The European Journal of Applied Economics

THE IMPACT OF CAPITAL FLOWS ON THE REAL EXCHANGE RATE: EVIDENCE FROM SERBIA

Aleksandar Zdravkovic — 2026-04-17

As a small open economy increasingly integrated into global financial markets, Serbia is exposed to fluctuations in cross-border capital movements that may influence exchange rate dynamics and macroeconomic stability. This paper examines the relationship between international capital flows and the real effective exchange rate in Serbia, with particular attention to the structure of capital inflows. The structural vector autoregression (SVAR) model is applied to capture the dynamic interactions between external economic conditions, capital flows, monetary policy, domestic economic activity, and the real effective exchange rate, using quarterly data for the period from 2007 to 2024. The results, obtained through impulse response analysis, indicate that shocks to capital inflows lead to a moderate appreciation of the real exchange rate, although the magnitude and persistence of the effect vary depending on the composition of capital flows. Equity inflows show a somewhat more persistent appreciation effect compared with debt inflows, while the overall impact of total capital flows appears relatively limited. These findings highlight the importance of capital flow composition for exchange rate dynamics and provide useful insights for the design of exchange rate and macroprudential policies in small open economies.

IS EXCHANGE RATE PASS THROUGH EFFECT VALID IN SERBIA? EMPIRICAL TESTING BY USING CO-INTEGRATION TECHNIQUES

Nemanja Lojanica — 2026-04-17

The aim of this paper is to examine whether the exchange rate pass-through effect on prices in Serbia is present. In a small and open economy with a managed floating exchange rate regime, the impact of exchange rate changes on inflation is particularly important. Since this topic has been extensively studied, the contribution of this paper lies in applying several cointegration techniques and analyzing a specific time period for the case of Serbia. The selected time frame is 2007–2021, with monthly data. The research results show that the exchange rate pass-through effect on prices is incomplete. Additionally, it has been found that the effect is more pronounced in the long run and that the strength of the impact depends on the cointegration technique used.

FINANCIAL RESILIENCE TO THE ECONOMIC SHOCK OF COVID-19: AN EMPIRICAL STUDY OF ENTERPRISES IN SERBIA

Danko Jevtović — 2026-04-17

This paper examines how COVID-19 affected medium and large enterprises in Serbia, revealing that size and ownership structure in this transitional economy challenge documented effects. Using panel data from Serbian enterprises (n = 3,020, period: 2018-2023), we employ fixed-effects regression with robust standard errors to analyse differential impacts. Large enterprises experienced statistically significant 19.4% higher operating revenues during COVID and 33.7% post-COVID compared to medium-sized firms (differential effects from baseline). Profitability patterns diverged as large private firms improved their operating margins by 4.1-6.8 percentage points, while state-owned firms experienced margin compression of 15.6-33.1 percentage points, despite having a six times larger asset base. Foreign ownership showed no statistically significant performance advantage. We concluded that institutional context could overturn established resilience patterns, indicating that models developed in advanced economies may not be directly transferable to transitional economies.

A TECHNICAL FRAMEWORK FOR DATA-DRIVEN INDUSTRIAL TRANSFORMATION IN NORTHEAST CHINA

Yong Chen — 2026-04-17

This study proposes a comprehensive data-driven technical framework to support industrial transformation in Northeast China, using the Shenyang-Fushun Reform and Innovation Demonstration Zone as a case study. Based on real-world industrial value-added data spanning from 2000 to 2024, we develop and validate predictive models using SARIMA and LSTM neural networks to forecast regional industrial development trends. The framework integrates time series analysis, comparative regional analysis, and policy impact assessment to provide actionable insights for decision-makers. Our empirical analysis of monthly industrial value-added growth rates reveals significant seasonal patterns and structural changes over the 24-year period. The SARIMA model demonstrates superior performance in capturing seasonal variations, while the LSTM model shows enhanced accuracy for non-linear trend prediction. Comparative analysis with Beijing, Shanghai, Jiangsu, and Guangdong provinces reveals the unique characteristics of Northeast China's industrial development trajectory. The study provides evidence-based policy recommendations for accelerating industrial transformation through data-driven approaches, offering a replicable framework for similar post-industrial regions.

THE IMPACT OF DIGITALIZATION ON STATUTORY AUDITING IN SERBIA

Jelena Gruslav — 2026-04-17

Digitalization is profoundly transforming audit operations in Serbia, significantly enhancing audit processes' efficiency, accuracy, and speed. This paper investigates how the adoption of digital tools and technologies is reshaping traditional audit methodologies. Key advancements include the integration of data analytics, automated systems, and blockchain technology, which collectively revolutionize the way auditors conduct reviews and assessments. The digital shift is not merely about adopting new tools; it fundamentally alters the skill sets required for today's auditors. Professionals must now navigate complex digital environments, develop competencies in data interpretation, and harness analytical tools to derive meaningful insights from vast amounts of information. Emerging challenges, such as cybersecurity threats, also require auditors to stay vigilant and responsive to safeguard sensitive data. While digitalization offers substantial benefits—including increased data precision, enhanced reporting capabilities, and streamlined workflows—it also necessitates substantial adaptation. Firms must invest in innovative technologies, upgrade their infrastructure, and prioritize ongoing skill development to effectively leverage these advancements. This strategic focus will allow audit firms to remain competitive in a rapidly evolving landscape while addressing the multifaceted challenges posed by the digital age. Ultimately, embracing digitalization is crucial for enhancing the value and effectiveness of audit services in Serbia.

