Olena Dobrovolska

The research reveals the peculiarities of shaping the sustainable development paradigm since the publication of the first studies on the human activity impact on the environment to date. Three main stages of development with the focus on the key goals and tasks through an analysis of the main documents regulating activities in this area are determined. The results showed a change in the vector for further development and identification of the financial component as an independent element.

The development of the organic market in the world requires conducting a research on the problems that accompany this process. Such studies are becoming more popular and apply not only to organic products market at the global level, but also at the local level. In order to identify global problems, the state and trends of the organic products markets in the USA, Germany, France, Britain as the biggest national markets were analyzed on the basis of the data characterizing the state of organic products market in Ukraine and in the world, provided by the Research Institute of Organic Agriculture (FIBL) and the International Federation of Organic Agricultural Movements (IFOAM). The research of the state and trends of the Ukrainian organic market and agricultural production development was conducted, and using the SWOT analysis methodology and the principles laid out in the PEST analysis, its strengths and weaknesses, opportunities and threats were identified. Within each element, social, environmental, economic and financial constituents have been grouped, providing a possibility to understand which factor is determining in terms of sustainable development. It enabled to make a conclusion that the Ukrainian market remains small in size, entailing significant risks, first of all, for producers, as its further development requires a significant all-round support from the state both from the financial point of view and from the point of view of active promotion of sustainable development ideas and education of the population on the importance of consuming quality products, taking care about their health and, as a result, contributing to the improvement of the environment.

In most countries of the world, realizing the sustainable development concept has caused a lively discussion in the scientific environment regarding the mutual influence of the economic growth and the environmental health. Is the economic growth even possible without environmental damage? The answer is still unknown. Research studies both confirm and refute this interaction. The U-shaped curve (Environmental Kuznets Curve) hypothesis is the most popular in this regard. Scientists from different countries analyze the impact of the economic climate on the environmental health taking the hypothesis into account. At the same time, these studies use gross national income as a base indicator, which reflects only the economic dimension of the research, but does not consider the depletion of natural capital on the path of economic growth. The purpose of this study is to identify the factors that have the most significant impact on the adjusted net savings in Ukraine and a number of selected countries, and also take into account the agrarian sector development, which is important in terms of substantiation of the expediency of a significant increase in natural agricultural production in the Ukrainian agrarian sector. The paper presents the results of constructing a model based on World Bank data for the period from 2009 to 2017, for Ukraine and 13 other countries that are neighbors of Ukraine and belong to the lower middle-income group. From the list of indicators provided by the World Bank to characterize the state of the environment in the world, 13 indicators are chosen that most fully characterize the situation in the selected countries. Based on the analysis of the panel data formed, the result is that agricultural land (% of land area), energy use per capita (kg oil equivalent), and agricultural productivity (value added per worker) have the most significant impact on the adjusted net savings. With that, the first two indicators show a positive impact, while the third one has a negative impact, indicating that the increase in productivity in the agrarian sector of the economy results in the environmental deterioration. All this allows us to conclude about the necessity to introduce natural agroproduction technologies in order to improve the environment, especially considering the fact that in Ukraine, the share of the agrarian sector in GDP increases every year.

Financial support for the agrarian sector is the priority of economic policy in many countries of the world, as it plays a key role in achieving the goals of sustainable development, in particular poverty reduction, food security, environmental improvement, including reducing CO2 emissions, reducing water pollution, etc. In the main, the financial support for the agrarian sector of the various countries is multi-channel and combines budget financing and financial market opportunities. At the same time, for many countries, including Ukraine, the issue of the ratio of these sources of financing and their influence on the development of agricultural production remains unresolved. The analysis of budget financing has shown a lack of stability in the implementation of financial support programs for the agrarian sector of Ukraine, which affects the financial sustainability of enterprises and their ability to attract market financing. In the article, using the structural modeling, the necessary amount of financing for the agrarian sector was determined through budget financing, bank lending and agro-insurance. The results of the calculations showed that the actual size of bank lending to agrarian enterprises is significantly lower than the simulated values. At the same time, budget financing creates conditions for ensuring financial sustainability of agrarian enterprises and encourages them to use bank lending, while increasing budget financing reduces the need for agro-insurance operations, which is a negative consequence of its use.

