EKONOMISTI
The international scientific and analytical, reviewed, printing and electronic journal of Paata Gugushvili Institute of Economics of Ivane Javakhishvili Tbilisi State University

DOI: 10.36172/EKONOMISTI

E ISSN 2346-8432
Print ISSN 1987-6890

Journal number 3 ∘ Rozeta Asatiani ∘

GENESIS OF SOCIAL SECTOR OF ECONOMY AS SCIENCE

Expanded Summary The public sector of the economy was preceded by the objective prerequisites, which laid the foundation for economic development of this relatively new field.This issue is not within the narrow confines of a local issue; however, it is connected organically with other issues.The economic progress and development theories, on the one hand, and, on the other hand,progressive structural changes in the public production contributed to this process, including the technological sphere. As a result of transformation of capitalism, the turn into a new quality of economic system based on domination of private capitalistic property changed the trajectory to world development. Social orientation was recognized as the general feature of market system based on property pluralism, together with the realization of market principles, which in its turn, confirmed the correctness of Keynesian theory about the necessity of state regulation of economy. The government has taken the market

Journal number 3 ∘ Vakhtang Burduli ∘

ASSESSMENT OF ECONOMIC STATE OF THE REGIONS OF GEORGIA AND GENERAL DIRECTIONS OF ITS IMPROVEMENT

Expanded Summary Acceleration economic development of the regions of Georgia is one of the most important tasks facing the economy of the country. For the government the solution of this problem seems to be one of the main four directions of economic development. In particular, as explains Prime Minister Giorgi Kvirikashvili "third block reform implies the development of the regions, which in this process should be one of the main cornerstones." In order to identify the ways of reform, that is, ways to improve national, regional and business coordination of economic development of regions, you must first statistical study the current state of the regional economy making the in-country and cross-country comparisons of this state with the major economic parameters and on this basis identify the main trends improving the economic situation in the regions. Just as the level of economic development of the country in the first place is estimated by gross domestic product (GDP) per ca

Journal number 3 ∘ George Berulava ∘

SERVICES SECTOR REFORMATION AND ENHANCEMENT OF EXPORT ACTIVITY OF MANUFACTURING FIRMS: EVIDENCE FROM TRANSITION ECONOMIES[1]

Summary. The objective of current paper is to explore the link between reforms in services sector and export performance of manufacturing firms in transition economies. The results of the study provide a new understanding of the consequences of trade liberalization in services sector. In particular, positive impact of services sector efficiency on export performance of manufacturers is revealed. Along with services impact, we find that firm specific characteristics such as introduction of new products, investments in research and development, employment of advanced technologies, and employee skills are key drivers of export performance in manufacturing sector in transition economies. Firm’s size and foreign investments do matter as well. The results of this study provide information for policymakers and stakeholders that will facilitate elaboration of policy interventions aimed at improvement of export performance of manufacturers in transition economies. JEL Classification: F1

Journal number 3 ∘ Lasha Kavtaradze ∘

INVESTIGATING SAVINGS-INVESTMENT GAP IN GEORGIA

Summary Prior to the global financial crisis, Georgia faced high foreign investment inflows with expanded domestic credits and government expenditures. High inflation and a positive output gap were also the other two major issues that Georgia had to face with during this period. A combination of these shocks associated with a sizable negative savings-investment gap during the 2006-2008 periods. However, the negative savings-investment gap narrowed and reached to a historically low level of 5.8% by 2013. In this paper, I investigate the driving factors that have determined the savings-investment gap in Georgia. I use the “Jacknife Model Averaging” Estimator to show private credit, GDP gap, FDI inflows, government expenditure and other indicators effects on the Georgian savings-investment gap. Effects of FX reserves and inflation on the savings-investment gap in Georgia constituted further findings of my study. While my analysis shows that the current account deficit suppor

Journal number 3 ∘ Tengizi Taktakishvili ∘

AIMS AND FORMS OF AGRICULTURAL SUBSIDIES

Expanded summary Governments in almost all countries intervene in the process of agricultural sector development. They subsidize farmers, stimulate agricultural productions, try to stabilize prices on agricultural products, establish tariffs and quotas on import, invest in irrigation systems, provide farmers with consultancy service and necessary machinery, subsidize inputs and etc. In the developed countries farms usually have more financial and material means to operate using modern production methods. In countries like Georgia small farmers are unable to adopt modern technologies without support from government. Hence pressure on the government increases to support farmers. Agricultural policy is often directed towards small households who produce small quantities and aren’t competitive on the market. These households are severely affected by price reductions and other fluctuations taking place in the field. Because of the fact that the most of grape growers in Georgia are

