European Integration Studies

European Vaccine-rollout Policy, Unraveled Markets, and Moral Externalities

Mitja Kovac, Amira Elkanawati, Vita Gjikolli, Jessica Woitalla — Fri, 15 Sep 2023 00:00:00 +0300

This paper seeks to address the role of European public policy in addressing the problem of Covid-19 vaccine-rollout policy. Currently in Europe, instead of market-based allocation a centralized command-based approach has been implemented to address the essential questions of production and distribution of vaccines throughout the EU. This is centralized, command-based decision-making on the allocation of vaccines which is leading to political and sociological tensions among EU Member States. Paper argues that in order to mitigate these shortcomings European public policy could employ a more nuanced approach. While employing law and economics tools this paper addresses the questions on how European societies should allocate vaccine and, more importantly, who should make this allocation decisions. Moreover, identified moral negative externalities, status quo and omission biases, planning fallacy, risk aversion, administrative rigidity, notorious type-I-type-II error fallacy and related unraveled markets phenomena might result in vaccine-rollout failures.

Framing of Information, Psychological Distance, and Belief in Health Related Information under Time Pressure in Older Adults

Fri, 15 Sep 2023 00:00:00 +0300

The time of pandemics could be described by the overflow of health related news in media, but also the rise of researches concerning it. However, there is still a lack of information about message characteristics which effect belief in it, besides older people are underrepresented in these studies. Belief in fake news is especially dangerous for older people, not only because fake news usually promotes dangerous behavior (e.g. do not seek COVID-19 vaccination), but also because older people are the ones who are most likely to share fake news on social media in such way helping to spread them. The aim of the study was to estimate the influence of information framing and psychological distance on belief in health related information under time pressure in older adults. Study was based on representable sample of 50 years and older Lithuanians. In total 505 participants took part in the study. 200 (30,6 %) were men, 305 (60,4%) were women. Participants ranged in age from 50 to 94 with the mean age of 66,27 (SD = 11,24). Study was a between-subject design experiment. Belief in Health related news information served as a dependent variable, Framing of Information and Psychological Distance as independent variables, also age, gender and education were control variables. Participants were presented with eight fake and eight true news headlines about vaccination and COVID-19 in the form of social media posts for 7 seconds and had to evaluate their belief in these headlines. Results indicate, that neither psychological distance, nor information framing have any influence on overall belief in health related information in older adults. Even though gender and education were not related to overall belief in news, a significant positive correlation between age and belief in health related information was found. Our research prove that older people become more truth biased with age.

What Enables Skilled Immigrant Women to Build Career-important Social Networks?

Mukhammadyusuf Shaymardanov, Anna-Maija Lämsä, Suvi Heikkinen — Fri, 15 Sep 2023 00:00:00 +0300

An aging workforce and a decreasing population have increased the need for immigration and international workers in European societies. The aim of this study is to contribute to literature on international workers and their careers by focusing on skilled immigrant women’s career-important social networks. In particular, it explores what enables the women’s access to such social networks, which support their careers in the country of destination. Qualitative interview data from 26 Russian skilled immigrant women working in information technology (IT) or healthcare in Finland were collected. Qualitative content analysis was done to analyze the data. The results show that the studied skilled immigrant women have many paths to accessing career-important social networks. It is concluded that although skilled immigrant women tend to experience challenges in accessing these networks, they can overcome challenges through their own initiatives and with the help of supervisors and colleagues as well as family members and friends. However, relevant organizational arrangements and practices are needed.

