· 2020. 9. 1. · 2 despre revistă… analele universităţii „eftimie murgu” reşiţa,...

UNIVERSITATEA „EFTIMIE MURGU” DIN REŞIŢA

ANALELE UNIVERSITĂŢII

„EFTIMIE MURGU” REŞIŢA.

FASCICOLA II. STUDII ECONOMICE

ANUL XXVII, 2020

ISSN 2344 – 6315

ISSN-L 2344 – 6315

e-ISSN 2344 – 6498

Reşiţa

2020

2

Despre Revistă…

Analele Universităţii „Eftimie Murgu” Reşiţa, Fascicola II. Studii Economice, se află la numărul XXVII, număr care marchează totdodată şi o maturizare a rezultatelor ştiinţifice cultivate de către această revistă. De-a lungul timpului, în această revistă au publicat cu succes articole ştiinţifice cadrele universitare din domeniul economic şi cercetători de prestigiu din ţară şi străinătate. O dată cu dezvoltarea UEMR, a Facultăţii de Ştiinţe Economice, revista noastră a câştigat în consistenţă, atât din punct de vedere cantitativ, cât şi calitativ. Recunoaşterea a venit treptat, facultatea noastră demarând legături şi activităţi ştiinţifice în consorţii internaţionale şi totodată diseminând rezultatele, atât a cadrelor didactice interne, cât şi a partenerilor străini prin intermediul revistei, care a câştigat notorietate. Validarea rezultatelor ştiinţifice în prezent se realizează de profesori universitari de anvergură internaţională. Aceştia susţin promovarea unor rezultate ştiinţifice de actualitate şi de utilitate dovedite pentru economia României şi pentru alte economii emergente sau dezvoltate.

- COMITETUL DE REDACŢIE -

About the Journal…

The Annals of „Eftimie Murgu” University Reşiţa, Fascicle II. Economic Studies, encounters itself at its XXVII number, number that celebrates a certain ripening of the scientific results nurtered by this journal. Along the time, in this journal, have been published scientifical papers belonging to the academic researchers from the economic field as well as well-known researchers from all over Romania and abroad. Once with the process of development of the UEMR, of the Faculty of Economic Sciences, our journal gained in consistency, both in a quantitative and a qualitative way. The recognition came gradually, with the development of scientifical connections and common activities that took place in the international consortium that our faculty accomplishedand in the same time, with the dissemination of results, that came from reasearchers from inside the country and from abroad. Currently, the validation of the scientifical papers is realized by proffesors with a high international reputation. They are interested in promoting current and useful scientific results, both for the Romanian economy and for the other emergent or developed economies.

- EDITORIAL BOARD -

3

The papers in the journal Analele Universităţii „Eftimie Murgu” Reşiţa.

Fascicola II. Studii Economice / Annals of „Eftimie Murgu” University Reşiţa,

Fascicle II. Economic Studies,

ISSN 2344 – 6315, ISSN-L 2344 – 6315, are published in printed format and

respectively on the site of the journal www.analefseauem.ro, in electronic format,

with free access to full text (e-ISSN 2344 – 6498).

The papers published in this volume are exclusively engaging authors

EDITORIAL BOARD

MANCIU VENERA CRISTINA – DIRECTOR

Assoc.Prof.PhD., University„Eftimie Murgu” of Reșița, Romania

DEMYEN SUZANA - EDITOR IN CHIEF

Lecturer PhD., University„Eftimie Murgu” of Reșița, Romania

Andreş Solomia Assoc. Prof. PhD., University„Eftimie Murgu” of Reșița, Romania

Bretcu Angela Assoc. Prof. PhD., University„Eftimie Murgu” of Reșița, Romania

Biloocaia Svetlana Assoc. PhD., Academy of Economic Studies of Moldova

Chybalski Filip Assoc. Prof. PhD., Technical University of Lodz, Poland

Ciurea Jeanina Lect. PhD., University„Eftimie Murgu” of Reșița, Romania

Ferreira Marques Helena Assoc. Prof. PhD., University of the Balearic Islands, Spain

Graef Michael Prof. PhD., FachhochschuleWorms, Germany

Hafiz Imtiaz Ahmad Prof . PhD, Higher College of Technology, Abu Dhabi

Kume Vasilika Prof. PhD., University of Tirana, Albania

Frumuşanu Nătăliţa Lect. PhD., University„Eftimie Murgu” of Reșița, Romania

Letonja Marina Assoc. Prof PhD., GEA College of Entrepreneurship, Slovenia

Miloş Laura Raisa Lecturer PhD, West University of Timisoara, Romania

Miloș Marius Cristian Lecturer PhD, West University of Timisoara, Romania

Minică Mirela Assoc. Prof. PhD., University„Eftimie Murgu” of Reșița, Romania

Pavlov Daniel Assoc. Prof. PhD, Rousse University „Angel Kanchev”, Bulgaria

Popovici Gheorghe Prof.PhD., University„Eftimie Murgu” of Reșița, România

Schulte Peter Prof. Phd.PhD., INEA, Dusseldorf, Germania

Sîrghi Nicoleta Assoc.Prof. PhD, West University of Timisoara, Romania

Singer Slavica Prof. PhD., Josip Juraj Strossmayer University of Osijek, Croatia

Tănase Adrian Assoc. Prof. PhD., University„Eftimie Murgu” of Reșița, Romania

Todorova Milena Chief assist. PhD., Rousse University „Angel Kanchev”, Bulgaria

Wassenberg Gerd Prof. PhD., Fachhochscule Aachen, Germania

Zeidan Rodrigo Assoc. Prof. PhD., University of Nottingham, China

EDITORIAL COLLEGE – ASSISTANCE

Assist.PhD. Roşu Monica

http://www.analefseauem.ro/

Analele Universității ”Eftimie Murgu” Reș ița. Fascicola II. Studii Economice

Annals of „Eftimie Murgu” University Reșița. Fascicle II. Economic Studi es vol. XXVII, ISSN 2344 – 6315 www.analefseauem.ro

4

SCIENTIFIC COMMITTEE

Antonova Diana Prof. PhD., Rousse University „Angel Kanchev”, Bulgaria

Cătoiu Iacob Professor PhD, ASE București, Romania

Cechin Crista Persida Professor PhD., European University Drăgan, Lugoj, Romania

Cismaş Laura Professor PhD., West University of Timișoara, Romania

Cocriş Vasile Professor PhD., „Al. I. Cuza” University, Iași, Romania

Corduneanu Carmen Professor PhD., West University of Timișoara, Romania

Donath Liliana Professor PhD., West University of Timișoara, Romania

Frunzăverde Doina Professor eng. PhD., University „Eftimie Murgu”of Reșița

Hîncu Rodica Professor PhD. hab., Academy of Economic Studies of Moldova

Hurduzeu Gheorghe Professor PhD., ASE București, Romania

Kalkowska Joanna Professor PhD, Poznan University of Technology, Poland

Lala-Popa Ion Professor PhD., West University of Timișoara, Romania

Olteanu Valerică Professor PhD., ASE București, Romania

Ožegović Lazar Professor PhD, University Business Academy, Novi Sad

Matiş Dumitru Professor PhD., „Babeș-Bolyai” University Cluj-Napoca, Romania

Pirtea Marilen Professor PhD., West University of Timișoara, Romania

Pop Alexandru Professor PhD., ASE București, Romania

Popovici Gheorghe Professor PhD, University „Eftimie Murgu”of Reșița, Romania

Stancu Ion Professor PhD., ASE, București, Romania

Ştefea Petre Professor PhD., West University of Timișoara, Romania

Talpoş Ioan Professor PhD.,West University of Timișoara, Romania

Włodarkiewicz-Klimek

Hanna Professor PhD, Poznan University of Technology, Poland

Web design: Bizău Viorel, Demyen Suzana

Redaction address:

320085 – Reşiţa, Traian Vuia, nr.1-4

Tel/fax: 0255210214

Contact address:

[email protected]



5

CONTENT

AUTHOR/S Title of the paper Page

1. Solomia ANDREȘ

Study regarding the

implementation of HRM in a

medium village hall in the Caras-

Severin county

7

2. Suzana DEMYEN

Employees’ perspective on the

usefulness of social media for an

organisation

17

3. Suzana DEMYEN

Adina – Iulia NICOLAE

Efficiency of commercial

management practices – premise

of successful businesses in the

pharmaceutical industry

32

4. Rodica HÎNCU

Ana LITOCENCO

The investment attractiveness of

the government securitie, as an

instrument of government debt in

the Republic of Moldova

47

5. Venera MANCIU

Trends regarding the marketing

and consumption of personal

hygiene products

58

6. Venera MANCIU

Profitable business vs. desire of

winning. Gambling-related

perception in Resita

69

7. Mădălina Dumitrița

MATICIUC

Location as a key factor in

cluster development. Focus on

the ITC sector in Romania

78

8. Marius Cristian MILOȘ

Laura Raisa MILOȘ

The contribution of investor

protection to the development of

the stock market and economic

growth

86

9. Mirela MINICĂ

Florin Ionuț AZUGA

European trends on the

automotive market 94

10. Mirela MINICĂ

Alexandra SIVULCA

Development and cooperation

policy of the European Union 103

11. Csaba NAGY

Directives, strategies, plans,

projects versus reality about

waste management in EU and

Romania

112

12.

Diana TĂNASE

Adrian TĂNASE

Iasmina ȘTEFANOVICI

Role of occupation in consumer

behaviour modelling 121



6



7

STUDY REGARDING THE IMPLEMENTATION OF HRM IN

A MEDIUM VILLAGE HALL IN THE CARAS-SEVERIN

COUNTY

Solomia ANDREȘ1

Submitted: 23th July 2020 Approved: 1st August 2020

Abstract The case study presented is in fact a continuation of the research initiated during the period

2015-2016, and will be extended to other types of organizations in order to compare the issues

analyzed in the field of HRM but also to generate conclusions and recommendations on

improving HRM practices at the level of entities in our county.

Keywords: management, human resources, village hall, efficiency, performance

JEL: A11, L11, M12, M13, J53, O12

INTRODUCTION

Considering the fact that one of the most difficult issues in a

contemporary organization is its change, I believe that this change could be

ensured at the organizational level only through the efficient management of

human resources available.

For this, it is necessary to know the social framework of the entity

strategy and analyze the manner in which human resources management

(HRM) is implemented, together with the analysis of current issues in the

field of HRM that could influence individual professional performance,

including managerial and organizational performance.