EKONOMISTI The international scientific and analytical, reviewed, printing and electronic journal of Paata Gugushvili Institute of Economics of Ivane Javakhishvili Tbilisi State University

DOI: 10.36172/EKONOMISTI E ISSN 2346-8432 Print ISSN 1987-6890	Journal number 3 ∘ Rozeta Asatiani ∘ GENESIS OF SOCIAL SECTOR OF ECONOMY AS SCIENCE Expanded Summary The public sector of the economy was preceded by the objective prerequisites, which laid the foundation for economic development of this relatively new field.This issue is not within the narrow confines of a local issue; however, it is connected organically with other issues.The economic progress and development theories, on the one hand, and, on the other hand,progressive structural changes in the public production contributed to this process, including the technological sphere. As a result of transformation of capitalism, the turn into a new quality of economic system based on domination of private capitalistic property changed the trajectory to world development. Social orientation was recognized as the general feature of market system based on property pluralism, together with the realization of market principles, which in its turn, confirmed the correctness of Keynesian theory about the necessity of state regulation of economy. The government has taken the market Journal number 3 ∘ Vakhtang Burduli ∘ ASSESSMENT OF ECONOMIC STATE OF THE REGIONS OF GEORGIA AND GENERAL DIRECTIONS OF ITS IMPROVEMENT Expanded Summary Acceleration economic development of the regions of Georgia is one of the most important tasks facing the economy of the country. For the government the solution of this problem seems to be one of the main four directions of economic development. In particular, as explains Prime Minister Giorgi Kvirikashvili "third block reform implies the development of the regions, which in this process should be one of the main cornerstones." In order to identify the ways of reform, that is, ways to improve national, regional and business coordination of economic development of regions, you must first statistical study the current state of the regional economy making the in-country and cross-country comparisons of this state with the major economic parameters and on this basis identify the main trends improving the economic situation in the regions. Just as the level of economic development of the country in the first place is estimated by gross domestic product (GDP) per ca Journal number 3 ∘ George Berulava ∘ SERVICES SECTOR REFORMATION AND ENHANCEMENT OF EXPORT ACTIVITY OF MANUFACTURING FIRMS: EVIDENCE FROM TRANSITION ECONOMIES[1] Summary. The objective of current paper is to explore the link between reforms in services sector and export performance of manufacturing firms in transition economies. The results of the study provide a new understanding of the consequences of trade liberalization in services sector. In particular, positive impact of services sector efficiency on export performance of manufacturers is revealed. Along with services impact, we find that firm specific characteristics such as introduction of new products, investments in research and development, employment of advanced technologies, and employee skills are key drivers of export performance in manufacturing sector in transition economies. Firm’s size and foreign investments do matter as well. The results of this study provide information for policymakers and stakeholders that will facilitate elaboration of policy interventions aimed at improvement of export performance of manufacturers in transition economies. JEL Classification: F1 Journal number 3 ∘ Lasha Kavtaradze ∘ INVESTIGATING SAVINGS-INVESTMENT GAP IN GEORGIA Summary Prior to the global financial crisis, Georgia faced high foreign investment inflows with expanded domestic credits and government expenditures. High inflation and a positive output gap were also the other two major issues that Georgia had to face with during this period. A combination of these shocks associated with a sizable negative savings-investment gap during the 2006-2008 periods. However, the negative savings-investment gap narrowed and reached to a historically low level of 5.8% by 2013. In this paper, I investigate the driving factors that have determined the savings-investment gap in Georgia. I use the “Jacknife Model Averaging” Estimator to show private credit, GDP gap, FDI inflows, government expenditure and other indicators effects on the Georgian savings-investment gap. Effects of FX reserves and inflation on the savings-investment gap in Georgia constituted further findings of my study. While my analysis shows that the current account deficit suppor Journal number 3 ∘ Tengizi Taktakishvili ∘ AIMS AND FORMS OF AGRICULTURAL SUBSIDIES Expanded summary Governments in almost all countries intervene in the process of agricultural sector development. They subsidize farmers, stimulate agricultural productions, try to stabilize prices on agricultural products, establish tariffs and quotas on import, invest in irrigation systems, provide farmers with consultancy service and necessary machinery, subsidize inputs and etc. In the developed countries farms usually have more financial and material means to operate using modern production methods. In countries like Georgia small farmers are unable to adopt modern technologies without support from government. Hence pressure on the government increases to support farmers. Agricultural policy is often directed towards small households who produce small quantities and aren’t competitive on the market. These households are severely affected by price reductions and other fluctuations taking place in the field. Because of the fact that the most of grape growers in Georgia are