Theoretical characteristics of using leverage instruments in the context of rural entrepreneurship

Today, the matters pertaining to regional and urban development in the EU are increasingly integrated into EU development plans and strategies. The EU actively facilitates regional development by supporting the development of small and medium-sized enterprises in the regions to contribute to employment, education and social integration. The strategic goal of the National Development Plan of Latvia 2021-2027 is to promote also regional development in Latvia in order to ensure long-term balanced growth in the country. Promoting entrepreneurship in the regions is of great importance, as Latvia is still one of the countries in the European Union experiencing unbalanced regional development and having socio-economic disparities. Consequently, financial performance and financial stability play an important role in sustainable business development. Rural entrepreneurs whose business is seasonal often lack an awareness of the role of financial leverage degrees, which could lead to making wrong decisions. Performing an assessment of the degrees of financial leverage could be useful not only in a situation when experiencing a business expansion but also when a business decline occurs, which is specific to rural entrepreneurship. A hypothesis of the present research is based on the authors’ opinion that by meaningfully applying the degrees of financial leverage, it is possible to enhance the financial performance of enterprises, which is particularly important for rural entrepreneurship. The aim of the research is to define the degrees of financial leverage – the degree of operating leverage (DOL), the degree of financial leverage (DFL) and the degree of combined leverage (DCL) – as measures of financial performance of enterprises and classify the principles of measure assessment in relation to whether the indicator percentage changes used in financial leverage calculations are positive or negative. The research employed the following methods: induction – to make scientific assumptions and identify similarities based on individual elements – and deduction – to logically systematize and explain empirical data. Applying the empirical and logical construction methods, the authors analysed six different theoretically possible situations, gave six different examples, defined and classified the principles of leverage degree assessment as different (positive and negative) in relation to the indicator percentage changes used in financial leverage calculations.

Assessment of results of reorganization of land relations in Baltic States

After the collapse of Soviet system, immediately after declaration of independence, Estonia, Latvia and Lithuania decided to initiate land reform within the framework of agrarian reform. The defined general objectives of land reform were: to establish a fairer system of property and use rights, to create conditions for intensity and productivity increasing of land use, to strengthen the rights of lessors and tenants, to grant land to those who wish to cultivate or otherwise use the land. However, the legislation and administrative systems of separate Baltic States were different, so the objectives and tasks of land reform, as well as the measures and methods for implementing the land reform, were different. The aim of the article is to compare and evaluate the land ownership reform processes in Estonia, Latvia and Lithuania, to analyse their legal security, the objectives, tasks, process and procedures of the reform, as well as the results obtained. In order to find out the situation and to make comparative judgments and conclusions, in research mainly document analysis and monographic or descriptive method haves been used. The positive role of land reform in all Baltic States is the restoration of land ownership, which has led to more targeted and intensive use of land in agriculture and other sectors. Land reform has created the preconditions for initiative and action of landowners in market economy. An additional effect is the development and implementation of state-of-the-art real estate registration systems in administration of each state. The article also analyses the shortcomings and problems encountered during the reform.

Economic effect of short-term period tax benefits in mountainous parts of Georgia

Migration processes of high mountains and population growth of cities have led to depopulation in mountainous regions, rising unemployment in the city and a had a decrease in agricultural products, ultimately provoke external migration processes. These problems are typical not only for Georgia but also for the postSoviet countries and are relevant in the global context. The purpose of the study was to identify and analyse the effects of the short-term tax privileges for the mountainous regions of Georgia. The paper is dedicated to research and quantitative analysis of the impact of tax and social benefits on improving demographic conditions and regulating internal migration processes, both in the short and long-term perspective. The research methodology was based on the statistical processing of the survey results. For quantitative research, we used a structured questionnaire, which was developed by face-to-face interviews. Approximately 500 respondents were interviewed in 79 villages of 11 communities of Khulo, the Adjara Autonomous Republic, Georgia. The study revealed that by regulating tax and social benefits, it is possible to partially manage the internal migration processes of the mountainous region in the short run, while in the long run, a complex approach to the issue is important. In the mountainous parts, tax, social and other benefits will have a positive economic effect in the short term. Increasing the amount of income for individuals and legal entities is one way to stimulate the rural economy.