ASSESSING THE POTENTIAL OF ELECTRIC MOBILITY FOR LOW CARBON TRANSIT TOURISM: EVIDENCE FROM THE BELGRADE-ZLATIBOR CORRIDOR

Branko Vranešević — 2026-04-17

Transit tourism in mountainous regions generates a considerable carbon footprint due to the dominant use of internal combustion vehicles, particularly along intensively used routes such as the Belgrade-Zlatibor corridor. Although electric mobility offers the potential to reduce transport-related emissions, its relevance for Serbia’s transit tourism has not been systematically examined. This study addresses this gap by integrating an assessment of the existing charging infrastructure, an on-site survey of travelers conducted on Zlatibor (N=500), and a comparison of electric and conventional vehicles using established life cycle assessment (LCA) data. The aim is to evaluate the extent to which electric mobility can support a transition toward lower-carbon transit tourism along this corridor. The findings show that adventure- and nature-based activities represent the primary motivation for travel, increasing the importance of sustainable transport solutions in environmentally sensitive mountain destinations. Survey results further indicate that more than half of respondents would be willing to use electric vehicles if charging infrastructure were more accessible and spatially distributed along the route. In line with international evidence, established LCA data consistently show significantly lower lifecycle CO₂ emissions for electric vehicles relative to conventional vehicles, depending on the energy mix and vehicle segment. Overall, the study highlights electric mobility as a feasible pathway for reducing transit-tourism-related emissions and strengthening destination sustainability planning.

THE IMPACT OF MARITAL AND PARENTAL STATUS ON BURNOUT AND WELLBEING AMONG HOSPITALITY EMPLOYEES

Pero Labus — 2026-04-17

This paper examines the relationship between marital and parental status and professional burnout among hospitality employees, utilizing the Maslach Burnout Inventory. Drawing on statistical evidence from a field study of 1,234 participants, the analysis reveals that marital and parental status significantly influence the three core dimensions of burnout. Marriage and parenthood appear to serve as protective resources, reducing emotional exhaustion and depersonalization, while simultaneously shaping different perceptions of personal accomplishment. Notably, the lower sense of accomplishment among married individuals suggests that competing with family and professional demands may constrain feelings of success, underscoring the dual role of family responsibilities as both supportive and demanding. These findings demonstrate that family-related factors are not merely demographic attributes but critical determinants of resilience and vulnerability in high-stress service industries such as hospitality. From a practical perspective, the results highlight the importance of family-supportive organizational policies, including flexible scheduling, parental leave, and wellness initiatives, to mitigate burnout and enhance employee wellbeing. Overall, this research advances understanding of how personal life circumstances intersect with professional burnout, offering insights that can guide organizational strategies, inform mental health interventions, and promote sustainable workforce practices aligned with global wellbeing and decent work agendas.

DIGITAL MARKETING STRATEGIES FOR POSITIONING RELIGIOUS TOURISM DESTINATIONS: EVIDENCE FROM BOSNIA AND HERZEGOVINA

Angelina Njeguš — 2026-04-17

This paper examines the role of digital marketing in positioning religious tourism destinations, focusing on Bosnia and Herzegovina (BiH). Using a mixed-method approach, the study integrates institutional and tourist perspectives to identify digital tools and governance strategies that improve destination visibility, visitor engagement, and competitiveness. Findings show a significant gap between the perceived potential of religious tourism and its limited operational framework, mainly due to institutional fragmentation and weak digital capacity. Social media, digital storytelling, and influencer collaborations stand out as key drivers of visitor decisions, loyalty, and destination image. The research introduces the Development–Cooperation–Dialogue framework, linking digital maturity and inter-institutional coordination as core factors of destination management in post-conflict, multi-faith societies. Policy recommendations emphasize the need for coordinated governance, digital innovation, and sustainable branding of sacred sites to boost Bosnia and Herzegovina’s visibility as a spiritual destination.

Roles of Financial Literacy and Digital Financial Literacy in Enhancing MSME Financial Well-Being

Birgitta Dian Saraswati — 2026-04-17

This study examines the effects of financial literacy and digital financial literacy on the financial well-being of micro and small enterprise (MSE) owners. Primary data were collected through surveys administered to MSE owners in Bantul Regency, Special Region of Yogyakarta Province. This research generated a sample through various sampling selection techniques (cluster, purposive, and accidental sampling). A total of 168 respondents were used for data analysis employing Partial Least Squares-Structural Equation Modeling (PLS-SEM) with SmartPLS software. The findings reveal that financial knowledge affects financial behaviors and attitudes, while digital financial knowledge affects digital financial behaviors and digital financial attitudes, with digital financial attitudes further impacting digital financial behaviors. In addition, this study also documents that the financial behaviors, digital financial knowledge, and digital financial behavior dimensions affect financial well-being. Micro and small enterprises will arguably make sound judgments, manage financial matters more effectively, and develop sustainable businesses if they have a better understanding of financial management and digital technology.

THE ECONOMIC ROLE OF SMALL FARMS IN THE SERBIAN ECONOMY

Aleksandra Tošović-Stevanović — 2026-04-17

Countries of different levels of development have different approaches to the economic importance and role of small farms. The backbone of agricultural development should be small and medium-sized farms, while large farms should create technological development and be the bearers of research in agriculture. However, in most countries, when we talk about the economic role of small farms, we are talking about a specific form of organizing agricultural production in an unfavorable market environment. For this reason, the main goal of this work is to analyze and present the position and role of small farms in the economy of Serbia, their position on the market, the environment in which they survive and the perspective of their further survival and development. For the purposes of this work, we will cite data from the latest agricultural census, public policy documents and SWOT analysis derived from available results and observations, in order to objectively list all advantages and disadvantages in order to improve the economic position of small farms in the Serbian economy.