That is the reason why it is considered important to continue this

research and analyses in the field of HRM.

1. CASE STUDY APPLIED TO A MEDIUM LEVEL VILLAGE

HALL

Starting from previous research, the results of which were published

in two articles, in journals recognized at an international level, efforts were

continued in this regard, using the survey method, questionnaire-type

instruments, interviews and thematic discussions with respondents, all

employees of a medium village hall in the Caras-Severin County.

The same questionnaire used in previous research was applied (at the

County capital level, town and village level), and the results are reflected in

1 Assoc. prof. Phd., Faculty of Economic Sciences, “Eftimie Murgu” University of Resita,

Romania, [email protected]



8

the following graphic representations.

I. Respondents data:

Of the respondents present at the time of questioning, 50% represent

the management personnel and 50% represent the human resources holding

execution functions, as observed in the first graphic representation presented

below.

Figure 1 – Position filled

When taking into consideration their gender, 60% of the respondents

are males, with different ages, and 40% females. As for their ages, all of them

are over 35 years old, half being in the category 35-45 Years old, and the

other half being over 45 years old.

Figure 2 – Gender

Figure 3 – Age

Figure 4 – Level of studies

Management function

50%

Execution function

50%

Femal

e

40%Male

60%

30%

0%70%

0% High school College University studies Post-graduate studies

0% 0%

50%50%

18-25 years

25-35 years

35-45 years

over 45 years



9

Among respondents of this questionnaire, an 70% prevalence of those

with higher education is observed, while 30% of the respondents have

finalized their high school studies, as seen in the graphic representation

above.

Most respondents have an experience in the domain, 8 people having

this job for more than 15 years. Still there are also people with an experience

over 5 years and between 10 and 15 years.

Figure 5 – Work experience Figure 6 – Domain

The predominance of the four domains of work, justifies the reality

of activities carried out at the level of villages, most people working in the

finances/accounting domain, followed by the judicial domain, and only one

person being responsible for the human resources part. The remaining other

people fill in different positions.

II. Questions

Figure 7

The results for this question show a prevalence of a medium measure

trust in the planning of human resources, while 40% of the respondents

consider it to be sufficient.

0% 0% 0% 10%

10%

80%

less than 6 months between 6 months and 1 year

between 1 and 5 years between 5 and 10 years

between 10 and 15 years over 15 years

10%

40%

0%

30%

0%20%

Human Resources

Finances/ Accounting

Communication and client relations

Judicial

Informatics

Others

40%

60%

0%

1. In what measure do you consider sufficient the activity of human

resources planning inside your institution?

High measure Medium measure Small measure



10

Figure 8 Figure 9

The personnel working in the village hall seems to be highly

qualified only in a percentage of 10%, for the position filled in, 60% being

qualified and 30% little qualified.

Figure 10 Figure 11

Personnel fluctuation is considered to be a threat for the institution by

40% of the respondent, another 40% also considering it a threat, while only

2 people think it is not a problem.

When asked about the way the people can get a position inside this

institution, all people responded that they had to pass a written exam, this

being the most difficult part of the recruitment process. Thus all answers

confirm the compliance with the legislation in this field.

All the people interviewed are also aware of their job tasks.

40%

40%

20% 0%

2. Which do you consider to be the most important

criteria involved in the planning of human resurces ?

The high volume of individual tasks and multi-tasking

The possibility for organisational development

The insuring of the citizen's quality of services

10%

60%

30%

3. Do you consider institution personnel to

be qualified for the position filled ?

Highly Medium Little

40%

40%

20%

4. Do you consider personnel fluctuation a

threat for the institution?


0%0%

100%

5. The recruitment process inside the

institution is realized by:

Selection inteview Classification exam Written exam



11

Figure 12 Figure 13

All employees are not stressed or overwhelmed by their activities.

Figure 14 Figure 15

The answers offered to questions 8 and 9 seem to be according to the

legislation in the domains. All people hired by this institution receive the

possibility to participate in professional training courses every year. Also, all

personal is evaluated every year.

100%

0%0%

6. Do you know your job description tasks?


0%0%

100%

7. Do you consider that your basic tasks are

overwhelmed by the taks you fulfil?

yes, greatly

occasionaly, according to the work volume

not at all

0%0%0%

100%

0%

8. The frequency of pssibilities to attend

professional training inside the institution

is:

monthly every semester ever trimester annualy never

100%

0%0%

9. The evaluation of personnel

performances in your institution is

realized:

Every semester Annualy Occasionaly



12

Figure 16 Figure 17

The replies confirm that the institution uses the analysis of key

performance indicators for the assessment.

Most respondents are not satisfied with the rewarding system used by

the institution, 8 people, while only 2 people show a little of concern.

Figure 18 Figure 19

Concerning the equality and non-discrimination issues among

employees of this institution, all consider that these rights are greatly

respected inside the institution.

Almost all performances are rewarded at a verbal level, as state by 9

people of 10 that is employees receive appreciations and appraisals.

0%0%

100%

10. Performances evaluation inside the

institution is realized by:

Performance evaluation qustionnaires

Constant feedback from superiors

The analysis of performance key indicators

10%0%

90%

11. Are you satisfied with the direct

rewarding system practiced by your

institution?


100%

0%0%

12. Inside your institution there is a feeling

of equality and non-discrimination among

employees?

Greatly Medium Little

0%

90%

10% 0%

13. Individual performances are mainly

rewarded by:

Financial rewardsNon-material rewards (appreciations, praisals)Promotion opportunitiesOthers



13

Figure 20 Figure 21

Concerning the manager’s involvement in the responsibilities he has

inside the institution, it seems that all people questioned consider him

involved. The strategy of human resources management seems to be an

efficient one, as 90% of the respondents mention. One person considers this

strategy to be a medium level one.

As a summary of the data interpretation and the analysis of the

information obtained from the application of the HRM questionnaire in a

medium village hall in our county, the following results:

I. The respondents, the employees of the village, occupy execution

functions in a percentage of 50%, only with a high school diploma and

management positions in a percentage of 50% - significant for an

organizational structure of the medium village level hall, the percentages

being similar to those of a town involved in the same research.

It should be noted that at the time of the survey 60% of the

employees were male, while 40% were women, two positions being vacant

for about a month, following the retirement of two employees, to be filled

through a possible contest, exam, where a member of the National Agency

of Officials Public (ANFP) showed interest in participating. The structure of

the staff by age is a balanced one, comprising employees aged between 35

and 45 years in a percentage of 50 % and over 45 years old are the other 50%,

a renewal of the personnel being needed, by opening new positions as they

become free, for beginners.

From the point of view of the form of education graduated,

employees with a university degree predominate with a percentage of 70%,

and the difference of 30% graduated high school, being guided to choose the

deepening of studies in a form of distance university education, in the

economic field or of public administration.

100%

0%0%

14. Does the manager respect his

responsibilities inside the institution?


90%

10%

0%

15. Do you consider the strategy of

human resources management as being

efficient?




14

This medium village hall doesn’t count employees with less

experience (beginners), most of them being employed as councilors, 10%

being assistant inspectors and 10% principal inspectors.

A significant percentage of employees are in the financial-

accounting domain, which includes in this case the IT department,

representing over 40% of the staff, 20% are those are working in client and

citizen relations in the community and other specialty services and 10% being

the human resources position, and 30% representing a rather high percentage

for a village hall, are the employees from the internal and administrative

services, most of the latter holding contractual administrative functions, not

public functions. One explanation for this would be the ownership of the

main office, some annexes with economic activities and several forested

areas, all of which require human resources with skills in these areas.

II. Following the development of activities for the implementation of

HRM in the mayor’s office of the village studied, it can be seen that all

respondents, employees, stated that human resource planning is carried out

in a percentage of 40% at a high level, while 60% chose a medium level,

considering it the most important planning criteria: ensuring the quality of

services provided to citizen in a percentage of 20%, the possibility of

organizational development in a percentage of 40% and the high volume of

individual attributions in a percentage of 40%.

Also, 60% of the respondents consider that the entire staff is qualified

and has the necessary skills to fill the position they have obtained. The

youngest ones consider that adapting theory to institutional practice is

difficult especially when legislative changes are frequent and the staff

turnover affects the institution at an average level in a percentage of 40%,

and the most experienced ones consider that to a large extent the staff

fluctuations poses a real threat for this mayor’s office, the percentage being

balanced, supported by 40% of respondents.

All responding employees state that the recruitment begins with the

recruitment / selection interview and that a written competition exam is held

for employment, as provided by the legal regulations in the field. As there

are no beginners to be mentored, it is easy to understand that 100% of

employees respond that they are largely familiar with the duties in the job

description and do not encounter any difficulties in performing tasks and

duties, they are well established for each in part with the description based

on the job description.

Given the small number of employees compared to town halls or city

halls, the statements of respondents on the semestrial opportunity for

inclusive training in projects carried out by the institution are certified. The

evaluation of performances is done according to the legislation in force

annually.

With the changing of the mayor mandate, he introduced in addition to

performance assessment based on the analysis of specific indicators for

assessing professional performance and the use of performance assessment



15

questionnaires for both the evaluation of administrative staff and the

evaluation of civil servants.

Most of the employed respondents, respectively 90% are unsatisfied

with the system of direct rewards which is in fact legally regulated according

to the law on unitary remuneration with subsequent amendments, with

smaller graphic salaries at the level of village halls. All employees

appreciated that there is in the analyzed mayor’ s office, the feeling of

fairness and equality between employees, respecting the principle of non-

discrimination, and along with legally regulated direct rewards they also

benefit from non-pecuniary rewards such as the opportunity to obtain a

higher position, appreciations, appraisals etc.

By analyzing some key indicators of the performance of the village

hall studied, the results of the questionnaire and the ideas scored during the

thematic discussions with the village hall representatives, it can be seen that

there was a permanent correlation of performance with rewards and job

satisfaction, compliance with HRM from the mayor’s office (confirmed by

100% of respondents).

Also, 90% of the respondents considered that the HRM strategy was

an effective one at a medium level, 10% considered it a largely effective

strategy.

By correlating these answers with the relevant balance sheet elements

as indicators for assessing the efficiency of the mayor’s office management,

the objective and realistic assessment of the responding employees can be

confirmed.

2. CONCLUSIONS

By analyzing all aspects resulting from the interpretation of data and

information that were communicated through the questionnaire and the

interview with thematically guided discussions, one can see not only the

realistic assessment of respondents to all HRM activities in the village hall

studied, but also the interest in compliance with the legislation in force, but

also for assuming social and economic responsibility in order to streamline

the activities carried out in the village hall.

