

19. Wang, X. et al. (2024) ‘The Impact of Artificial Intelligence on Economic Growth

From the Perspective of Population External System’, Social Science Computer

Review, p. 08944393241246100. Available at:

https://doi.org/10.1177/08944393241246100.

20. Yalcinkaya, T., Ergin, E. and Yucel, S.C. (2024) ‘Exploring Nursing Students’

Attitudes and Readiness for Artificial Intelligence: A Cross-Sectional Study’,

Teaching and Learning in Nursing, 19(4), pp. e722–e728. Available at:

https://doi.org/10.1016/j.teln.2024.07.008.

21. Yildiz, T. (2023) ‘Measurement of Attitude in Language Learning with AI

(MALL:AI)’, Participatory Educational Research, 10(4), pp. 111–126. Available at:

https://doi.org/10.17275/per.23.62.10.4.

22. Yu, S. and Carroll, F. (2023) ‘A Balance of Power: Exploring the Opportunities

and Challenges of AI for a Nation’, in R. Montasari (ed.) Applications for Artificial

Intelligence and Digital Forensics in National Security. Cham: Springer Nature

Switzerland (Advanced Sciences and Technologies for Security Applications), pp.

15–37. Available at: https://doi.org/10.1007/978-3-031-40118-3_2.

23. Zhang, L. et al. (2021) ‘Introduction to Artificial Intelligence’, in Zhang, L. et al.,

Artificial Intelligence in Construction Engineering and Management. Singapore:

Springer Singapore (Lecture Notes in Civil Engineering), pp. 1–15. Available at:

https://doi.org/10.1007/978-981-16-2842-9_1.

24. Zuo, X. (2023) ‘Research on the Application of Artificial Intelligence Technology

in Economic Management in the Information Age’, in 2023 IEEE 3rd International

Conference on Information Technology, Big Data and Artificial Intelligence (ICIBA).

2023 IEEE 3rd International Conference on Information Technology, Big Data and

Artificial Intelligence (ICIBA), Chongqing, China: IEEE, pp. 1737–1741. Available at:

https://doi.org/10.1109/ICIBA56860.2023.10165033.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

351

QUALITATIVE RESEARCH ON THE ROLE AND IMPACT OF

MARKETING ACTIVITY FOR CREATING A HIGHER STANDARD

OF LIFE

Oana Maria SECARĂ, Carmen ACATRINEI

1University of Oradea, Faculty of Economic Science, Department of Management

Marketing

2University of Economic Studies, Bucharest, Faculty of Marketing

osecara@gmail.com; carmen.acatrinei@mk.ase.ro

Abstract: This paper aims to highlight the role of marketing and its influences on

society's standard of living. Starting from the phrase "the role of marketing is to

ensure a higher standard of living", it has been analyzed how marketing has an

impact on society by: knowing the needs of customers and potential customers,

ensuring a balance in the economic system, creating new jobs and facilitating the

process of specialization and international trade. The role of marketing has therefore

been analyzed from different perspectives, with concrete examples of real life being

provided. The purpose established in order to carry out the qualitative research was

identifying the attitudes of marketing specialists regarding the impact of marketing

activity on the standard of living. At the same time, this paper contains the results of

our conducted reaserch carried out by applying an interview to marketing specialists

with the help of an interview guide.

Keywords: Standard of living; qualitative research; Maslow’s Pyramid; societal

marketing

JEL Classification: I12, I15, I31, M31, M51

1. Introduction

In contemporary society, for the survival and development of a company, the

importance of marketing activity is paramount, marketing influencing in one way or

another both the approach of a company and its life. Starting from these universally

accepted truths, the present work is intended to explain, motivate and analyze how

marketing helps to ensure a standard of living. Moreover, considering the quote "A

marketer once said that the role of marketing is to ensure a higher standard of living",

different perceptions will be presented in order to validate the previous statement,

concrete examples from everyday life and at the same time qualitative research was

carried out in order to validate them. Starting from the previously mentioned quote,

the meaning of the concept of standard of living was presented, the effective role of

marketing on standard of living was analyzed, it being viewed from two perspectives,

namely: "microeconomic" and "macroeconomic", as well as the pyramid of needs

Maslow as the starting point in ensuring a higher standard of living. The practical

framework consists of conducting qualitative research, using the interview as a

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

352

method and the interview guide as a tool. The selected sample consists of nationally

renowned marketing professionals. The purpose of conducting this interview was to

identify the attitudes of marketing specialists regarding the impact of marketing

activity on the standard of living,

2. Theoretical Background

2.1. The standard of living and the role of marketing to ensure a higher

standard of living

Mazur (1965) states, “Marketing is the delivery of standard of living”. Markets being

the place of the economy it always teaches us the importance of numbers and how

to use them wisely.

For a better understanding of how marketing contributes to improving the standard

of living, it is important to really know what "standard of living" and subsequently

"higher standard of living" mean.

Our Romanian Explanatory Dictionary tells us that the standard of living actually

means "degree of development of the living conditions characteristic of a person or

a community; standard of living." In other words, a person's ability to spend on food,

shelter, education, etc. A higher standard of living presupposes an increase, an

improvement of what is meant by the purchases made, the products owned, the

services rendered.

Sirgy et al (2008) believe that from a business perspective, living standards in a

given country are important information that show the level of consumption, which

can later lead to prospects for making a profit or not. When households have a larger

budget at their disposal, respectively higher incomes and expenses will be more

numerous. Moreover, a high standard of living is in line with the increased demand

for high quality products or even luxury products and services. So commercial

activities are the main factor affecting and influencing the standard of living.

In Stewart’s opinion (2008) another aspect of standard of living refers to satisfaction

with the environment considering the stimulation of physical, mental, emotional and

cultural influences. According to a Mercer Quality of Life study, presented by there

are ten factors that make up a good quality of life. Here are included as we have

previously predicted: the political and social environment, the economic

environment, the socio-cultural environment, health and sanitation, schools and

education, public services and transport, recreation, consumer goods, housing and

the natural environment.

Accumulating knowledge also from the field of business, economy, looking towards

economic development and the existing situation worldwide, therefore, from a

"macroeconomic" perspective, Camargo Filho et al (2018) claim that marketing

raises the standard of living through several elements.

For example, marketing is the one that supports a balance in the economic system.

We can say that marketing is a bridge between producers and consumers. It allows

manufacturers to know people's needs and preferences and also informs consumers

about the product. In this way, marketing helps in economic stability, which

subsequently leads to economic development.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

353

Another element is job creation. The respective marketing activity following the

marketing activity was the employment of an increased number of people in different

companies as seller, agents, transports, communication, research. We can therefore

affirm that, through these jobs, marketing contributes to the development of the

standard of living.

S.M. Rahman (2005) consider that marketing functions help people in different

places of a country to enjoy the goods located in opposite parts of the country.

Through the development of the distribution process, the standard of living

increases, having the opportunity to benefit from goods that were not accessible until

that moment. So, from this perspective, marketing does not only ensure a higher

standard of living, but actually deals with its delivery

Another key concept in understanding how marketing ensures a higher standard of

living is that of "societal marketing". The concept of societal marketing supports the

fact that an enterprise must orientate itself in such a way that when decisions are

taken by it, it must consider three elements, namely: the needs of consumers, of the

company and, more than that, the well-being of society in the long term.

Philip Kotler (2008) is the one who introduced the concept of "societal marketing"

and the definition provided by him sounds like this: "the idea that a company must

make decisions taking into account what the consumer wants, the company's needs

and requirements, the consumer's long-term interests long and the interests of

society in general". We therefore infer that societal marketing raises the standard of

living of people in society, ensuring meaningful and fruitful economic planning for

society.

2.2. Maslow's pyramid - the starting point in ensuring a higher standard of

living

In order to set as a starting point in securing a higher standard of living, a hierarchy

of needs, we will look at perhaps the most suggestive figure that will actually help us

understand what people's needs are. The so-called Maslow's Pyramid represents a

concept that the American psychologist Maslow (1970), with the same name,

launched in his work entitled Motivation and Personality, trying to decipher what are

the motivations that are at the origin of human actions. He concludes that self-

interest is the driving force and, moreover, that this interest can be ranked as follows:

At the first level of the pyramid are the physiological needs. The second level refers

to personal safety needs. The next level, namely the 3rd, refers to social or belonging

needs. Regarding this level we can say that man feels an urge to enter into

relationships with other people and at the same time to be part of different groups.

As far as these groups are concerned, we can exemplify groups such as religious,

professional organizations, work teams, sympathizers of some people or other

groups. At the same time these groups can be even smaller - social ones that satisfy

the need for appearance which can be a family. The fourth level, Maslow specifies

the need for social recognition, a need that can materialize in self-confidence and

self-respect at the same time. Finally, the last level, the fifth, is dedicated by Maslow

to personal development, i.e. self-realization or fulfillment of potential. Hobbies,

especially the expensive ones, are at the top of the pyramid of needs and this level

can be difficult to reach in some cases.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

354

Next, we ask how much human activity matters both in general and in a company,

form of organization and so on. If we turn to the specialized theory, Kenrick (2010)

notice that there are 3 factors of production, namely: nature, labor and capital. So,

we notice that the man, who is actually employed, is one of the 3 factors that

contribute to the performance of an activity. First of all, he must be prepared both

physically and mentally. In our field, which is marketing, it is important to have both.

At the same time, your mind needs to be trained with new information to deal with

new demands in the market, but we will talk about that later. It goes without saying

that people's needs and wants result in people's standard of living. In other words,

the standard of living is a direct consequence of the degree to which people's needs

and wants are satisfied by marketing activities.

