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The purpose of the research in this article is to investigate the main trends in the development of the different industries during the COVID-19 pandemic, to identify the main problems facing the different industries in the context of the global crisis, as well as to form the basic concepts necessary for a real recovery of the global industry. The authors identify the main problems facing the aviation industry in the developing world crisis and possible ways to solve them. As a working hypothesis, it is proposed to form the basic concepts necessary for preparing and implementing operational measures to restore passenger and cargo aviation. Considering the main threats facing the aviation industry during COVID-19, the article proposes the organizational and economic mechanisms to restore the industry. Furthermore, several recovery scenarios are considered, considering the relevant factors that have a particular impact. Next, a novel mathematical model for pharmaceutical products, which are the most important in COVID-19 pandemics, is proposed. Moreover, the model considers the uncertainty, and a robust optimization approach is applied. The study is based on a comprehensive analysis of documentary data provided by government agencies in several European countries. An analysis of global and Russian passenger traffic for Q1-Q4 (quartile) of 2020 and a development forecast for Q1-Q2 of 2021 is provided. The scenario problems facing the aviation industry in the context of the COVID-19 crisis are identified. There are key concepts necessary to prepare and implement effective measures to restore the aviation industry.

Until recently, the high rates of aircraft engine engineering's development were ensured by the technological solutions improvement and the desire to approximate as much as possible the ideal thermodynamic cycle of turbojet engines. The traditional fuel for turbojet engines is an aviation kerosene - Jet-A fuel group and their regional analogies. The traditional way of aircraft engines efficiency increasing is a raising of a temperature in front of the high-pressure turbine. New alloys and technologies allow to increase the aircraft engines efficiency to a certain level. Raising the temperature in the combustion chamber by 50 degrees increases the efficiency, which leads to a 5% reduction in fuel consumption. However, this approach is technology limited and does not provide innovative solutions. The aircraft engine engineering's development tempo in the 21st century continues to accelerate. The main driver of such processes in recent years is the tightening of economic and environmental requirements. Many aircraft manufacturers are actively looking for ways to reach a new qualitative level in terms of turbojet engines economic efficiency and meeting strict environmental requirements. The paper considers the feasibility of using new cryogenic fuels in aircraft turbojet engines, and possible ways for aircraft industry successful development.

This paper considers the development of attractive strategies featuring cryptocurrency assets, considering their costs and potential risks. The object of analysis in this paper is cryptocurren- cy as an investment instrument. The main hypothesis of the research is that modern portfolio theory can be applied to cryptocurrency investments to design an investment portfolio with appropriate risk and profitability characteristics. The authors of the paper: (i) place crypto- currencies in the context of modern financial market and financial technology development; (ii) develop assessment criteria for determining attractiveness of individual cryptocurrencies; and (iii) develop recommendations for creating an optimal cryptocurrency investment portfolio. In order to test the hypothesis, the authors performed calculations and used such methods of scientific research as the collection and processing historical values for cryptocurrency rates from July 2017 to January 2018, as well as data analysis for correlation, covariance, and return on investment. It is shown that a cryptocurrency investment portfolio should be created considering investor objectives and should obey a logical relationship between risk and profitability. Therefore, cryptocurrencies should not be correlated; an investment portfolio should be sufficiently diversified to minimize risk; cryptocurrencies should be liquid, that is freely exchangeable to a fiat currency on an appropriate exchange (e.g. dollars, euros). Investors should also consider regular rebalancing of the portfolio, which could help increase its profitability.

Social and economic aspects of life of society have been impacted by digital technologies; a process, which has significantly accelerated with the new millennium. Making effective business decisions in the contemporary world of evolving digital solutions without considering digital information and sources is hardly productive. This has triggered a deep socio-economic transformation across various aspects of life of society, including a diverse range of business sectors and the emergence of the gig economy and gig workforce, which has been defined by Wood et al. (2019) as people who offer their services through mobile applications. This results in the need of more rigid management systems. Furthermore, the EU vision of competitiveness of EU economies is associated with the transformation of markets and the acquisition of digital skills by the EU workforce. However, there is a lack of management professionals with digital skills capable of fluent use of digital technologies and their promotion in their teams. Business and management programs at universities are structural units that can offer the development of such skills. The key goal of this research paper is to identify manager digital competencies that are currently in demand and to determine if entrepreneurial skills and knowledge of personality can assist in the development of digital skills in order to provide more effective educational approaches to support the management needs in the era of digital transformation. In order to attain the goal, literature review and the survey of senior managers of Latvian enterprises were conducted. Latvia was chosen because Latvia has low indicators of integrating digital technologies into the economy. The outcome of the research is the proposal of conceptual aspects of enhancing students’ digital, entrepreneurial and psychological skills in order to provide more effective educational approaches to support the management needs in the era of digital transformation and the digital quotient having been added to one of the key coefficients of people’s abilities.