Based on these realistic assessments and the results reflected in the

annual financial statements, I believe that it would be necessary to correlate

the results of research with previous ones, compare cases and compare in

time realistic assessments of professional performance in all structures and at

all levels of management, the ways of reward adopted according to the law

and the evolution over time of efficiency indicators.

I believe that all this can be the prerequisite for further research in

this area also by expanding to economic entities and by taking into account

and comparing the aspects discovered so far, to encourage realistic and

creative ideas of efficient operation of the village, town or city halls through



16

a high-performance HRM system, the content of which may become richer

with the future recomandation offered by the end of this research.

REFERENCES Andreş S. (2009). ”Managementul Resurselor Umane. Sinteze, teste, îndumări”,

Resita: Eftimie Murgu Publishing House

Andreş S., (2006). ”Managementul participativ-cale de crestere a eficacitatii

managerilor si a eficientei organizatiei”, Timisoara: Mirton

Andreș S, (2019). ”Study on the practices of human resources management in a town

hall of a village in the Caras-Severin County”, Annals of ”Eftimie Murgu”

University, Fascicle II, Economic Studies, no. XXVI

Andreș S, (2018). ”Study on the Human Resources Management implemented in a

Town Hall Caras-Severin municipality”, ISI Proceedings International

Conference LDMD, Tîrgu-Mureș

Andreș S., (2016). ”Analysis on the implementation of Human resources

management in a town hall of the Caras-Severin County”, Annals of

”Eftimie Murgu” University, Fascicle II, Economic Studies

Bibu N.A., Predişcan M., Sala D.C., (2008). ”Managementul organizatiilor”,

Timisoara: Mirton

Bibu N. A., Coordinator, (2008). ”Managementul organizatiilor publice”, Timisoara:

CECMA PARTNER

Nicolescu O., Verboncu I., (2007). ”Managementul organizaţiei”, Bucharest:

Economic Publishing House

Miles R., Snow Ch., (1984). ”Designing Strategic Human Resources”, in

Organisational Dynamics, nr. 3

***Romanian Constitution revised by Law nr. 429/2003

***Law no. 188 from 1999 on the Statute of public workers, republished, with future

modifications.

***www.mfinante.ro



17

EMPLOYEES’ PERSPECTIVE ON THE USEFULNESS OF

SOCIAL MEDIA FOR AN ORGANISATION

Suzana DEMYEN1

Submitted: 5th March 2020 Approved: 10th May 2020

Abstract The role of social media has grown more and more over the last two decades. Starting from

the simplest forms of online communication, people have come over the years to consider these

platforms as indispensable for social and even professional life. But what happens if the need

for online socialization interacts too much with the professional side? Is it right or wrong for

employees to check personal accounts daily or even several times a day? This paper comprises

two main parts, the first presenting the theoretical aspects on the subject. The second part

includes a case study aimed at presenting employees' perceptions on the usefulness of social

media at the workplace.

Keywords: social media, enterprise, employees, performance, productivity

JEL: J24, L29, M19

INTRODUCTION

The twentieth and twenty-first centuries are certainly important

milestones in the evolution of mankind in many ways. If we start the analysis

from the management perspective, the vision regarding the importance of

human resources has changed fundamentally, as we are reminded by the

sources in the literature that debate the particularities of management schools.

Thinking about the contributions of the human relations school, we

conclude that people have become the most important category of resources,

requiring good management from multiple perspectives, both quantitative

and qualitative. It is not enough to have the necessary number of personnel,

it is essential that they have on the one hand the necessary qualifications,

skills, abilities, competencies required by the job, and on the other hand, they

possess the capabilities needed for the sustainability of the organization,

namely fundamental qualities such as responsibility, loyalty, involvement,

etc.

Also from the perspective of the human relations school we

remember the fact that, in the middle of the twentieth century, Abraham

Maslow elaborated the pyramid of human needs, synthesizing on five levels

an individual’s system of needs. Without insisting on this subject, given that

it is a very well-known aspect at this time, we must remember that the need

1 Lecturer PhD, University ”Eftimie Murgu” of Reșița, Faculty of Economic Sciences,

Romania, [email protected]



18

for relationships ranks rather high in the hierarchy prepared by Maslow,

intervening at the third level, at the very middle of the pyramid.

So, people need socialization, relationships, communication and a

sense of belonging. The literature (Rai, 2012) even speaks of a

“commitment” of employees, as a measure of the level of attachment to the

workplace. Regardless of the environment in which they are, at home, at

school, at work or in other environments, people enter into relationships with

one another, exchange ideas, impressions, opinions, this giving them a sense

of integration, acceptance, social balance. The last two decades, however,

have revolutionized the way individuals interact, keeping the pace with

technological progress, so communication and relationships in general have

largely moved to the virtual environment. From this perspective, however,

opinions remain divided: there is a benefit in terms of increasing the speed of

message transmission and communication in general, but at the same time,

the barrier of lack of truthfulness has been created. In online, anyone can take

on a role, everybody can reinvent oneself and create a personality different

from that in the real world. It is also possible to discuss from a psychological

point of view the long-term impact of inefficient personal branding strategies

put into practice, this paper offering as a theme perspective of continuity from

this point of view.

According to the MediaFactBook study (2018, 2020), in the vast

majority of European countries, the Internet is used by at least 80% of the

urban population. From an economic perspective, the creation and launch of

social networks can be considered as perhaps one of the most profitable

business categories of the 21st century, with millions of users worldwide. At

the same time, the development of social networks meets technological

progress, keeping up with new applications or functions requiring optimized

devices as technological capability, which leads to the simultaneous

development of businesses in the field of telecommunications and fixed or

mobile IT technology.

From the perspective of human resources, the entire IT field is a

creator of jobs, being indispensable content developers, web designers,

programmers, etc.

In general, opinions remain divided, and a careful analysis would

certainly highlight the strengths or benefits of developing social networks,

but it largely depends on the behaviour of individuals about them and their

rational use.

1. PRODUCTIVITY AND EMPLOYEE PERFORMANCE

One of the most relevant measurable indicators in terms of

employees is productivity at work, an aspect of great interest to the

management of organizations. Labour productivity is an indicator of results,

an indicator of the level of individual performance which, from the point of

view of traditional factor analysis, is determined as a ratio between



19

production and the number of employees. It is also an element of influence

that intervenes in the factorial analysis of turnover, in the model that takes

into account the total number of hours worked by all employees in a year and

hourly labour productivity.

Workplace performance, however, is directly related to a number of

factors that cannot be quantified as easily. We are talking here about the

behaviour of individuals, the mentality, the attitude towards work in general,

the feeling of belonging, the level of responsibility, involvement, dedication,

the correlation between the individual objectives and those of the

organization of which they are part, etc. Of course, the performance of

employees should be increased, and this involves drawing up individual plans

to motivate human resources.

Social media, as a form of online communication (Mohamed et al,

2019) have penetrated over the last decades both in the lives of individuals

and in the lives of organizations. Few companies currently do not have either

a Facebook page, an Instagram page or a LinkedIn account, using these tools

for professional purposes, responding to the need to adapt to contemporary

changes in the economic and social environment. One even discusses the

need for the use of these networks (Sarbu, 2013) by organizations considering

that the correct understanding of their real role can play an important role in

the early development of employee engagement (Haddud et al, 2016). Also,

there is no denying when it comes to a certain set of benefits that the existence

of social media brings to a company (Awolusi, 2012). Sources in literature

debate, however, on ”how social networking sites (…) are affecting

employees and their organizations (Murphy, 2013), Deloitte studies, on the

other hand, defining the concept of ”digital workplace”, for the embracing of

which, the gains consist in: talent attraction, employee productivity,

employee satisfaction, employee retention and more efficient communication

tools.

The role of social networks has also increased in terms of staff

recruitment. It is no longer a secret that a candidate's personal profile can

qualify him or her or, on the contrary, disqualify that job seeker from the race

for a job. Employers are informed and publicly available information often

contributes to forming an opinion about the potential candidate. The

controversies did not take long to appear, the role of social networks being

either defended or contested.

But what about employees? Is their productivity (and performance

Aguenza et al, 2012) positively or negatively affected by the use of social

networks? If so, to what extent?

An employee who has an account on one or more social networks

will always be tempted to check them during working hours. Is this illegal?

Of course not. But it can run counter to the organization's policies and

regulations, even forbidding access to these accounts on the company's

computers. However, the advanced technology also present through phones



20

does not prevent employees from interacting, however, using various social

applications.

Figure 1 – Relationship between employee skills, organizational factors and objectives of

the enterprise

(Source: elaborated by the author, based on bibliographic sources)

A work process involves the interaction of a complex system of

elements. Therefore, both the employee or the executor, who must carry out

a job task, and the means by which he or she can perform the proposed tasks

and which can come into contact with two categories of factors, intervene in

this process. We speak on the one hand of factors that contribute as elements

of jamming individual performance, and on the other hand of factors that

acquire the role of performance facilitator, a category in which we include

elements that aim to motivate human resources, creating an environment that

improves the level of weight of the tasks to be performed etc.

We previously mentioned productivity as an essential result

indicator. This is directly related to obtaining good results, but at the same

time, to technical progress, the quantity of products manufactured, sold, etc.

The quality of work, on the other hand, can actively contribute to increasing

the level of productivity, being determined, as a notion, by a varied complex

of factors.

Sullivan J. classifies the factors that bring an important contribution

to increasing individual and team performance, identifying a number of 22

elements that he groups into 6 main categories, highlighting the fact that they

can exhibit positive or negative influences.



21

Figure 2 Factors influencing individual and team productivity

(Source: Sullivan, 2011)

2. RELATION BETWEEN SOCIAL MEDIA USE AND EMPLOYEES’

PERFORMANCE

We live in a world where speed dominates, and “the rapidity of social media

evolution changes the way organizations act and the way they communicate”

(Adzovie et al, 2017). We move faster in the performance of work tasks,

being greatly aided by technological progress. There are always new

applications, software, both for businesses and individuals. There are both

positive and negative perceptions regarding the use of social media, the

relationship between their level of use and employee performance can be

direct or indirect.

Adapting to technological progress is imperative, but the question is

whether employee performance is improved through the use of social

networks or, on the contrary, they contribute to lower productivity. It

becomes important to understand the need for employees to use these

platforms and, on the other hand, to establish clear policies, adapted to the

profile of organizations.