Cundiff et al (2010) emphasized marketing innovations by individual entrepreneurs

as a means to increase the level of economic development.

3. Methodology

3.1. Introduction

In order to support the aspects related in the theoretical framework, I considered it

necessary to carry out research in the chosen field. Being a topic that refers directly

to qualitative aspects and indirectly to quantitative aspects, I chose as a research

method a qualitative method, namely the interview. In this section of the paper, the

research is presented with all the steps taken.

The goal established in order to carry out the research was: Identifying the attitudes

of marketing specialists regarding the impact of marketing activity on the standard of

living. Starting from this goal, four key objectives were penciled in: identifying the

opinions of specialists regarding: the balancing role of marketing in the economic

system, the contribution of marketing activities regarding the creation of jobs, the

contribution of societal marketing regarding the well-being of the individual/

community, the relationship between: Maslow's pyramid of needs - marketing activity

- standard of living.

The information analysis was carried out through content analysis. As I mentioned,

the interviews were applied to marketing specialists in our country. The sample

initially targeted was a larger one, however, due to the fact that not all the specialists

contacted responded favorably to our request, we have currently collected a total of

15 interviews.

3.2. Research methodology

The research method chosen was a qualitative research method and one of the most

frequently used data collection techniques, entitled the interview technique. It

contributes to the deep understanding of certain actions, processes, attitudes or

points of view, specific in our case to a company.

The purpose of the interview is to obtain as deep, detailed information as possible

regarding the opinions, attitudes, feelings of the respondent relative to the subject of

the discussion.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

355

This research was used to identify the attitudes of marketing professionals regarding

the impact of marketing activity on the standard of living. At the same time, I chose

the interview as a research method due to the fact that it offers an overview, a clear

picture, with information coming directly from specialists in the field on the relevant

influence and the effective role of marketing in the context of society. The information

expected to be obtained from this research is qualitative information.

The questions that formed the interview guide were correlated to the four major

objectives set. The fulfillment of these objectives was achieved by using an interview

guide that was the basis of the actual interview. This interview guide consisted of

five key questions, open-ended questions that allowed the respondent to provide the

necessary information. Therefore, the collected data are primary data, realized by

carrying out the questionnaire. The sampling process was carried out by choosing

well-known marketing specialists. Initially, a number of twenty specialists were

contacted, receiving a response from a number of fifteen people involved in the

marketing activity.

The specialists interviewed are entrepreneurs, consultants and trainers on marketing

and communication issues in social media or bloggers, with many years of

experience in social media (over 13,000 articles written on the blog). As bloggers,

they have been involved in hundreds of campaigns for hundreds of brands. As

consultants, they organized and implemented hundreds of other social media

campaigns, held over 50 social media workshops and over 100 presentations at

various events. And as entrepreneurs, they formed social media agencies.

4. Data analysis and results

4.1. Interview Guide

Purpose: To identify the attitudes of marketing specialists regarding the impact of

marketing activity on the standard of living. Objectives - identifying the opinions of

specialists regarding:

▪ The balancing role of marketing in the economic system

▪ The contribution of marketing activities to job creation

▪ The contribution of societal marketing regarding the well-being of the

individual/community

▪ The relationship between: Maslow's pyramid of needs - marketing

activity - standard of living

Questions: 1. Do you think that marketing supports a balance in the economic

system? (If it is a bridge between producer / service provider and consumer?)

2. To what extent do you consider that marketing activity can contribute to job

creation?

3. What do you consider to be the contribution of societal marketing to the well-being

of the individual / community?

4. Given Maslow's Pyramid of Needs, to what extent do you think marketing

activities are built on it?

5. At the same time, do you consider that it has a contribution in defining a plan to

ensure a high standard of living?

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

356

4.2. Interpretation of results

According to the Interview Guide, it began with the question, "Do you consider that

marketing supports a balance in the economic system?" . With this question, we

wanted to validate one of the hypotheses with which we started, namely the fact that

marketing is between the two pawns of the economic system, namely between the

producer and the consumer. Thus, by asking this question, we wanted to outline a

first vision of the respondents, marketing specialists, regarding its role in the context

of the economic system. Thus, the answers received were different, but merged in

the same main idea.

5 respondents analyzed the balance supported by marketing in the economic system

as essential for the success of a business especially in the context where digital

breaks all conventions. They also refer to the failure rate of start-ups and their

correlation with the lack of marketing budgets. Another 5 respondents present

marketing from a theoretical perspective, arguing that marketing, by its definition,

represents a point between the producer and the consumer. At the same time, they

consider marketing as the key element without which no other product would exist

in the mind of the consumer. Another 5 respondents also validate our hypothesis,

considering that normally, marketing is the one that supports a balance in any

economic system, mentioning the condition that this economic system is a balanced

economic and social climate. Moreover, the respondents offered as an example the

situation of Romania, where people still buy impulsively, marketing not being focused

on loyalty or recurring conversion. Thus, we can conclude that marketing is really a

key element between the producer and the consumer, being the element without

which a product is not placed in the consumer's conception, as long as the economic

climate is favorable.

2. To what extent do you consider that marketing activity can contribute to job

creation? In this question we wanted to find out if marketers believe that marketing

can contribute to job growth. Jobs are very important to society. They can provide

material, financial and spiritual resources materialized in spiritual well-being and a

balance in a financial and material way. At the same time, jobs contribute to society's

standard of living. 5 respondents believe that businesses create jobs and not

marketing. They believe marketing is only one component of a business, and

business is what creates jobs. Another 5 respondents believe that any legal form

contributes to job creation and that marketing is responsible for job creation to a

greater or lesser extent. In this regard, the PROFI retailer gives an example, which

ends up immediately opening the 1000th store in Romania. Their answers are

justified by explaining a phenomenon, namely the expansion of the PROFI store in

the country. He believes that the retailer would not have expanded if it had already

realized from the start that it would not work and that the motivation to expand was

strictly from the development opportunity. Another 5 respondents believe that the

more effective the marketing activities, the more the possibilities for creating jobs

and new prospects increase. At the same time, they believe that the more marketing

tools appear, the more positions appear that can be occupied.

3. Question number three was formulated as follows: "What do you consider to be

the contribution of societal marketing to the well-being of the individual and/or the

community?" Being a current topic and at the same time a controversial one, we

wanted, through this question, to outline an image of societal marketing on the well-

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

357

being of the individual and the community, and at the same time, to see what is the

perspective of a marketing person, who daily encounters such of problems regarding

the practical situations in which societal marketing is encountered. Regarding this

question, 5 of the respondents believe that it is not societal marketing that brings

welfare to society or the individual, but the actual product or service. Another 5

respondents bring human individualization to the fore. They champion the fact that

people are different, and each individual responds differently to the stimuli created

by marketing activity. This can be a successful promotion of a product or actually its

quality. However, the marketing specialist does not explain the relationship between

societal marketing and individual well-being. This is also highlighted in the answers

given by 5 other respondents who consider this question to be a real challenge due

to the existing global debates regarding new marketing methods and the situation of

users' personal data. Thus, through the prism of the answers received following the

interview, the true role of societal marketing and the respective concept were not

analyzed, the specialists presenting other aspects from the sphere of marketing but

found in structures related to societal marketing activity, namely: promotion, new

marketing methods, etc.

Given Maslow's Pyramid of Needs, to what extent do you think marketing

activities are built on it? And regarding the previous question, do you consider

that Maslow's Pyramid of Needs has an input in defining a plan for ensuring a

high standard of living? With this question, we wanted to find out if specialists

consider whether marketing activities are built on the basis of Maslow's pyramid

and if they consider that the mentioned pyramid has an input in defining a plan

to ensure a high standard of living.

Each level in this pyramid has a counterpart in certain products and services.

As a consequence, the marketing of these products also starts from the needs

in the pyramid. Unfortunately, there are many cases of marketing campaigns

that confuse levels of need. And it throws, without any sense, in my opinion,

some products from the mice to cave category into the category of basic needs.

And then he wonders if I'm fair. It depends on who we are talking about.

Marketers should link the levels of the pyramid to their strategy. Some do, most

don't. As for the customers, they fall into certain levels, but they have no idea

about such complex theories.

5 respondents believe that each of the products and / or services have a certain

correspondent among Maslow's pyramid, but unfortunately, he believes that a

lot of marketing campaigns confuse the levels of you so that in the end the

products and / or services created are not successful on the market and

disappear very quickly or not even have a life cycle. Moreover, they believe that

marketers should, based on the pyramid, incorporate all elements of the pyramid

into their promotion strategy.

3 of the respondents do not consider anything.

Marketing people base their strategies (and) on Maslow's pyramid of needs, but

there are many other recent theories of human needs that are part of this

context. I don't know how much Maslow is part of this story, but it's definitely

there. It has, of course, it happens naturally - you satisfy your basic needs, then

you start building comfort around them and so on. It depends on what you want

from life.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

358

7 respondents believe that strategies are also built on the basis of Maslow's

pyramid. At the same time, they believe that the creation of the plan happens

naturally and it creates a vicious circle in which as a consequence the

satisfaction of needs is achieved repetitively.