Realization of agricultural production complying with the sustainable development principles has resulted in a separate direction – organic farming. Its big difference from all other economy sectors is in its dependence on the natural and climatic conditions. Therefore, agricultural production has a dual nature, namely it depends on the environment health on the one hand, and, on the other hand, directly affects this health through the use of technologies that can both improve and substantially worsen the environmental situation. The institutional support for the organic farming is of great importance. This issue is relevant for scientists from countries, where organic farming is actively developing. In Ukraine, this is also a topical issue. The paper presents a conceptual framework of institutional support for the organic farming development, which includes elements such as state regulation, self-regulation, objects and subjects of organic farming, as well as an organic product market. Legal, informational, infrastructure and financial directions of ensuring the development of organic farming are also defined. The essence of each element is revealed. The main indicators of the organic farming development in Ukraine are analyzed, i.e. the organic farming areas, their proportion in agricultural lands, the number of producers, the volume of the organic market, the volume of organic consumption per capita, as well as the share of domestic organic land in the world's territory. A correlation analysis based on data from the largest world market of the USA made it possible to determine the factors that have the greatest impact on the development of the organic agricultural sector. The number of organic producers is statistically significant, and the share of land in the organic farming does not have a significant impact on the organic product consumption. At the same time, this can be seen from the point of view that the more producers will offer their products, the more saturated the market will be, and therefore the level of the organic products coverage can be greater.

The present state of the financial market in Ukraine determines a lack of funding for agricultural enterprises. The research aims to find internal sources of funding for the reproduction of fixed assets for agricultural enterprises. The calculation of the depreciation return index is a component of financial analysis of the efficient renovation investment use. It allows controlling its targeting and influence on enterprises in a financial aspect in order to provide a stable position of the enterprise`s investor.
Implementation of economic and mathematical modeling using correlation and regression analysis verified a tight correlation between gross profit margins in agriculture and depreciation returns. For this purpose, general indexes were formed that is the primary value of fixed assets at the end of the year; the extent of their depreciation, depreciation and residual value of fixed assets at the end of the year, the average annual value of fixed assets, annual income, investment return and calculated gross profit and depreciation during 2001–2016 were determined.
The results of the calculations showed that the funds saved through depreciation (renovation investments), and retained earnings are the financial resources for continuous renovation of fixed assets of agricultural enterprises. Also, attraction to internal reserves should have an impact on the increase of the agricultural enterprises’ profitability and should facilitate the increase of production volumes due to the implementation of innovations.

Personal income tax (PIT) is one of the most important taxes in Ukraine due to its economic, social and political role. With its help, one can regulate the investment process, the level of real incomes and maintain stability in society. However, the potential of this tax in Ukraine is not fully used. The purpose of the study is to identify the main problems of PIT and further directions of its implementation as an instrument of social policy. Laffer’s tax theory, on the dependence of economic efficiency of taxation on lower tax rates and the degree of progressiveness of taxes, was taken as a conceptual line of research. Consideration of world trends in the practice of PIT allowed tracing its evolution and choose the methods of its optimization that are acceptable for Ukraine. The use of comparative and statistical analyses, grouping, structural modeling method, index method and systematization of results allowed formulating the author’s version of the income taxation reform in Ukraine. The introduction of a progressive taxation scale should take into account the quality of tax administration, the availability of tax benefits, deductions and loans, the amount of fines, and public perception of the tax system in addition to quantitative results. The proposed family taxation, based on the differentiation of taxpayers by their marital status, actual solvency through the introduction of family rates and the establishment of progressive rates of personal income tax, will fully implement the principle of social justice in the distribution of income.