We cannot ignore the differences between the generations in terms

of the importance of online socialization. Certainly, social networks will be

used more by young people, while older people use them less or not at all,

possibly limited to a single platform, while young people generally use a

wider variety of applications.

MediaFactbook studies indicate the following situation regarding the

use of online platforms in Romania, while the evolution of the number of

Internet users is presented:



22

Figure 3 Daily used Social Media platforms Figure 4 Internet users in Romania

(Source: Media Factbook, 2019) (Source: Media Factbook, 2020)

But what is the usefulness of social networks? They are primarily a

way of interacting online, allowing real-time communication or providing

feedback, which becomes useful as a feature, if we consider that free time

has gradually become a very limited resource, reducing the possibility of

individuals interacting face to face as often as it did years ago. People are

increasingly involved from a professional point of view, the century of speed

also requires taking hours spent over the regular schedule, which leads, to

ensure a balance at least apparent between professional and personal life, to

accept this form of communication with friends and the circle. of knowledge

(Munene, 2013).

Of course, they can also be used for professional purposes, platforms

such as LinkedIn being designed to promote companies online and identify

suitable candidates for certain desirable profiles. Networking is therefore

shifting from a private to a professional profile, justifying the importance of

the existence of such platforms. The vast majority of LinkedIn users, as

indicated by statistical sources, are in the 25-34 age group.

On the other hand, we have platforms such as Facebook, Twitter,

MySpace, social web applications, available to everyone, created to facilitate

connections with people around the world, including employees, friends and

family. All of these ”have attracted millions of users who have integrated

these websites into their daily practices (Tudu, Pathak, 2015). Of course, the

usefulness of each platform, the design, the functions are different. The

number of users is growing every year, and organizations are also trying to

connect with employees to a greater extent than ever before, the social media

platforms mentioned above being used also for ”official purposes”

(Cetinkaya, Rashid, 2018). Thus, the evolution of Facebook has been

exponential, currently reaching over 1.69 billion active users in 2020

worldwide, according to Statista.com, being considered "a valuable resource

for employees" (Adzovie et al, 2017).



23

Figure 5 Number of Facebook users (billions) Figure 6 – Distribution of LinkedIn users by

age groups (Source:

https://www.statista.com/statistics/490424/numb

er-of-worldwide-facebook-users/)

(Source:

https://www.statista.com/statistics/273505/glob

al-linkedin-age-group/)

Perhaps one of the most important aspects of the usefulness of social

media use is that these online tools can be an essential element for building

and strengthening a team, with advances in IT making it possible to develop

algorithms that assess the individual potential of each employee, such as and

the group potential of the team, based on information on the skills and

abilities of each member. As a result, appropriate measures can be

implemented to increase the level of individual and group performance,

studying the level of compatibility of individuals with the positions occupied

and the best motivational strategies.

The decision to allow or prohibit employees from consulting

accounts on social media during the working hours belongs to the company's

management, which builds its overall strategy taking into account its own

vision. What cannot be denied, however, is the fact that the level of employee

satisfaction, respectively the behaviour at work are also directly related to

this aspect.

In some cases, social networks are used by organizations as a means

of recruitment and employment, representing a rapid source of information

dissemination, without incurring additional costs, while being able to search

and access information about potential candidates, the profile on a network

of socialization allowing the employer to conduct “an assessment of the

character of uncomplicated candidates” (Clark, Roberts, 2010). The use of

social media can inspire employees a greater sense of belonging and the idea

of reduced control, can increase the level of mutual trust and can help shape

a positive organizational climate. It can increase the level of responsibility

for what an individual posts, but at the same time it can awaken employees'

attention to their own image. Certainly, the speed with which messages are

sent is higher than in the case of communication through the classic email

system.

As we stated before, social media use may ”simultaneously

contribute to productive behaviors (…) as well as unproductive behaviors at

work (Carlson et al, 2016).

However, a large number of companies worldwide remain skeptical

about the benefits of using social media in the workplace, certain studies

https://www.statista.com/statistics/490424/number-of-worldwide-facebook-users/

https://www.statista.com/statistics/490424/number-of-worldwide-facebook-users/



24

showing that ”if not well managed, social media participation may lead to a

loss of productivity” (Varghese, Kumari, 2018). They thus block employees'

access to personal accounts, not being willing to take the risk of their

"wasting the time" by answering personal messages, watching various videos

or looking for information other than those directly related to the job. Various

studies also mention “perceived losses in staff productivity; data leaks from

staff gossiping freely in an open environment; malware and phishing scams

by cybercriminals; open access to company servers through loose and

outdated passwords” (Wilson, 2009).

Studies carried out by Mayer and Brown identify a number of

questions that organizations need to answer, namely:

- Whether there are risks involved in the process of social network using?

- What are the steps to be taken in order to minimize the risks?

- What problems may occur, as a result of employees using social media

accounts?

Opinions on the usefulness of social networks thus remain divided.

Of course, a multitude of factors contribute, and a factorial analysis of

productivity should take into account the number of hours spent online by

employees per week. Also, in order to draw relevant conclusions, it is

necessary to conduct studies on employee performance, designing different

scenarios, some involving the use of networks and others in their absence.

In general, studies show that employees' perception of social media

is positive (North, 2010), as they use them to connect with family, friends or

colleagues. The usefulness of social media in the workplace lies in improving

work, creating a stronger team, facilitating the transfer of knowledge, etc.

Evidence from practice indicates that the level of well-being at work is

directly dependent on the relationship between productivity and social media

use, promoting both diversity and mutual respect. On the other hand, it is

argued that employees who are not productive will identify other methods of

distraction and lack of access to social platforms.

However, there are arguments against the use of social media tools

(Shahrulanuar et al, 2017). Practice indicates that in some organizations, the

level of productivity of employees has decreased by almost 2% after allowing

the use of accounts on these networks, distracting and reducing the

performance of individuals.

In general, job performance is studied in relation to the potential of each

employee to achieve the proposed objectives, the use of social networks can

be transformed into a lever to ensure a strategic advantage for the company.

Generational differences are felt from these points of view,

socialization being very important for the newly graduates, they make a

greater effort if the need for relationships is met. In this sense, some

companies, in order to keep up with the specifics of the new generations,

include in their recruitment strategy online communication tools,

encouraging socialization. Relevant examples in this regard are especially

those in the IT field, from Google to small companies, which view online



25

networking as a priority, conducting online interviews, using employee

profiles as assessment tools, implementing policies on the use of video

resumes and so on.

Of course, an online company profile can also generate benefits at

organizational level, the Facebook and LinkedIn pages can be used both for

recruitment and employee training. Also, an active Facebook page can

contribute to raising the morale of employees, can create a pleasant

atmosphere at work, can send inspirational or motivational quotes from

managers, can highlight high-performing employees, can be popularized

news about implemented projects or other ads.

3. STUDY ON THE EMPLOYEES’ PERCEPTION REGARDING

THE RELATION BETWEEN SOCIAL MEDIA USE AND

PERFORMANCE. RESULTS AND CONCLUSIONS

In order to analyse the relationship between the level of use of social

networks and employee performance, we further conducted an online

research, based on a questionnaire. The study was answered by 200 people,

residents of Caraş-Severin County, the tool used to administer the

questionnaire being Google Forms. The study was conducted between

February and March 2020, and the centralization of the results and the

conclusions obtained are presented below. The questionnaire included a

number of 8 items on which the respondents were asked to express their

opinion, as well as a number of three identification questions.

The following objectives were proposed at the beginning of the

study:

1. Identifying the main social-media platforms used by the respondents

2. Determining the intensity of use of social networks by respondents

3. Identifying respondents' perceptions of the usefulness of social networks

in the workplace

4. Identifying the criteria considered important in making the decision to use

a certain social platform

5. Detecting respondents' perceptions of the relationship between the use of

social networks and individual and organizational performance.

The distribution of the sample was random, as follows:



26

Figure 7 Sample structure

by gender

(Source: elaborated by the

author)

Figure 8 Sample structure by age (Source: elaborated by the author)

Figure 9 Sample structure by domains of activity

(Source: elaborated by the author)

From the point of view of the field of activity in which the

investigated subjects fall, we identify the distribution below:

The conclusions obtained from the centralization of the results

indicate the following:

Item

1 Preferred mode

of interaction at

the place of

work

Figure 10

(Source:

elaborated by

the author)

Item

2 Employee's

favourite social

network /

communication

tool

Figure 11

(Source:

elaborated by

the author)

43%57

%

Male Female

12%

38%30%

14%

5%1%

18 - 24 years 25 - 34 years

35 - 44 years 45 - 54 years

55 - 64 years over 64 years

35%

21%12%

10%

12%

10%

Trade Services

Tourism Indutry

Transport Others

27,30%18% 4,70%

29%21%

Direct communication Phone calls SMSs Email Social media (Facebook etc)

35,00%28%

2,00%

32%

3% 0 0

Facebook Instagram Twitter Whatsapp Skype Google meet Others



27

Item

3 Frequency of

using social

networks at

work

Figure 12

(Source:

elaborated by

the author)

Item

4 What is the

duration of

daily

connection at

the workplace?

Figure 13

(Source:

elaborated by

the author)

Item

5 The use of

social media

has a positive

or negative

effect on

personal

productivity

Figure 14

(Source:

elaborated by

the author)

Item

6 Acceptance of

the use of

social networks

in the

workplace

Figure 15

(Source:

elaborated by

the author)

55,00%

30%

7,00% 3% 5%

Several times a day Once a day Weekly Occasionally Not at all

32,00%

58%

8,00% 2%

5-10 minutes 10 -30 minutes 30 min - 1 h More than 1 hour

52,00%44%

4,00%

Positive effect Negative effect Do not know

87,00%

10% 3,00%

Agree Disagree Do not know



28

Item

7 The effect of

social media

use on

individual

performance

Figure 16

(Source:

elaborated by

the author)

Item

8 Usefulness of

social media at

the place of

work

Figure 17

(Source:

elaborated by

the author)

The first Item analysed considers the preferred mode of interaction

at the workplace. From this point of view, most respondents state that they

prefer the email option (29%), this being followed by direct communication

(27.30%), respectively the use of social media (21%). The least used method

of communication is SMS, this variant being supplemented as a function of

certain facilities offered by social networks and tools such as Whatsapp. A

closer analysis indicates that methods such as email and SMS are used more

by adults, while young people more actively opt for the use of social

networks, without eliminating the option of direct interaction.

