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Volume XXI, Special Issue, 1(91), 2026
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This editorial introduces the Special Issue of the Journal of Applied Economic Sciences entitled “Structural Reforms, Sustainability, and Economic Transformation in Emerging and Transitional Economies.” The collection of studies examines how structural reforms interact with macroeconomic stability, institutional governance, financial sustainability, and technological innovation to shape contemporary development trajectories. Drawing on empirical evidence from Europe, the Middle East, Africa, and Asia, the contributions provide new insights into the mechanisms through which reforms influence economic resilience, institutional capacity, and sectoral transformation. Together, the articles highlight the importance of integrated policy approaches capable of supporting inclusive and sustainable economic development in emerging and transitional economies.
Keywords: structural reforms; economic transformation; emerging economies; sustainability; institutional governance; digital transformation.
JEL Classification: O10; O20; O43; F63.
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Fiscal sustainability remains a cornerstone of structural reform for transitional economies in the Western Balkans. This study evaluates the impact of direct and indirect taxation on the economic growth of North Macedonia using quarterly data from 2010Q1 to 2023Q4. Employing a Vector Autoregression (VAR) framework and Ordinary Least Squares (OLS) regression, the research identifies the distinct economic outcomes associated with varying tax structures. The findings reveal that while both direct and indirect taxes influence growth, North Macedonia’s path to sustainable social and economic development is increasingly dependent on the transition toward progressive direct taxation. The comparative analysis with neighbouring Western Balkan states highlights North Macedonia's unique fiscal position and provides a roadmap for policy reforms aimed at reducing income inequality while maintaining financial resilience. This study offers critical evidence for policymakers tasked with modernizing fiscal architectures in emerging markets.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 30th of November, 2025; Revised 7th of January, 2026; Accepted 12th of February, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue 1(91), 2026.
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This study evaluates the comparative impact of personal remittances and Foreign Direct Investment (FDI) on the Human Development Index (HDI) across Latin American countries over a 33-year period (1990–2023). Using a robust panel data econometric framework, the research tests the hypothesis that different external financial flows yield divergent outcomes for social welfare and human capital accumulation.
The findings indicate that while both inflows contribute positively to development, remittances show a more direct correlation with immediate poverty reduction and household-level human capital investment (education and health), whereas FDI serves as a long-term driver of macroeconomic growth and structural transformation. The results highlight a regional "development duality" where remittance-dependent economies achieve different social milestones compared to FDI-driven ones. The study provides critical policy implications for Latin American governments, emphasising the need for structural reforms to improve productive absorption of remittances and social spillover effects of foreign capital.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 30th of November, 2025; Revised 19th of February, 2026; Accepted 1st of March, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue 1(91), 2026.
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This paper examines whether variations in environmental responsibility, social development, and governance quality are systematically associated with sovereign borrowing costs in emerging market economies, based on panel data analysis. The analysis is based on an annual panel dataset covering the period 2014–2023 for Brazil, Chile, India, Indonesia, Malaysia, Turkey, South Africa, and Poland. Sovereign borrowing costs are measured by sovereign bond yield spreads, calculated as the difference between each country’s 10-year government bond yield and the 10-year US Treasury yield. ESG performance is represented by a composite ESG index as well as its environmental, social, and governance sub-dimensions, constructed using indicators obtained from the World Bank Sovereign ESG Data Portal. The empirical framework employs a two-way fixed effects model to account for unobserved country-specific heterogeneity and common time effects. To ensure robust statistical inference, standard errors are adjusted using the Driscoll–Kraay procedure, which accounts for heteroskedasticity, serial correlation, and cross-sectional dependence.
The results indicate that ESG performance has a statistically significant effect on sovereign bond yield spreads. Disaggregated estimations further indicate that the social dimension plays a particularly prominent role in explaining variations in sovereign borrowing costs. In addition, heterogeneity and robustness analyses confirm that the main findings remain largely stable across alternative model specifications. Overall, the findings suggest that ESG performance serves as a complementary risk indicator in the pricing of sovereign borrowing costs in emerging economies.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 23rd of November, 2025; Revised 9th of February, 2026; Accepted 1st of March, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue, 1(91), 2026.
