The Journal of European Economy is a quarterly peer-reviewed scientific periodical published since 2002. JEE is the only specialised economic journal in Ukraine to publish complete full-text issues in Ukrainian, English and Russian (untill 2015) languages. All archives untill 2017 are available at http://jee.tneu.edu.ua The journal aims to publish original manuscripts that analyse issues related to topical theories and concepts of international economics, peculiarities of economic development in transition economies, phenomena of global and European economic integration, as well as the place of the European countries in the world economy. The scope of the Journal covers the following topics: • Economic theory; • Macroeconomics; • Microeconomics; • International economics; • Economy of European countries; • European integration; • Regionalization in European economic area; • International economic relations of European countries; • Financial and banking services market. The Journal of European Economy is indexed by: «Ukrainika Naukova» database, «Dzherelo» abstracts journal, National Vernadskyi Library (Ukraine) Online scientometric database "Index Copernicus (IC)" (Poland) «Journal of Economic Literature» (JEL) American Economic Association (USA) <a href="https://doaj.org/toc/2519-4089?source=%7B%22query%22%3A%7B%22filtered%22%3A%7B%22filter%22%3A%7B%22bool%22%3A%7B%22must%22%3A%5B%7B%22terms%22%3A%7B%22index.issn.exact%22%3A%5B%222519-4070%22%2C%222519-4089%22%5D%7D%7D%5D%7D%7D%2C%22query%22%3A%7B%22match_all%22%3A%7B%7D%7D%7D%7D%2C%22size%22%3A100%2C%22sort%22%3A%5B%7B%22created_date%22%3A%7B%22order%22%3A%22desc%22%7D%7D%5D%2C%22_source%22%3A%7B%7D%7D">Scientometric database "DOAJ" <a href="https://doaj.org/toc/2519-4089?source=%7B%22query%22%3A%7B%22filtered%22%3A%7B%22filter%22%3A%7B%22bool%22%3A%7B%22must%22%3A%5B%7B%22terms%22%3A%7B%22index.issn.exact%22%3A%5B%222519-4070%22%2C%222519-4089%22%5D%7D%7D%5D%7D%7D%2C%22query%22%3A%7B%22match_all%22%3A%7B%7D%7D%7D%7D%2C%22size%22%3A100%2C%22sort%22%3A%5B%7B%22created_date%22%3A%7B%22order%22%3A%22desc%22%7D%7D%5D%2C%22_source%22%3A%7B%7D%7D">(Sweden) « The European Science Foundation » (Norway) «The Digital Object Identifier» Scientometric database “EBSCO” (USA) Academic Resource Index "ResearchBib" Publication of the journal is performed on a non-commercial basis. Manuscripts are subject to independent peer-review by three or more leading experts in the field. Please see “Guidelines for authors” for detailed description of the peer-review process and article submission details. Please see “Publishing Ethics” for detailed description of the duties of editors, reviewers and authors. The contents of each issue is subject to approval by the Scientific Council of West Ukrainian National University. «Journal of European Economy» is registered at the International Centre of Periodicals on November 10, 2016 (ISSN International Centre of. Paris) and received an ISSN 1684-90Ukrainian printed version), ISSN 2519-190X (Ukrainian electronic version), ISSN 2519-4070 (English printed version), ISSN 2519-4089 (English electronic version). Starting from September 2019, for English versions, the JEE received the DOI (The Digital Object Identifier) - a unique hyperlink that provides direct communication with the publication. https://doi.org/10.35774/jee Publishing partners: University of Western Macedonia (Kozani, Greece) Bratislava University of Economics and Management (Bratislava, Slovakia) The Journal is included in the List of Category B Professional Publications of the Ministry of Education and Science of Ukraine, i.e. periodicals recommended for publishing the results of candidate and doctoral dissertations in the field of economics in specialties 051, 072, 073, 075, 076, 292 (order of the Ministry of Education and Science of Ukraine No. 886 of July 02, 2020). The journal is listed in the Supreme Attestation Commission’s register of specialized publications in economic sciences (Resolution №1-05/2 of 10.03.2010 of the SAC of Ukraine). The Journal of European Economy is registered with the State Committee for Information Policy, Television and Broadcasting (Certificate of state registration of the printed mass media КВ №24737-14677ПР of March 16, 2021, issued by the Ministry of Justice of Ukraine). 2015 subscription index in the catalogue of “Ukrposhta” (Ukrainian State Enterprise of Posts): 23527 (Ukrainian version); 23528 (Russian version); 23529 (English version). Mailing address: Editorial office of the «Journal of European Economy», West Ukrainian National University, vul. Lvivska, 11 Ternopil 46020 Ukraine Tel.: +38 (0352) 47-58-75 (editor-in-chief), +38 (0352) 47-50-75 (editorial office). E-mail: Editor-in-chief: yev.savelyev@gmail.com Editorial office: jee.tneu09@gmail.com Publishing House «Economichna Dumka» (vul. Lvivska 11, Ternopil, 46000, Ukraine, tel (0352) 47 58 72).