As regards the second Item, namely the social network or the

communication tool preferred by employees, we find the following:

Facebook and Facebook messenger respectively rank first in the top, being

still perceived as a basic social tool, even if in over the last year it is expected

to enter a phase of decline. This is largely due to the fact that most companies

currently have a Facebook page that is also accessed by employees, thus

encouraging online communication. Whatsapp is in second place, with a

percentage of 32%, this tool gradually becoming an indispensable application

for fast communication. Its advantage is also ensured by the fact that it allows

the initiation of voice calls, videos, group calls, etc., which causes users to

turn to this tool even at the expense of regular phone calls. Instagram is a

47,00%

36%

17,00%

Positive effect Negative effect Do not know

56,00%

29% 4,00% 11%

Better communication with colleagues Easier transfer of inforrmation

More relaxed organisational climate More coherent teams



29

socializing tool used mainly by young people, less by senior employees, who

do not consider it as useful as those mentioned above. Twitter is used by a

very small number of people, while the Skype application is especially

suitable for professional activities, such as video conferencing or even remote

interviews. None of the respondents mentioned Google Meet as a commonly

used application.

Regarding the third Item, namely the frequency of use of social

networks in the workplace, 55% of respondents say that they use these tools

or check their personal profiles several times a day, especially young people,

30% of respondents stating they do this once a day. A much lower percentage

are not concerned with checking social networks, doing so only weekly,

occasionally or not at all.

The daily connection time depends on a multitude of factors. On the

one hand, we can talk about jobs whose specifics include the daily or long-

term consultation of social networks. On the other hand, the duration of the

connection depends on the type of information to be transmitted, the purpose

of use, even the position held within the organization or the personality of the

employee. Thus, the respondents to the questionnaire stated the following

situation regarding the daily connection time to the accounts on social

networks: most connect between 10 and 30 minutes daily (58%), while 32%

of individuals remain connected between 5 and 10 minutes. 8% use social

networks for a longer period of time, between 30 minutes and an hour, while

only 2% stay connected for more than an hour a day.

Most employees (52%) consider that the use of social media has a

positive effect on personal productivity, while 44% indicate negative effects

related to their use. By comparison with the results discussed in the case of

item no. 5, the paradox is that 87% of respondents agree with the use of social

networks at work, only 10% say no, and 3% abstain.

A percentage of 47% of the subjects consider the impact on overall

performance to be positive, with 36% saying the opposite. 17% of those

surveyed do not express any opinion from this point of view.

As for the usefulness of social media at the workplace, we remark

that 56% of respondents identify an improvement in communication with

colleagues, 29% believe that they contribute to an easier transfer of

information, 11% say that social networks help strengthen teams work, and

4% consider them useful for relaxing the organizational climate.

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32

EFFICIENCY OF COMMERCIAL MANAGEMENT

PRACTICES – PREMISE OF SUCCESSFUL BUSINESSES IN

THE PHARMACEUTICAL INDUSTRY

Suzana DEMYEN1

Adina – Iulia NICOLAE2

Submitted: 16th May 2020 Approved: 8th July 2020

Abstract Pharmaceutical industry represents one of the largest and most profitable businesses around

the world. Customers will always exist, thus profit will always be ensured. It is an area that

has already reached a great extent, but also one that promotes innovation and progress, with

great development potential. The present paper aims to highlight a brief overview of the

dimensions of this sector, using statistical data, while the last part consist in a study through

which we tried to find out what are the preferences of customers when speaking about the

pharmaceutical units in the city of Resita.

Keywords: commercial management, pharmaceutical industry, business

JEL: I11, L81

INTRODUCTION

Sustainable businesses have often been built on the foundations

created by capitalizing the right opportunities at the right time. Health has

always been the most important good of human beings, and today we can talk

about the pharmaceutical industry as one of the most profitable in the world,

while the "immunity to failure" of these businesses lies in the fact that "illness

does not take a vacation” (Purcărea et al, 2009). People are investing more

and more in their health every year (KMPG report), while the price of

medicines is not low, but the development of business in this field is due also

to massive promotion. According to Monnet, ”there is a complex relationship

between the pharmaceutical industry and society” (Monnet, 2005, IPE report,

2012), but we cannot deny that the pharmaceutical market increased rapidly

during the last years (Stratulat Albulescu, Report, 2018).

People have always been fascinated by the myth of eternal life,

continuing the search for the philosopher's stone for centuries, and the efforts

of researchers and scientists in general have led over the years to prolong an

individual's life expectancy, even if immortality remains a utopia.

The importance of health has been realized since ancient times, even

the legends and mythology of nations providing many examples in this

1 Lecturer PhD, University ”Eftimie Murgu” of Reșița, Faculty of Economic Sciences,

Romania, [email protected] 2 Independent researcher, PhD, Vienna, Austria, [email protected]



33

regard, even if at first, the character of healing was viewed more from a

mystical point of view than from a scientific one.

Greek mythology thus presents Asclepius or, under another name,

Aesculapius, son of the god Apollo, who, under the care of the centaur

Chiron, acquired knowledge of healing diseases, being considered a

forerunner of medicine. It is the mythological figure from which the

pharmaceutical industry also acquired the distinctive symbol, the snake

coiled on a cup, following the discoveries made by Asclepius about the

healing properties of snake venom. Raised to the rank of a god after his death,

the temples dedicated to him were rather medical clinics, intended for healing

people.

Hippocrates later redefined ancient medicine, delimiting it as a

distinct discipline, laying the foundations of the medical profession, his name

being closely linked to this field by the moral code of the profession,

Hippocrates' oath being taken at the beginning of the route by doctors.

Pharmacy itself, however, has a tradition of thousands of years,

meaning "searches, accumulations, development" of knowledge about the

usefulness of herbs, medicinal plants, chemicals or products of animal origin,

the ultimate goal being to alleviate diseases and patient suffering (Pharmacy

History Course, 2010). However, some of the first great chemists were the

Arabs, who laid the incipient foundations of the pharmacy, appearing written

papers in this field, an important representative being Avicenna. But we

certainly can't forget a much more recent name, the Scottish Alexander

Fleming, who discovered penicillin in 1928.

1. FROM THE PRINCIPLE OF "DOING GOOD" TO THE

PRINCIPLE OF ”DOING BUSINESS”

In everyday life, diseases progress rapidly, being triggered by a wide

variety of factors, so countermeasures require large and rapid investment in

order to reduce long-term effects. There are, however, many voices today that

vehemently challenge the ethics of current practices in the pharmaceutical

industry, announcing the theory of artificiality and anthropogenic nature of

diseases, created within an effective and long-term strategic plan to ensure

business sustainability. But, although interesting and at least partially based

on plausible hypotheses, requiring a study from the perspective of ethics, this

is not the purpose of the present article.

From a managerial and strategic point of view, the pharmaceutical

industry is actively facing changes and challenges, being a dynamic,

demanding and constantly developing field. It ”integrates business strategy

with science and technology and the unique perspective of the industry”

(Anush et al, 2017). It is an area where risk-taking is a common practice and

also a field directly dependent on the most valuable category of resources:

time. This happens because there are categories of drugs that require years of

improvement, during which time the tests performed can provide good



34

results, as well as poor ones, while requiring a good correlation with technical

progress. The pharmaceutical industry is characterized primarily by

innovation (Raja, Sambandan (2015), aiming to provide new solutions and

design new medications, for the best results for patients.

Peterson et al (2009) justify the need for a more "sophisticated"

approach to understanding the processes in the pharmaceutical industry, in

terms of quality. They argue the need for a statistical data approach, taking

into account factors such as: regulatory trends and guidelines (from the FDA,

EMEA, ICH, etc.), inherent characteristics of pharmaceutical manufacturing,

economic pressures, increased need for effective technology transfer

(Peterson et al, 2009), given the need to achieve predict and build the correct

scenarios. However, in terms of quality, strict procedures are foreseen both

from the perspective of the production process and of the organization, staff,

laboratory facilities, material resources and equipment, cleaning, packaging

and labeling, distribution, logistics process, control, etc. (Harris, in Gad,

2008).

Literature (Blanc, 2015) indicates as main barriers for exports in the

pharmaceutical sector: tariff barriers, non-tariff barriers (“registration,

certification, government policies concerning the price and the

reimbursement of medications”), the protection of intellectual property

rights.

The reports prepared by SESRIC, on the other hand, indicate a high

level of concentration of the pharmaceutical industry in developed countries,

although some developing countries have become major contributors over

time. However, “their share in the global pharmaceutical industry remained

very low” (SESRIC, 2011). Forecasts made by PricewaterhouseCooper

indicate that "the aging of the population, together with dietary changes and

more sedentary lifestyles, is driving up the disease burden in both developed

and developing countries".

The role of human resources is also extremely important in the

pharmaceutical industry. From the management point of view, the trainings

are indispensable, because both in the production and in the distribution

system, respectively sales, the staff must be very well trained. From this

perspective, by referring to the field discussed, Gallup, Domenick and Gillis

(Gallup et al, in Gad, 2008), mention the importance of employees' skills so

that they "perform their jobs correctly and efficiently", this being also

reflected in the level of safety, respectively success of the production process.

It argues the need for skill – based training, while involving the appreciation

of the level of responsibility of employees and their ability to find quick

solutions, using limited resources.



35

Figure 1. Critical elements for the training of human resources

(Source: Gallup et al, în Gad, 2008)

However, regarding the field analyzed by this paper, the literature

(Marinescu, 2019) raises some questions desired to be investigated more

detailed, namely: what is the perception of the population regarding the

activity of health units, are there significant differences between products

offered as a remedy for the same condition, what is the impact of promotional

actions? etc.