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This study examines the impact of exchange rate volatility on financial market activity using a sample of 20 MENA countries from 1990Q1 to 2022Q4. An exchange rate volatility index was derived for each country based on the conditional variance estimated using ARCH/ GARCH models. The main findings using a dynamic panel threshold estimation technique revealed a threshold effect in the relationship between the exchange rate volatility and financial market activity. In oil-exporting countries, exchange rate volatility negatively effects on stock returns at lower or upper threshold levels in a different regime. in non-oil-exporting countries, the adverse effect intensifies when transitioning to the high-threshold regime, indicating greater sensitivity to exchange rate instability. Thus, policymakers in the MENA should formulate foreign exchange policy strategies that support exchange rate stability and assist financial market participants in improving risk management, expand the use of hedging instruments, and diversifying portfolios to withstand heightened volatility.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 20th of November, 2025; Revised 22ndof December, 2025; Accepted 21st of February, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue, 1(91), 2026.
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This study explores the development and implementation of economic mechanisms designed to prevent financial crimes within the tax system, specifically focusing on the challenges faced by Ukraine as a transitional economy. Financial sustainability in emerging markets is fundamentally tied to the integrity of tax administration; systemic tax evasion and financial crimes create fiscal deficits that undermine structural reforms. Using a multi-disciplinary approach, this paper analyses the effectiveness of current preventive measures against international benchmarks established by the OECD and the European Union.
The research identifies critical structural vulnerabilities in the current tax system and proposes a modernized framework of "Economic Mechanisms" that includes digital transparency, risk-based auditing, and international information exchange protocols. The findings suggest that transitioning from reactive legal enforcement to proactive economic prevention significantly reduces the "tax gap" and enhances the state's fiscal resilience, safeguarding tax revenues, these mechanisms provide the necessary financial stability to support broader structural reforms and long-term economic growth. The study offers practical recommendations for policymakers to align national tax enforcement with global standards, ensuring corporate and state financial sustainability in volatile transitional environments.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 17th of November, 2025; Revised 19th of December, 2025; Accepted 10th of January, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue 1(91), 2026.
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This study examines the impact of public grants on firms’ innovation expenditures using a large sample of Latin American firms. The methodology is based on the non-parametric matching procedure. The results indicate that public incentives have a positive and statistically significant effect on firms’ innovation spending. However, public grants do not boost additional net innovation spending. This may reflect the general structural weakness in Latin America's technological system, where complex relationships involving complementarities and synergies, typically found in the technological field, are not entirely fulfilled. Moreover, companies that utilize government funds tend to finance innovation by using their own financial resources more than non-granted companies. Although the data do not allow for identifying potential substitution effects, the analysis suggests that, without the grants, these firms would have been possibly less committed to innovation. This finding supports the idea of partial positive effects of public support on firms’ innovative activities.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 23rd of November, 2025; Revised 13th of February, 2025; Accepted 1st of March, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue, 1(91), 2026.
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This study examines the transformation of political elites under the influence of globalization and analyses their role in shaping structural reform agendas in transitional economies. As globalization increasingly integrates national markets into the global financial and institutional architecture, the composition, orientation, and capacity of political elites become key determinants of economic resilience and institutional development. Using a multidisciplinary political economy approach combined with qualitative structural analysis, the research investigates how the transition from traditional, closed elite structures toward more technocratic and internationally connected leadership influences governance quality, institutional reform, and fiscal discipline. Empirical evidence is derived from semi-structured interviews with policymakers, civil society representatives, and international experts, complemented by documentary analysis of policy reports and institutional documents. The findings suggest that elites integrated into global governance networks are more likely to promote structural reforms that support foreign investment, institutional modernization, and long-term economic stability, while fragmented or locally entrenched elites may resist reform initiatives, contributing to institutional inertia and fiscal vulnerabilities.
This study contributes to the literature on political economy and globalization by providing an empirical qualitative assessment of elite transformation in a transitional economy and by illustrating how global governance integration shapes domestic reform capacity. The findings offer policy-relevant insights for understanding the institutional conditions that facilitate structural reform in emerging and post-transition economies.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 7th of November, 2026; Revised 19th of December, 2026; Accepted 12th of January, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue, 1(91), 2026.