Air transportation plays an important socio-economic role, and an airport, as part of the transportation system, is a significant component of the national infrastructure. The airport is not just a provider of aviation services, whose activities are regulated by the state, but is a self-sustainable commercial complex with its own business goals and development strategy aimed at the growth and economic efficiency of operations. Strengthening its position in the Nordic region is the strategic goal of Riga International Airport. Competitive advantage in airport charges policy should contribute to the accomplishment of this strategic goal - Riga Airport should be the first choice for airport transit passengers, airlines and regional enterprises. However, although Riga Airport has a competitive advantage in charges, which are the lowest among the major competitor airports (Helsinki-Vantaa and Stockholm-Arlanda airports), it does not have a market leader position in Northern Europe.

Communication measurement is a useful way to exam where communication works or doesn’t work within a company’s strategic goals; it helps managers to make smart managerial decisions. A company with effective communication strategy has higher return to shareholders, more motivated and engaged employees, higher value of an intellectual capital created inside the corporation.

This paper studies the dynamics of concentration levels in the market for audit of public interest entities (further PIEs) in Latvia from 2016 to 2018. This is important to identify initial effects on concentration and the likely consequences of the new EU statutory audit legislation (i.e. Directive 2014/56/EU and Regulation 537/2014) entered into force in June 2016. This paper relies primarily on the analysis of the annual reports of Latvian PIE audit firms and their associates and computes some key measures describing concentration – the Herfindahl-Hirschman index and concentration ratios CR1 or CR4. It also analyses market concentration in different categories of PIEs, notably banks. The main findings are that the concentration of the market for Latvia’s PIE audit firms/networks remained relatively high after the EU audit reforms. Furthermore, the Big Four firms’ effectively have an oligopoly in the PIE audit market and one of the Big Four firms is dominant in the banking sector. The authors develop recommendations aimed to make the Latvian audit market more transparent and less concentrated.

There is a growing competition between banks and fintech not only in advanced economies, but also in the emerging markets. However, it is yet to be observed in Latvia to the same extent. This paper aims to evaluate fintech’s level of development in Latvia compared to Europe. The paper identifies financial services using innovative technologies offered by fintech companies, analyses the advantages and disadvantages of these services in comparison with services offered by the traditional financial sector companies (banks, insurance companies, institutions involved in asset management and investment, etc.), and evaluates how prepared are consumers to use fintech services. This paper documents the results of the survey aiming to clarify how well-informed consumers in Latvia are about fintech services, their convenience, speed and safety, as well as the consumers' current satisfaction with banking services. The hypothesis of this paper is that Latvian society is not ready to use services provided by fintech, but prefers banking services instead. Survey results provide some evidence in favour of this hypothesis: they show that respondents are generally unaware about fintech services in Latvia and their associated innovations and new financial products. This paper makes several recommendations for managers of fintech enterprises, association of start-up enterprises and risk capital funds as well as state institutions., peer-reviewed

Transport infrastructure is an integral part of the transport system of any city or state. In connection with the development of society and intensification of international relations due to the globalization processes, the importance of transport as a factor for economic and social development has enhanced. Various aspects of the activities related to the development of transport infrastructure have increasingly become the objects of scientific researches. Transportation as an economic factor is a measure of economic activity and at the same time transportation is a reflection of economic activity. So, the questions about transport infrastructure performance measurement and relationship between transport infrastructure and economic growth are the subjects for discussions in both academic and non-academic circles. This paper highlights the role of the transportation industry in economic development of Latvia, describes the concept of transport infrastructure as an important part of the state transport system, and estimates the employed international approaches to the measurement of performance of transport infrastructure development. The article focuses on the necessity for the development of the methodology of measuring the transport infrastructure performance, that should be applied systematically and that would be generally helpful to all responsible people making transportation-related decisions.