2. ANALYSIS OF STATISTICAL DATA

The statistical data provided by official sources, such as the National

Institute of Statistics, show us the following evolution of the main health

units in Romania, comparing 2013 with 2018:

Figure 2 The evolution of the main sanitary units

(Source: www.insse.ro, Romanian Statistical Yearbook, 2019)

We note that the number of hospitals has increased very little, from

499 in 2013 to 515 in 2018, which is a very little progress for a period of 5

years, if we include in the analysis the fact that the number of polyclinics has

decreased very much, from 298 to 154, in the same time frame. The number

of family doctors' offices also had a decreasing trend, reaching from 11.158

in 2013, to 10.944 in 2018. However, the number of specialized medical

offices increased (10.160 in 2013, compared with 11.382 in 2018),

respectively of dental offices (13.458 in 2013 to 15.203 in 2018) and

pharmacies and pharmaceutical outlets (8960 in 2013, to 9953 in 2018).

required skills

• evaluation of training needs

• provision of training to satisfy these needs

providing knowledge

• documentation of training

ethical approach to work

responsibility

• clear and realistic goals

http://www.insse.ro/



36

Figure 3 – Number of jobs in the pharmaceutical industry at EU level, in 2018

(Source: Statista.com)

Taking into account only the pharmaceutical field, as we can see in

the chart no. 3, in terms of human resources insurance, in 2018, at the level

of the European Union, the pharmaceutical industry provided a very large

number of jobs. Most of these were in Germany: 119.535, followed by France

– 98.528, Italy and the United Kingdom, respectively, providing 66.500 and

62.500 jobs. This can be partly explained by the fact that at the level of these

countries a lot is invested in research in the field, being a job-creating

industry. Still, there are views according to which, the pharmaceutical

industry is nothing more than a "profitable business", with large companies

investing more time and money in product promotion than investing in

research and discovering new treatments (Monnet, 2005, Dukes, 2002).

According to Teramae et al, on the other hand, ”the business model

of the pharmaceutical industry involves making investments into research

and development” (Teramae et al, 2020). EFPIA 2018 report on

Pharmaceutical industry states that ” all new medicines introduced into the



37

market are the result of lengthy, costly and risky research and development

(R&D) conducted by pharmaceutical companies”.

At the opposite pole are countries such as Estonia (380 jobs), Malta

(1057), Cyprus (1140) and Lithuania (1220). We notice that all the latter are

small countries compared to the former, even insular (Cyprus and Malta).

Romania is positioned in a middle place, with 32.000 jobs, surpassing even

countries such as Poland, Ireland or Denmark. But, ”although after 2000 the

Romanian pharmaceutical market registered a consistent increase, still it is

one of the smallest markets in Europe” (Șteliac, 2015).

Making the connection with the data presented in the figure above,

we can conclude that the rather large number of jobs in the pharmaceutical

field is directly related to the number of companies operating in this area.

Many of them prove to be largely profitable, the analysis of turnover reported

in 2018 in this regard indicating a number of 11 companies with results of

over 100 million lei in Romania. There are, however, quite large gaps

between the occupants of the first positions, the company ranked first,

according to Statista.com achieving a turnover of 730.2 million lei during

2018, being followed by its main competitor, which achieves a turnover of

461.4 million lei. The companies in positions III and IV respectively register

close results in this regard, but they are quite far from the rivals that occupy

the following places in the ranking.

Figure 4 – Turnover of companies in the pharmaceutical field (mil. lei) – 2018

(Source: Statista.com)



38

As the data for 2020 are not complete, the year being only halfway

through, it cannot yet be analyzed so that we can draw pertinent conclusions

regarding the evolution of these businesses. However, it would be an

interesting point to discuss and even provide continuity perspectives for this

research, studying how the onset of the Coronavirus pandemic in early 2020

affected positively or negatively the activity of these companies and, on the

other hand, what were the influences from multiple perspectives. We can

think of an approach in terms of financial analysis, which will require

publicly stated situations by companies, on the other hand we can think of an

analysis from the perspective of business management, including aspects

related to production, distribution, logistics, we can refer to the size of sales,

consumer behavior, respectively the analysis of the challenges faced by

human resources.

The conclusions that will be presented as a result in the last part of

the present research will partially constitute the starting hypotheses for future

studies.

3. STUDY REGARDING THE CUSTOMERS' PERCEPTION OF THE

COMMERCIAL MANAGEMENT ACTIVITY OF PHARMACEUTICAL

UNITS

3.1. RESEARCH METHODOLOGY

We further performed an analysis of the activity of the

pharmaceutical units within the municipality of Resita. In order to study the

commercial management activity of pharmacies, we proceeded to analyze the

perception of customers, who were the sample of respondents in this study.

A research was conducted, with the main tool used being an online

questionnaire. It was applied using Google Forms, between 20.02 –

15.04.2020 on a sample of 205 people, residents in Reșița municipality, Caraş

Severin county, aged between 20 – 70 years, of which 31.4% men and 68.6%

women. The distribution of the sample according to the identification criteria

are listed in the following table:

31,4% male

68,6% female 8,8% under 25 years 26,5% 25 – 35 years

12,7% 35 – 45 years

45,1% 45 – 55 years 6,9% over 55 years

39,2% under 2000 lei 37,3% 2000-3000 lei

22,5% 3000-4000 lei

1% over 4000 lei

Figure 5 - Gender criterion Figure 6 - Age criteria Figure 7 - Level of income

(Source: developed by

authors)


authors)


authors)



39

Regarding the field of activity of the respondents, they work in

different branches of the economy: tourism, education, light industry, trade,

services, construction, etc., without this criterion being a question of

identification in the questionnaire.

The questionnaire included a number of 18 questions, of which 3 of

identification and 15 content questions. The structure of the questionnaire

was a complex one, containing both closed questions, with options of answer,

and questions based on measurement scales, the respondents allowing a score

for the proposed criteria, according to Likert's scale, from 1 to 5. The

identification questions targeted respondents' gender, age, and income level.

3.2. ANALYSIS OF THE RESULTS OBTAINED AND

CONCLUSIONS OF THE RESEARCH

Following the centralization of the results, we obtained the following

conclusions regarding the points followed in the questionnaire:

Respondents are well acquainted with the activity of pharmacies in

the city, over 40% of individuals who answered the questions declaring a

level of familiarity which is at least average, while 41.1% of respondents

identify a high level of knowledge of the activity of these pharmaceutical

units.

The most knowledge is held regarding the largest chain of

pharmacies in the country, as it has many units in the city. However, the main

rivals in the field are not anonymous either, given the constant need of the

population to take care of health, although the percentages in these cases are

significantly lower (we observe percentages of 9-12% in the case of the main

competitors). In general, as an additional observation, the level of knowledge

about a pharmaceutical unit is directly correlated with its level of promotion.

The distribution can be found in the second diagram below, but in order to

preserve the anonymity of the units, we will present them only in the form of

the initial letter of the name, the purpose of this article being to analyze in

general the commercial management activity at the level of pharmacies in

Resita, not to realize a comparison between companies.

We cannot delimit the analysis of the commercial activity of

pharmacies from the consumption habits of the clients. Thus, in terms of the

frequency of purchasing products in this category, we note that most

respondents purchase products from pharmacies, with a monthly frequency

(61.8%), while 26.5% do so at intervals of more than one month, and 11.8%

- weekly.



40

Figure 8. Level of

familiarity with the activity of pharmacies in

the city

Figure 9 The level of knowledge regarding

the pharmacies in the city

Figure 10 Frequency

of purchasing pharmaceutical

products


authors)

(Source: developed by authors) (Source: developed

by authors)

Regarding the category of products most often purchased by

customers of pharmaceutical units, they are differentiated as follows:

medicines for seasonal colds (35.3%), medicines for chronic diseases

(15.7%), analgesics (20.6%), vitamins (7.8%), other categories (20.6% -

including cosmetics, oral hygiene or disinfectants). Within a month, most

respondents allocate an average amount of less than 50 lei for the purchase

of these types of products (44.1%), while 30.4% allocate amounts between

50 - 100 lei, and a percentage of 19.6% allocates monthly between 100 - 200

lei.

Figure 11 Categories of

purchased products

Figure 12 The amount of money

allocated monthly

(Source: developed by authors) (Source: developed by authors)

Next, the following items were analyzed, using a Likert scale from 1

to 5, with respondents scoring the criteria, depending on their personal level

of satisfaction with the factors mentioned. These were selected as elements

that customize the content of managerial decisions (Safta et al, 2012):

1. The level of prices charged - in relation to the company's pricing strategy

2. Diversity of the product range, in relation to the product strategy and the

diversification strategy

3. Possibility to reserve products and sales methods used

4. Level of staff training

5. Speed of service and effectiveness of the means used

6. Speed in fulfilling orders

7. Possibility to compensate the prescriptions, in relation to the targeted

clientele



41

8. Geographical location of pharmacies, location and physical characteristics

of the enterprise

Figure 13 Figure 14 Figure 15

(Source: developed by authors)

The analysis of the degree of satisfaction with the level of prices

charged indicates in most cases, a fairly high level of customer satisfaction.

They largely grade this criterion with 4 points. On the other hand, in the case

of three of the pharmaceutical units analyzed, we can also identify a low level

of satisfaction with the pricing policy. In general, they are part of the category

of pharmacies that provide to a lesser extent additional benefits or bonuses to

customers, promotional products or gifts when purchasing a larger quantity

of products. These tools therefore prove to be very important for customers,

often turning into a "fuel" for loyalty.

Regarding the diversity of the product range, in relation to the

diversification strategy practiced by pharmacies, customers say they are

satisfied at least at an average level, grading with 3 and 4 points, as can be

seen in the figure above. In correlation with the previous item, this is relevant

because the range of products available in a pharmacy will show strong

influences on the purchase decision.

The manager must thus pay close attention to the complete and on-

time supply, so that customers can purchase the requested products. A

challenge from this point of view may be that many medicines found in

pharmacies are of external origin, being obtained by import. As a result,

extreme or special situations, such as those caused by the Coronavirus

pandemic, can negatively affect the stocks of a pharmacy or even an entire

chain, if the forecasts are not made correctly. One can thus discuss

hypothetical cases in which borders are closed, drug shipments are stopped

at the border or traffic restrictions arise even inside the country.

A good option in this case, at least for certain products, is where there

are stocks in the category of "substitutes", which can replace, even

0%

20%

40%

60%C

DM

R

SD

HN

I

The level of prices

5 4 3

2 1

0%

20%

40%C

DM

R

SD

HN

I

Diversity of the product

range5 4 32 1

0%

20%

40%

C

DM

R

SD

HN

I

Possibility to reserve

products5 4 32 1



42

periodically, these shortages, until the regulation of supply terms, contracts

with suppliers, or until such extreme situations are remedied.

Also from the commercial management perspective, we can refer on

the other hand, to the possibility of reserving some products in the

pharmaceutical units. A useful tool in this regard is the pharmacy platform,

which does not exist in all cases, or if there is a platform - not all units provide

access to this service. If we study the figure above, corresponding to this

aspect, customers are satisfied to an average extent, there are very few cases

in which grades given were 4 and 5, respectively.

What is true is that the reservation of medicines through the online

platforms, although a quick and useful option, is not available to everyone,

especially the elderly, who prefer the classic option of picking up products

directly from the store, even if this involves waiting in line, with the risk of

not finding the product they are looking for.