5. Conclusion

Looking as a whole, we therefore observe how important the marketing activity is

both inside the company and in its relationship with the environment in which the

company carries out its activity. We therefore conclude that along with the creation,

communication and provision of customer value, the role of marketing is also to

ensure the best way of life, an increased standard of living. If we look at the general

way, we find that it is marketing that paves the way for new products, transforms

everything that is unknown and new into something desired and familiar, leads and

improves the way of life by transforming latent needs into demands for products that

cover the needs generated by products respectively. Analyzing in detail, marketing

is the one that ends up improving our standard of living by ensuring a balance in the

economic system, being a bridge between the producer and the consumer, it creates

new jobs in related fields (we can mention here transport, research, various

agencies) and at the same time facilitate the process of specialization and

international trade. The answers received after the interview led to the fact that

marketing is really a key element between the producer and the consumer, being

the element without which a product is not placed in the consumer's conception, as

long as the economic climate is favorable. Regarding the creation of jobs through

the prism of marketing activity, we thus concluded that businesses are the ones that

create jobs and for a business to be prosperous, marketing activity is the key factor.

At the same time, regarding the way in which societal marketing influences the well-

being of society, after the interviews we found that the specialists do not give

importance to this type of marketing activities, considering that the products are what

contribute to the increase of well-being and not the societal marketing activity itself.

Questions about Maslow's pyramid and the extent to which marketing activities are

based on it, specialists believe that marketing and marketing activities are designed

with its help and that marketing strategies should also be designed according to each

level of the pyramid. Moreover, Maslow's pyramid creates a vicious circle that results

in satisfying basic needs and building comfort around them. All these perspectives,

examples and arguments lead to a single conclusion, namely the fact that from

whatever angle marketing activity is viewed, it will always have an impact on the

standard of living and ensure its growth.

References

1. Camargo Filho A.- Vieira Borges C., J., ( 2018), Impact of Marketing Activities in

the Early Years of a Firm’s Life on Its Future Performance, Revista de

Empreendedorismo e Gestao de Pequenas Empresos, 8(1):01-23, REGEPE, e-

ISSN: 2316-2058

https://www.researchgate.net/publication/329853846_Impact_of_Marketing_Activiti

es_in_the_Early_Years_of_a_Firm's_Life_on_Its_Future_Performance/references

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
359 
 
 
2. James R. ( 2018), Marketing makes life better! Marketing Automation&AI/META 
Decision  Science  Team https://www.linkedin.com/pulse/marketing-makes-life-
better-roshan-james 
3. Kenrick, D. T. – Griskevicius, V. – Neuberg, S. L. – Schaller, M. (2010) Renovating 
the pyramid of needs: Contemporary extensions built upon  ancient foundations, 
Perspectives on Psychological Science, Vol. 5, pp. 292-314  
4. Kotler, P. – Keller, K. (2020)  Marketing management, V Edition,  
https://www.yumpu.com/ro/document/view/65144713/kotler-keller-managementul-
marketingului  
5.Kotler  P.  (1994)  Principles  of  marketing,  Ed.  Pretinde  Hill,  London,  ISBN: 
9780137017317 
6. Kurolov,  M., O. (2023), Digital healthcare marketing: a  catalyst for  improving 
human  capital  and  raising  the  standard  of  living  of  the  population,  Tashkent 
University of Economics  
https://conference.tsue.uz/index.php/article/issue/view/2 
7. Mazur, P. (1965), The dynamics of Economic Growth, Published by Prentice 
Hall, Englewood Cliffs,  
8. Rahman S. M, (2005),The Role of Marketing in Standard of Living, Journal Of 
Applied Science, Vol: 5 Issue: 1 , pp. 195-201, DOI: 10.3923/jas.2005.195.201, 
https://scialert.net/fulltext/?doi=jas.2005.195.201,  
How  does  marketing  improve  standard  of  living? 
https://mernetwork.com/index/archive/index.php/t-18995.html 
9. Sirgy M., J.- Grace B.-  Yu, Dong- Jin Lee, Shuqin Wei and Ming-Wei Huang 
( 2012), Does Marketing Activity Contribute to a Society's Well-Being? The Role 
of Economic Efficiency, The Journal of Business Ethics, Vol. 107, No. 2 pp. 91-
102 https://www.jstor.org/stable/41476235 
10.StewartD.,Marketing’sroleinqualityoflife,BrandingStrategyInsider,  
https://brandingstrategyinsider.com/marketings-role-in-quality-of-life/ 
11.Turkeș, M.C. (2016) Another way to learn marketing, Ed. Pro Universitaria, 
Bucharest, ISBN: 
12.How  Does  Marketing  Improve  Standard  Of  Living, 
https://www.knowledgiate.com/how-does-marketing-improve-standard-of-living/ 
13. Indeed Editorial Team,( 2024),  What is the role of marketing in business?  
14.  https://uk.indeed.com/career-advice/career-development/what-is-role-of-
marketing 
15. https://www.ama.org/AboutAMA/Pages/Definition-of-Marketing.aspx 
16.  https://www.ama.org/publications/MarketingNews/Pages/friendship-changed-
marketing-forever-kotler-levy.aspx 
17 . https://www.quora.com/How-does-marketing-increase-the-standard-of-living-of-
people 
 
   

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

360

RESEARCH ON THE COSMETIC PRODUCTS MARKET IN

ORADEA. PRACTICAL STUDY

Oana Maria SECARĂ

University of Oradea, Faculty of Economic Science, Department of Management

Marketing

osecara@gmail.com

Abstract: This paper was carried out with the aim of determining the preferences of

consumers in the municipality of Oradea, with regard to cosmetic products, marketed

by both multinational companies and local ones in Romania. Also, as a result of the

study carried out on a simple, non-stratified representative sample, data were

obtained regarding the purchase locations, the factors that influence their purchase

decisions, the frequency of purchase and use of cosmetic products, as well as the

brands and types of products preferred by to them. In order to carry out this study, a

questionnaire with closed dichotomous, multichotomies and mixed questions was

created, which was applied to a representative sample of 250 subjects, residents of

the municipality of Oradea.

Keywords: cosmetic product market; preferences of consumers; multinational

companies; purchase decision; questionnaire.

JEL Classification: C83, F20, D47, L66, M31, M37, M51

1.Introduction

The Romanian market of cosmetic products is a heterogeneous, strongly stratified

market, the offer includes both cheap, "no name" products, of very low quality, but

whose success is based on the consumer's lack of information and money, as well

as sophisticated products and prestigious brands on the international market.

The practical framework consists in carrying out quantitative research carried out

with the aim of determining the preferences of consumers in the municipality of

Oradea, regarding the cosmetic products, marketed, both by multinational

companies and by domestic ones in Romania.

Also, as a result of the study carried out on a simple, non-stratified representative

sample, data were obtained regarding the purchase locations, the factors that

influence their purchase decisions, the frequency of purchase and use of cosmetic

products, as well as the brands and types of products preferred by to them.

In order to carry out this study, a questionnaire with closed dichotomous,

multichotomies and mixed questions was created, which was applied to a

representative sample of 250 subjects, residents of the municipality of Oradea.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

361

2.Theoretical Background

2.1. The world market of cosmetic products

The global cosmetics market is dynamic and significant in size. Swiderska et al

(2023) opines that the cosmetic products’ market is constantly expanding its

influence to different target audiences and covers all classes of consumers. but most

likely taking into account the epidemiological context, in 2020, the global cosmetics

market decreased by approximately 8%, compared to the previous year. Fatriasari

et al (2024) consider that the global beauty industry showed resilience, quickly

recovering the loss recorded during the health crisis (-7.7%) and reaching in 2021 a

value of approx. 378 billion Euros. Kukhta et al (2023) claim that demographic

changes, the increase in incomes and the number of people in the middle class,

complemented by the degree of penetration of purchase experiences (testing,

consulting, actual sale) in the online environment represent market growth factors,

both in Romania and at the national level international. International retail purchases

are facilitated by e-commerce and the digitalization and communication efforts made

by brands even during the pandemic.

In Euromonitor (2024) we can read that the global cosmetics industry recorded a

16% increase in 2021 compared to 2020, supported by sales of cosmetics and

perfumes. At the European level, the market was estimated at approx. 125 billion

Euros in 2022, being considered a fairly mature market, with a growth forecast

indicating an average annual rate of 1.6% for the period 2022-2026, supported

mainly by the Cosmetics and Skin Care segments. According to Yin (2024), skin and

hair care products, make-up/decorative cosmetics, toiletries, such as perfumes, eau

de toilettes or deodorants and cavity care cosmetics oral, are the main product

categories of the cosmetic market. Skin care products are considered the market

leader in this segment, representing approximately 42% of the global market and

this category of cosmetics obviously represents the most significant growth in this

regard, estimating - a value of approximately 177 billion dollars, until 2025. Analyzed

individually, the market of anti-aging products is estimated to exceed, in the near

future, 34.49 billion dollars, with an annual growth rate of 7.3%.

2.2.The Romanian market of cosmetic products

The Romanian market of cosmetic products is a heterogeneous, highly stratified

market, with fierce competition, the offer including both cheap, "no name" products,

of very low quality, but whose success is based on the consumer's lack of information

and money, as well as a few Romanian names, a few producers with a long tradition,

but also sophisticated products and prestigious brands on the international market.

The main advantages of imported products are: superior quality obtained on the

basis of major technological innovations, special design, both in terms of color,

shape and quality of materials, easy, convenient and hygienic use of cosmetic

products. The brands are recognized worldwide, which is why they are easily

accepted, even desired by the Romanian consumer. Lupoiu et al (2024) believe that

the promotion system, namely advertising, the sales force, relations with the public

and sales promotion are much better organized, both due to a wider experience in

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

362

this field and due to financial resources. Romanian producers are based on tradition,

on the high notoriety enjoyed by their products and on the trust of consumers in

them. They market large lines of products that address all segments of the

population, and the prices are lower than those of imported products. However, once

the buyer tests the products offered locally, he is often convinced of their quality and

becomes a loyal customer of the brand. Financial resources in Romania are smaller

than in other European countries, so even local producers have a harder time

sneaking among the public's preferences. The local cosmetics market is below the

European development average, due to the imbalance of financial resources

available in Romania compared to other European states, but also to the size of the

local cosmetics market compared to markets such as France, Germany or Spain.

