Economics and Business

Economics and Business
Referential and Reviewed International Scientific-Analytical Journal of Ivane Javakhishvili Tbilisi State University, Faculty of Economics and Business

ISSN 1987-5789 ESSN 2587-5426
doi 10.52340

Journal number 1 ∘

Journal N1, 2025 content

„ECONOMICS and BUZINESS“ VOLUM XVII, N1, 2025

C O N T E N T
Modern economy

Irakli Kovzanadze - Trends and Prospects of Global Economic Development: Risks and Opportunities
Maya Gogokhia - Financial Stability in the Conditions of Economic Digitalization
Beka Baiashvili - Implementation of the Circular Economy Model in the Agricultural Sector: The Case of Wine Production
Lela Kintsurashvili - The Characteristics of the Gig Economy and Its Impact on the Labor Market
Marika Goguadze - The Impact of Digital Innovations on the Georgian Economy

BUSINESS ◊ MANAGEMENT ◊ TOURISM

Teimuraz Shengelia - Entrepreneurial University as a Tool for Innovative Business Development
Shota Shaburishvili, David Sikharulidze, Leila Kadagishvili, Tea Munjishvili, Vanda Chitashvili - Main Trends in Georgia's Foreign Trade in the Context of European Union Candidate Status
Lamara Qoqiauri - Investment Policy and Legal Framework for Investments

FINANCE and BANKING ◊ ACCAUNTING and AUDIT

Levan Sabauri, Lia Gvazava - Principles of Formulating Supply Services and Final Consumption Tariffs in the Electricity Sector
Nadejda Kvatashidze - Equity Method of Investment Evaluation
Ana Chechelashvili - Fundamentals of Sustainable Development Audit: A Review of Corporate and Environmental Aspects
Berdia Gatenadze - Lari Exchange Rate and Factors Affecting it

CRITICISM and BIBLIOGRAPHY

Ioseb Archvadze - A Work of Great Historical and National Importance

ANNIVERSARIES

Academician Vladimer (Lado) Papava - 70

2025-04-06

Journal number 1 ∘ Irakli Kovzanadze ∘

Trends and Prospects of Global Economic Development: Risks and Opportunities

doi.org/10.52340/eab.2025.17.01.01 journal N 1.2025 The article analyzes the trends and prospects of global economic development in the short-term and medium-term. The analysis covers not only the global economy as a whole but also the economies of individual countries, regions, and groups of countries. The dynamics of key macroeconomic indicators are examined, including GDP growth rates, inflation, unemployment, investment, public finances, and the balance of payments. Factors such as the cyclical nature of economic development, the macroeconomic situation, and the influence of geopolitical factors are taken into account. The article highlights the high uncertainty regarding future developments, with the possibility of both positive and negative scenarios for the global economy. Keywords: Global economy, global trade, trends and prospects of development, global crisis, geopolitical conflicts, economic cycle, GDP growth, inflation, unemployment rate, investment, balance of
2025-04-06

Journal number 1 ∘ Maya Gogokhia ∘

Financial Stability in the Conditions of Economic Digitalization

doi.org/10.52340/eab.2025.17.01.02 A new term has emerged in economic science - digital economy. At the current stage, digital data has become the leading factor of production, and its large-scale processing and analysis results can significantly increase production efficiency and output levels. The article discusses the impact of financial technologies on financial markets, in particular, their digital transformation. Financial institutions are modernizing and simplifying their It infrastructure, central banks are developing their own digital currencies, and regulation in this area is evolving. An important trend in the development of financial markets is the focus on achieving the goals of sustainable development, a green economy and green finance. The article discusses the mechanism for financing the “Green” economy (“Green” bonds, IPOs). Particular emphasis is placed on various types of crypto-assets and digital currencies, both including those issued by
2025-04-06

Journal number 1 ∘ Beka Baiashvili ∘

Implementation of the Circular Economy Model in the Agricultural Sector: The Case of Wine Production

doi.org/10.52340/eab.2025.17.01.03 Addressing ecological and economic challenges in the modern world requires implementing sustainable development principles. These principles emphasize the rational use of resources, minimization of waste, and the balancing of ecosystems. The circular economy serves as an effective tool for optimizing resource utilization in production processes and transforming waste into economic value. This is particularly significant in the agricultural sector, where production processes generate substantial waste that can be repurposed as valuable resources.This article explores the potential for implementing a circular economy model in Georgia, specifically focusing on the wine production sector. It aims to evaluate existing waste management practices, analyze international experience, and develop optimal approaches tailored to the local context. Wine production in Georgia is an economic driver and an integral part of the country’s cultural heritage.
2025-04-06