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Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s History: Received 15th of November, 2025; Revised 29th of December, 2025; Accepted 24th of February, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue 1(91), 2026.
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This study examines the influence of environmental, social, and governance (ESG) performance and sustainability governance on corporate capital structure decisions across developed and emerging markets. Drawing on a balanced panel of 2,000 publicly listed firms over the period 2000–2024, the research integrates traditional capital structure theories, trade-off, pecking order, agency, and market timing, with contemporary ESG paradigms. Using fixed effects, random effects, panel-corrected standard errors, and system GMM estimators, the findings reveal that ESG performance increases leverage and debt maturity while significantly reducing the cost of capital. Governance quality amplifies these effects, particularly in emerging markets where institutional enforcement mechanisms are less mature.
Robustness checks using alternative ESG metrics, subsample estimations, lagged specifications, and outlier exclusions confirm the stability of results. The evidence suggests that ESG and governance are structural determinants of financing strategy rather than peripheral sustainability attributes, effectively redefining traditional capital structure optimization under sustainability constraints. The study contributes to the development of ESG-integrated corporate finance models and offers policy-relevant insights for managers, investors, and regulators seeking to align financial architecture with long-term sustainability objectives.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 25th of November, 2025; Revised 19th of January, 2026; Accepted 22nd of February, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue, 1(91), 2026.
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Digital transformation is increasingly a structural determinant of corporate sustainability strategies in emerging economies. This research investigates the impact of digitalization on Environmental, Social, and Governance (ESG) performance among Indian firms listed on the BSE 500 between 2022 and 2024. Utilizing a novel text-mining approach to quantify digital intensity followed by panel regression analysis, the study explores the mechanisms through which technological adoption enhances corporate accountability. The findings reveal a robust positive correlation between digital transformation and ESG outcomes, with the most significant impact observed within the governance dimension. This suggests that digitalization facilitates financial sustainability by reducing information asymmetry and enhancing regulatory compliance. The study provides critical insights for policymakers and investors in transitional economies regarding the strategic integration of digital reforms to achieve long-term ESG resilience.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 15th of October, 2025; Revised 29th of November, 2025; Accepted 11th of January, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue 1(91), 2026.
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The technology acts as both a driver of environmental solutions through AI-driven climate modelling and a source of pressure via high energy consumption and carbon emissions. This study employs a BERT-based Natural Language Processing (NLP) architecture to conduct a sentiment analysis of environmental sustainability reports from leading technology firms. By evaluating the consistency of these disclosures and their alignment with sector-specific indicators, the research assesses the reliability of "green" narratives in high-growth sectors. The findings demonstrate that sentiment-based analysis can effectively identify patterns of reporting quality, which is essential for ensuring the financial sustainability and accountability of tech-driven economies. This study offers a structural framework for regulators and investors to utilize AI in verifying the integrity of sustainability reporting, particularly in transitional markets where transparency is a prerequisite for long-term economic stability.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 29th of October, 2026; Revised 19th of January, 2026; Accepted 15th of February, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue, 1(91), 2026.
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This study develops and empirically validates a hybrid transformational business model for service enterprises operating under structural transition conditions. Focusing on Ukraine’s digitally evolving service sector, the research integrates SWOT benchmarking, qualitative adaptability assessment, and indicator-based computational modelling to compare eight archetypal business model configurations. An original multidimensional indicator system, capturing adaptability, strategic agility, resilience, digital integration, customer elasticity, and circular alignment, was constructed using normalized financial and operational metrics. Comparative testing demonstrates that ecosystem-coordinated and digitally servitized configurations significantly outperform traditional transactional and on-demand models in terms of structural resilience and financial sustainability.