Compliance of fire safety measures for accommodation of people in Riga schools

This article describes the situation with fire safety at Riga schools regarding their compliance with the fire safety requirements set in Latvia for accommodation of people in schools. The objective of the current paper was to research and evaluate the compliance with the requirements of regulatory enactments regarding the accommodation in Riga schools and analyse the actual fire safety situation during accommodation of participants of the Dance and Song Festivals in Riga schools. The research was conducted in spring of 2018, prior to the Dance and Song Festival, assessing the compliance of 60 accommodation sites with the Latvian regulatory enactments on fire safety. During the Dance and Song Festival, it was planned to organise accommodation places in schools for 24 000 persons – participants of the festival events in the city of Riga. Ensuring fire safety at public facilities is a topical issue for any country, since the fulfilment of fire safety requirements is important not only in cases, when school premises are intended to be used for temporary accommodation of participants of the Dance and Song Festivals for a period not exceeding a week, but also in cases when children have to stay in school premises every day to receive the knowledge they will need in their future lives and the fulfilment of fire safety regulations is an important condition for providing the overall safety.

Factors contributing to the regional development of e-commerce in Latvia

E-commerce contributes to the improvement of communications between the company, producers, distributors and customers. However, it should be noted that success in e-commerce depends upon determining effective factors in e-commerce. There is a set of effective inside organisational and outside organizational factors in e-commerce which should be taken into consideration during the development of e-commerce. According to the recent results of DESI Index, Latvia lags behind the EU average on integration of digital technology by businesses. Despite excellent connectivity and good digital public services, Latvian SMEs do not use effectively online selling, social media, cloud computing and big data possibilities. At the same time, it is recognised nationally that e-commerce provides good opportunities to develop business, including in the regions. Taking into account the before-mentioned, the aim of the paper is to analyse the factors contribution to the development of e-commerce in the regions in Latvia. Main results of the research: in general, factor groups “Technological development” and “Social factors (human skills)” were assessed the highest among Latvian entrepreneurs. Such individual factors as desire to develop, employee knowledge, and managerial attitude, technological development in the world, and managerial knowledge and existence of financial resources in the company were evaluated the highest in terms of effect on usage of e-commerce in the business. In case of regional cross-cut, in Kurzeme, Riga and Latgale regions entrepreneurs are rather in favour of technological development factors affecting the usage of e-commerce, while entrepreneurs in Zemgale and Vidzeme regions think that social factors affect the development of e-commerce the most.

Reduction of non-value added activities in restaurant services: the case of BBS-Dizain Ltd

In order to ensure the development and competitiveness of an organization, it is essential to continuously enhance processes, particularly those that generate revenue, i.e. business processes, as well as to introduce innovations. One of the business processes at BBS-Dizain Ltd that needs to be enhanced is the catering service. The aim of the research is to examine possibilities for shortening order processing times at BBS-Dizain Ltd. The research concluded that the average rating of order processing time at the restaurant given by the employees of BBS-Dizain Ltd (internal customers) was higher (4 points) than the rating given by visitors (external customers) (3.49 points). A contingency analysis showed that there was no correlation between the ratings given by external and internal customers; therefore, the restaurant’s personnel did not critically assess their performance in terms of order processing time. Since changes in the demand for the dishes on the menu of the restaurant exceeded 25%, and none of the dishes on the menu was a leader in terms of revenue generated, there were no dishes, the cooking process of which BBS-Dizain Ltd needed to optimize. The chefs of BBS-Dizain Ltd could enhance their skills in preparing Group AY meals, as the demand for them was relatively steady. Rearranging the workplace of a chef, using the 5S methodology, and replacing the worktop for the chef with a freezer allows significantly – two-fold – reducing the number of the steps made during the shift. However, rearranging the restaurant’s storeroom, using the 5S methodology, allows saving 95 % time spent on searching for things needed. Therefore, the possibilities to reduce order processing times at the restaurant of BBS-Dizain Ltd involve decreasing unnecessary movements of chefs at their workplaces and reducing the time spent on searching for things in the storeroom.