Journal number 1 ∘ Lela Kintsurashvili ∘

The Characteristics of the Gig Economy and its Impact on the Labor Market

doi.org/10.52340/eab.2025.17.01.04 In today's global economy, where the knowledge economy and technological advancements are becoming increasingly pervasive, digital work platforms are expanding rapidly. This shift is closely tied to the expansion of the knowledge economy, with sectors such as information technology, digital services, and freelancing gaining greater prominence. The gig economy presents new opportunities for both workers and employers by enhancing flexibility in the labor market. However, these benefits are accompanied by significant challenges, particularly concerning labor rights, taxation, and the accurate measurement of informal employment. This paper explores the defining features of the gig economy, highlighting its relevance and the methodology employed. The focus is on key business trends within the gig economy, an analysis of unemployment trends in Georgia, and the relationship between these trends and the growth of the gig economy sector. The study employs
2025-04-06

Journal number 1 ∘ Marika Goguadze ∘

The Impact of Digital Innovations on the Georgian Economy

doi.org/10.52340/eab.2025.17.01.05 The digital transformation of the banking sector has revolutionized financial services globally, and Georgia has been no exception. Over the past decade, Georgia's banking industry has undergone significant changes, driven by technological advances and the growing demand for more accessible, secure, and efficient financial services. As a result, digital banking platforms have gained widespread adoption, enabling Georgians to conduct financial transactions, manage accounts, and access services remotely. This shift has led to numerous benefits, such as improved accessibility, enhanced financial inclusion, and operational efficiency, but also presents challenges like cyber security risks, digital literacy issues, and data privacy concerns.One of the primary benefits of digital banking in Georgia is its ability to improve accessibility, particularly for people in rural areas. In the past, many rural Georgians faced difficulties accessing banking
2025-04-06

Journal number 1 ∘ Teimuraz Shengelia ∘

Entrepreneurial University as a Tool for Innovative Business Development

doi.org/10.52340/eab.2025.17.01.06 The success of the development of modern society is determined by a knowledge-based economy. Human capital, intellectual development, creativity, innovation and education occupy a central place in economic development of society, as they are the driving forces of a country's economic growth and its main factor. Knowledge has become the main factor in increasing the country's competitiveness. Modern trends in economic development indicate that the determining elements of competitiveness: natural, financial and labor resources are moving into the background, and in this context, knowledge and the speed of creating and distributing information are becoming priorities. Knowledge-intensive companies are the main drivers of economic development. As a result of the implementation of technological ideas in practice, by turning science and knowledge into a competitive advantage, innovative companies can accelerate the country's economic development and
2025-04-06

Journal number 1 ∘ Shota Shaburishvili ∘ Davit Sikharulidze ∘ Leila Kadagishvili ∘ Tea Munjishvili ∘ Vanda Chitashvili ∘

Main Trends in Georgia s Foreign Trade in the Context of European Union Candidate Status

doi.org/10.52340/eab.2025.17.01.07 The ongoing changes in Georgia’s foreign trade geography and structure, coupled with the transition to a new phase of integration with the European Union, highlight the importance of assessing the main trends in trade and economic relations with EU member states. This article analyzes the fundamental theories of international trade and empirical scientific studies that explore the results of a country's foreign trade within regional integration unions. It examines the evolution of the framework for cooperation between Georgia and the EU, and analyzes foreign trade under the conditions of a Deep and Comprehensive Free Trade Area (DCFTA). The Main Advantages of EU Membership: • Political stability and the accelerated of economic development; member countries commit to the EU's common foreign and security policy, which aims to maintain peace and strengthen international security in line with the principles of the United Nations
2025-04-06