Building on these findings, the study synthesizes a hybrid architecture that integrates platform coordination, predictive digital infrastructure, subscription-based monetization, and circular value-retention mechanisms. Indicator-based verification confirms the superior adaptive capacity of the hybrid model across all integral metrics. Theoretically, the research advances business model scholarship by operationalizing adaptability as a quantifiable, multidimensional construct and moving beyond descriptive typologies toward measurable structural competitiveness. Practically, the results provide strategic guidance for managers and policymakers seeking to enhance financial sustainability, institutional resilience, and digital interoperability in transitional economic environments.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 30th of October, 2025; Revised 27th of November, 2025; Accepted 28th of December, 2025; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue 1(91), 2026.
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This study investigates the transformative impact of Artificial Intelligence (AI) and predictive analytics on decision-making processes within Human Resource Management (HRM), framed as a structural reform in the modern service economy. As emerging and transitional economies integrate Industry 4.0 technologies, the ability to optimize human capital through data-driven insights becomes a critical determinant of firm-level sustainability. Utilizing a cross-sectional survey and Structural Equation Modelling (SEM), the research evaluates how AI-generated insights influence strategic workforce planning, talent acquisition, and employee retention. The findings indicate that AI adoption significantly enhances decision-making accuracy, reduces operational friction, and optimizes resource allocation within the labour function. The study concludes that the structural integration of predictive analytics is essential for sustaining competitive advantage and financial resilience in volatile market environments.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 23rd of November, 2026; Revised 9th of January, 2026; Accepted 19th of February, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue 1(91), 2026.
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This study develops a comprehensive system of metrics to evaluate the effectiveness of management decisions during crisis periods, with a specific focus on enterprises in the transitional economy of Ukraine. Under conditions of extreme market volatility and systemic shocks, including wartime challenges, traditional performance indicators often fail to capture the nuances of organizational resilience. Using a structural-analytical approach, this paper identifies key performance indicators (KPIs) that prioritize liquidity maintenance, resource optimization, and strategic flexibility over short-term profit maximization.
The research establishes that the adoption of adaptive management metrics serves as an internal structural reform, allowing firms to navigate the transition from crisis survival to long-term stability. By integrating qualitative and quantitative measures of decision-making efficiency, the proposed framework provides a roadmap for safeguarding an enterprise's financial health during periods of intense uncertainty. The findings demonstrate that effective crisis-period metrics are a prerequisite for maintaining corporate solvency and supporting national economic resilience. The study concludes with practical recommendations for managers to implement these metrics as part of a broader strategy for financial sustainability in transitional and conflict-affected environments.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 17th of November, 2025; Received in revised form 27th of December, 2025; Accepted 4th of February, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue, 1(91), 2026.
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This research paper examines the nexus between digital transformation and investment activity across a diverse economic spectrum, encompassing the rapid growth of the BRICS bloc, the advanced industrial framework of Germany, and the resilient, IT-driven economy of Ukraine. As global logistics networks shift toward "Industry 4.0" standards, the traditional investment model, historically focused on physical fleet expansion, is being restructured to prioritize digital infrastructure, AI-driven logistics, and Big Data analytics. Utilizing a structural-analytical framework, this research evaluates how these digital investments enhance the financial sustainability of transport firms by optimizing asset utilization and reducing operational risks.
The findings demonstrate that digital transformation acts as a catalyst for institutional change, enabling firms to achieve higher capital productivity and long-term economic resilience. In the context of transitional markets, the shift toward digitalized investment activity serves to mitigate macroeconomic vulnerabilities by lowering logistics costs and improving regional trade integration. The study concludes that for transport enterprises, digital-led structural reforms are not merely technological upgrades but are essential strategies for ensuring fiscal stability and competitive advantage in an increasingly volatile global economy. Practical recommendations for managers and policymakers focus on balancing CAPEX between physical assets and digital innovation to ensure sustainable growth.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 29th of October, 2025; Revised 9th of December, 2025; Accepted 12th of January, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue, 1(91), 2026.
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This study investigates the role of green technological innovation in supporting structural economic transformation and human development in Iraq, a resource-dependent economy facing significant environmental pressures and institutional constraints. Using a descriptive–analytical approach covering the period 2014–2024, the research evaluates Iraq’s performance across key Human Development Index (HDI) components and selected green technological innovation indicators. The findings indicate that while government expenditure on education (3.9% of GDP) and health (4.2% of GDP) has remained relatively stable, green innovation capacity remains limited, with research and development (R&D) investment averaging only 0.04% of GDP and recycling rates remaining comparatively low. These results highlight a structural gap between social development investments and technological modernization.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 27th of December, 2026; Revised 9th of February, 2026; Accepted 1st of March, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue, 1(91), 2026.