The purpose of the paper is to determine the causal relationship between financial and investment indicators and the level of innovation development in GII leading countries and Ukraine. For a sample of 10 leaders in GII-2022 and Ukraine for 2011–2020, a correlation analysis was conducted based on the following indicators: the value of GII, foreign direct investment (net inflows), domestic credit to the private sector, ease of getting credit, protecting minority investors, and real interest rate. A positive relationship (with moderate/high strength) between innovation development and foreign direct investment has been proven in 7 out of 11 countries with a time lag of 0-2 years; domestic credit to the private sector – in 6 countries (lag of 0-3 years); and protecting minority investors – in 9 countries (lag of 0-2 years). For other indicators, the relationship is negative. Through VAR-modelling and Granger test, it is proven that the change in the value of foreign direct investment causes the change in the value of GII in 6 countries (bidirectional causality exists only in Ukraine); domestic credit to the private sector – in 6 countries, protecting minority investors and real interest rate – in 2 countries, and ease of getting credit – only in Switzerland. The results show that foreign direct investment and domestic credit to the private sector are the reasons for increasing the level of innovation development and have potentially the highest influence. In Ukraine, compared to GII leaders, only the factor of foreign direct investment is identified as a cause of innovation development.

The study aims to determine the influence of the R&D expenditure structure funded by different sectors of stakeholders on the level of innovation development. The data sample involves values of GII and R&D expenditure funded by business, government, higher education, private non-profit sectors, and foreign sources for 10 countries – Ukraine and 9 top countries in GII-2022 for 2011–2020. Pearson/Spearman correlation analysis considers time lags to determine the nature and strength of relationships. For GII’s top countries, the relationship with innovation development level is confirmed as direct for funding R&D by business (in 8 from 9 countries), higher education (5 from 7), and foreign sources (5 from 9) with power from moderate to very high and 0-3-year lag. In Ukraine, the direct relationship is for financing by business (very high power and 3-year lag) and foreign sources (high power and 1-year lag). The regression modeling of dependences (Arellano-Bover/Blundell-Bond dynamic model for panel data and linear model for Ukraine) was also applied using STATA 18. In GII’s top countries, increasing the share of R&D expenditures financed by business by 1% contributes to increasing GII’s score by 0.25%, higher education – 2.47%; government, non-profit sector, and foreign sources – decreasing by 0.89%, 1.68% and 0.81% accordingly. In Ukraine, increasing financing R&D by the government by 1% leads to a similar decrease of GII estimate by 0.19% with a 2-year lag, and the business sector – an increase of 0.16% with a 3-year time lag. Vice versa, in Ukraine, R&D expenditures financed by higher education lead to GII’s score decreasing.

Knowledge-based economy causes changes in the higher education system: university graduates must have the ability to constantly learn and improve their skills, generate and disseminate new knowledge, form and multiply the knowledge capital of business. This paper aims to investigate a pairwise interconnection between higher education indicators and sets of parameters characterizing knowledge creation, impact, and diffusion. The following higher education indicators are used: expenditure on education, tertiary enrollment, graduates in science and engineering, tertiary inbound mobility, researcher, gross expenditure on R&D, top 3 global corporate R&D investors, top 3QS university ranking. Knowledge creation indicators are patents by origin, PCT patents by origin, utility models by origin, scientific and technical articles, citable documents, H-index. Knowledge impact is characterized through labor productivity growth, new businesses, software spending, ISO 9001 quality certificates, high-tech manufacturing. Knowledge diffusion parameters include intellectual property receipts, production and export complexity, high-tech exports, ICT services exports. The information base of the study is the data of the Global Innovation Index Report from the World Intellectual Property Organization for 40 European countries (selected depending on the availability of statistics) for 2022, research method – Canonical Correlation Analysis. The strongest positive correlation was found between higher education indicators and knowledge creation parameters. The second position takes connection between higher education indicators and knowledge diffusion parameters, the third – between higher education indicators and knowledge impact indicators. Among the higher education indicators, the most significant were gross expenditure on R&D, top 3 global corporate R&D investors, top 3 QS university ranking.