Many of the personal care products have prices that are not necessarily affordable,

and economists' fears were that the pandemic will have a negative impact on sales

and, implicitly, on profits. However, the surprise was major: the sales trend until the

end of 2023 was an overall upward trend. Although international cosmetics remain

the main players in the industry, the Romanian market is on an upward trend, which

can be characterized by a refinement of consumer preferences, which now show

more elaborate requirements, determined by the increase in information about care

products and to their particularities. The gratifying trend is that Romanians are

moving towards higher quality, advanced products, with proven effects in the

medium and long term and which are based on the latest generation ingredients. As

long as Romanian companies are able to offer this, the occasional buyer becomes

a customer.

What is behind the upward trend of Romanian cosmetics? Marcu et al. (2024)

consider that the refinement of buyers' tastes is the main reason why serious

producers of Romanian cosmetic products have managed to grow on the market,

even in such a difficult period for all industries. It is about "the maturing of the

Romanian consumer, who begins to have more confidence in what is produced in

the country, at the local level".

What is behind the upward trend of Romanian cosmetics? Georgescu (2023) in Biz

Magazine consider that the refinement of buyers' tastes is the main reason why

serious producers of Romanian cosmetic products have managed to grow on the

market, even in such a difficult period for all industries. It is about "the maturing of

the Romanian consumer, who begins to have more confidence in what is produced

in the country, at the local level".

The Romanian cosmetics industry has to face important challenges. Mombekov et

al (2024) claim that the limited sales market is one of the most important problems

faced by manufacturers. The large chain stores limit the number of items presented

on the shelf, so many products in the range remain unknown and unpromoted,

despite the fact that they are competitive in terms of price and quality. Also, local

brands are not as well-known as international ones because they are not equally

promoted both online and offline. Turdean (2023) believe that Romanian brands

would be strongly stimulated by the reduction of excessively bureaucratic

procedures and the foundation of certain measures simplified. The limited budget

for promotion is another reason why many Romanian products of good quality

remain in the shadows. Romanian cosmetics companies have a limited marketing

budget compared to international brands, which during the pandemic, invested

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

363

heavily in advertising. Turdean (2023) consider that the international competition

comes with huge promotion budgets, which we cannot match, so we seek to

compensate with the quality and honesty of the products. The purchase of raw

materials is often made at high prices, from abroad; under these conditions, it is a

permanent effort to maintain the prices in an appropriate range, which would make

the products competitive on the market. State aid is almost non-existent, so

Romanian investments and local businesses are not stimulated at all. Bisa (2024)

claim that the major challenge for the Romanian cosmetics industry is the lack of

local suppliers of raw materials, which require companies to buy them from imports.

At the same time, there are very few state aid strategies to stimulate Romanian

investments and provide certain benefits for local businesses.

In the Skin Care Cosmetics segment, the main active companies by turnover value

are: L'Oreal Romania, Farmec, Amway Romania Marketing, Forever Living

Products, Naos Skin Care Romania, Nu Skin Enterprises, Sabon Holdings, Ivatherm,

Nala Cosmetics, Gerocossen, Cosmetic Plant Prodcom,

The beauty industry in Romania has registered an upward trend in recent years

(2015-2021 period), registering an average annual growth rate of 3.1% and reaching

at the end of the analysis period a value of around 1.5 billion Euros. Bisa (2024) in

Virtual Board consider that sales of cosmetics (CAGR 5.1%) and skin care products

(3.7%) were the drivers of market growth, closely followed by the fragrance segment

(3.6%). Analyzing the data from the market study carried out by KeysFin (2024) for

the period 2015-2021 we observe a favorable evolution regarding the growth of the

market for personal care products. With a share of 44% of the total market value,

body care products reflect a mature market segment.

In eToro Retail Investor Beat (2024) we can read that it is certain that there will be

some small corrections in the level of demand in the next period, but we can say for

sure that for the forecast period (2022-2026) we are heading towards an increase in

the local market (CAGR 2.3%). This will be supported by the Cosmetics segment

(CAGR 3.8%), followed by perfumes (CAGR 2.4%) and Skin Care products (CAGR

2.3%). We are facing a time when consumers are focusing on quality products, with

multiple benefits and clinically proven results, to ensure their well-being, safety and

sense of comfort.

It is estimated that the market for skin care products will reach about 177 billion

dollars by 2025. The pace is slightly lower than that of the period 2015-2021.

Thus, the cosmetics and perfumery market in Romania will grow by 2.3%, on

average, annually, until 2026, according to an analysis by Virtual Board (2024) a

platform for democratization of managerial information that integrates artificial

intelligence solutions in consulting activity managerial. For comparison, the average

annual rate from 2015-2021 was 3.1%, according to the same source.

The beauty market in Romania will register a growth (2.3%) supported by

consumers' interest in quality products that ensure their overall well-being. Edis et

al. (2024) believe that the general trend is towards a healthy lifestyle that motivates

the consumption of natural and organic products, including dermato-cosmetics

(associated with sale in pharmacies)

In Environmental Working Group (2024) we can read that the cosmetics segment

remains the driver of the beauty and personal care industry, with a forecasted sales

growth of 16% in 2026 vs 2022, to the value of 270 mil. Euro.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

364

A survey carried out by Picodi.com (2024) reported that Romanian women spend an

average of 2057 lei on cosmetics annually. Among the respondents, 51% stated that

they purchase organic cosmetics only if the price is convenient, 34% buy regardless

of the price, and 14% show no interest in organic ingredients.

A trend to monitor is the popularity of products with multiple benefits, such as anti-

aging foundations, mascaras to strengthen eyelashes or anti-wrinkle cosmetics.

Ustymenko (2023) believe that the sales of dermatocosmetics are expected to

increase as a way to meet the growing demand for healthy, youthful-looking skin.

Many of them are distributed through pharmacies, which contributes to strengthening

the image of high-quality products with healing effects. Navickaitė et al. (2023)

consider that emphasis will be placed on natural ingredients such as thermal water

or marine mud and on paraben-free products.

The segment of skin care products, with an estimated value of 368 million Euros,

represents 26% of the local beauty industry, being one of the most dynamic

segments of the market.

Pryor et al. (2023) consider that beyond basic moisturizers and cleansers,

consumers have been paying more attention to products with rejuvenating, anti-

aging and blemish-correcting properties.

In eToro Retail Investor Beat (2024) we can read that face creams have the largest

share in the Skin Care segment, with a value of approx. 250 million Euros in 2022

and its growth is estimated at an average annual rate of 2.4% (2022-2026). At the

opposite pole, body lotion sales growth is estimated to register a CAGR of 1.1%.

The SNS Insider report (2024) indicated that the most dynamic growth rate is

forecast for the segment of newborn & children’s products (CAGR 3.7%, 2022-

2026), although the demographic trend is not favorable for an optimistic forecast in

sales volume, the increase in value can be supported by educating parents in what

concerns the needs and physical well-being of children.

3. Methodology

In order to support the aspects related in the theoretical framework, I considered it

necessary to carry out descriptive research thought in this way to provide an image

at a given moment of a situation in the chosen field. The survey was used as the

primary data collection method, and the questionnaire administered to a

representative sample of respondents was used as a research tool specific to the

survey.

In this section of the paper, the research is presented with all the steps taken. The

purpose established in order to carry out the research was to identify the preferences

of consumers in the municipality of Oradea, regarding the cosmetic products,

marketed, both by multinational companies and by domestic ones in Romania.

Starting from this goal, four key objectives were penciled in: the degree of information

of the population regarding the offer of cosmetic products on the Romanian market;

the need to inform the population about how to use cosmetic products, as well as

their action; the degree of perception of the demand for cosmetic products related to

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

365

the area under analysis; the degree of satisfaction of the level of demand by the

supply of foreign and domestic manufacturers of cosmetic products.

The second major part of the work is divided into three chapters. The first chapter

presents the research methodology. The second chapter covers the questionnaire

designed to be applied. In the third chapter, the results are interpreted, punctually

for each question, the answers obtained being partially illustrated, the complete

questionnaires being attached in the appendices. The information analysis was

carried out through content analysis.

The research method chosen was a quantitative, descriptive research method and

one of the most frequently used methods of collecting primary data, namely the

survey. It contributes to the analysis of the way in which consumers of cosmetic

products in Oradea perceive the quality of purchased cosmetic products, as well as

to the estimation of the share of the total population of Oradea municipality of people

oriented towards concerns regarding body hygiene. As a research tool specific to

the investigation, the questionnaire administered to a representative sample of

respondents was used, the purpose of its application being to obtain information

directly from the consumers of cosmetic products in the municipality of Oradea

regarding the subject of the discussion.

The information expected to be obtained from this research is quantitative

information. The questions that formed the questionnaire were dichotomous,

multichotomies and mixed closed questions, which were applied to a representative

sample of 250 subjects, residents of the municipality of Oradea.

This research was used with the aim of identifying the preferences of consumers in

the municipality of Oradea, regarding cosmetic products, marketed by both

multinational and local companies in Romania.

4. Data analysis, Results and Discussion

Purpose: Identifying the preferences of consumers in the municipality of Oradea

regarding cosmetic products, marketed by both multinational companies and local

ones in Romania. Also, as a result of the study carried out on a simple, non-stratified

representative sample, data were obtained regarding the purchase locations, the

factors that influence their purchase decisions, the frequency of purchase and use

of cosmetic products, as well as the brands and types of products preferred by to

them.