Participation of Morocco and Tunisia in the European Research Area: Research-intense Collaborative Patterns Across the European Southern Neighbourhood

Zane Šime — Fri, 15 Sep 2023 00:00:00 +0300

The purpose of the study is to explore the research-intense collaborative patterns that weave the EU Southern Neighbourhood into the European Research Area through EU-funded projects. The task of this article is to test the straw-in-the-wind hypothesis which, as the results demonstrate, rightly argues that the EU Framework Programmes do not encourage very restrictive engagement in projects among Morocco- and Tunisia-based entities. The study design entails explaining-outcome process-tracing performed with data-set observations of the collaborative patterns engaging Morocco and Tunisia. Despite taking part in projects coordinated primarily by managers from the European Mediterranean littoral countries, many European centres of expertise located elsewhere included Morocco and Tunisia in their consortiums. As a result, both countries are exposed to very rich European scientific expertise, including diverse subfields, habitus and capital transactions of the European Research Area facilitated by various project management styles. The Moroccan National Institute for Agricultural Research and the Tunisian Pasteur Institute stand out because, when comparing Framework Programme 7 and Horizon 2020 project portfolios, both sustain increasing engagement. Research cooperation addresses the pressing challenges of the neighbourhood, especially in environmental and agricultural domains and the capacity to engage in international collaboration. The article commences filling the gap in the literature on the EU Southern Neighbourhood.

The Role of Community Resilience Dimensions of Agency and Resources in Community Resilience to Crises and Uncertainty in Polish Border Communities

Natalia Bełdyga — Fri, 15 Sep 2023 00:00:00 +0300

The aim of the study is to analyze the role of community resilience in Polish border communities in response to crises and uncertainty caused by Russian invasion of Ukraine on 24^th February in 2022. Therefore, the main tasks of the research are to firstly gather knowledge of the core dimensions of community resilience, namely agency and resources, to see if they have developed and enhanced community resilience to this crisis and uncertainty and secondly to study how individuals internalize risk and how this perception affects their response to crises and uncertainty. For this purpose, two cases of responses made by two Polish border communities, in Suwałki, known as Suwałki Gap, and in Biecz were analyzed. Interviews in three interview groups of volunteers, community members and the municipality were conducted with respondents who were privately or professionally involved in helping Ukrainian refugees arriving in Poland. Results of the qualitative analysis reveal that despite the atmosphere of growing uncertainty about how the developments of the Russia-Ukraine conflict may impact Poland, in response to refugee crisis caused by the Russian invasion of Ukraine, both Polish border communities did manage to activate their agency which was exercised mainly as a natural reaction to help leading to an instant decision to act in order to help. Critical resource in this response was information which was shared, updated and distributed among the groups of helpers. Also, a range of emotions experienced during this unprecedented crisis, did not prevent those communities from finding ways to secure other necessary resources which were not available or accessible until the crisis, in order to help people in need. The case of the responses to the refugee and humanitarian crisis caused by the Russian invasion of Ukraine on 24^th February 2022 made by communities in Poland and other receiving EU countries, may serve as a vast territory for academic research on the role of community resilience and its core dimensions.

Development of Bulgarian Black Sea Municipalities in the Context of European Integration

Kamen Petrov, Nikolay Tsonkov — Fri, 15 Sep 2023 00:00:00 +0300

The Black Sea region is an economic, trade, transport, energy, geostrategic and political crossroads. The Black Sea is not only an external border of the EU but also a strategic European macro-region that needs to be integrated into the European economy and market. Over the decades, several initiatives have been organized to satisfy the interests of global and regional players in order to improve the economic, environmental, social, and transport situation, including connectivity through the construction of strategic transport infrastructure (regional and interregional). Such initiatives include the Organization for Black Sea Economic Cooperation; the European Union's policies related to the development of the region as an external border, the Three Seas, and individual country strategies and policies. In fact, to a large extent, all these initiatives and policies aim at stability, security, and economic and social development of the region while protecting the environment. The analysis of the policies so far leads to the conclusion that a high degree of coherence, coordination, and implementation of a strategic approach to solving regional problems and creating integrity, connectivity, and regional coherence in the context of European integration has not been achieved so far.

