Articles

• Daniela Bobeva-Filipova — Economic Research Institute at the Bulgarian Academy of Sciences

  Emil Panusheff — Economic Research Institute at the Bulgarian Academy of Sciences

  Nedialko Nestorov — Economic Research Institute at the Bulgarian Academy of Sciences

  Atanas Pavlov — Economic Research Institute at the Bulgarian Academy of Sciences

  US TARIFF CHANGES AND BULGARIA'S PRESENCE IN GLOBAL VALUE CHAINS

  Abstract ▾ PDF

  стр. 411-426

  With the introduction of new tariffs and restrictions in international trade, global value chains are undergoing a transformation. Traditionally, small and open economies such as Bulgaria's are actively involved in these chains, which tie their economic dynamics to their survival. The introduction of new tariffs on goods imported into the United States has led to an escalation of reciprocal actions and an expansion of the scope of customs restrictions in mutual trade. All this requires consideration of the impact on the functioning and future of value chains and, more generally, on trade in intermediate goods. While the broader EU–US trade framework provides context, the analysis focuses mainly on Bulgaria’s role as a small open economy integrated into European GVCs.

  This article proposes a new methodology to assess the effects of the introduction of tariffs on trade in intermediate goods. It develops the concept of indirect exports and evaluates the effect of the new US tariffs on indirect exports of Bulgarian goods that are processed and then exported to the US. The methodology is based on an analysis of export-significant commodity items and assesses the exports of goods with Bulgarian content from Bulgaria's largest trading partners. Conclusions are drawn about the impact of the new US tariffs on participation in value chains.

  The results show that indirect effects range between a reduction of 1.79% of Bulgaria’s total goods exports and 0.74% of GDP, using the average value approach, and a decrease of 0.49% of total exports and 0.20% of GDP under refined commodity level assessment. These moderate losses place Bulgaria among the EU countries with relatively lower adverse effects compared to more highly exposed economies.

• Nikola Stoichkov — New Bulgarian University

  Eduard Marinov — New Bulgarian University, Economic Research Institute at the Bulgarian Academy of Sciences, University of Insurance and Finance

  THE ICT SECTOR IN BULGARIA: CURRENT STATE OF AFFAIRS INNOVATION CAPACITY AND CHALLENGES

  Abstract ▾ PDF

  стр. 427-451

  The article examines the development of the information and communication technologies sector in Bulgaria within the context of the global digital economy, combining theoretical perspectives, empirical data, and case studies of leading applied research institutes. Key indicators such as the sector’s contribution to GDP, employment, revenue, and indexes like DESI and WDCI are presented. Particular attention is given to the role of the INSAIT and GATE institutes as catalysts of innovation through the “triple helix” model. Their contribution to attracting investments, fostering human capital, and establishing strategic partnerships is analysed in depth. The article also incorporates findings from semi-structured interviews with stakeholders which highlight the challenges facing digital transformation in Bulgaria. Based on this analysis, specific recommendations are formulated for strengthening cooperation between academia, industry, and the public sector in order to promote sustainable development and enhance Bulgaria’s international competitiveness.

• Daniel Petrov — Institute of Agricultural Economics

  OBESITY IN BULGARIA: ECONOMIC DETERMINANTS, INTERGENERATIONAL DYNAMICS, AND POLICY IMPLICATIONS

  Abstract ▾ PDF

  стр. 452-466

  Research examines obesity in Bulgaria as both a public health concern and a structural economic challenge shaped by intergenerational dynamics and institutional transformations. A fixed-effects panel data model was applied to 33 European countries (2006–2022) to test two hypotheses: that childhood overweight is a predictor of adult obesity and that a high absolute number of obese individuals maintains the phenomenon through normalisation effects. The findings confirm a strong positive association between early-age overweight and obesity in adulthood, while the role of absolute numbers appears to be more complex, reflecting demographic and structural influences. Bulgaria is identified as an “ascending-risk” case, positioned between high-income and upper-middle-income economies, where deregulated food environments and demographic decline amplify health inequalities. The study argues that obesity should not be addressed primarily through medical treatment but through preventive strategies, including early childhood interventions, nutrition programmes, and cross-sectoral coordination. Despite limitations related to age-disaggregated data and sample size, the research provides solid evidence that obesity is an economic problem with long-term consequences for human capital and sustainable development.

• Lejla Terzić — University of East Sarajevo, Bosnia and Herzegovina

  ECO-INNOVATION AND COMPETITIVE SUSTAINABILITY IN THE EU-27: A CROSS-SECTIONAL BENCHMARK (2024)

  Abstract ▾ PDF

  стр. 467-483

  The purpose of the study is to benchmark the association between the Eco-Innovation Index and the Competitive Sustainability Index (CSI) across the EU-27 in 2024. The study used official 2024 scores and Spearman rank correlations on a cross-sectional dataset. This 2024 study of the EU-27 found a strong positive correlation between the Eco-Innovation Index and the overall Competitive Sustainability Index (ρ=0.866), indicating that higher eco-innovation performance is associated with greater competitive sustainability, though the strength of the association varied across CSI pillars. The study is limited to descriptive associations but provides crucial data for EU benchmarking and generating hypotheses for multi-year analyses on the relationship between eco-innovation and competitive sustainability.