Journal number 1 ∘ Lamara Qoqiauri ∘

Investment Policy and Legal Framework for Investments

doi.org/10.52340/eab.2025.17.01.08 The formation and development of market mechanism for investment at the beginning of the 21st century, and implementation of investment policy, have been inconsistent and contradictory nature. Taking a country out of the deep economic crisis, achievement of macroeconomic stabilization, and sustainable economic growth, is impossible without improvement and development of investment potential. This, in its turn requires development and implementation of effective investment policy and strategy. As well as the enhancement of legal and legislative regulations in the investment domain in general. The main purpose of this work is to present a clear picture of the contradictive nature of investment activities in the country. Specifically, while the state cannot make significant investments into the economy, and, on the other hand, the existing market mechanisms for investments are non-operational, hindering the activation of the investment market. The
2025-04-06

Journal number 1 ∘ Levan Sabauri ∘ Lia Gvazava ∘

Principles of Formulating Supply Services and Final Consumption Tariffs in the Electricity Sector

doi.org/10.52340/eab.2025.17.01.09 On December 20, 2019, the Parliament of Georgia adopted the Law on Energy and Water Supply, initiating a fundamental reform in the energy sector. Within the framework of this reform, the Regulatory Commission approved and introduced amendments to the subordinate legislative acts governing the energy sector, aligning them with European best practices.It is noteworthy that in 2014, Georgia signed the Association Agreement with the European Union, which, among other obligations, mandated the harmonization of Georgian energy legislation with EU energy regulations. Furthermore, in 2016, Georgia signed the Protocol on Accession to the Treaty Establishing the Energy Community, thereby committing to transpose the Community's energy legislation into national law within specified timelines and conditions.Pursuant to the aforementioned law, the Government of Georgia approved a new concept for the electricity market model through Resolution No. 246 on
2025-04-06

Journal number 1 ∘ Nadezhda Kvatashidze ∘

Equity Method of Investment Evaluation

doi.org/10.52340/eab.2025.17.01.10 Financial statement preparers, auditors, and other stakeholders have expressed dissatisfaction with the fact that IAS 28 Investments in Associates and Joint Ventures does not provide clear guidance on how investments should be evaluated using the equity method in specific situations.In response, the International Accounting Standards Board (IASB) initiated work on this issue, which culminated in the publication of an exposure draft on September 19, 2024: Equity Method of Accounting – IAS 28 Investments in Associates and Joint Ventures (Exposure Draft, IASB/ED/2024/7). This draft presents a revised and updated equity method for accounting for investments. The comment period for the draft closed on January 20, 2025. Currently, the IASB is reviewing feedback and recommendations received from respondents.The Board has identified and analyzed key practical challenges associated with applying the equity method to investments in associates
2025-04-06

Journal number 1 ∘ Ana Chechelashvili ∘

An Overview of Corporate and Environmental Aspects in Sustainability Auditing

doi.org/10.52340/eab.2025.17.01.11 In the modern era, auditing has become a vital tool for evaluating sustainable development and corporate responsibility. The primary objective of a sustainable development audit is to evaluate a company's business practices in alignment with sustainable development principles and corporate social responsibility (CSR). It involves a thorough evaluation of various aspects, including environmental policies, energy efficiency, employee social protection, ethical production, and other critical sustainability factors. The scope of a sustainable development audit spans environmental, social, and governance (ESG) components. This includes analyzing energy consumption and carbon footprints, waste management practices, supply chain sustainability, water usage efficiency, and the company’s impact on biodiversity. The main goal of such audits is to provide independent and objective assurance regarding sustainability-related processes within a
2025-04-06

Journal number 1 ∘ Berdia Gatenadze ∘

Lari Exchange Rate and Factors Affecting it

doi.org/10.52340/eab.2025.17.01.12 The exchange rate of a currency plays a critical role in shaping a country’s economy, impacting international trade, investment levels, and ultimately, the well-being of its citizens. For international organizations like the International Monetary Fund (IMF) and the World Bank, exchange rates, alongside inflation, are key indicators used to evaluate a nation's macroeconomic health and determine project feasibility within that country. This is particularly significant for import-dependent nations like Georgia, where approximately 80% of the consumer basket comprises imported goods and services. The volatility of the Georgian Lari (GEL) greatly affects businesses and citizens, creating challenges for long-term planning, price stability, and economic growth. This study examines the factors influencing the exchange rate of the Georgian lari over short, medium, and long-term periods, analyzing their impacts before the pandemic, during the
2025-04-06