Objectives: - identifying the consumer opinions regarding:

▪ the level of information of the population regarding the offer of cosmetic

products on the Romanian market

▪ the need to inform the population about how to use cosmetic products, as

well as their action

▪ the degree of perception of the demand for cosmetic products related to the

area under analysis

▪ the degree of satisfaction of the level of demand by the supply of foreign

and domestic manufacturers of cosmetic products.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

366

Table 1: Frequency of responses shopping location

Frequency of responses

Answer option

No of respondents

Percent (%)

20,4

115

In the case of face creams, the majority of respondents (115 - 46%) are used to

buying them from specialty stores, in second place are profile distributors (51 -

20.4%) who offer products based on distribution catalogs, and supermarkets are in

third place (45 - 18%). Convenience stores (5 - 2%) represent a source of purchase,

only for 2% of the respondents, while 10% of those surveyed prefer to purchase

them from markets or stalls (25 - 10%).

Figure 1: Frequency of responses shopping location

Table 2: Frequency of influencing factors of the purchase decision

responses

Frequency of responses

Answer option

No of respondents

Percent (%)

176

70,4

0,4

14,4

12,4

6,4

A; 25

B; 5

C; 45

D; 51

E; 115

F; 15

Frequency of responses

A B C D E F

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

367

Figure 2: Frequency of influencing factors of the purchase decision responses

The major factor influencing the decision to buy face creams is represented by

"brand" (176 - 70.4%), followed at a great distance by "price" (50 - 20%) and "smell"

(36 - 14, 4%); interesting to note is the fact that factors such as "packaging" (20 -

8%), "quantity" (1 - 0.4%) and "advertisement" (31 - 12.4%) are not relevant in

making the decision to purchase, despite the fact that most companies are spending

ever-increasing amounts on superior packaging, 2-in-1 offers, and media

advertising.

Table 3: Frequency of purchase frequency responses

Frequency of responses

Answer option

No of respondents

Percent (%)

18,4

3,2

100

150

200

ABCDEFG

176

36 50 31 16

Frequency of responses

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

368

Figure 3: Frequency of purchase frequency responses

Regarding the frequency of purchasing face creams, it is noted that, in the case of

the majority of respondents (90 - 36%), it is done at an interval of 1-2 months, while

only 10 subjects, i.e. 4%, usually to buy them at an interval of 1-2 weeks.

Table 4: Frequency of purchase responses decisions

The frequency of purchase of face creams depends on weight, skin type and the

types of creams used (differentiated according to their structure). The conducted

study illustrates the high (high) frequency of face cream use: thus, the majority of

respondents (161 - 64.4%) use face creams frequently, i.e. at least once a day, while

8% (20 respondents) use 4-6 times a week, and 10.4% (26 respondents) 2-3 times

a week.

100

A B C D E F

A; 10

B; 46

C; 90

D; 45

E; 40

F; 8

Frecvenţa răspunsurilor

Frequency of responses

Answer option

No of respondents

Percent (%)

161

64,4

10,4

6,4

0,4

2,4

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

369

Figure 4: Frequency of purchase responses decision

Table 5: Frequency of brand preferences responses

Frequency of responses

Answer option

No of respondents

Percent (%)

20,4

7,2

10,4

Figure 5: Frequency of brand preferences responses

-25 75 175

Frequency of responses

-5

75 Frecvenţa răspunsurilor

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

370

According to the data resulting from the study, the leader in the top brand

preferences on the face cream market is Nivea (70 - 28%), closely followed by the

challenger brands L'Oréal (65 - 26%) and Avon (51 - 20.4%). Romanian brands,

such as Gerovital H3 and Elmiplant, have a significant weight in respondents'

preferences, outranking some prestigious international brands such as Chanel and

Lancôme.

Table 6: Frequency of type of creams used responses

Frequency of responses

Answer option

No of respondents

Percent (%)

151

60,4

11,2

18,4

23,2

8,4

Figure 6: Frequency of type of creams used responses

Moisturizing cream is the type of face cream used by the largest number of

respondents (151 - 60.4%), by a long distance, followed by anti-wrinkle cream

(23.2%) and day cream (18.4%), this the latter, being used by 46 of the questionnaire

respondents. The night cream has the lowest share in user preferences, being used

by only 8% (20) of them.

Due to low incomes, 62% of the respondents are not willing to spend an amount

greater than 50 lei / month for face creams, 31.2% of them are willing to allocate an

amount between 50 lei and 1000 lei of income for face creams face, while only 6.8%

are willing to spend an amount greater than 1000 lei for the purchase of face creams.

The largest share (35.2% women, 10.8% men) among the surveyed subjects is those

aged between 14-25 years, this, gradually decreasing as they get older, to those

between 26- 35 years old (20.4% women, 5.6% men). The number of men surveyed,

who are over 36 years old, is small (5 men), compared to that of women (63 women).

Moisturising

cream

Nutritional

cream

Day cream

Night

cream

Anti-wrinkle

cream

Cleanser cream

Frequency of responses

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
371 
 
 
5.Conclusion 
Looking as a whole, we therefore observe that he Romanian market of cosmetic 
products  is  a  heterogeneous,  strongly  stratified  market,  the  offer  includes  both 
cheap, "no name" products, of very low quality, but whose success is based on the 
consumer's lack of information and money, as well as sophisticated products and 
prestigious brands on the international market.  
Following the interpretation of the results of the questionnaire administered to the 
250 residents of Oradea, the conclusion can be drawn that they prefer the products 
of multinational companies, which  operate  on the  market  of our country, to the 
detriment of those made and marketed by local producers. Despite the fact that they 
do not have a purchasing power comparable to that of consumers in the countries of 
origin of the mentioned foreign companies, nevertheless, due to the notoriety of 
these brands with tradition on the world market, the subjects surveyed prefer to 
purchase branded products, having the conviction that they will satisfy their needs 
better than domestic products. 
Although  international  cosmetics  remain  the  main  players  in  the  industry,  the 
Romanian market is on an upward trend, which can be characterized by a refinement 
of  consumer  preferences,  which  now  show  more  elaborate  requirements, 
determined  by  the  increase  in  information  about  care  products  and  to  their 
particularities. 
 
References 
 
1.  Amberg,  N.–Gyenge,B.(2020),  Model  development  opportunities  for  analyze 
customer  behavior  in  the  cosmetic  market,  Conference:  12th  International 
Conference of J. Selye University, Komárno, Slovakia, DOI:10.36007/3754.2020.09, 
https://www.researchgate.net/publication/347522049_MODEL_DEVELOPMENT_O
PPORTUNITIES_FOR_ANALYZE_CUSTOMER_BEHAVIOUR_IN_THE_COSMET
ICS_MARKET 
2.  Fatriasari,  W.–  Arung  A.,T.–Edis,  Z  –Kuspradini,  H.  (2024),  Biomass-based 
Cosmetics Research Trends and Future Outlook, Springer Nature Singapore Pte 
Ltd., ISBN: 978-981-97-1907-5 
3. . Ishankulova, L.,I.- Mombekov, S.,E.- Zhakipbekov, K.,S.-  Seitova, Zh.,D. (2024), 
  Current  trends  in  the  development  of  the  cosmetic  market,Farmaciâ 
Kazahstana,,DOI: 10.53511/PHARMKAZ.2024.51.29.045 
4. Kotler, P.– Keller, K. (2020)  Marketing management, V Edition,  
https://www.yumpu.com/ro/document/view/65144713/kotler-keller-managementul-
marketingului  
6. Laskina, O.S. (2016), Strategic marketing of innovations in the cosmetic market, 
Proceedings of the Voronezh State University of Engineering Technologies, DOI: 
10.20914/2310-1202-2016-1-277-281 
7. Luoiu,G.– Marcu,L. (2024), Trends regarding the European cosmetic market, 
Conference:  Global  Interferences  of  knowledge  society,  Valahia  University  of 
Targoviste,  Romania, 
https://www.researchgate.net/publication/381635131_TRENDS_REGARDING_TH
E_EUROPEAN_COSMETIC_MARKET 

                                         Analele Universității din Oradea. Seria științe economice 
                                                                 TOM XXXIII, 2nd Issue, December 2024 
372 
 
 
8.  Nasni  Naseri,R.,N–Mohamad,M.,S.–Mohd  Esa,M.–Jais,Z.(2024),  A 
Conceptual  Model  for  Factors  Influencing  Purchase  Intention  of  Cosmetic 
Products,  Information  Management  and  Business  Review  16(1(I)S).:299-
305,DOI:10.22610/imbr.v16i1(I)S.3754 
9.Navickaitė,  G.  (2022)  New  product  development  and  market  launch  in 
cosmetics  industry,  Mokslas  -  Lietuvos  ateitis,14:1-8,  DOI: 
10.3846/mla.2022.15668 
10..Niesheva, A.– Nebaba, N.– Kutsenco, V.– Vasylieva, T. (2023), Management of 
marketing launching of a new product ( on the example of the cosmetic products 
market), Herald of Khmelnytskyi National University Economic sciences 320(4):143-
151, DOI: http://dx.doi.org/10.31891/2307-5740-2023-320-4-21  
11.Pryor,S.–Yin,B.,M.(2024),BeautyintheAgeofMarketing, 
https://www.researchgate.net/publication/256022728_Beauty_in_the_Age_of_Mark
eting 
12.Sviderska S.,– Zhylinska O.,–Kukhta P.(2023) Identification of the Factors 
Influencing the Cosmetic Products Market, Studies in Business and Economics 
18(1):328-341,DOI: 10.2478/sbe-2023-0018 
13. Ustymenko, R. (2023) Trends and innovation in cosmetic marketing, Economics 
& Education 8(3):12-17, DOI: 10.30525/2500-946X/2023-3-2 
14.. Vella, K. (2017) A study of the buying behaviour of consumers in the local 
cosmetic  market,  Bachelor  of  Arts  (Honours)  Business  Enterprise,  DOI: 
10.13140/RG.2.2.14372.99209 
15.  https://economedia.ro/ 
16. https://eToro Retail Investors Beat.com/ 
17.https://Environmental Working Group.com   
18 . https://www.quora.com/How-does-marketing-increase-the-standard-of-living-of-
people 
19.https://www.news.ro/economic/analiza-piata-produselor-
cosmetice1922404019552024091621738309 
20. https://managementpro.ro/piata-produselor-cosmetice-romania-2015-2026/ 
21.  https://www.ceccarbusinessmagazine.ro/analiza-rezultatelor-si-a-structurilor-
adiacente-in-industria-produselor-cosmetice-si-de-
parfumerie/a/NTQ2MTMyMTA0MzQ5NzE2MxGrFfjDTmjbUQ2RphbiG4w 
23.  https://piccodi.com/ 
24.  https://Keys Fin.ro/ 
  