The focus of our study is the Black Sea municipalities. The aim of our presentation is to outline the necessary levels of regional connectivity and investment policies that can be important for the overall sustainable development of our coast in the context of European integration. In this respect, small agglomeration areas have spatially formed from north to south by 2021.

This paper focuses on regional connectivity and investment policies in the Bulgarian Black Sea region, outlining an important range of issues related to its development. The present presentation provides an overview of the Black Sea coast by highlighting the common socio-economic characteristics in its spatial development. Relevant conclusions and recommendations for the development of the region are drawn. The scientific results of the study are related to some general conclusions on how Black Sea European integration, connectivity, and overcoming territorial disparities can be achieved. First, there is a need for a new approach to long-term planning in the field of strategic transport infrastructure and regional development. Secondly, there is a need to consider the idea of developing a Strategy for the Black Sea Region based on integrated territorial investments, the development of agglomerations of municipalities, and improved connectivity. Thirdly, it is necessary to establish a Black Sea operational program.

Editorial

Rasa Daugėlienė — Fri, 15 Sep 2023 00:00:00 +0300

The main aim of the journal is to analyse scientific and practical problems in the scope of European integration processes. The articles are brought under three wide, multidisciplinary and interdisciplinary themes. These are Social Evolution of Europe (e. g. social equality, migration, cross-cultural aspects, education management, etc.), Economics of the European Union (e. g. economic growth, competitiveness, financial aspects, comparative analysis of economic situation of countries, etc.) as well as Managerial Aspects of European Integration (business management, innovations, human capital development aspects, intellectual capital, etc.).

Productivity Challenges in Europe During the COVID-19 Pandemic

Janis Priede — Fri, 15 Sep 2023 00:00:00 +0300

Productivity determines the competitiveness of an economy. High productivity implies low inputs for producing a given amount of output. This allows firms to offer their products and services at lower prices than firms in other regions and countries. In contrast, low productivity implies wasteful usage of labor, capital or other inputs to produce a certain output and leads to higher production costs and, ultimately, higher prices.

Many European countries are exhibiting a prolonged slowdown in productivity growth. When it comes to labor productivity, a key indicator, countries like France, Germany or Italy had annual growth rates between 3 and 9 percent until the mid-1970s. Since then, growth rates have declined substantially and are well below 2 percent since the year 2000. Explanations for this phenomenon range from a slowdown of technological progress and diffusion to a structural shift of economies towards lower productive services, restrained investment activity since the financial crisis and mere measurement difficulties. Some believe that the big productivity boost from digitization is yet to come.

The COVID-19 pandemic has brought unprecedented challenges to productivity across Europe. The pandemic has disrupted businesses, supply chains, and the labor market, resulting in reduced economic activity and an increase in unemployment. Some of the productivity challenges faced by Europe during the pandemic include remote work, supply chain disruptions, reduced consumer demand, increased sick leaves and many other problems that directly influence productivity during the COVID-19 pandemic.

COVID-19 pandemic has presented significant challenges to productivity across Europe. Businesses and governments must work together to find innovative solutions to overcome these challenges and help the European economy recover from the pandemic.

The purpose of the study is to evaluate the productivity issues in European countries during the COVID-19 pandemic.

Tasks of the research: 1) analyze literature about the main productivity determining factors; 2) determine main reasons for the productivity slowdown in the European countries during the pandemic; 2) Analyze government response policies related to COVID-19 pandemic and impact on the long-term productivity and competitiveness.

Research methods: Literature analysis, data analysis.

Domestic Savings and International Capital Flows in the EU

Pawel Mlodkowski — Fri, 15 Sep 2023 00:00:00 +0300

This paper uses new statistical estimates to test for effects of economic integration in Europe on international capital mobility. In a world of perfect capital mobility, one should experience little or not statistically significant relationship between the amount of domestic savings and domestic investment. Alternatively, under less-than perfect capital international mobility, diverse portfolio preferences and country-specific transactions costs would create impediments for long-term capital flows. This would result in direct connection between any changes (increases) in domestic savings and domestic investment. According to empirical results of a similar empirical study by Feldstein and Horioka (1980) for developed countries (including some of current EU members included in this investigation), there were portfolio preferences and institutional rigidities, which resulted in almost equal corresponding differences in domestic investment rates driven by domestic savings rates among major industrial countries.

