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 2 ∘

Journal N2, 2024 content

„ECONOMICS and BUZINESS“ VOLUM XVI, N2, 2024 C O N T E N T S ECONOMIC THEORY ◊ ECONOMIC POLICY Mikheil Jibuti - Political-Economic Eclecticism in GeorgiaZurab Garakanidze, Solomon Pavliashvili - Demonopolization of the EU Gas Market in the Conditions of the Russia-Ukraine War Lali Khurtsia - Topical Issues of Distribution and Use of Housing FINANCE and BANKING Leila Ghudushauri - Basel IV: Implementation, Challenges and ProspectsZurab Zurabishvili, Davit Chelidze - Over the Thirty-Year History of the State Budget of Georgia, the Trends and some Directions for Improving the Budget Process Beka Darakhvelidze - Comparative Analysis of the Cost of Equity Measurement Models for Developing Countries MARKETING ◊ TOURISM Nugzar Todua, Nino Gogitidze - The Impact of Social Media Marketing Activities on Purchase Intentions of Healthcare Consumers Teona Tavdishvili, Ekaterine Maglakelidze - Generation Y and Z Preferences Regarding

Journal number 2 ∘ Mikhail Jibuti ∘

Political-Economic Eclecticism in Georgia

doi.org/10.52340/eab.2024.16.02.01 ჟურნალი N 2. 2024 Decommunization in Georgia followed its restoration of independence in 1991. The dismantling of a monopolistic system centered around the single-party rule of the USSR Communist party and its Marxist-Leninist ideology was a pivotal development. This period marked the acceptance of ideological and political diversity, yet despite the emergence of numerous political parties, the one-party dominance persisted. The ruling parties always had constitutional majority in the Parliament, but despite their declared ideologies, transformation of the Soviet economy was implemented through right-wing principles. Due to the complete lack of theoretical and practical expertise, politics and economy proved to be eclectic, and this eclecticism was further accentuated by the way in which the market economy interacted with the remnants of the Soviet system. The social structure that had existed during the Soviet era was shattered by the

Journal number 2 ∘ Zurab Garakanidze ∘ Solomon Pavliashvili ∘

Demonopolization of the EU Gas Market in the Conditions of the Russia-Ukraine War

doi.org/10.52340/eab.2024.16.02.02 The proposed ‘Vertical Gas Corridor’ is a project that will directly challenge Russia’s last remaining major gas pipeline Bratstvo - Brotherhood (Urengoy-Pomary-Uzhgorod route) into the heart of Europe.Bringing non-Russian gas into southern and central Europe via the Southern Gas Corridor has been a long-standing aim of the EU, regional EU member states, Turkey and gas producers as far afield as Central Asia and the Middle East, albeit with significantly differing agendas. Many projects, often grandiose, have been proposed over the years, often falling foul of the complex political and economic interests which crisscross the region. Russia’s invasion of Ukraine in February 2022 provided yet another twist to this Levantine Great Game, creating both new impetus for supply diversification and new infrastructure options as the Kremlin’s control over the pipelines originally built to bring gas west and south from Russia weake

Journal number 2 ∘ lali khurtsia ∘

TopicalIssues of Distribution and Use of Housing

doi.org/10.52340/eab.2024.16.02.03 The goal of the state housing policy is to create conditions that will allow each person to have decent housing at an affordable price. Due to high prices and growing demand, there may be market failures, which necessitates government intervention in the functioning of the housing market.When we talk about the involvement of the state in the policy of providing housing, we must also consider the activities of the market. The high demand for housing resources determines the high price of residential areas. There are often cases when housing prices rise and exceed average wage growth, making own housing an unaffordable luxury for many people. The distribution of housing in the world is mainly carried out by market forces. More than 90% of the 1.1 million households in Georgia own their homes. The majority of housing, as the graph shows, was built during the Soviet Union in the 50s, 60s, 70s, and 80s, while the construction and distribution of residenti