In what direction is agricultural specialization headed in Central and Eastern Europe? (2005-2016)

The paper deals with the main directions of specialization in Central and Eastern European Countries’ (CEECs, EU10) agriculture after the EU’s Eastward Enlargement. We analyse and compare growth and productivity advantages of specialized farm types by physical size (in hectare) in EU10 member-states to the EU10/27/15 average based on EUROSTAT data in the period of 2005-2016. We focus on exploring the main directions of specialization using such indicators as the number of specialized farms, land (Utilized Agricultural Area, UAA) and labour (Agricultural Working Unit, AWU) use on the input side, average farm size by land and labour use as well as area-, labour-, and total productivity on the output side. We conclude that the directions of specialization in farming in EU10 were based on the traditional farm production structure making the latter better able to adjust and take advantages of Common Agricultural Policy. Concerning production growth rate, the three leading specialization types of CEECs’ farms were: (i) cattle rearing and fattening, (ii) cereals, oilseed and protein crops and (iii) fruits and citrus fruits. These three specialization types of farms – in the same ranking order - also increased land (UAA) and labour (AWU) use well above the average. Specialized cereals farms and cattle rearing and fattening farms were also ranked in top three by number. Both cereals and fruits specialized farms have leading position in growth rate of land and labour use and also are in top three in growth rate of land area and total farm productivity. Cereals and fruits specialized farms also more than doubled labour productivity during the first decade after the EU’s Eastward enlargement but did not rank in the top three in this category.

Principles of effective mentoring communication in entrepreneurship: the results of a survey of experts

With the development of mentoring networks, communication between mentors and mentees and related problems in entrepreneurship have become an increasingly important topic in recent years. The aim of the research is to identify the most important problems that hinder an effective communication process between the mentor and the mentee in entrepreneurship based on expert opinions on the elements of and barriers to the communication process. The research results have revealed that mentors’ willingness to communicate, appropriately engaging in dialogue with their mentees, as well as honour and other skills and traits are essential. The experts have emphasized that it is important that the mentee does not take the mentor’s experience literally but critically assesses whether his/her resources are aligned with the goal. According to the experts, the most essential barriers to communication were a lack of time and logical barriers and obstacles that emerged to partners with different ways of thinking. Researchers need to continue the research started by the authors of the paper by working on and designing a communication model for mentors and mentees, taking into account the communication barriers identified in the present research and other factors relevant to communication in entrepreneurship.

Economic results and development of organic farms in Latvia

Organic farming is experiencing rather rapid development in Europe, including in Latvia. This could be rated from different aspects. The purpose of this article is to assess the economic indicators of the development of organic farming, linking them to conclusions stated in various studies in Latvia and other countries on the diverse economic, social and environmental impact of this type of farming, as well as potential problems. So, theoretical and empirical approaches are combined in this article. The different problems we can state as outcome of the research. The farms concentrate in areas with less favourable conditions for conventional farming. Also, large continuous areas under organic farming often leads to low production value per hectare and do not reach social goals.

Influence of institutional framework on economic activity of agricultural cooperatives: Latvia’s case

Given the important role of agricultural cooperatives in strengthening competitiveness and market power of farmers in the food chain, it is essential to understand the competitiveness of their own economic activities. The purpose of this article is to summarize the institutional base affecting agricultural cooperation to assess its impact on the economic activity. To reach the goal, the normative documents that affect the agricultural co-operation directly were gathered and studied, and certain institutional obstacles and problems affecting the cooperation of economic activity were highlighted. At the end, conclusions on the institutional framework for economic activity of agricultural cooperatives in Latvia and suggestions on the legislative changes needed to improve the competitiveness of agricultural cooperatives are offered.