Statistical data suggest that Latvian women entrepreneurs are amongst the most active business founders in Europe. According to the Stockholm School of Economics in Riga, 10% of women aged between 18 and 64 in the country have started their own businesses of which the majority were found to lead small or micro-companies, which ultimately results in about 40% of all small and micro- size Latvian companies being run by women. What makes these women different from other professionals? Given the fact that many women reside in similar contexts but not all of them become entrepreneurs, the aim of this research was to identify personality characteristics of women entrepreneurs in Latvia. In order to translate the global aim into research questions, the Big Five model of personality, which is a dispositional model, was deployed in a questionnaire format. As for the specifics of the research questions, they were created based on a review of a few Big Five Personality Tests and targeted verification of previous research findings on women entrepreneurs in other countries. Earlier women were found to score higher on Conscientiousness and Openness to Experience and lower on Agreeableness and Neuroticism. Based on earlier research findings on Extraversion, this trait was suggested to play a moderate role. Since personalities reside in a social context, another aim was to identify one most powerful factor beyond the personality dimensions that has encouraged them to engage in entrepreneurial activities. To attain this aim, participants were asked a question of the most influential factor that affected their decision to start and sustain their enterprises. The obtained data were discussed in a broader context.

Despite their novelty, cryptocurrencies have by now acquired certain popularity due to convenience in making payments, high speed of transactions and the application of modern technology to ensure transaction security among other things. The aim of this research is to evaluate cryptocurrencies as an investment instrument. The tasks of the research are as follows: (i) to evaluate a hypothesis about potential profitability of the cryptocurrency investment portfolio, (ii) to analyse cryptocurrency investment profitability, (iii) to assess the attractiveness of creating an investment portfolio of cryptocurrencies, and (iv) to provide recommendations to a potential investor for creating an investment portfolio comprised of cryptocurrencies. The research methods used include statistical data analysis and econometric modelling. Applied results were obtained using correlation-covariance analysis yielding a balanced profitable investment portfolio according to the Markowitz model. The results of the research have allowed the authors to conclude that cryptocurrencies would be an attractive investment instrument; the following indicators can be used to assess the attractiveness of cryptocurrency: market capitalization, the objectives of currency creators (issuing tokens on different resources to currency holders, bounty programs, etc.), trend assessment, and the analysis of reproducibility and replicability of the platform on which the cryptocurrency is built.

This paper is devoted to topical issues in the development of transport infrastructure as a key component of the transport system of Latvia. The level of development of transport infrastructure is measured by specific economic indicators, which in their turn depend on the volume and efficiency of acquisition of sources of funding. The paper sheds light on the economic indicators of the development of the transport infrastructure in Latvia and issues of funding of this sector. The data contained in this paper reveals the size and directions of public investment in the transport infrastructure development. The paper focuses on the necessity to create the effective investment mechanism for financing the transport infrastructure of Latvia as a useful instrument in making investment decisions. Based on the theory of decision making the authors developed Investment Decision-Making Concept, which can be used when selecting investment projects in the field of transport infrastructure and their evaluation. This paper is based on the litera ture review of previously published papers of these authors. The authors refine their conceptual approach for developing an investment decision making mechanism, proposed in earlier papers, and offer recommendations aimed at policy-makers, professionals, academics and those with a broad interest in the field.

Currently Latvia runs a three-pillar pension system. Despite positive dynamics of change of net assets of pension schemes, investments into pension programs are not regarded as financial products that could be popular amongst the population of Latvia. This problem is one of the key social economic issues in society and therefore its solution, which should be developed with consideration of ethical principles of investment, is socially important, which is why it should be addressed by the state. The aim of this research is to consider social and economic aspects of activities of the 2nd pillar pension fund in Latvia and to identify the attitude of Latvian residents to investments into pension programs. The authors’ conclusions are based on the analysis and synthesis of scientific and economic literature, the official statistical data, and research of opinion of the Latvian population.

The new management paradigm and the necessity to implement company's strategy makes the management of the companies analyze characteristics and structure of the financial management system and applied investment and financing models using the elements of strategic and operative financial management. The analysis of methods and tools being applied, as well as the formation of conceptual basis for the financial management is the first step on the way to the enhancement of the financial management efficiency. Problems are often associated with the necessity to combine individual elements of financial management into a unified, well-adjusted system and to coordinate its functioning. Therefore, there is a growing need for the development of the financial management system that would be directly linked to the strategic goals of the company. Research objective: to develop recommendations for the formation of an effective financial management system based on process-oriented approach for Latvian multi-business companies that would be aimed at meeting the strategic goals of the company.