Figure 16 Figure 17 Figure 18

(Source: developed by authors)

The management of human resources in the commercial field is very

important for the general management of the enterprise, this category of

resources having a special role. Most of the staff in the pharmaceutical units

are part of the category of contact staff, who enter into permanent, frequent

relationships with customers. We are talking here about pharmacists,

respectively pharmacy assistants, who have the role of advising the client, in

order to offer the best product alternatives, according to their needs.

From a management point of view, the focus should be on:

- providing the company with an adequate number of staff;

- ensuring the appropriate level of human resources qualification;

- ensuring the appropriate salary level for each employee;

- ensuring optimal promotion conditions.

Especially in the pharmaceutical field, we must address the issue of

human resources and in terms of the high level of responsibility, both

0%

10%

20%

30%C

DM

R

SD

HN

I

Level of staff training

5 4 3

2 1

0%

20%

40%C

DM

R

SD

HN

I

Speed of service

5 4 3

2 1

0%

20%

40%C

DM

R

SD

HN

I

Speed in fulfilling orders

5 4 3

2 1



43

material and moral, of the employee. It should be noted, however, that a much

larger number of women work in this field, compared to men, being

professions considered to fit more the category of women. A good knowledge

of the products, of their utility, of the distribution within the store,

respectively of the potential effects to be generated is mandatory. As

literature states, it is important for schools to provide skilful and professional

pharmacy personnel (Alabbadi, 2015).

Pharmacy staff is, on the other hand, very important for maintaining

an optimal quality system, according to the World Health Organization,

relying heavily on professional experience, compliance with hygiene

standards and a high degree of responsibility.

In the present study, the respondents expressed their appreciation

towards the staff of the pharmacies in Reșița, from the following points of

view: level of preparation, speed of serving, respectively speed of order

fulfillment.

In most cases, we notice a high level of satisfaction of respondents

regarding the activity of human resources in pharmacies, with a very high

score of 4 and 5, respectively. A very small percentage of respondents (below

20%) say they are satisfied in small or very small measure of the level of

training of employees. The situation is similar in terms of speed of serving,

respectively of fulfilling orders. However, the study could be completed in a

future version, with an analysis in terms of staff friendliness, ability to

provide prompt and accurate information, communication skills, etc.

Figure 19 Figure 20

(Source: developed by authors) (Source: developed by authors)

From the point of view of compensation for prescriptions, opinions

are divided. A single chain of pharmacies registers the most grades of 4,

respectively 5 from customers, who are satisfied to a large or very large

extent. There are also situations in which, not being affiliated to a large chain

of pharmaceutical units, acting independently, pharmacies do not offer this

0%

20%

40%C

DM

R

SD

HN

I

Possibility to compensate

prescriptions

5 4 3

2 1

0%

20%

40%

60%C

DM

R

SD

HN

I

Location

5 4 3

2 1



44

possibility to customers, although it is a weakness in a possible SWOT

analysis that could be prepared.

The characteristic that registers the most negative opinions in the

case of four pharmacies is the one regarding the positioning, considering the

fact that, either there is only one unit in the city, or several, which are located

from a geographical point of view, at very great distances, not being optimal

as a positioning for the inhabitants of other areas of the city, even if from the

point of view of other pricing, promotions, they are much better prepared

than the main competitors.

CONCLUSIONS. LIMITATIONS OF THE STUDY AND FUTURE

RESEARCH DIRECTIONS

Given the fact that this study was initiated in February 2020, when

the pandemic was not yet declared in Romania, the analyzed issues addressed

general aspects, without reference to the behavior during the spread of

CoVID-19 virus. However, this aspect is a basic premise for future research,

given the health crisis and the challenges posed to the management of

pharmaceutical units during this time. The lack of protective materials, the

obligation of social distancing and other factors are points that can to be

analyzed in the future.

It is important to analyze how the onset of the Coronavirus pandemic

in early 2020 positively or negatively affected the activity of these companies

and, on the other hand, what were the influences from multiple

perspectives.To begin with, in addition to the previous study, we limit

ourselves to analyzing the following data, currently available, on the situation

of customers' supply of sanitary materials during the CoVID-19 pandemic:

Figure 21. Procurement method of protective masks at the beginning of the pandemic

(Source: Study conducted by the Romanian Institute for

Evaluation and Strategy, Statista 2020)

Figure 22. The situation of insurance with protective materials

(Source: Study conducted by the Romanian Institute for

Evaluation and Strategy, Statista 2020)

The Romanian Institute for Evaluation and Strategy conducted a

study between April 7-8 2020 on how the population provided with sanitary

materials. As we can see from the data presented in the figures above, the



45

study was conducted in early April, therefore during the onset of the

pandemic, the data collected indicating the following:

- only 41% of respondents purchased masks on the market, while 22%

received them from acquaintances / friends, 33% had such protective

materials even before the pandemic broke out, and 19% made their own

masks;

- during that period, 55% of respondents stated that they had a sufficient

amount of hand sanitizer, while 26% were not satisfied with the quantity

purchased and 18% did not have this product at home at all. A similar trend

can be observed in the case of surface disinfectants, where the percentages

differ very little. Larger differences are observed in the case of masks, where

40% were dissatisfied with the amount held.

We therefore propose to study how the pandemic has affected

national medicine imports and how management has found appropriate

solutions in the context of this crisis.

REFERENCES

Alabbadi I. (2015), Pharmaceutical business and pharmaceutical industry: new tracks

in pharmacy education initiated in Jordan”, Jordan Journal of

Pharmaceutical Science, vol. 8, no.3: 217 – 227

Anusha K, Krishna Priya P & Praveen Kumar V (2017), ”Pharmaceutical product

management”, Pharma Innovation Journal, 6(11):112-114

Blanc L.(2015), ”The European Pharmaceutical Industry in a Global Economy: what

drives EU exports of pharmaceuticals?”, Bruges European Economic

Research Papers, no. 31

Buckley J., ”Pharmaceutical marketing – time for change”, Electronic Journal of

Business Ethics and Organization Studies, vol. 9, no. 2

Dukes M.N.G. (2002), ”Accountability of the pharmaceutical industry”, Lancet, 360:

1682-1684

Gad S.C. (2008), ”Pharmaceutical manufacturing handbook. Regulations and

quality”, Wiley Interscience, New Yersey

Marinescu V. (2019), ”Advertising and health in Romania”, Revista de Științe

Politice / Revue des Science Politique, no. 63: 72-81

Monnet D. (2005), ”Antibiotic development and the changing role of the

pharmaceutical industry”, International Journal of Risk & Safety in

Medicine, no. 17: 133-145

Peterson J, Snee R., McAllister P., Schofield T. & Carella A. (2009), ”Statistics in

pharmaceutical development and manufacturing”, Journal of Quality

Technology, vol. 41(2)

Purcărea I., Rațiu M.P., Purcărea V. L. & Popa F (2009), ”Exploring the

pharmaceutical marketing – mix facing the challenge of business

intelligence in the 21st century”, Farmacia, vol. 57(3): 366 - 388

Raja B.H.& Sambandan P. (2015), ”Open innovation in pharmaceutical industry: a

case study of Eli Lilly”, Master Thesis, KTH School of Industrial

Engineering and Management, Sweden



46

Safta V, Brumărel M, Ciobanu N & Adauji S (2012), ”Management și legislație

farmaceutică!, Tipografia Centrală, Chișinău

Șteliac N (2015), ”A general overview of the Romanian pharmaceutical market”,

Annals of the ”Constantin Brâncuși” Univeristy of Târgu Jiu, Economy

Series, Issue 2: 15-22

Teramae F., Makino T., Lim Y, Sengoku S &Kodama K (2020), ”International

strategy for sustainable growth in multinational pharmaceutical

companies”, Sustainability, 12, 867

***European Federation of Pharmaceutical Industries and Associations, The

pharmaceutical Industry in Figures, 2018

***SESRIC, Statistical, Economic and Social Research and Training Centre for

Islamic Countries (2011), Pharmaceutical industry in OIC member

countries. Production, consumption and trade, Ankara, Turkey

***KPMG, Pharma outlook 2030: from evolution to revolution. A shift in focus

***PriceWaterHouseCoopers, Pharma 2020: Marketing the future. Which path will

you take?

***PriceWaterHouseCoopers, Pharma 2020: Challenginf business models. Which

path will you take?

***Stratulat Albulescu, Attorneys at Law, Business opportunities in Romania.

Market overview, 2018

***World Health Organization (2007), Quality assurance of pharmaceuticals. A

compendium of guidelines and related materials, vol. 2, Second updated

edition

*** World Health Organization (2011), Pharmaceutical production and related

technology transfer

*** Pharmaceutical history course, 2010

***UNODC, World drug report, 2017

***OECD, Excessive prices in pharmaceutical markets, 2018 report

***National Institute of Statistics, Romanian Statistical Yearbook, 2019

***Institutul de Prognoză Economică, Industria farmaceutică în România.

Principalele tendințe și impactul asupra societății și economiei, 2012

***www.statista.com



47

THE INVESTMENT ATTRACTIVENESS OF THE

GOVERNMENT SECURITIE, AS AN INSTRUMENT OF

GOVERNMENT DEBT IN THE REPUBLIC OF MOLDOVA

Rodica HÎNCU1

Ana LITOCENCO2

Submitted: 22nd July 2020 Approved: 5TH August 2020

Abstract Beside development of the economy as a whole, investments in government securities, as a

financial instrument, contribute to the financing of the budget balance and the needs of the

sectors of the national economy. For this reason, most countries of the world show increased

interest in developing and increasing its attractiveness. This article proposes a synthesis of

the evolution of the government securities market in the period of 2017-2020, its relations with

the state budget, as well as an analysis of the level of attractiveness of government securities

in relation to other investment opportunities.

Key Words: investments, government securities, treasury bonds, government bonds, primar

dealer.

JEL: F65, G23, G28, H63, O16

1.INTRODUCTION

Government securities (GS) are, both in the Republic of Moldova

(Moldova) and in most other countries, an important instrument of

government debt, which allows the state to borrow in optimal conditions on

the domestic market, constituting in the same time a liquid and efficient

financial instrument for market operators.

In Moldova, the GS market was established in 1995. The GS is issued

by the Ministry of Finance of Moldova. At the same time, the National Bank

of Moldova (NBM) holds the quality of state agent, which implies the

administration on the primary market of GS issued in the form of account

registration.