The study aims to test whether increasing a share of R&D expenditure in GDP strengthens the level of innovation development in Ukraine compared with top countries in the Global Innovation Index. It models the impact of changing a share of R&D expenditure in GDP on the level of innovation development based on 10 countries-leaders in GII 2022 and Ukraine. Correlation analysis proved the existence of a relationship between the levels of R&D expenditure (as percent of GDP) and innovation development (the overall score of GII); its strength and direction are characterized (for 2011–2020). The results show that in GII’s top countries, the relationship between innovation development and R&D expenditure is direct in 70% of the sample’s countries, mostly with high and very high relationship power without time lag or 1-2-year time lag. This relationship is inverse in Ukraine, with high relationship power and a 1-year time lag. The system dynamic linear panel-data model is built to determine and formalize the impact of changing a share of R&D expenditure in GDP on the level of innovation development for GII’s top countries and the linear regression model – for Ukraine. For GII’s top countries, it is confirmed that with an increase in R&D expenditures by 1%, innovation development potentially increases by an average of 2.71%, and in Ukraine – it decreases by an average of 4.8%. This discrepancy is explained by the need to improve state policy and regulatory framework in innovation development and its financing in Ukraine.

The study aims to cluster countries worldwide by business practices in the agrosector to reveal trends and specifics in applying sustainable methods in agrobusiness management. The analysis covers 26 countries from the OECD database as of 2021. The Word and k-means clustering methods are based on General Services Support Estimate indicators from the OECD: share of agricultural knowledge and innovation system, share of inspection and control, share of development and maintenance of infrastructure, share of cost of public stockholding, which has a determining, statistically significant influence on the formation of clusters. The first cluster included three Asian countries; China is the leader (share of agricultural knowledge and innovation system – 6,529.7 million USD, share of inspection and control – 3177.9 million USD, share of development and maintenance of infrastructure – 12,874.7 million USD, share of cost of public stockholding – 14,668.5 million USD). The second cluster comprised six countries, with the USA as the leader (share of agricultural knowledge and innovation system – 2,908.4 million USD, share of inspection and control – 1,298.0 million USD, share of development and maintenance of infrastructure – 2,392.5 million USD). The third cluster has 17 countries, with Canada being singled out (share of inspection and control – 631.8 million USD and share of agricultural knowledge and innovation system – 683.1 million USD). The results indicate the diversity of countries’ approaches to support and develop their agrosector. Advanced Asian countries and the US invest significant resources in innovation, infrastructure development, and quality control, underscoring their commitment to food security, efficiency, and sustainability.

One of the effective ways to increase the level of population coverage with medical services is health insurance. The paper aims to determine what type of health insurance (compulsory, social, or voluntary) has the greatest impact on a country’s ability to provide large-scale and timely medical services to citizens, as measured by the number of unmet needs for medical examination, treatable and preventable mortality. The control variables included a country’s population size, the level of economic well-being, and the scale of the public health system (number of doctors and hospital beds) based on EUROSTAT data for all 27 EU countries in 2012–2021. Modelling (regression models of panel data with fixed and random effects in STATA 18, Wald test, Hausman test, Breusch and Pagan test) proved that only one of three researched types of insurance – voluntary health insurance – positively influences a country’s ability to provide large-scale and timely medical services to citizens: an increase in its volume by 1% leads to a decrease in unmet needs in medical examination on average across all EU countries by 0.26%, treatable mortality rate by 0.08%, preventive mortality rate by 0.27%. The influence of the other two types – compulsory and social – was not confirmed (received regression coefficients for these variables are not statistically significant). This emphasizes the importance of citizens’ conscious attitude to their health (due to the increase in voluntary health insurance) both in strengthening public health and in ensuring faster and better access to medical services.