The current study tests for capital mobility in the EU Member States (2010-2020) discussing compatibility of findings with previous evidence found in the literature (Feldstein and Horioka 1980). It also addresses the optimal national savings policy, tax incidence and concludes on capital formation in the EU.

Driving Growth and Innovation: Exploring Foreign Direct Investment in the Manufacturing Sector (The Case of Lithuania)

Ineta Zykiene, Aistė Leskauskienė, Ieva Mičiulienė, Rasa Daugėlienė — Fri, 15 Sep 2023 00:00:00 +0300

Recent geo-economic transformations have led to new challenges for countries in their economic development. The evolving global landscape has emphasized regional competitiveness and attractiveness in terms of capital, labor force, and information. Scholars widely agree that countries receiving foreign direct investment (FDI) gain new knowledge, management skills, and advanced production techniques, leading to increased competitiveness and economic growth (Bayar, et. al., 2020). Changing conditions have also influenced investors’ behavior. Globalization and digitalization have shaped international economic relations, focusing not only on resource acquisition, but also on leveraging human capital, knowledge, institutional structures, and networking for firm efficiency. This shift is reflected in changing investors’ preferences: the importance of natural resources, cheap labor, and the size of the national market has decreased, with greater attention given to service- and technology intensive manufacturing markets (Sadeghi, et. al., 2020).

The aim of this study is to identify the factors that determine the attraction of foreign direct investment in the Lithuanian manufacturing sector and assess their impact. To accomplish this objective, several main tasks were formulated:

1) Highlight the necessity for assessing FDI attraction in the manufacturing sector.

2) Identify the factors that influence the attraction of foreign direct investment in the manufacturing sector.

3) Provide empirical evidence of the impact of these factors.

The article is structured as follows: Firstly, a review of the scientific literature was conducted to address the research problem, which is the lack of literature on foreign direct investment at the sectoral level. Based on this literature analysis, the factors influencing investment attractiveness at the regional and sectoral levels were identified and compared. Additionally, the factors that determine the attractiveness of the manufacturing sector for investment were also identified.

In the second part of the study, a research methodology was developed to assess the impact of these factors on foreign direct investment in the Lithuanian manufacturing sector. The results of the third part of the study indicated that although the Granger causality test did not reveal any causal relationship between FDI in Lithuanian manufacturing and variables such as exports, imports, gross domestic product, the number of educated individuals, government gross debt, government R&D expenditure in manufacturing, the number of FDI enterprises in manufacturing, the wage index, and labor productivity, the correlation analysis demonstrated that exports, gross domestic product, and labor productivity have a significant influence on attracting FDI to the industrial sector. These macroeconomic indicators were statistically significant both in the short term and in the long run.

Empirical findings indicated that labor productivity has the greatest impact on the attractiveness of foreign direct investment in the Lithuanian manufacturing sector, both in the short and long term. To maintain the viability and promote the development of the manufacturing industry, Lithuania should focus on the factors that affect labor productivity in this sector.

Keywords: investment attractiveness, foreign direct investment, manufacturing sector, sectoral determinants of investment.

Going Global or Staying Local: Determinants of Domestic and International Corporate Bond Issues in the Baltics

Natalja Tocelovska, Oskars Vainovskis, Tenis Lenerts — Fri, 15 Sep 2023 00:00:00 +0300

In the period 2017-2022, there has been a notable growth in international bond placements by Baltic companies, which is distinct from corporate bond issuance in the European Economic Area. While the Baltic governments have demonstrated an increased focus on the corporate bond market development – the pan-Baltic Capital Markets Union launched in 2017 and covered bond law as adopted in Latvia in 2021, those activities are not directly linked to the ongoing shift to international corporate borrowing. In the academic literature, the determinants affecting corporate bond issuance are getting certain attention while studying separately the country-level determinants and the firm-level determinants, which are further split into domestic and international corporate bond issuance. For the Baltic countries, rare academic research has focused on the corporate bond market development of an individual Baltic country.