Economics and Business Referential and Reviewed International Scientific-Analytical Journal of Ivane Javakhishvili Tbilisi State University, Faculty of Economics and Business

ISSN 1987-5789 ESSN 2587-5426 doi 10.52340	Journal number 1 ∘ Journal N1, 2025 content „ECONOMICS and BUZINESS“ VOLUM XVII, N1, 2025 C O N T E N T Modern economy Irakli Kovzanadze - Trends and Prospects of Global Economic Development: Risks and Opportunities Maya Gogokhia - Financial Stability in the Conditions of Economic Digitalization Beka Baiashvili - Implementation of the Circular Economy Model in the Agricultural Sector: The Case of Wine Production Lela Kintsurashvili - The Characteristics of the Gig Economy and Its Impact on the Labor Market Marika Goguadze - The Impact of Digital Innovations on the Georgian Economy BUSINESS ◊ MANAGEMENT ◊ TOURISM Teimuraz Shengelia - Entrepreneurial University as a Tool for Innovative Business Development Shota Shaburishvili, David Sikharulidze, Leila Kadagishvili, Tea Munjishvili, Vanda Chitashvili - Main Trends in Georgia's Foreign Trade in the Context of European Union Candidate Status Lamara Qoqiauri - Investment Policy and Legal Framework for Investments FINANCE and BANKING ◊ ACCAUNTING and AUDIT Levan Sabauri, Lia Gvazava - Principles of Formulating Supply Services and Final Consumption Tariffs in the Electricity Sector Nadejda Kvatashidze - Equity Method of Investment Evaluation Ana Chechelashvili - Fundamentals of Sustainable Development Audit: A Review of Corporate and Environmental Aspects Berdia Gatenadze - Lari Exchange Rate and Factors Affecting it CRITICISM and BIBLIOGRAPHY Ioseb Archvadze - A Work of Great Historical and National Importance ANNIVERSARIES Academician Vladimer (Lado) Papava - 70 2025-04-06 Journal number 1 ∘ Irakli Kovzanadze ∘ Trends and Prospects of Global Economic Development: Risks and Opportunities doi.org/10.52340/eab.2025.17.01.01 journal N 1.2025 The article analyzes the trends and prospects of global economic development in the short-term and medium-term. The analysis covers not only the global economy as a whole but also the economies of individual countries, regions, and groups of countries. The dynamics of key macroeconomic indicators are examined, including GDP growth rates, inflation, unemployment, investment, public finances, and the balance of payments. Factors such as the cyclical nature of economic development, the macroeconomic situation, and the influence of geopolitical factors are taken into account. The article highlights the high uncertainty regarding future developments, with the possibility of both positive and negative scenarios for the global economy. Keywords: Global economy, global trade, trends and prospects of development, global crisis, geopolitical conflicts, economic cycle, GDP growth, inflation, unemployment rate, investment, balance of 2025-04-06 Journal number 1 ∘ Maya Gogokhia ∘ Financial Stability in the Conditions of Economic Digitalization doi.org/10.52340/eab.2025.17.01.02 A new term has emerged in economic science - digital economy. At the current stage, digital data has become the leading factor of production, and its large-scale processing and analysis results can significantly increase production efficiency and output levels. The article discusses the impact of financial technologies on financial markets, in particular, their digital transformation. Financial institutions are modernizing and simplifying their It infrastructure, central banks are developing their own digital currencies, and regulation in this area is evolving. An important trend in the development of financial markets is the focus on achieving the goals of sustainable development, a green economy and green finance. The article discusses the mechanism for financing the “Green” economy (“Green” bonds, IPOs). Particular emphasis is placed on various types of crypto-assets and digital currencies, both including those issued by 2025-04-06 Journal number 1 ∘ Beka Baiashvili ∘ Implementation of the Circular Economy Model in the Agricultural Sector: The Case of Wine Production doi.org/10.52340/eab.2025.17.01.03 Addressing ecological and economic challenges in the modern world requires implementing sustainable development principles. These principles emphasize the rational use of resources, minimization of waste, and the balancing of ecosystems. The circular economy serves as an effective tool for optimizing resource utilization in production processes and transforming waste into economic value. This is particularly significant in the agricultural sector, where production processes generate substantial waste that can be repurposed as valuable resources.This article explores the potential for implementing a circular economy model in Georgia, specifically focusing on the wine production sector. It aims to evaluate existing waste management practices, analyze international experience, and develop optimal approaches tailored to the local context. Wine production in Georgia is an economic driver and an integral part of the country’s cultural heritage. 