The evaluation of small-companies performance includes financial and non-financial indicators of companies. The main source of information about financial indicators of business activities is the financial statements of a company; basing on them there is performed the evaluation of the company’s business activities and financial status. The evaluation of small companies business performance and financial status have a significant role in making financial managerial decisions, as it help assessing the risks and potential benefits planning the perspective performance of the company. Exploration and evaluation of the meaning of financial indicators, successful solution of business management problems can be reached by the development of a single financial indicators assessment system in the context of complex analysis of business performance. Despite the fact that in scientific literature the number of publications on this theme increases, the researchers have not arrived to a common view on the essence and composition of the financial performance indicators, as well as their measurement and assessment methods. The content of the article reveals various theoretical approaches to the understanding of the essence, classification of financial indicators and types of their measurement. According to the official statistical data each day every fourth company faces the insolvency procedure. The data of the Latvian businessmen survey show that the owners of small enterprises need a definite system of financial indicators to manage efficiently the financial situation in the company. As it is known, the most characteristic feature of small enterprises is limited financial resources and difficulties in receiving them. Due to it this theme has become very topical in the context of borrowed capital, for example, getting bank loan. In order to evaluate the creditworthiness of the borrower financial institutions usually use the data about the average indicators of the branch calculated by LR Central Statistical Bureau and LTD “Lursoft”. Ass regards financial indicators there are at least three conditions to be improved: - applied models of financial indicators used by the institutions mentioned above were developed more than 10 years ago and they are considered to be universal, they do not consider the size of the enterprise and the form of business organization; - simple selection of financial coefficients is the basis of these models with any logical interrelations; - the most complex issue is the quality of information included into financial statements basing on which financial coefficients are calculated; international standards are not taken into account and there is no information whether financial statements are drafted according to the international standards. The ratings of companies published basing on such information by financial coefficients sometimes can mislead the users of financial statements taking into consideration the conditions mentioned above. The aim of the paper is to make recommendations on the development of the financial indicators system on the basis of study and generalization of the scientific publications, and analysis of Latvian practice in the field of a company performance, which the owners of small enterprises in Latvia could successfully apply for evaluation of the company’s financial position. The offered system of financial indicators can be used in the future as a basis for developing a complex model for the evaluation of the financial status of small enterprises. In order to reach the aim of the research the following tasks have been put forward: · to investigate the essence of financial indicators and financial ratios, and to show their role in company performance; · to provide critical evaluation of the approach to the evaluation of financial indicators used in Latvia to assess business performance; · to develop recommendations for designing a financial indicators system for evaluation of a small company’s business performance and its practical implementation. The research is based on the analysis and evaluation of special literature and scientific publications on the financial indicators of business activities and their role in the evaluation of business performance. The following methods have been used in the research: logical analysis ad synthesis, content analysis and a monographic method. The articles analyses and evaluates prior researches on the financial indicators of business performance, considered and systematized financial indicators for the evaluation of small companies’ business performance. The results of the give research could be useful not only for the owners of small enterprises in Latvia, but also for private and public institutions having access to financial information about companies performance in Latvia. DOI: http://dx.doi.org/10.5755/j01.eis.0.6.1554

Purpose – Definition of Management Controlling Framework (MCF) had undergone many changes during a short period of time. Definition change mostly reflected a scope transformation during this system development. The aim of this paper is to investigate evolution of Management Controlling Framework, to compare different approaches and discuss outcomes, to propose future development directions based on historical background. It presents a historical revision of different trends of management controlling systems in organisations, according to four indicators: scope, outcome, tools and contradictions. Johnson and Kaplan (1987) suggestion was taken as the starting point of current investigation, as it significantly affected viewpoint change and further behaviour. Design/methodology/approach – A systematic literature review of publications in public sector, management and accounting journals since 1990 was conducted with the aim to answer the research questions: 1. How Management Controlling Framework are described? 2. What are the main characteristics of MCF? 3. How scope of Management Controlling Framework changed over time. 4. What are the main contradictions? Data analysis was performed using Theory of Inventive Problem Solving (TIPS, TRIZ), and a special part of this theory — ‘Laws of (technical) systems evolution’ (LTSE). Findings – Overall, the results confirm that Management Controlling Framework (MCF) can be described and trended through Laws of (technical) systems evolution. These findings provide the following insights for future research such as solve contradictions: 1. Overview, but not overload (detalization problem). 2. Subsidiary independent, but over control (HQ involvement problem) 3.Managing Innovation versus Managing Operations (development problem). 4. Differentiation and unification (culture problem). 5. Leadership versus review (GM problem). 6. Common understanding on the control way and results quantification (Measurement identity problem). Research limitations/implications – Generalisation of research results is limited by three main controlling frameworks and Agency theory as additional lever. Only one aggregation methodology was taken as tool - Theory of Inventive Problem Solving.