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

373

THE EFFECTS OF SOCIAL MEDIA CONTENT

CHARACTERISTICS ON CONSUMER ENGAGEMENT – A

SYSTEMATIC LITERATURE REVIEW

Flavia HERLE

Marketing Department, Faculty of Economics and Business Administration, Babeș-

Bolyai University, Cluj-Napoca, Romania

flavia.herle@econ.ubbcluj.ro

Abstract: This paper explores the relationship between social media content

characteristics and consumer engagement. Utilising a systematic literature review,

we analysed 89 relevant studies, highlighting key findings on how various content

types, formats and other characteristics affect user engagement. Our findings reveal

that while high-quality visual content generally enhances engagement, emotional

appeal and interactivity are essential for fostering connections with consumers.

However, we identified several gaps in the literature, which future research should

address to clarify how social media content should be designed and delivered in

order to maximise consumer engagement.

Keywords: social media; content; consumer engagement

JEL classification: M31

1. Introduction

Social networking sites (SNS) have become a global phenomenon. Most recent data

suggests that every minute, 4 million posts on Facebook receive a “like”, and a billion

story-type posts are shared daily on social media (Statista, 2024). We, individual

users and companies, are now connected globally through these networks.

Interaction between brands and consumers is easier than ever. And yet, how do you

keep consumers engaged? What type of content should you post?

Given the official data (Statista, 2024) Facebook, YouTube, Instagram, WhatsApp

and TikTok are the most popular social networks worldwide, by number of monthly

active users. Some authors (Voorveld et al, 2018) argue that when it comes to these

online networks, engagement is highly context-specific and consists of various types

of experiences on each social media platform, with each experience being unique.

For instance, it was found that higher levels of engagement are obtained on

Facebook, compared with Instagram or X (Twitter) (Devereux, Grimmer, & Grimmer,

2020). However, given the type of content available on all of these platforms, the

recent trends made them more similar (Roma & Aloini, 2019). These shifts in content

formats and engagement dynamics suggest a need for a deeper exploration of the

content-related factors that drive consumer engagement across different platforms.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

374

This paper aims to synthesize key aspects from existing literature on the

characteristics of social media content and its impact on consumer engagement,

while also identifying gaps in the literature.

2. Research purpose and methodological approach

This systematic literature review seeks to consolidate existing concepts and

correlations examined within the specialized literature, explaining the relationship

between social media content, its characteristics, and consumer engagement.

Accordingly, this study synthesizes key findings from prior research in the field,

employing the PRISMA model framework (Tricco et al, 2018) as a methodological

guide. The adopted PRISMA approach encompasses five stages, outlined as

follows:

Phase 1: Database research

Firstly, to conduct the systematic analysis of the specialized literature, we used the

Web of Science as the main database to identify articles related to the following

combinations of keywords: (social media AND content characteristics) OR (social

media AND consumer engagement) OR (content-type AND consumer engagement)

OR (content characteristics AND consumer engagement). We focused on papers

indexed in the Social Science Citation Index (SSCI) and Science Citation Index

Expanded (SCIE) that pertain to the following fields: economics, business,

psychology, communication, social sciences, management or computer science.

During the initial phase of our research, we identified 280 relevant articles.

Phase 2: Refinement based on source quality

After the initial phase, we applied a refinement process to ensure the quality and

credibility of the sources. Specifically, we selected only papers published by well-

regarded academic publishers: Emerald, Elsevier, Taylor & Francis, Wiley, and

Springer. These publishers are known for their strict peer-review process and

dedication to publishing high-quality research, which enhances the reliability of the

papers in our database. By applying this criterion, we narrowed down our collection

to a set of 216 studies.

Phase 3: Shortlisting Publications Based on Content

From this new dataset, we aimed to identify only the studies that directly relate to

our research goals. Research design was not a deciding factor, meaning we took

into consideration studies with various methodologies (qualitative, quantitative,

experimental, etc.). Thus, we proceeded to exclude irrelevant articles by scanning

their titles or abstracts. Specifically, any studies not addressing the relationship

between content characteristics and consumer engagement on social media were

removed. After this phase, we identified 89 relevant studies that fulfilled all the

specified criteria.

Phase 4: Relevant data analysis

The final sample of studies was systematically analysed based on a summary table

including the following details for each study: authors, year of publication, journal,

publisher, objective/hypothesis, method and social networking sites taken into

consideration.

Phase 5: Compiling the results

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

375

The final phase consisted of compiling data about the hypotheses, research methods

and results extracted from all the studies in such a way as to allow us to formulate

clear conclusions, based on empirical evidence, regarding the relationship between

content and customer engagement. In addition, we could identify a series of gaps in

the existing literature but also highlight the practical implications that this type of

study can add to existing literature.

3. Results and Discussion

3.1. Key characteristics of the studies

The 89 studies included in our dataset were published in journals owned by six

different prestigious publishers. As it can be seen in Table 1, out of these studies, a

significant amount was published by Emerald (31,5%) and by Taylor & Francis

(23%).

Table 1: Articles included in the systematic literature review

Journal

No. of articles

Journal of Retailing and Consumer Services

Journal of Research in Interactive Marketing

Online Information Review

Journal of Consumer Behaviour

Psychology & Marketing

Journal of Advertising

Journal of Brand Management

Journal of Business Research

Journal of Interactive Marketing

Cogent Social Sciences

International Journal of Consumer Studies

Internet Research

Journal of Computer Information Systems

Journal of Product and Brand Management

Other journals (with one paper each)

Publisher

No. of articles

Emerald

Taylor & Francis

Elsevier

Wiley

SAGE

Springer

Year published

No of articles

2023-2024

2021-2022

2019-2020

2017-2018

2015-2016

2013-2014

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

376

We noticed an increasing number of publications focused on the relationship

between social media content characteristics and consumer engagement over the

past decade. Thus, from only two articles published in each of the biennia 2013-2014

and 2015-2016, the volume of research rose steadily through subsequent periods,

reaching a notable 29 articles by 2023-2024. This upward trend reflects academia's

response to the evolving role of social media as an essential platform for consumer-

brand interaction.

3.2. Methodologies and research approaches

The methodologies and research approaches utilized in the studies varied

significantly (see Table 2). More than 50% of the studies (50 out of 89) employed

content analysis as the primary research method, which involved extracting existing

content from various social networks and analysing consumers’ level of engagement

with that content. Other quantitative research methods included online surveys, used

in 20 out of the 89 studies, while experimental research design was conducted in

only 11 studies. The remaining studies were more theoretical or conceptual,

providing valuable recommendations for future research.

Table 2: Distribution of studies by methodological approaches

Method

No. of articles

Observation (Content analysis)

Online surveys

Experiments

Theoretical / Conceptual

The prominence of content analysis indicates a strong focus on observational data

and tangible metrics (i.e., likes, comments, shares etc.) that can capture real-world

interactions between consumers and brands. On the other hand, online surveys offer

a complementary perspective, capitalizing on self-reported consumer attitudes,

perceptions, and motivations that may not be directly observable through content

analysis alone. However, experimental designs offer a more appropriate framework

to examine cause-effect relationships between specific content characteristics and

engagement outcomes, enabling researchers to isolate and test individual variables.

3.3. Investigated social network sites

As previously mentioned, each social network has its own unique characteristics.

However, according to official data from DataReportal (2023), Facebook is the most

widely used platform among consumers. This dominance is evident in the numerous

studies conducted, with 46 out of 89 studies identifying Facebook as the primary

social network for testing research hypotheses (see Table 3). The second most

referenced network in these studies is Instagram, appearing in 11 studies, followed

by X (formerly Twitter), which was mentioned in 10 studies. Only a small percentage

of studies (about 10%) considered YouTube, LinkedIn, or TikTok for research

purposes.

This platform-specific distribution of studies highlights potential research gaps,

particularly on emerging or less-examined platforms like LinkedIn and TikTok, where

consumer engagement might differ substantially from more traditional networks,

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

377

given the fact that most recent data shows that TikTok gains eight new users every

second, making it one of the most widely used social media platforms worldwide

(DataReportal, 2023).

Table 3: Distribution of studies by investigated social network platform

Social network site

No. of articles

Facebook

Instagram

X (Twitter)

YouTube

TikTok

Our results suggest that future research could benefit from exploring the unique

engagement characteristics of these platforms, especially as they continue to evolve

and attract diverse user segments.

3.4. Main topics

3.4.1 Content type

Social media content can take different forms, from text to audio, photos, or videos.