2025-04-06 Journal number 1 ∘ Lela Kintsurashvili ∘ The Characteristics of the Gig Economy and its Impact on the Labor Market doi.org/10.52340/eab.2025.17.01.04 In today's global economy, where the knowledge economy and technological advancements are becoming increasingly pervasive, digital work platforms are expanding rapidly. This shift is closely tied to the expansion of the knowledge economy, with sectors such as information technology, digital services, and freelancing gaining greater prominence. The gig economy presents new opportunities for both workers and employers by enhancing flexibility in the labor market. However, these benefits are accompanied by significant challenges, particularly concerning labor rights, taxation, and the accurate measurement of informal employment. This paper explores the defining features of the gig economy, highlighting its relevance and the methodology employed. The focus is on key business trends within the gig economy, an analysis of unemployment trends in Georgia, and the relationship between these trends and the growth of the gig economy sector. The study employs 2025-04-06 Journal number 1 ∘ Marika Goguadze ∘ The Impact of Digital Innovations on the Georgian Economy doi.org/10.52340/eab.2025.17.01.05 The digital transformation of the banking sector has revolutionized financial services globally, and Georgia has been no exception. Over the past decade, Georgia's banking industry has undergone significant changes, driven by technological advances and the growing demand for more accessible, secure, and efficient financial services. As a result, digital banking platforms have gained widespread adoption, enabling Georgians to conduct financial transactions, manage accounts, and access services remotely. This shift has led to numerous benefits, such as improved accessibility, enhanced financial inclusion, and operational efficiency, but also presents challenges like cyber security risks, digital literacy issues, and data privacy concerns.One of the primary benefits of digital banking in Georgia is its ability to improve accessibility, particularly for people in rural areas. In the past, many rural Georgians faced difficulties accessing banking 2025-04-06 Journal number 1 ∘ Teimuraz Shengelia ∘ Entrepreneurial University as a Tool for Innovative Business Development doi.org/10.52340/eab.2025.17.01.06 The success of the development of modern society is determined by a knowledge-based economy. Human capital, intellectual development, creativity, innovation and education occupy a central place in economic development of society, as they are the driving forces of a country's economic growth and its main factor. Knowledge has become the main factor in increasing the country's competitiveness. Modern trends in economic development indicate that the determining elements of competitiveness: natural, financial and labor resources are moving into the background, and in this context, knowledge and the speed of creating and distributing information are becoming priorities. Knowledge-intensive companies are the main drivers of economic development. As a result of the implementation of technological ideas in practice, by turning science and knowledge into a competitive advantage, innovative companies can accelerate the country's economic development and 2025-04-06 Journal number 1 ∘ Shota Shaburishvili ∘ Davit Sikharulidze ∘ Leila Kadagishvili ∘ Tea Munjishvili ∘ Vanda Chitashvili ∘ Main Trends in Georgia s Foreign Trade in the Context of European Union Candidate Status doi.org/10.52340/eab.2025.17.01.07 The ongoing changes in Georgia’s foreign trade geography and structure, coupled with the transition to a new phase of integration with the European Union, highlight the importance of assessing the main trends in trade and economic relations with EU member states. This article analyzes the fundamental theories of international trade and empirical scientific studies that explore the results of a country's foreign trade within regional integration unions. It examines the evolution of the framework for cooperation between Georgia and the EU, and analyzes foreign trade under the conditions of a Deep and Comprehensive Free Trade Area (DCFTA). The Main Advantages of EU Membership: • Political stability and the accelerated of economic development; member countries commit to the EU's common foreign and security policy, which aims to maintain peace and strengthen international security in line with the principles of the United Nations 2025-04-06 Journal number 1 ∘ Lamara Qoqiauri ∘ Investment Policy and Legal Framework for Investments doi.org/10.52340/eab.2025.17.01.08 The formation and development of market mechanism for investment at the beginning of the 21st century, and implementation of investment policy, have been inconsistent and contradictory nature. Taking a country out of the deep economic crisis, achievement of macroeconomic stabilization, and sustainable economic growth, is impossible