Authors who publish with this journal agree to the following terms: Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
SMART MANUFACTURING AS A STRATEGIC DETERMINANT OF UKRAINE’S INDUSTRIAL POLICY AMID GLOBAL STRUCTURAL TRANSFORMATIONS
This article substantiates the development of smart manufacturing as a key determinant of Ukraine’s industrial policy in the context of global transformations. Trends in global deindustrialization are analyzed using the Lawrence model, which reveals a unidirectional dynamic: rising GDP per capita leads to a declining share of manufacturing in GDP. Ukraine is currently undergoing accelerated deindustrialization marked by pendulum-like fluctuations, which necessitates the implementation of reindustrialization policies that align with contemporary needs. The study identifies both external and internal factors shaping demand and supply for manufacturing output and evaluates the effectiveness of current «Made in Ukraine» policy initiatives. To operationalize the logic of local protectionism, the research proposes creating registries of goods, services, and activities aligned with Industry 4.0 technologies, as well as the establishment of special regulatory regimes based on industrial parks. JEL: O25, L52.
MODELING THE PATTERNS OF THE IMPACT OF MILITARIZATION ON MACROECONOMIC DEVELOPMENT
The system of the modern global security space is characterized by growing instability, rising conflicts, and increasing military spending. The discrepancy in empirical findings regarding the impact of military spending on economic growth indicates that the issue is debatable and demonstrates that the reasons for and forms of conflict are always specific and unique, which makes it necessary to seek new approaches to assessing the intensity of militarization of economies. This article studies the socio-economic differences among countries that determine the possibilities for building up military potential. It has been substantiated that a high level of economic militarization does not guarantee greater stability, and social and economic inequality intensifies further stratification in society and becomes a source of conflict. The integrated index of the intensity of a country’s military build-up was developed and tested, the application of which develops a system for monitoring, assessing and modeling the processes of militarization of countries’ economies. A comparative analysis of countries by the intensity of militarization processes was conducted, which made it possible to: (1) classify countries by the intensity of these processes; (2) identify the patterns; and (3) assess their impact on country development indicators. Based on the assessment of the relationships between the developed integrated index and the indicators of the most significant international ratings (the Global Prosperity Index, the Fragile States Index, the Global Peace Index, the Human Development Index, the Social Progress Index, and the Democracy Index), it has been proven that intensive militarization has a significant negative impact on peace and security, as well as on the institutional, legal, and socio-economic stability and resilience of the country. JEL: C43, С51, F51, H56.
MERGING CONTINUOUS AUDITING AND DIGITAL TWIN IN TELECOMMUNICATION ENTERPRISES WITHIN THE CONTEXT OF AZERBAIJAN
This article explores the conceptual and practical integration of two interrelated digital technologies – digital twin and continuous auditing – within the governance and operational systems of communication enterprises. In the era of pervasive digitalization, telecommunications organizations operate in complex, dataintensive environments that require real-time decision-making and continuous risk management. The digital twin is examined as a virtual representation of a communication enterprise’s technical and service infrastructure, enabling real-time modeling, monitoring, and predictive optimization of network processes and resources. In parallel, continuous auditing is analyzed as a digital assurance mechanism that performs ongoing, automated evaluation of financial, operational, and technical activities across the enterprise. Methodologically, the research is based on a synthesis of theoretical and comparative analysis, interpretive evaluation of secondary data drawn from enterprise reports, policy documents, and sectoral strategies. The article argues that their integration creates a closed-loop system where digital twins simulate and forecast enterprise performance, and continuous auditing validates and controls these digital processes. Using the case of Azerbaijan’s telecommunications sector, including Aztelekom LLC, Bakcell LLC, and Azercosmos, the research assesses the current state of technological readiness, identifies institutional and legal barriers, and outlines strategic pathways for implementation. By combining comparative analysis of EU best practices with an evaluation of the national «Digital Azerbaijan» strategy, the study demonstrates that the convergence of digital twin and continuous auditing can significantly improve efficiency, sustainability, and competitiveness in communication enterprises, marking a new stage in the country’s digital transformation. JEL: M15; M41.