Some researchers have focused their studies on measuring the impact of various

types of content on consumer online behaviour, demonstrating that the effect differs

across them (Luarn, Lin, & Chiu, 2015; Le, 2018). For instance, posts that include

high-quality photos tend to result in higher engagement rates, attracting the most

likes and comments (Doyle, Su, & Kunkel, 2022). If a photo showcases a product,

particularly fashion accessories, engagement levels increase (Bonilla-Quijada et al,

2023). On the other hand, a study on X (formerly Twitter) (Li & Xie, 2019)

emphasizes the importance of using a combination of images and text when

promoting products. Additionally, other researchers (Li & Ensafjoo, 2024) found that

audio tweets tend to be more engaging compared to text or video tweets because

text-based posts result in lower user engagement compared to audio-visual content.

When it comes to video content, it appears to generate limited engagement, even

though it is shared more frequently (Balamurugan et al, 2021). Videos without texts

get more likes, shares, and views, whilst videos including music or spoken language

are more frequently added to “favourites” (Einsle, Garcia-Fernandez, & Izquierdo,

2024).

For Instagram in particular, publishing content in carousel format (including more

than 1 photo per post) leads to a higher number of likes (Wahid & Gunarto, 2022).

Research on Instagram shows that aesthetically appealing visual content leads to

more likes and comments (Kusumasondjaja, 2020), while the story-like format is

gaining popularity among users (Karpinska-Krakowiak & Modlinski, 2018). However,

a study found that when involvement with the product is low, users generally engage

more with brand posts regardless of their format (Barreto & Ramalho, 2019).

These findings emphasize that different types of social media content and different

content formats can drive distinct patterns of consumer engagement, which need

further investigation. For instance, the varying impact of video content raises

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

378

important questions about the effectiveness of video as an engagement tool, which

future research could explore. For example, none of the studies included in our SLR

have analysed short-form video content, which is becoming increasingly popular on

social media platforms (Facebook, Instagram, YouTube, TikTok), and its impact on

consumer engagement. In addition, the preference for audio tweets over text-based

ones on some platforms suggests that audio content can create a more immersive

experience for users. Yet, little is known about the broader applicability of audio

across other platforms or types of products. Also, while text content typically shows

lower engagement levels, it remains unclear how this format can be optimized to

appeal to consumers. Furthermore, there seems to be a knowledge gap in

understanding how the interplay between content format and product involvement

shapes engagement outcomes.

3.4.2 Content characteristics

Content can vary widely in its characteristics. Research indicates that hedonic

content is shared less often than utilitarian content (Hoang, Tran, & Le, 2024).

Additional studies suggest that to increase likes and shares, content should focus

on emotional appeal rather than solely promoting a product (Izogo & Mpinganjira,

2020).

Gupta, Mahajan, and Bhusan (2023) also concluded that emotional content fosters

emotional engagement, whereas informational content impacts cognitive and

behavioural aspects. For instance, content should be more functional and

communicate product benefits to stimulate sales (Liadeli, Sotgiu, & Verlegh, 2023).

However, non-sales-related content is more helpful in generating likes and shares

(Xu, Chen, & Ow, 2023). On the opposite, the findings of Wahid, Karjaluoto & Asiati

(2023) suggest that informational content generates higher engagement than

emotional content.

Kujur & Singh (2017) indicate that the characteristics of social network content, such

as vividness, interactivity, entertainment, and information, directly influence

consumers' online participation. Some authors agree that interactivity is crucial for

creating engaging content (Pathak & Kaushik, 2024). Including questions in the

content is likely to enhance consumer engagement and increase responses (Li,

Chang, & Liang, 2022). Additionally, offering promotional incentives can enhance

audience engagement (Fan et al., 2023). Drossos, Coursaris & Kagiouli (2024),

discovered that the length of a message plays a crucial role in consumers' intentions

to share. This finding is supported by Pancer et al. (2019) who found that easy-to-

read posts receive more likes, comments, and shares on social media. Additionally,

Shabbir-Husain et al. (2024) confirmed that the use of conversational language

enhances consumer engagement. Moreover, another significant factor in driving

consumer engagement is the use of pronouns, particularly second-person pronouns

(Labrecque, Swani, & Stephen, 2020).

Overall, previous research indicates that content characteristics play an important

role in driving consumer engagement on social media. Nevertheless, many specific

topics in this area still need further investigation. For instance, while utilitarian and

emotionally engaging content both appear effective, they each fulfil different

engagement functions. This points to a potential gap in understanding how to

balance or combine emotional and informational elements to maximize engagement.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

379

In addition, even though research suggests that interactivity is essential, there is

limited research on the specific types of interactivity that most effectively foster

different forms of engagement, across diverse platforms and demographics.

Moreover, the importance of message length and readability suggests that ease of

processing is critical, yet more research is needed to identify optimal lengths or

linguistic styles for maximizing engagement within different content types and

product categories. Furthermore, previous findings suggest that a personalized,

approachable communication style may help brands resonate on a more individual

level with consumers. However, further research could examine how these stylistic

elements interact with brand image, as what is effective for one brand or context may

differ for another.

3.4.3. Consumer engagement

Eigenraam, Eelen, & Verlegh (2018) classified digital engagement practices into five

categories: engaging for fun, learning, providing customer feedback, discussing a

brand, and working for a brand. Others view consumer engagement through the lens

of likes, comments, and shares on social media. They argue that liking a post

generally generates positive feedback while sharing can be linked to both positive

and negative comments about a brand (Dhaoui & Webster, 2021). The findings

indicate that a branded content experience enhances consumer engagement with

the content, ultimately fostering a sense of virtual community among customers

(Waqas, Hamzah, & Salleh, 2021).

It seems that content source plays a moderating role in content engagement

(Giakoumaki & Krepapa, 2020). Sardar, Tata, & Sarkar (2024) agree that consumer

engagement acts as a mediator between source credibility, content characteristics,

and purchase intentions.

Moreover, the effectiveness of social media content on users' engagement is

moderated by content context (Shahbaznezhad, Dolan, & Rashidirad, 2021). Some

authors argued that not only the content type is important, but also the time when it’s

posted. Hoang, Tran & Le (2024) concluded that posting visual content midweek, on

weekends, or on afternoons, generates higher engagement rates. Content released

in the morning enhanced the positive effects of warmth, excitement, and joy on

consumer engagement, compared to content released in the afternoon (Dong et al,

2024). In contrast, a study (Yesiloglu, Memery, & Chapleo, 2021) found that

medium-length and long videos posted during non-business hours on weekdays are

more likely to receive views, likes, and comments. However, content quality drives

engagement more than frequency (Romero-Jara et al, 2024).

All these findings suggest several areas where researchers could further explore the

relationship between content characteristics and consumer engagement. One key

area is the role of engagement practices, particularly in terms of how different forms

of engagement relate to distinct consumer behaviours and outcomes. Research

could investigate how these engagement practices interact with content type and

platform characteristics to influence overall consumer responses. Additionally, the

moderating effect of content source on engagement warrants further investigation,

especially in terms of how source credibility and brand authority interact with content

characteristics to drive engagement or influence purchase intentions.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

380

The role of content context, such as posting time and timing strategies, is another

promising area for future research. While some studies suggest that certain times of

day or specific days of the week enhance engagement, further exploration is needed

to identify the optimal posting windows across different social media platforms,

industries, and demographic groups. Research could also tackle into how these

contextual factors interact with content type to amplify or diminish engagement

outcomes.

Also, the role of branded content in creating a sense of virtual community represents

another potential future research direction, by specifically examining how brands can

enhance engagement by creating a more personalized or community-driven

experience. Future studies could investigate how virtual communities, driven by

branded content, contribute to long-term brand loyalty or influence consumers’

behavioural intentions beyond the immediate post-engagement stage.

4. Theoretical and practical implications

Our systematic literature review (SLR) identifies several gaps in the existing

literature, highlighting opportunities for future studies to address these areas. Future

research should explore various aspects of social media content and consumer

engagement. Studies could examine the effectiveness of different content formats,

such as video, audio, and text, and how they interact with product involvement to

shape engagement outcomes. Research should also address the use of both

utilitarian and emotional value to obtain more content consumer engagement while

investigating how interactivity and platform-specific dynamics influence engagement

across diverse demographics. Further exploration is needed to determine optimal

message lengths, linguistic styles, and the role of personalised communication in

enhancing engagement. Additionally, the impact of contextual factors like posting

time and timing strategies on engagement should be studied across different SNSs

and industries. Finally, researchers could focus on how branded content fosters

virtual communities, driving long-term brand loyalty and influencing consumer

intentions beyond immediate interactions.

On the other hand, this SLR on social media content marketing serves as a valuable

resource for practitioners seeking to understand how to effectively engage

consumers through the content they share on social networks. It highlights what

types of content - such as photos, videos, or text - are most effective and identifies

areas for improvement in their online communication strategies. Given the

continuously evolving online environment, with new technologies emerging

frequently, consumer behaviour is significantly influenced by these changes.

Therefore, social media marketing specialists must stay informed about these

ongoing changes to ensure their strategies remain relevant and effective.

5. Conclusion

Engagement on social media varies by content type and platform. Different forms of

content impact consumer engagement in distinct ways across various platforms.

Content characteristics and timing are essential factors that drive engagement.

Specific traits, such as interactivity, vividness, and language style, play a significant

role in influencing engagement levels. Therefore, social media content creators

should take both the characteristics of their content and the timing of their posts into

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

381

account to maximize reach and interaction. Also, while frequent posting can maintain

visibility, the quality and relevance of content are more significant in driving

meaningful engagement.