The purpose of this paper is to identify the peculiarities of banks’ business models and assess their risks, which is especially relevant in the context of the war in Ukraine since 2014. The information base is the published statements for each month of 63 Ukrainian banks for the period from 1 January 2018 to 1 January 2024. The number of indicators is chosen in an empirical manner. Business models are investigated using the method of structural-functional groups of banks, which allows estimating large arrays of financial indicators, grouping banks with similar characteristics and drawing conclusions about the main risks. It is convenient to use neural networks, namely Kohonen’s self-organizing maps, to estimate large data sets. The largest group of banks places a significant part of assets in government securities and has an unstable resource base. The share of these banks in the system as of January 1, 2024 is 38% and total assets are 10%. The second group by number of banks is focused on corporate lending with a high share of current resources in liabilities, and includes 21% of banks, whose assets account for 31% of total assets. State-owned banks, PrivatBank and OschadBank, account for 35% of total assets. The business models of these banks are characterized by dependence on retail funds, a high share of investment operations, and high credit and currency risks. Ukraine’s banking system has significantly developed a risk-oriented approach to management, which allowed it to maintain stability in the face of a full-scale war.

The development of strategy and tactics for reforms in the energy industry involves the identification of benchmark countries whose experience can form the basis of a quantitative assessment of the main targets of the reforms. The basis for such decisions can be the results of the integrated assessment of energy reforms in the EU countries for 2010–2021. This study aims to cluster these countries according to the integral indicator and determine specific directions in which the respective country needs to make progress in moving to another cluster. Thus, based on a linear model, the Fishburn formula, and variance analysis, 10 energy development indicators were combined into a single indicator that characterizes the effectiveness of energy reforms (for example, in 2021, it was the highest in Austria (0.612), Germany (0.644), and France (0.620); the lowest – in Latvia (0.383) and Croatia (0.369)). Based on this indicator, countries were clustered using the k-means method. Four clusters were formed: representatives of the highest first (Austria, Germany, France, Spain, Sweden, and Luxembourg) are strategic benchmarks for all EU countries, and representatives of other clusters are tactical benchmarks for countries from lower clusters. The average values of all 10 indicators of energy development were calculated. Their low values are a sign that this direction should be a priority when carrying out reforms, and their quantitative estimates can be used as specific targets when setting strategic and tactical tasks (transition to a higher cluster or achieving average values in one’s cluster).

Acknowledgment
The research was funded by a Fellowship agreement for a research fellowship in the framework of the 11th funding round within the Philipp Schwartz Initiative of the Alexander von Humboldt Foundation.

Environmental taxes ensure sustainable development, but their fiscal and environmental effectiveness differs for countries with different socio-economic characteristics. This study aims to compare the impact of environmental tax revenues on economy’s decarbonization (measured through carbon productivity – the ratio of GDP to carbon dioxide emissions) in different countries, considering their green technologies development and carbon emissions. The paper analyzed OECD and World Bank statistical data for 38 OECD countries for 2002–2021 using linear panel regression models with fixed and random effects (using Hausman test and STATA 18). To identify explicit and latent patterns of this influence, which are common to certain countries, this analysis did not consider each country separately but targeted clusters, distinguished by Ward and Sturges methods based on the effective tax rate on carbon emissions, total environmental tax revenues, total carbon emissions, and carbon productivity. The positive influence of environmental tax revenues on the economy’s decarbonization level has been confirmed for 29 countries (four from six clusters). The effect is the largest for the USA (an increase in tax revenues by 1% leads to an increase in carbon productivity by 0.9% on average) and the smallest – for the cluster including Austria, Belgium, Canada, Costa Rica, Czechia, Estonia, France, Germany, Hungary, Iceland, Korea, Lithuania, New Zealand, Poland, Portugal, Slovakia, Spain, and the Great Britain (increase – 0.1%). The negative impact was confirmed for nine countries (two from six clusters): Denmark, Finland, Israel, Latvia, and Sweden (decrease – 0.3%) and Greece, Italy, the Netherlands, and Slovenia (decrease – 0.21%).