This paper aims to discover the determinants for domestic and international corporate bond issuance of Baltic companies. While providing theoretical insight into corporate bond issuance rationale for both domestic and international placements, the paper focuses on factors that have contributed to firms choosing to issue bonds internationally. The methods applied in this study are scientific publication analysis, document analysis, expert survey, in-depth interviews, and statistical data analysis. For the statistical analysis, macroeconomic data was acquired from Cbonds, The World Bank, and International Monetary Fund databases in combination with company-specific data gathered from Nasdaq CSD, Orbis, Lursoft, Storybook, and Rekvizitai. The authors have employed a panel regression model for domestic and international bond issuance, and probit regression for all issued bonds in the Baltics from 2003-2022 to estimate the probability of pursuing bond financing internationally.

The findings of this paper indicate that in the Baltics the main firm-level determinants for domestic corporate bond issuance are the company’s financial performance, its geographic exposure, documentation and listing costs, and access to alternative funding sources; on the country-level, the determinants are the share of sovereign international bonds of GDP, corruption perception, and exports as a share of GDP. For issuing international corporate bonds, the main determinants on the firm-level are bond placement size, company size, equity ratio, a satisfactory credit rating, and appropriate yields in the context of higher competition for international investor attention; on the country-level, GDP per capita, country’s export share, interest rate spread, regulatory quality, and political stability play an important role.

Employment Precarization and Skilled Labour Migration in Western EU Countries

Kamile Botyriute — Fri, 15 Sep 2023 00:00:00 +0300

The purpose of this study is to examine the relationship between employment precariousness and high skilled migration. There exists a large number of studies investigating the effects of precarious employment on various issues ranging from unemployment to job insecurity, however, the studies on precariousness effects on migration are scarce. In addition, in scholarly literature, high skilled migration in developed economies is presented as a specific migration with patterns differing from those from low-income countries or among those with lower educational attainment. For these reasons, data from a relatively homogeneous sample of EU-15 or Western European countries that represent the highly developed European sub-region was selected. In the analysis, fixed-effects linear regression was applied. The model included part-time, involuntary part-time, temporary, involuntary temporary, short-term employment, unemployment and earnings as independent variables and the emigration of people with tertiary education as a dependent variable. The analysis showed that involuntary part-time and short-term employment are significant positive predictors of high skilled emigration. Meanwhile, unemployment and earnings did not predict high-skilled labour mobility in the sample of EU-15 countries. The results support the implication that labour precariousness may be related to increased emigration of those with higher education in developed economies.

The Compliance of Lithuanian Environmental NGO’s Objectives with European Green Deal

Vilija Šatienė — Fri, 15 Sep 2023 00:00:00 +0300

European Commission in 2019 has developed an ambitious strategy for sustainable economic growth - the European Green Deal. It sets out two key objectives: to make Europe the first climate-neutral continent, with zero net greenhouse gas emissions by 2050 and to decouple economic growth from resource use.

While the responsible authorities will be taking the relevant decisions, citizens must also do their part by changing their habits, protecting the environment and conserving natural resources. The Green Deal implementation’s success requires the participation and commitment of the public.

There are eight main Green Deal initiatives / policy areas, which need to be transferred to Lithuanian law (Increasing the EU’s climate ambition for 2030 and 2050; Building and renovating in an energy and recourse efficient way; From “Farm to Fork”: a fair, healthy and environmentally friendly food system; Accelerating the shift for sustainable and smart mobility; Supplying clean, affordable and sustainable energy; Mobilizing industry for a clean and circular economy; Preserving and restoring ecosystems and biodiversity; A zero pollution ambition for a toxic free environment).