• Victor Yotsov — Economic Research Institute аt the Bulgarian Academy of Sciences

  THE EURO, FINANCIAL LITERACY AND THE EXPERIENCE OF OTHER COUNTRIES: A COMPARATIVE ANALYSIS

  Abstract ▾ PDF

  стр. 484-512

  The article analyses the pivotal role that financial literacy will play in Bulgaria’s forthcoming adoption of the euro, portraying the transition as a fundamental transformation that entails significant opportunities alongside systemic risks. Empirical evidence reveals a capability gap that could deepen market inefficiencies, stimulate price speculation and fuel public discontent. The study identifies the economic and social imperatives of literacy: facilitating price comparisons, protecting consumers from fraud and strengthening trust in the monetary changeover. A multi-layered national strategy is advocated, combining (1) systematic financial education at every scholastic tier; (2) large-scale informal programs for vulnerable adults; (3) digital calculators and mobile applications; (4) communication campaigns adapted to demographic specifics; and (5) co-ordination among government, the Bulgarian National Bank, business and NGOs.

  Comparative scrutiny of Estonia’s, Lithuania’s and Croatia’s changeovers isolates proven instruments: mandatory dual price display, business ethics codes, free cash exchange and mobile information teams. Evidence from these cases shows that the mix of preventive inspections, public disclosure of violators and fines limits the one-off inflationary effect while bolstering public confidence. Enhanced literacy, in turn, reinforces economic integration through lower transaction costs, greater investment appeal and stabilized inflation expectations. The article concludes by urging Bulgaria to adopt an urgent communication strategy with measurable milestones (≥ 80 % awareness, ≥ 60 % support), to intensify price oversight and to frame euro adoption as an “inter-sectoral social contract” requiring strategic managerial resolve.

• Federico Nastasi — UAM Xochimilco, Mexico

  Salvatore Spagano — University of Catania

  INSTITUTIONALIST CLUES IN CELSO FURTADO’S ECONOMIC THOUGHT: A BRIDGE BETWEEN OLD INSTITUTIONALISM AND LATIN AMERICAN STRUCTURALISM

  Abstract ▾ PDF

  стр. 513-534

  This paper examines the intersection between Celso Furtado’s economic thought and Old Institutional Economics (OIE), a connection largely overlooked in the literature. Although best known as a leading figure of Latin American structuralism, Furtado’s work incorporates key institutionalist principles, notably the centrality of institutions, historical path dependence, and the role of power in development. His approach converges with OIE in its critique of neoclassical equilibrium models, emphasis on cumulative causation, and evolutionary view of economic systems. Furtado’s analysis of social heterogeneity, institutional constraints, and cultural factors further resonates with institutionalist frameworks. By combining historical analysis, interdisciplinarity, and an active role for the state, his work bridges structuralism and institutionalism, offering valuable insights for contemporary development theory. Recognising these connections enriches both traditions and advances the debate on the institutional foundations of economic development.

• Yonko Yotov — UNWE, National Revenue Agency, Bulgaria

  THE CONCEPT OF TAX GAP: ESSENCE, DEFINITION, TYPES, COMPONENTS, METHODS, INTERNATIONAL PRACTICES AND CHALLENGES IN ITS MEASUREMENT

  Abstract ▾ PDF

  стр. 535-566

  The tax gap, also referred to as a tax ‘difference’, ‘mismatch’, ‘emptiness’, ‘omission’, ‘hole’, ‘deficit’, ‘shortage’, ‘loss’ or ‘damage’, represents the amount of tax revenue lost or foregone. It is the difference between the potential and actual revenue collected. More specifically, it is the difference between the amount of tax that could theoretically be collected if all taxpayers fulfilled their tax obligations by voluntarily submitting complete and accurate tax returns and paying the taxes due, compared to the current, or hypothetically most extensive, tax legislation, and the amount of actual collected tax over a specific period. This article provides a literary overview of the ‘tax gap’ concept and issues related to it, as well as theoretical and practical insights related to its nature, components, and methods and practices used for measurement in some advanced countries and in Bulgaria. Statistical data are also presented along with results from a survey conducted in December 2024 and January 2025 among experts in the field of financial control in Bulgaria working at the National Revenue Agency (NRA) and the Customs Agency, as well as university lecturers in finance and accounting. The author’s insights are intended for experts from revenue organisations and can also be useful to scientific and business analysts more broadly.

• Galateya Kolikova — Economic Research Institute at the Bulgarian Academy of Sciences

  GLOBAL FOREIGN DIRECT INVESTMENT AND ITS IMPACT ON BULGARIA

  Abstract ▾ PDF

  стр. 567-577

  This paper analyses shifts in global Foreign Direct Investment (FDI) and their impact on Bulgaria, focusing on the period 2021-2024. The study combines secondary data analysis from sources such as UNCTAD, Eurostat and the Bulgarian National Statistical Institute with a SWOT framework to assess Bulgaria’s position amidst evolving European and global FDI patterns. Global FDI declined sharply during the COVID-19 pandemic in 2020 but rebounded strongly in 2021, driven largely by increased investments in digital economy sectors and green energy. However, from 2022 onwards, FDI flows experienced instability and declines, particularly in developed countries, although digital and renewable energy investments continued to grow.

  In Bulgaria, FDI inflows showed resilience and growth after the initial pandemic shock, with significant increases in 2022 and 2023. The country’s investment attractiveness is enhanced by the growing IT sector investments, though challenges remain, such as bureaucratic inefficiencies, underdeveloped infrastructure, and a dependence on European markets. Bulgaria’s integration into global value chains, especially in manufacturing and IT services, aligns with EU priorities in digitalisation and sustainability.

  The study concludes that Bulgaria’s FDI attractiveness depends on addressing institutional and infrastructure weaknesses, leveraging EU recovery funds effectively, and promoting high-tech to sustain long-term economic growth and competitiveness in a fluctuating global investment environment. Policy improvements in governance and strategic investment in innovation are necessary for Bulgaria to take advantage of emerging global FDI trends.