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This paper examines the impact of daily availability of pasteurized milk on household consumption in Sri Lanka. Data were collected from 230 randomly selected households in the Jaffna and Nallur Divisional Secretariat divisions. To address potential selection bias in market availability, the analysis employs nearest-neighbour propensity score matching (PSM) to estimate the Average Treatment Effect (ATE) and the Average Treatment Effect on the Treated (ATET). The results show that daily availability of non-flavoured pasteurized milk increases household consumption by approximately 238 ml per week for the overall population and by 214 ml per week among households with access to daily supply. These findings indicate that limited market availability represents a significant constraint on pasteurized milk consumption in Sri Lanka, contributing to the continued reliance on milk powder. The results highlight importance of improving distribution systems and retail availability to promote the consumption of nutritious fresh milk and strengthen the domestic dairy sector.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 31st of October, 2025; Revised 29th of November, 2025; Accepted 1st of March, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue 1(91), 2026.
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This study examines the integration of a grant component into relationship lending frameworks as a mechanism for ensuring the financial sustainability of government and local debt in transitional economies. Focusing on Ukraine’s wartime fiscal transformation, the research analyses how hybrid financing models, combining repayable loans with non-repayable grants, reshape debt dynamics and support structural adjustment under conditions of extreme uncertainty. The study applies comparative analysis, the Public Finance Sustainability Index (PFSI), and multivariate regression modelling with scenario forecasting to a panel of eight countries (Ukraine, Moldova, Georgia, Poland, Hungary, Latvia, Croatia, and Bulgaria) over the period 2020–2024. The results demonstrate that Ukraine exhibits the highest Grant Participation Ratio (GPR), exceeding 0.4 in 2022, while in EU countries it generally remains below 0.1–0.2. Regression estimates reveal a statistically significant positive relationship between the share of grants and fiscal sustainability: a 10% increase in the grant share raises the PFSI by approximately 0.025, whereas a higher loan share has the opposite effect.
Scenario modelling indicates that maintaining a grant share of at least 25% in external financing is a necessary condition for preserving macro-financial stability in Ukraine during 2025–2027. The academic contribution of the paper lies in operationalizing the grant component within a relationship lending framework and embedding it into a quantitative sustainability assessment. Practically, the findings provide policymakers with an evidence-based tool for optimizing loan–grant ratios in public borrowing, particularly in post-conflict reconstruction and decentralization contexts, where fiscal resilience is critical for long-term institutional transformation.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 4th of November, 2025; Revised 19th of December, 2025; Accepted 2nd of February, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue, 1(91), 2026.
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Improving cost efficiency and financial sustainability remains a critical challenge for manufacturing enterprises operating in transitional economies. This study examines the role of strategic cost management through the application of target costing in an Iraqi manufacturing enterprise, using the Babylon Battery Factory as an empirical case study. The research analyzes pricing structures, production capacity, and cost components in order to evaluate the alignment between internal production costs and market-based pricing mechanisms. The empirical results reveal a significant gap between the actual production cost of the A60 battery and the allowable target cost determined by competitive market prices.
The findings demonstrate that the adoption of target costing enables firms to identify inefficiencies in production processes and implement cost-reduction strategies without compromising product quality. Furthermore, the integration of value analysis contributes to improving resource allocation and operational performance.
The study highlights the importance of market-oriented cost management practices for enhancing industrial efficiency and strengthening competitiveness in manufacturing enterprises operating within transitional economic environments. This study provides empirical evidence from an Iraqi manufacturing enterprise showing how target costing can serve as an effective strategic cost-management tool for improving industrial efficiency and financial sustainability.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s history: Received 30th of November, 2026; Revised 19th of January, 2026; Accepted 21st of February, 2026; Available online: 15th of March, 2026. Published as article in the Volume XXI, Special Issue 1(91), 2026.