The main tasks of this article were to identify the main goals and initiatives of the European Green Deal, to perform a content analysis of Lithuanian environmental NGOs and their activity goals and present conclusions.

Primary methods used: content analysis of Lithuanian environmental NGOs objectives, data comparison with main policy areas of the European Green Deal (EGD), survey to check if organizations aligned their objectives with the EGD purposefully.

The key results. After comparing the main Green Deal initiatives with Lithuanian environmental NGO’s performance objectives, we can see, that most of them work in preserving and restoring ecosystems and biodiversity, also in mobilizing industry for a clean and circular economy. There’s only one NGO which act in clean, affordable and sustainable energy field and two NGOs which act in building and renovating in an energy and recourse efficient way. Estimating the size of Lithuanian population, there is a large number of environmental NGOs, but unfortunately, they are not very well known for society. That’s why their performance is not very much influential on political decisions. The key barriers for the development of green initiatives should be identified and the attraction of new members with specific knowledge and with understanding the purpose for working at NGO.

Keywords: environmental NGOs, green deal, green deal initiatives, environmental protection, political decisions.

Exploring Growth Strategies of European Small and Medium-sized Enterprises in the Service Sector using ChatGPT

Linmu Cui — Fri, 15 Sep 2023 00:00:00 +0300

In recent years, the development of the artificial intelligence is changing with each passing day. Artificial intelligence has more and more application scenarios in modern production and life, generating more value and sparking numerous discussions. The epoch-making significance of the launch of ChatGPT (and its successive version GPT4) in late 2022 cannot be overstated. In just two months, it became the fastest application in human history to exceed 100 million registered users worldwide and is considered the core digital product of the next-generation technological revolution, with great potential for development. ChatGPT's high intelligence can efficiently solve many problems faced by the European small and medium-sized enterprises in the service sector, providing more possible approaches for their growth. To explore growth strategies for small and medium-sized enterprises in the service sector, semi-structured interviews have been conducted (n=24) and a qualitative methodology is used to analyze the role that ChatGPT can play. The optimization and assistance that ChatGPT can bring to the development of small and medium-sized enterprises in the service sector is analyzed in a structured way from the aspects of human resource management, strategy decision making, fund raising, service research and development, finance, marketing, sales, administration and operation. Based on findings and existing research on the role of artificial intelligence in SMEs’ development, the authors propose development paths and implementation strategies for ChatGPT technology to assist small and medium-sized enterprises in optimization and growing.

Development of Non-financial Reporting: the Case of Estonian Listed Companies

Piret Tamm, Natalie Aleksandra Gurvitš-Suits — Fri, 15 Sep 2023 00:00:00 +0300

Non-financial reporting as "the way to disclose how companies operate and manage social and environmental challenges" is gaining popularity during last decade and is constantly changing field of study. Being non-mandatory for most companies the non-financial information is disclosed in the form of Environmental reports, CSR reports, Social activity reports, SDG and ESG reporting.

During recent five years a growing body of literature has been discussing how the EU member states are ratifying non-financial reporting Directive 2014/95/EU (NFRD) (Camilleri, 2017), its impact on the quality of the non-financial reporting (Ottenstein et al., 2021, Schroder, 2022, Lippai-Makra et al., 2022).) and the importance for investors (Amel-Zadeh & Serafeim,2018). This directive requires large public interest entities with over 500 employees (listed companies, banks, and insurance companies) to disclose certain non-financial information. These changes seem to be challenging and require companies to review their compliance with the latest requirements.