In the circumstances of globalisation, the assessment of the companies’ business performance becomes crucially important for small and medium-sized enterprises (SMEs). Despite a wide variety of the methods for evaluation of the companies’ financial performance offered by the theory of economics, the issue on what is the optimal method to be chosen and to be applied by the company to manage efficiently the enterprise is still up-to-date. During the research performed by the authors, it was established that the SMEs business performance assessment in Latvia can be carried out mainly using just financial indicators. The research reveals inadequacy of traditional performance measurement approach based on the analysis of just financial indicators of the economic activities and explains its insolvency by using as an example the analysis of financial conditions of some bancrupted companies during the recent years of their existance. The current research is based on the analysis of scientific publications, results of the authors’ previous studies, and the results of the expert survey.

System approach in strategic management enables managers to take well-grounded long-term managerial decisions basing upon their notion of the overall state of business, as well as to make decisions on the improvement of the management system or its individual elements at each stage of business development. Therefore, business management system, including financial management system, turns into a system of continuous improvement. Furthermore, synergetic effect of application of the system of “continuous improvement” far exceeds the cumulative effect of applying each management method and tool separately. Every manager who is planning to implement any “regular improvement” in the current system of company management is interested in one and the same question: whether it is possible to measure a potential economic effect of introduction of an innovative measure and how the effectiveness of the improved management system can be evaluated? This article is the continuation of the authors’ article “Improving Financial Management System for Multi-business companies” (Savina&Kuzmina-Merlino, 2014) and provides an overview of the ways of measuring the effectiveness of an improved financial management system. The result of the article is the framework to assess the effectiveness of the developed financial management system for a multi-business company, using the expertise-oriented evaluation approach.

The authors of this article pay particular attention to the study of the nature of venture capital as a multi-meaning concept. It is evident that venture capital is one of the main sources of financing innovation entrepreneurship and small business. On the other hand venture capital represents an independent sector of market economy of a certain country. At the same time venture capital operation mechanism requires a definite system of public relations in risky business, which is based on economic interests of investors, entrepreneurs, government and society. The purpose of this research is, on the basis of the investigation, analysis and synthesis of contemporary publications on the topic of venture capital and opinions of Latvian venture investors, to make an attempt to evaluate the role of venture capital in the development of entrepreneurship and small businesses in Latvia, identifying the peculiarities and contradictions of its functioning in the conditions of entrepreneurial environment in the context of globalization.

Well-developed and efficient infrastructure is crucial for ensuring the effective functioning of the economy. A considerable lack of industry financing certainly affects the assessment of the quality of the overall infrastructure in a global context; according to the report by the World Economic Forum, Latvia languished in 51st position in its global league table for overall quality of the transport infrastructure provision [1]. In countries that have a high rating on the quality of the overall infrastructure, for example, Germany and Great Britain, appropriate investment mechanisms have been developed. They set benchmarks for decision-making and evaluation of investment efficiency. The goal of this study is to develop a conceptual approach to the creation of an investment mechanism for Latvia, based on the experience of Germany and other countries having a high rating of the quality of the overall infrastructure. In general, the results of the study can be useful in developing financial mechanism for investing in the development of transport infrastructure in Latvia as an integral part of the investment policy for the industry development.

The term “business model” is associated with the “dot-com” firms and its exponential growth in late 90s, but in contemporary economics it is a transversal matter to any organization according to Osterwalder et al. (2004). There are many definitions of business model, but there is a common point in all of them: a business model is created to represent a certain service or product in order to create value to stakeholders and to be purchased by a company’s customers. The aim of the paper is to define the theoretical way for building a successful business model, which can be useful for a passenger transport company. As a result of theoretical research the authors developed recommendations for building a prototype of business model for a company, which is operating in transport industry.