The state policy of Ukraine aims to promote sustainable economic growth and improve its quality through economic activity, particularly through the optimization of the tax system, which is particularly relevant both during the period of martial law in Ukraine and the post-war recovery. The purpose of the study is to assess the formation and implementation of the state tax policy to activate the internal factors of economic growth in Ukraine under martial law. The study of tax policy in Ukraine and EU countries has shown that the EU countries are characterized by a consistent and transparent tax policy that stimulates investment, innovation, and entrepreneurship to activate internal factors of economic growth. The paper uses fiscal analysis based on the Cobb-Douglas production-institutional function; its main concept is the mutual location of the Laffer points of the first and second types and the actual level of the tax burden. The results show a noticeable adjustment of the real fiscal climate in Ukraine in line with changes in threshold fiscal standards. Considering martial law in Ukraine and the need for the state’s ability to post-war recovery, the study suggests changing the rates of specific taxes, after which it is necessary to make a transition from private fiscal instruments with inherent rate values to the aggregate fiscal burden.

Conservation of forest resources is a prerequisite for sustainable development of human society, both in the context of preventing negative climate change and for economic growth. The study aims to establish or refute the co-dependence between the level of forest cover in European countries and the production of gross domestic product. The study object is the socio-economic systems of the national economies of European countries in relation to the totality of forest resources of the continent. Studying the dynamics of forest cover indicators (the share of forests in the total area of the country and forest area per capita), weighted within the internationally recognized regions of Europe, it is confirmed that the level of forest cover of European countries is gradually increasing. The analysis of forest fire area maps identifies three main groups by the level of vulnerability to forest fires: safe (Northern European countries), conditionally safe (Western European countries), and dangerous (Eastern and Southern European countries).
Denmark, Finland, France, Norway, and Finland show a direct correlation between the level of forest cover of a country’s territory and gross domestic product. The results of cluster analyses based on the data from 2000, 2010, 2015, and 2020 confirm the existence of a stable cluster of European countries (34 countries) in which there is one type of relationship between the production of gross domestic product and the level of forest cover of the territory.

Acknowledgment
This study was funded by the grant support from the Philipp Schwarz Initiative of the Alexander von Humboldt Foundation.

Bank capitalization is a key factor in the banking system’s resilience to economic shocks, as outlined in the Basel Accords on banking regulation. The paper aims to empirically evaluate the connection between bank capitalization and the socio-economic development level. The study uses World Bank data across 34 European countries of varying income levels (high, upper-middle, and lower-middle) for the years 2010, 2015, and 2020 as periods of financial and socio-economic turbulence. The study applies principal component analysis and correlation methods to identify relevant indicators. Countries were grouped using hierarchical clustering and K-means clustering methods. The results of the variance analysis revealed that only two indicators of bank capitalization – the share of non-performing loans and return on assets, and three socio-economic indicators – the Gini index, inflation, and unemployment, were statistically significant. As a result of both qualitative and quantitative changes between clusters, countries were reallocated from four clusters in 2010 and 2015 to three clusters by 2020: high-income countries, including Austria, Belgium, Denmark, Ireland, Iceland, Latvia, and others, consolidated into a single stable cluster (Cluster 3) in terms of both bank capitalization and socio-economic development. The primary drivers of inter-cluster movements were the positive dynamics of non-performing loans and bank assets, superior bank capitalization ratios, and improvements in inflation and unemployment levels. Based on the study’s findings, a matrix of transformational sustainability among European countries has been developed. The analysis confirms a relationship between the components of the chain: “level of bank capitalization – level of socio-economic development”.