The aim of this study is to determine whether the Estonian listed companies have implemented the requirements of the NFRD and what are the major changes related to its enforcement as well as the preferred way of disclosing non-financial information. Authors have conducted a qualitative content analysis of non-financial information of companies in the period of 2015-2020. The sample of the survey includes thirteen companies listed on the main list of the Nasdaq Tallinn Stock Exchange as of 31.12.2021 as. Authors analysed non-financial information disclosed in the 78 reports of companies by selected areas on the basis of a unified valuation model. The main focus is on the content of the reports and on the changes that have taken place during the research period.

The main findings revealed that in general companies have successfully complied with the requirements stipulated by the NFRD. The relevance, consistency and comparability of the information disclosed have improved over the years.

In general, it can be concluded that mandatory requirements for the harmonization of non- financial information are important and contribute to the measurement and monitoring of the activities of companies and their impact on society and environment.

Problems and Solutions of Multi-apartment Housing Management in Latvia

Rosita Zvirgzdina, Ervins Straupe, Iveta Linina — Fri, 15 Sep 2023 00:00:00 +0300

Housing policy is closely related to the well-being and social integration of the population of each country, and has a great impact on the development of various sectors and the entire national economy. An important part of housing policy is the housing management sector, whose processes affect all levels of society. The goals of the housing policy in Latvia are to promote the quality and availability of housing and to ensure the regulatory basis for management. Special attention should be paid to multi-apartment residential buildings, as they occupy more than half of the total residential area in Latvia, and approximately 65% of the population lives in apartments. The tasks of the study are to identify, collect and analyse information on the aspects of managing multi-apartment residential buildings, as well as to provide recommendations for the improvement of the housing policy. The monographic or descriptive method was used for the analysis of the theoretical base. In order to find out the current situation and the main problems related to the management of residential buildings, a survey was conducted in which residents of multi-apartment residential buildings of different series and different in number of apartments participated. Analysing the results of the survey, it was found that the main problems are related to incomplete information, lack of interest, incompetence, lack of communication between apartment owners and the house manager, as well as various legal deficiencies regarding ownership rights. Improvement of the regulatory base, increasing the competence of managers and information measures for apartment owners are offered as solutions.

Corporate Social Responsibility – Assessment of Facilitating and Impeding Factors for Small and Medium-sized Enterprises in Latvia

Oļegs Ņikadimovs — Fri, 15 Sep 2023 00:00:00 +0300

Small and medium-sized enterprises (SMEs) make up for ~99% of all companies in both Latvia and the European Union (EU), they are a significant contributor to national economies and should not be disregarded when discussing corporate social responsibility (CSR). SMEs are not smaller-scale versions of corporations and differ greatly in terms of managerial structure, revenues, resource availability and allocation, market reach, product and service lines, as well as available manpower. Given that a CSR strategy often necessitates additional investment, many SMEs might not anticipate it to increase the bottom line, however, a large part of consumers are willing to pay more for goods and services from a socially responsible company, and CSR can facilitate higher employee attraction and retention rates. This sets up the aim of this study, to analyse CSR initiatives deployment, and facilitating and impeding factors for SMEs in Latvia, a country that is considered to be in the transition process to a market economy. To classify important CSR facilitating and impeding factors, analysis and generalisation of multiple academic sources were used. Analysis of the regulatory framework, fundamental planning documents, international CSR, ESG and other indices, as well as a collateral examination of empirical CSR research in the EU member states and Latvia, was carried out to identify possible CSR development issues for SMEs in Latvia. The study shows that while CSR awareness is increasing in Latvia, the implementation of CSR by SMEs is limited, and there is a need for more guidance and support to promote CSR practices. The study identifies several facilitating factors, such as policy-regulatory support, social pressure, ethical considerations, and impeding factors, such as lack of resources, limited knowledge, and perceived low relevance of CSR for business, as well as the excessively bureaucratic approach in the public sector. The study highlights the importance of private and NGO stakeholder engagement with the public sector in the collaboration and promotion of CSR practices among SMEs in Latvia. Policymakers, business executives, and other stakeholders interested in encouraging CSR practices among SMEs could benefit from the findings of this study.