Journal number 2 ∘ Leila Gudushauri ∘

Basel IV: Implementation, Challenges and Prospects

doi.org/10.52340/eab.2024.16.02.04 Basel IV is the latest package of international banking reforms in international agreements. Built on Basel I, Basel II and Basel III accords, it was developed by the Basel Committee regarding the global financial crisis of 2008-09.Basel IV, also known as Basel 3.1, aims to strengthen liquidity and solvency of the global banking system, ensure safety and stability across countries by introducing uniform standardized rules, including risk assessment rules. Its implementation started on January 1, 2023, will be accomplished until 2028, phases vary by countries.The article discusses and analyzes the main recommendations of Basel IV, alongside with updated approach to banking risk assessment, including operational risk, their implementation peculiarities, challenges; the impact of new operational risk assessment standards on capital standards is also analyzed and opinions about further refinement of some regulations are expressed.During the implementatio

Journal number 2 ∘ Zurab Zurabishvili ∘ Davit Chelidze ∘

Over the Thirty-Year History of the State Budget of Georgia, the Trends and some Directions for Improving the Budget Process

doi.org/10.52340/eab.2024.16.02.05 The aim of the paper is to find, systematize and systematize important budgetary parameters recorded during the almost thirty-year (1996-2024) history of the state budget of Georgia drawn up in national currency and to develop recommendations aimed at overcoming the problems identified through their study and analysis. Taking into account the fact that since the restoration of Georgia's independence, there is practically no information on the formation of important budgetary parameters in the form of a single dynamic (temporal) row and their comparison with the actual performance indicators, the mentioned direction should be considered as a determining factor of the relevance of the research. In order to achieve the goal, in the form of dynamic rows, the important budgetary parameters recorded in the 1996-2024 laws on the state budget of Georgia are systematized, both the amounts planned for the day of adoption of these laws and the amounts achieved

Journal number 2 ∘ Beka Darakhvelidze ∘

Comparative Analysis of the Cost of Equity Measurement Models for Developing Countries

doi.org/10.52340/eab.2024.16.02.06 When evaluating the value of a particular firm or asset, to calculate the final result objectively and consider the critical variables of the market conjuncture, it is necessary to select the optimal discount rate, which will be used to assess the riskiness of cash flows. The discount rate should reflect all possible premiums impacting the financial and non-financial riskiness of the evaluated asset. In particular, for calculating the value of the loan obligation, the discount rate must reflect the default premium, which implies the risk that the borrower will not be able to repay the obligation in the predetermined volume and term stipulated by the agreement. On the other hand, when investing with equity, the discount rate should reflect the equity risk premium. Therefore, a logical question arises: how do we measure the riskiness of default and investor's equity? It is rational to share the opinion that assessing the risk from the investors' point

Journal number 2 ∘ Nugzar Todua ∘ Nino Gogitidze ∘

Impact of Digital Banking Services on Consumer Satisfaction

doi.org/10.52340/eab.2024.16.02.07 The main factors affecting the use of digital banking services by customers in Georgian banks are studied in the article. Based on diverse literature, appropriate hypotheses and a conceptual model of research have been developed. The questionnaire survey method is used for the research. Data were collected through a random sampling of consumers and a self-administered questionnaire. The collected data is used to process correlation, regression, and factor analysis. The reliability of the research analysis was confirmed, and the main factors identified were awareness, ease of use, trust, and social media marketing activities, which have a positive effect on the intention to use digital banking, which, in turn, has a positive impact on satisfaction and use of Internet banking. As a result of the research, it was determined that consumers in the banking sector of Georgia should be encouraged to use digital banking services through various marketing acti

Journal number 2 ∘ Teona Tavdishvili ∘ Ekaterine Maglakelidze ∘

Generation Y and Z Preferences Regarding Influencer Marketing

doi.org/10.52340/eab.2024.16.02.08 This study examines generational differences in influencer marketing preferences, particularly focusing on how Generations Y (Millennials) and Z evaluate information sources and types offered by influencers. Additionally, it assesses the target groups' ratings and perceptions of Georgian influencers.Influencer marketing has become a prominent tool in the digital marketing landscape, leveraging the reach of social media personalities to connect brands with consumers. This approach offers brands a unique opportunity to target specific audiences and promote products through trusted influencers. However, the effectiveness of influencer marketing strategies can vary significantly across generational groups, particularly between Millennials (Generation Y) and Generation Z. This study investigates these generational differences in influencer marketing preferences.The purpose of the research was to investigate the preferences of Millennials (Generations Y) a