without improvement and development of investment potential. This, in its turn requires development and implementation of effective investment policy and strategy. As well as the enhancement of legal and legislative regulations in the investment domain in general. The main purpose of this work is to present a clear picture of the contradictive nature of investment activities in the country. Specifically, while the state cannot make significant investments into the economy, and, on the other hand, the existing market mechanisms for investments are non-operational, hindering the activation of the investment market. The 2025-04-06 Journal number 1 ∘ Levan Sabauri ∘ Lia Gvazava ∘ Principles of Formulating Supply Services and Final Consumption Tariffs in the Electricity Sector doi.org/10.52340/eab.2025.17.01.09 On December 20, 2019, the Parliament of Georgia adopted the Law on Energy and Water Supply, initiating a fundamental reform in the energy sector. Within the framework of this reform, the Regulatory Commission approved and introduced amendments to the subordinate legislative acts governing the energy sector, aligning them with European best practices.It is noteworthy that in 2014, Georgia signed the Association Agreement with the European Union, which, among other obligations, mandated the harmonization of Georgian energy legislation with EU energy regulations. Furthermore, in 2016, Georgia signed the Protocol on Accession to the Treaty Establishing the Energy Community, thereby committing to transpose the Community's energy legislation into national law within specified timelines and conditions.Pursuant to the aforementioned law, the Government of Georgia approved a new concept for the electricity market model through Resolution No. 246 on 2025-04-06 Journal number 1 ∘ Nadezhda Kvatashidze ∘ Equity Method of Investment Evaluation doi.org/10.52340/eab.2025.17.01.10 Financial statement preparers, auditors, and other stakeholders have expressed dissatisfaction with the fact that IAS 28 Investments in Associates and Joint Ventures does not provide clear guidance on how investments should be evaluated using the equity method in specific situations.In response, the International Accounting Standards Board (IASB) initiated work on this issue, which culminated in the publication of an exposure draft on September 19, 2024: Equity Method of Accounting – IAS 28 Investments in Associates and Joint Ventures (Exposure Draft, IASB/ED/2024/7). This draft presents a revised and updated equity method for accounting for investments. The comment period for the draft closed on January 20, 2025. Currently, the IASB is reviewing feedback and recommendations received from respondents.The Board has identified and analyzed key practical challenges associated with applying the equity method to investments in associates 2025-04-06 Journal number 1 ∘ Ana Chechelashvili ∘ An Overview of Corporate and Environmental Aspects in Sustainability Auditing doi.org/10.52340/eab.2025.17.01.11 In the modern era, auditing has become a vital tool for evaluating sustainable development and corporate responsibility. The primary objective of a sustainable development audit is to evaluate a company's business practices in alignment with sustainable development principles and corporate social responsibility (CSR). It involves a thorough evaluation of various aspects, including environmental policies, energy efficiency, employee social protection, ethical production, and other critical sustainability factors. The scope of a sustainable development audit spans environmental, social, and governance (ESG) components. This includes analyzing energy consumption and carbon footprints, waste management practices, supply chain sustainability, water usage efficiency, and the company’s impact on biodiversity. The main goal of such audits is to provide independent and objective assurance regarding sustainability-related processes within a 2025-04-06 Journal number 1 ∘ Berdia Gatenadze ∘ Lari Exchange Rate and Factors Affecting it doi.org/10.52340/eab.2025.17.01.12 The exchange rate of a currency plays a critical role in shaping a country’s economy, impacting international trade, investment levels, and ultimately, the well-being of its citizens. For international organizations like the International Monetary Fund (IMF) and the World Bank, exchange rates, alongside inflation, are key indicators used to evaluate a nation's macroeconomic health and determine project feasibility within that country. This is particularly significant for import-dependent nations like Georgia, where approximately 80% of the consumer basket comprises imported goods and services. The volatility of the Georgian Lari (GEL) greatly affects businesses and citizens, creating challenges for long-term planning, price stability, and economic growth. This study examines the factors influencing the exchange rate of the Georgian lari over short, medium, and long-term periods, analyzing their impacts before the pandemic, during the 2025-04-06