SPATIAL TRANSFORMATION FOR POST-WAR UKRAINE: EUROPEAN CASES AND THE POTENTIAL OF LOCAL INNOVATIONS
The article examines the issue of spatial transformation in post-war Ukraine by combining European experience with local innovations. It suggests using an infrastructure-service approach to rebuild the country, combining physical reconstruction with the development of a service ecosystem focused on innovation, human capital and sustainable development to foster regional and community growth. The types of local innovation are categorised, and their unique role in territorial transformation «from below» is demonstrated. The results of European case studies on spatial transformation (in Denmark, Spain and Germany) in terms of restoring energy, social and environmental infrastructure, and restructuring the economy are presented. These results could be adapted for the post-war recon struction of Ukrainian territories. The article proposes a system of metrics for evaluating the effectiveness of infrastructure and service design for managing the reconstruction of Ukraine’s affected regions. This system seeks to coordinate the activities of government agencies, corporations, communities, and foreign partners; ensure the transparency of management decisions; and set criteria for choosing reconstruction projects. JEL: О18, О31, R11, R58.
ENERGY INDEPENDENCE OF LOCAL COMMUNITIES: INTERNATIONAL EXPERIENCE AND DEVELOPMENT PROSPECTS IN UKRAINE
This article examines the formation of energy independence among local communities in times of crisis. It studies the international experience of establishing energy communities in European countries, defining them as non-profit organisations that provide environmental, economic, and social benefits to communities. Using historical and logical methods combined with critical, statistical, structural, and graphical analyses within a systemic framework, the study examines the advantages of transitioning from centralised to distributed energy generation to ensure community energy independence. A multi-criteria methodology is proposed for assessing energy projects, taking into account economic, environmental, social, and innovation efficiency indicators. Key areas for achieving energy independence in territorial communities are identified, including the development of local energy plans, implementation of renewable energy sources, application of smart technologies, and creation of local energy communities. The study demonstrates the need for a systemic approach to forming energy-independent territorial communities as a foundation for sustainable development during crises. JEL: C52, F20, L59, O20, Q21.
THE IMPACT OF RURAL LABOUR MIGRATION ON FARM INCOME: THE CHINESE EXPERIENCE AND A CONCEPT FOR THE EU AND UKRAINE
This study analyses how rural labour migration (RLM) affects household income in rural areas, combining theoretical approaches and empirical data. Using an unbalanced panel sample from several periods based on data from the China Family Panel Studies (CFPS), the authors apply the propensity score matching (PSM) method and a fixed effects model to assess the impact of RLM on farmers’ incomes. The results show a significant positive effect, achieved mainly through the strengthening of family social capital and access to the social security system. Heterogeneous analysis indicates that the effect is more pronounced in western China and among low-income households. The paper also conceptualises the applicability of China’s experience to the European Union and Ukraine, given similar demographic challenges, dependence on the agricultural sector and depopulation processes. The results are of practical importance for the formulation of rural economy development and migration management policies, especially in the context of post-pandemic and post-war recovery. JEL: D12, R23, J61.
CROSS-CORRELATION ANALYSIS OF DYNAMIC INTERDEPENDENCIES BETWEEN SOCIOECONOMIC DEVELOPMENT AND THE DEMAND FOR HIGHER EDUCATION IN UKRAINE
The paper identifies time lags and provides a quantitative assessment of the interrelationships between key socio-economic indicators and the dynamics of enrollment in higher education institutions. The methodological framework is based on cross-correlation time series analysis using distributed lags, which made it possible to determine the delayed effects of demographic and economic factors on educational processes. The study revealed a delayed correlation between birth rates and the number of students, with a time lag of 16–18 years, as well as an inverse relationship between the unemployment rate among individuals with higher education and the number of applicants. A negative impact of high lending rates on the demand for higher education was identified, alongside a positive effect of the growth of vulnerable employment, which stimulates the pursuit of education. The practical significance of the study lies in the potential use of the obtained results for forecasting educational needs, improving public funding mechanisms, optimizing the network of higher education institutions, and developing an integrated «education–economy–security» strategy in the context of Ukraine’s European integration. JEL: I21, O15, O16, C22.
TOURISM-DRIVEN EMPLOYMENT IN GREECE: UNPACKING REGIONAL SPILLOVERS AND THE ROLE OF MARKET DYNAMICS
Inbound tourism performance is an important factor in the overall business cycle in Greece. In 2016-2022, the change in inbound tourism exports constituted about a half of the GDP change. This paper analyses the structural issues of employment effects of the inbound tourism in Greece in 2009-2022. Correlation analysis was used to find associations between tourism indicators and employment in accommodation services; agriculture; food and beverage industry; food and beverage service activities; libraries, archives, museums and other cultural activities; water collection, treatment, and supply. No significant effect on employment trends in air transport and tour reservation services was found. Tourism is especially important in some regions of Greece, where it also provides spillover effects to employment in local suppliers. Regression models were used to estimate the positive effects on employment in accommodation establishments, total regional employment and its sectoral structure, unpacking regional spillovers and the role of market dynamics. JEL: Z33, Z32, M31, F16, P48, R23.