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 2 ∘ Journal N2, 2024 content „ECONOMICS and BUZINESS“ VOLUM XVI, N2, 2024 C O N T E N T S ECONOMIC THEORY ◊ ECONOMIC POLICY Mikheil Jibuti - Political-Economic Eclecticism in GeorgiaZurab Garakanidze, Solomon Pavliashvili - Demonopolization of the EU Gas Market in the Conditions of the Russia-Ukraine War Lali Khurtsia - Topical Issues of Distribution and Use of Housing FINANCE and BANKING Leila Ghudushauri - Basel IV: Implementation, Challenges and ProspectsZurab Zurabishvili, Davit Chelidze - Over the Thirty-Year History of the State Budget of Georgia, the Trends and some Directions for Improving the Budget Process Beka Darakhvelidze - Comparative Analysis of the Cost of Equity Measurement Models for Developing Countries MARKETING ◊ TOURISM Nugzar Todua, Nino Gogitidze - The Impact of Social Media Marketing Activities on Purchase Intentions of Healthcare Consumers Teona Tavdishvili, Ekaterine Maglakelidze - Generation Y and Z Preferences Regarding Journal number 2 ∘ Mikhail Jibuti ∘ Political-Economic Eclecticism in Georgia doi.org/10.52340/eab.2024.16.02.01 ჟურნალი N 2. 2024 Decommunization in Georgia followed its restoration of independence in 1991. The dismantling of a monopolistic system centered around the single-party rule of the USSR Communist party and its Marxist-Leninist ideology was a pivotal development. This period marked the acceptance of ideological and political diversity, yet despite the emergence of numerous political parties, the one-party dominance persisted. The ruling parties always had constitutional majority in the Parliament, but despite their declared ideologies, transformation of the Soviet economy was implemented through right-wing principles. Due to the complete lack of theoretical and practical expertise, politics and economy proved to be eclectic, and this eclecticism was further accentuated by the way in which the market economy interacted with the remnants of the Soviet system. The social structure that had existed during the Soviet era was shattered by the Journal number 2 ∘ Zurab Garakanidze ∘ Solomon Pavliashvili ∘ Demonopolization of the EU Gas Market in the Conditions of the Russia-Ukraine War doi.org/10.52340/eab.2024.16.02.02 The proposed ‘Vertical Gas Corridor’ is a project that will directly challenge Russia’s last remaining major gas pipeline Bratstvo - Brotherhood (Urengoy-Pomary-Uzhgorod route) into the heart of Europe.Bringing non-Russian gas into southern and central Europe via the Southern Gas Corridor has been a long-standing aim of the EU, regional EU member states, Turkey and gas producers as far afield as Central Asia and the Middle East, albeit with significantly differing agendas. Many projects, often grandiose, have been proposed over the years, often falling foul of the complex political and economic interests which crisscross the region. Russia’s invasion of Ukraine in February 2022 provided yet another twist to this Levantine Great Game, creating both new impetus for supply diversification and new infrastructure options as the Kremlin’s control over the pipelines originally built to bring gas west and south from Russia weake Journal number 2 ∘ lali khurtsia ∘ TopicalIssues of Distribution and Use of Housing doi.org/10.52340/eab.2024.16.02.03 The goal of the state housing policy is to create conditions that will allow each person to have decent housing at an affordable price. Due to high prices and growing demand, there may be market failures, which necessitates government intervention in the functioning of the housing market.When we talk about the involvement of the state in the policy of providing housing, we must also consider the activities of the market. The high demand for housing resources determines the high price of residential areas. There are often cases when housing prices rise and exceed average wage growth, making own housing an unaffordable luxury for many people. The distribution of housing in the world is mainly carried out by market forces. More than 90% of the 1.1 million households in Georgia own their homes. The majority of housing, as the graph shows, was built during the Soviet Union in the 50s, 60s, 70s, and 80s, while the construction and distribution of residenti Journal number 2 ∘ Leila Gudushauri ∘ Basel IV: Implementation, Challenges and Prospects doi.org/10.52340/eab.2024.16.02.04 Basel IV is the latest package of international banking reforms in international agreements. Built on Basel I, Basel II and Basel III accords, it was developed by the Basel Committee regarding the global financial crisis of 2008-09.Basel IV, also known as Basel 3.1, aims to strengthen liquidity and solvency of the global banking system, ensure safety and stability across countries by introducing uniform standardized rules, including risk assessment rules. Its implementation started on January 1, 2023, will be accomplished until 2028, phases vary