Our SLR provides actionable insights for social media marketers looking to enhance

engagement. It suggests that brands should leverage emotional and visually

engaging content, optimize posting times, and focus on high-quality, interactive

posts to build stronger connections with consumers.

Additionally, this SLR identifies gaps in current research, particularly concerning

different types of social media content and its effects on audience engagement. Also,

we suggest that future studies should investigate user interactions with content on

other emerging SNSs. Filling these gaps will enhance our understanding of shifting

audience preferences in an increasingly dynamic digital environment.

References

1. Balamurugan, A., Masayuki, Y., Sanjeev, V., Atul Arun, P., & Pingali, V. (2021).

Social media content strategy for sport clubs to drive fan engagement. Journal of

Retailing and Consumer Services, 62.

2. Barreto, A. M., & Ramalho, D. (2019). The impact of involvement on engagement

with brand posts. Journal of Research in Interactive Marketing, 13(3), 277-301.

3. Bonilla-Quijada, M., Del Olmo, J. L., Andreu, D., & Ripoll, J. (2023). Customer

engagement on Instagram for luxury fashion brands: An empirical comparative

analysis. Cogent Social Sciences, 9.

4. Devereux, E., Grimmer, L., & Grimmer, M. (2020). Consumer engagement on

social media: Evidence from small. Journal of Consumer Behaviour, 19(2), 151-159.

5. Dhaoui, C., & Webster, C. (2021). Brand and consumer engagement behaviors

on Facebook brand pages: Let's have a (positive) conversation. International Journal

of Research in Marketing, 38(1), 155-175.

6. Dixon, S. J. (2024, march). Facebook - statistics & facts. [online]

https://www.statista.com/topics/751/facebook/#editorsPicks

7. Dixon, S. J. (2024, july 10). Most used social networks 2024, by number of users.

[online] https://www.statista.com/statistics/272014/global-social-networks-ranked-

by-number-of-users/

8. Dong, X., Liu, H., Xi, N., Liao, J., & Yang, Z. (2024). Short video marketing: what,

when and how short-branded videos facilitate consumer engagement. Internet

Research, 1066

9. Doyle, J., Su, Y., & Kunkel, T. (2022). Athlete branding via social media: ex

amining the factors influencing consumer engagement on Instagram. European

Sport Management Quarterly, 22(4), 506-526.

10. Drossos, D., Coursaris, C., & Kagiouli, E. (2024). Social media marketing content

strategy: A comprehensive framework and empirically supported guidelines for

brand posts on Facebook pages. Journal of Consumer Behaviour, 23(3), 1175-1192.

11. Eigenraam, A., Eelen, J., & Verlegh, P. (2018). A Consumer-based Taxonomy

of Digital Customer Engagement Practices. Journal of Interactive Marketing, 44(1),

102-121.

12. Einsle, C., Garcia-Fernandez, J., & Izquierdo, G. (2024). TikTok video formats’

impact on user interaction – evidence from the Ocean Race. Managing Sport and

Leisure, 1-15.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

382

13. Fan, F., Chan, K., Wang, Y., Li, Y., & Prieler, M. (2023). How influencers’ social

media posts have an influence on audience engagement among young consumers.

Young Consumers, 24(4), 427-444.

14. Feddema, K., Harrigan, P., Nekaris, A. I., & Maghrifani, D. (2020). Consumer

engagement behaviors in the online wildlife trade: Implications for conservationists.

Journal of Psychology & Marketing, 37(12), 1755-1770.

15. Giakoumaki, C., & Krepapa, A. (2020). Brand engagement in self-concept and

consumer engagement in social media: The role of the source. Psychology &

Marketing, 37(3), 457-465.

16. Gupta, S., Mahajan, R., & Bhusan Dash, S. (2023). The impact of influencer-

sourced brand endorsement on online consumer brand engagement. Journal of

Strategic Marketing, 1-17.

17. Hoang, H., Tran, K., & Le, T. (2024). Engaging users on university Facebook

pages: insights from the uses and gratifications theory and post characteristics.

Cogent Social Sciences, 10.

18. Izogo, E., & Mpinganjira, M. (2020). Behavioral consequences of customer

inspiration: the role of social media inspirational content and cultural orientation.

Journal of Research in Interactive Marketing, 14(4), 431-459.

19. Karpinska-Krakowiak, M., & Modlinski, A. (2018). Popularity of Branded Content

in Social Media. Journal of Computer Information Systems, 60 (4), 309-315.

20.Kepios. (2023). Global Social Media Statistics, Data Reportal [online]

https://datareportal.com/social-media-users

21. Kujur, F., & Singh, S. (2017). Engaging customers through online participation in

social networking sites. Asia Pacific Management Review, 22(1), 16-24.

22. Kusumasondjaja, S. (2020). Exploring the role of visual aesthetics and

presentation modality in luxury fashion brand communication on Instagram. Journal

of Fashion Marketing and Management, 24(1), 15-31.

23. Labrecque, L., Swani, K., & Stephen, A. (2020). The impact of pronoun choices

on consumer engagement actions: Exploring top global brands' social media

communications. Psychology and Marketing, 37(6), 796-814.

24. Le, T. D. (2018). Influence of WOM and content type on online engagement in

consumption communities: The information flow from discussion forums to

Facebook. Online Information Review, 42(2), 161-175.

25. Li, J., & Ensafjoo, M. (2024). Media Format Matters: User Engagement with

Audio, Text and Video Tweets. Journal of Radio & Audio Media, 1-21.

26. Li, Y., & Xie, Y. (2019). Is a Picture Worth a Thousand Words? An Empirical

Study of Image Content and Social Media Engagement. Journal of Marketing

Research, 57 (1), 1-19.

27. Li, Y., Chang, Y., & Liang, Z. (2022). Attracting more meaningful interactions:

The impact of question and product types on comments on social media

advertisings. Journal of Business Research, 89-101.

28. Liadeli, G., Sotgiu, F., & Verlegh, P. (2023). A Meta-Analysis of the Effects of

Brands’ Owned Social Media on Social Media Engagement and Sales. Journal of

Marketing, 87(3), 406

29. Luarn, P., Lin, Y.-F., & Chiu, Y.-P. (2015). Influence of Facebook brand-page

posts on online engagement. Online Information Review, 39(4), 505-519.

Analele Universității din Oradea. Seria științe economice

TOM XXXIII, 2nd Issue, December 2024

383

30. Pancer, E., Chandler, V., Poole, M., & Noseworthy, T. (2019). How Readability

Shapes Social Media Engagement. Society for Consumer Psychology, 29(2), 262-

270.

31. Pathak, A., & Kaushik, K. (2024). Driving consumer engagement for digital

payment brands: Content strategy on instagram. Journal of Retailing and Consumer

Services, 79.

32. Roma, P., & Aloini, D. (2019). How does brand-related user-generated content

differ across social media? Evidence reloaded. Journal of Business Research, 96,

322-339.

33. Romero-Jara, E., Solanellas, F., Lopez-Carril, S., Kolyperas, D., &

Anagnostopoulos, C. (2024). The more we post, the better? A comparative analysis

of fan engagement on social media profiles of football leagues. International Journal

of Sports Marketing and Sponsorship,

34. Sardar, S., Tata, S., & Sarkar, S. (2024). Examining the influence of source

factors and content characteristics of influencers' post on consumer engagement

and purchase intention: A moderated analysis. Journal of Retailing and Consumer

Services, 79.

35. Shahbaznezhad, H., Dolan, R., & Rashidirad, M. (2021). The Role of Social

Media Content Format and Platform in Users’ Engagement Behavior. Journal of

Interactive Marketing, 53(1)

36. Soares, J. C., Limongi, R., & Cohen, E. D. (2022). Engagement in a social media:

an analysis in higher education institutions. Online Information Review, 46(2), 256-

284.

37. Tricco A. C., L. E. (2018). PRISMA extension for scoping reviews (PRISMA-

ScR): Checklist and explanation. Annals of Internal Medicine, 467-476.

38. Voorveld, H. A., van Noort, G., Muntinga, D. G., & Bronner, F. (2018).

Engagement with Social Media and Social Media Advertising: The Differentiating

Role of Platform Type. Journal of Advertising, 47 (1), 38-54.

39. Wahid, R., & Gunarto, M. (2022). Factors Driving Social Media Engagement on

Instagram: Evidence from an Emerging Market. Journal of Global Marketing, 35,

161-191.

40. Wahid, R., Karjaluoto, H., & Asiati, D. (2023). Becoming TikTok Famous:

Strategies for Global Brands to Engage Consumers in an Emerging Market. Journal

of International Marketing, 31(1), 106-123.

41. Wang, X., Cheng, M., Li, S., & Jiang, R. (2023) Tourism Management, 96.

Waqas, M., Hamzah, Z., & Salleh, N. A. (2021). Customer experience with the

branded content: a social media perspective. Online Information Review, 45(5), 964-

982.

42. Xu, Y., Chen, W., & Ow, T. (2023). The effects of social media posts’

characteristics on customer engagement: Evidence from WeChat. Information &

Management, 60(7).

43. Yesiloglu, S., Memery, J., & Chapleo, C. (2021). To post or not to post? Exploring

the motivations behind brand-related engagement types on social networking sites.

Internet Research, 31(5), 1849-1873.

0 views·385 pages

Analele Universității din Oradea. Seria științe economice TOM XXXIII, 2nd Issue, December 2024 PDF Free Download

Analele Universității din Oradea. Seria științe economice TOM XXXIII, 2nd Issue, December 2024 PDF free Download. Think more deeply and widely.

Uploaded by anthonyy27 on 4/9/2026

/385