by countries.The article discusses and analyzes the main recommendations of Basel IV, alongside with updated approach to banking risk assessment, including operational risk, their implementation peculiarities, challenges; the impact of new operational risk assessment standards on capital standards is also analyzed and opinions about further refinement of some regulations are expressed.During the implementatio Journal number 2 ∘ Zurab Zurabishvili ∘ Davit Chelidze ∘ Over the Thirty-Year History of the State Budget of Georgia, the Trends and some Directions for Improving the Budget Process doi.org/10.52340/eab.2024.16.02.05 The aim of the paper is to find, systematize and systematize important budgetary parameters recorded during the almost thirty-year (1996-2024) history of the state budget of Georgia drawn up in national currency and to develop recommendations aimed at overcoming the problems identified through their study and analysis. Taking into account the fact that since the restoration of Georgia's independence, there is practically no information on the formation of important budgetary parameters in the form of a single dynamic (temporal) row and their comparison with the actual performance indicators, the mentioned direction should be considered as a determining factor of the relevance of the research. In order to achieve the goal, in the form of dynamic rows, the important budgetary parameters recorded in the 1996-2024 laws on the state budget of Georgia are systematized, both the amounts planned for the day of adoption of these laws and the amounts achieved Journal number 2 ∘ Beka Darakhvelidze ∘ Comparative Analysis of the Cost of Equity Measurement Models for Developing Countries doi.org/10.52340/eab.2024.16.02.06 When evaluating the value of a particular firm or asset, to calculate the final result objectively and consider the critical variables of the market conjuncture, it is necessary to select the optimal discount rate, which will be used to assess the riskiness of cash flows. The discount rate should reflect all possible premiums impacting the financial and non-financial riskiness of the evaluated asset. In particular, for calculating the value of the loan obligation, the discount rate must reflect the default premium, which implies the risk that the borrower will not be able to repay the obligation in the predetermined volume and term stipulated by the agreement. On the other hand, when investing with equity, the discount rate should reflect the equity risk premium. Therefore, a logical question arises: how do we measure the riskiness of default and investor's equity? It is rational to share the opinion that assessing the risk from the investors' point Journal number 2 ∘ Nugzar Todua ∘ Nino Gogitidze ∘ Impact of Digital Banking Services on Consumer Satisfaction doi.org/10.52340/eab.2024.16.02.07 The main factors affecting the use of digital banking services by customers in Georgian banks are studied in the article. Based on diverse literature, appropriate hypotheses and a conceptual model of research have been developed. The questionnaire survey method is used for the research. Data were collected through a random sampling of consumers and a self-administered questionnaire. The collected data is used to process correlation, regression, and factor analysis. The reliability of the research analysis was confirmed, and the main factors identified were awareness, ease of use, trust, and social media marketing activities, which have a positive effect on the intention to use digital banking, which, in turn, has a positive impact on satisfaction and use of Internet banking. As a result of the research, it was determined that consumers in the banking sector of Georgia should be encouraged to use digital banking services through various marketing acti Journal number 2 ∘ Teona Tavdishvili ∘ Ekaterine Maglakelidze ∘ Generation Y and Z Preferences Regarding Influencer Marketing doi.org/10.52340/eab.2024.16.02.08 This study examines generational differences in influencer marketing preferences, particularly focusing on how Generations Y (Millennials) and Z evaluate information sources and types offered by influencers. Additionally, it assesses the target groups' ratings and perceptions of Georgian influencers.Influencer marketing has become a prominent tool in the digital marketing landscape, leveraging the reach of social media personalities to connect brands with consumers. This approach offers brands a unique opportunity to target specific audiences and promote products through trusted influencers. However, the effectiveness of influencer marketing strategies can vary significantly across generational groups, particularly between Millennials (Generation Y) and Generation Z. This study investigates these generational differences in influencer marketing preferences.The purpose of the research was to investigate the preferences of Millennials (Generations Y) a