During the activity, from 1995 until now, the Ministry of Finance of

Moldova, issuer of the GS, in collaboration with the NBM, as a state agent,

have taken a series of measures to create the conditions for the development

of a modern financial market:

- organizing the primary market of GS on the principles of major

transparency and fair competition;

1 Professor, PhD, Finance Faculty, Academy of Economic Studies, Republic of Moldova,

[email protected]. 2 PhD Student, Finance Faculty, Academy of Economic Studies, Republic of Moldova,

[email protected]



48

- creation of the system of primary dealers for ensuring the GS underwriting

and development of the secondary market;

- ensuring a high level of security and safety of the registration of the

ownership identity on the GS in the securities registration system.

GS are instruments of government debt issued in the form of a

negotiable financial security. Investments in GS represent, for the state, a

loan in order to support the development of the country's economy and

investment activity, the creation of new jobs, etc. Subsequently, at maturity,

the state pays the investor the invested amount and a certain interest. GS

issued on the Moldovan market are advantageous investments for the

following reasons:

- they are very safe financial instruments, with zero risk, given the fact that

they benefit from the full state guarantee. Since the establishment of the GS

market, the Government has never withheld payment for their redemption or

interest.

- have a high level of liquidity. As a result of trading the GS on the secondary

market, the investor obtains certain funds. At the same time, the investor

receives the interest for each day of holding the GS in the portfolio.

- interest on GS is not subject to taxation.

1.1. RESEARCH METHODOLOGY

The research methods used in this article are as follows: the

documentary method, the analogical method, the qualitative, quantitative

data method, the synthesis method, the comparison method, as well as the

graphical method. The analysis is based on statistical data and activity reports

available on the official websites of national public authorities such as:

Ministry of Finance of Moldova and the NBM.

1.2. SPECIALTY LITERATURE AND THE CONTRIBUTIONS OF

THE STUDY

The topic of GS (their essence and role) has been enshrined in

various scientific researches developed at national and international level by

capital market researchers.

Also, given that GS, as instruments of government debt, are one of

the most important sources of financing the budget balance, they are the

subject of various strategies, programs developed periodically by the

Ministry of Finance of Moldova, as well as various regulations issued by it,

but also by the NBM in order to facilitate the application of this large-scale

investment instrument on the domestic market under optimal conditions and

risks.

The regulation of the GS market in Moldova is carried out through a

series of legislative and normative acts of the authorities, namely:



49

- Law no. 419/2006 on public sector debt, state guarantees and state

refinance;

- Government Decision no. 1136/2007 on some measures for the execution

of Law no. 419/2006 on public debt, state guarantees and state refinance;

- Government Decision no. 56/2020 on the approval of the Program „Medium

Term Government Debt Management (2020-2022)”;

- Regulation on the placement, trading and redemption of state securities in

the form of registration in the accounts, approved by Decision of the

Executive Board of the NBM no.170/2018 and Order of the Minister of

Finance of Moldova no.129/2018;

- Instruction regarding the placement, trading and redemption of State Bonds

with fixed interest, approved by the Order of the Minister of Finance of

Moldova no. 29/2019;

- Instruction on the placement, trading and redemption of Government Bonds

with floating interest, approved by the Order of the Minister of Finance of

Moldova no. 29/2019.

The study presented in this article serves as an introduction to the

situation of state debt of the Republic of Moldova, as well as provides an

analysis of the main types of GS issued in the Republic of Moldova, including

in relation to other investment instruments such as bank deposits.

2. THE DOMESTIC GOVERNMENTAL DEBT OF MOLDOVA

The domestic governmental debt is an integral part of the state debt

(see Figure 1), representing the total amount of unpaid obligations and

interest due and unpaid, contracted, on behalf of Moldova, by the

Government, through the Ministry of Finance, from residents of Moldova.

GS issued to be placed on the domestic market of Moldova and purchased by

non-residents is also attributed to the domestic government debt.

Figure 1 – Position of the domestic government debt of Moldova in the public sector debt

(Source: Made by authors based on Law of Moldova no.419/2006)

According to the provisions of the national framework, the Ministry

of Finance of Moldova is appointed responsible for the administration of the

government debt. In order to ensure an efficient administration, the Ministry

of Finance of Moldova periodically elaborates a medium-term government



50

debt management program, which consists of a set of measures and activities

exercised and ensured by the Ministry of Finance of Moldova. In the process

of managing the government debt in the medium term, the Ministry of

Finance of Moldova has as fundamental objective the assurance of the

financial needs of the state budget at an acceptable level of medium and long

term issuance costs in the conditions of limiting the risks involved. The

activities in the field of medium-term governmental debt management are

oriented towards:

- identification, monitoring and management of risks related to the

government debt portfolio;

- maintaining medium and long-term government debt costs at an acceptable

level;

- development of the GS market.

As instruments generating domestic government debt, may be

utilised the financial instruments regulated by the legislation of Moldova,

including GS and domestic government loans (loans from commercial banks

and other domestic loans). Analyzing the statistical data published by the

Ministry of Finance of Moldova, we find that the domestic governmental debt

of Moldova, according to the data presented in Figure 2, consists entirely of

GS.

Figure 2 – The structure of domestic governmental debt of Moldova in the period of June

2017–June 2020, %

(Source: Made by the authors based on data of the Ministry of Finance of Moldova)

Analyzing the data in Figure 2, it can be mentioned that among the

GS that form the domestic government debt, most are GS issued for certain

purposes set by law (48.4% as of June 30, 2020). These represent government

bonds issued in order to execute the obligations of the Ministry of Finance of

Moldova resulting from the state guarantees granted to the NBM for lending

to commercial banks. On the second place, in terms of volume, are the GS

issued on the primary market (about 44% as of June 30, 2020). At the same

time, in 6 months of 2020 there is an increase (by 8.5 p.p.) of the share of GS

9,6

%

28,4

%

62,0

%

on 30.06.2017

Converted GS

GS issued on primary

marketGS issued on certain

purposes

9,0

%

32,

7%

58,

3%

on 30.06.2018

Converted GS



purposes

8,8

%

35,

4%

55,

8%

on 30.06.2019

Converted GS



purposes

7,7

%

43,9

%

48,4

%

on 30.06.2020

Converted GS



purposes



51

issued on the primary market compared to the same period of 2019. A share

of 7.7% of the total domestic government debt of Moldova are represented

by converted GS, which are the GS obtained in the NBM portfolio following

the conversion in 1998 and 2008 of the loans previously granted to the

Government by the NBM.

3. PRIMARY MARKET OF GOVERNMENT SECURITIES IN

REPUBLIC OF MOLDOVA

The types of GS issued on the primary market in Republic of

Moldova are:

• Treasury bills - short-term GS, issued at a discount and redeemed

at maturity at their nominal value, with a term of circulation of up to one year

(91, 182 and 364 days).

• Government bonds - long-term GS, issued at a floating or fixed

interest rate. Interest on government bonds is paid periodically (quarterly/

half-yearly) in the form of coupons. Government bonds can be sold at a

discount, at their nominal price or at a premium, and are redeemed at maturity

at their nominal value (from 1 year to 5 years).

It is easy to notice that there are certain gaps in the development of

the GS market. Thus, compared to the experience of other states, where

government bonds with a maturity of 7 and 10 years are practiced, the GS

market of Moldova is not characterized by a broad maturity spectrum related

to government bonds. The accessibility of individuals to the purchase of GS,

as saving tools, as well as the diversification of GS sales channels remain

important segments for improvement.

Currently, individuals or legal entities, residents or non-residents of

Moldova can purchase GS through a primary dealer. The primary dealer

represents the bank that has been accepted by the Ministry of Finance of

Moldova to carry out operations with GS on the market as a result of

coresponding to the selection criteria and which may carry out operations in

its own name and on behalf of its clients, individuals and / or legal persons,

resident or non-resident.

The sales auctions of GS are carried out in accordance with a

calendar elaborated and approved quarterly by the Ministry of Finance of

Moldova. The calendar for conducting GS auctions is presented to the NBM

with 5 calendar days until the beginning of the quarter, for which the calendar

is drafted, and is published on the official web pages of the Ministry of

Finance of Moldova and the NBM before the beginning of that quarter. Thus,

according to the Calendar available on the official web pages of the 2

authorities, in the third quarter of the current year it is expected to be

conducted 13 tenders for trading treasury bills and government bonds.

At the same time, the characteristics of the GS, the manner of

placement, payment of the related interests and their redemption, as well as

the identification elements of the issuances are established through the

bulletins of their placement. The information on the results of GS placement



52

auctions is published weekly, every Tuesday, for treasury bills, and monthly,

on Wednesday, for government bonds.

Analyzing the statistical data available on the official website of the

Ministry of Finance of Moldova, it is found that annually the government

sells GS issued on the primary market worth about 10 billion lei (see Figure

3). At the same time, starting with 2018, there is a slight steady decrease in

the value of GS traded annually. Thus, compared to 2017, the reduction for

2018 is 120.77 million lei, and the one for 2019 - 573.11 million lei.

Figure 3 – The amount of GS issued and sold on the primary market in the period of 2017–

June 2020, mil. Lei

(Source: Made by the authors based on data of the Ministry of Finance of Moldova)

In fact, a distinct situation is characteristic for 2020, when, in just 6

months, GS were sold in the amount of 8.2 billion lei. Thus, there is not only

a significant increase in sold GS, but also in financial resources borrowed by

the government on the domestic market. In this context, it should be noted

that, given that GS is one of the sources of financing the balance of the state

budget, their amount offered on the domestic market during a year is directly

dependent on the value of funds planned in the Annual Law of the state

budget (see Figure 4).

Figure 4 – The amount of GS planned for issuance and sold according to the state budget

Laws for the period of 2017– 2020, mil. Lei

(Source: Made by authors based on state budget Laws for the period of 2017 - 2020)

20172018

2019

6 months 2020

9900,219779,44

9327,11

8.214,03

20172018

20192020

600600 1570

4.000,00



53

Based on the provisions of the state budget Laws for the years of

2017–2020, it is noted that in the current year the government expects to

cover about 4 billion lei on financing needs from the GS account, an amount

that exceeds, on average, 3-4 times the values planned for the years of 2017–

2019. This situation is also explained by the significant amount of the budget

deficit for 2020 compared to the previous periods.

Analyzing the structure of GS issued on the domestic market, by their

type, we find that, it did not register significat changes during the analyzed

period (2017-2020), and the most traded GS is represented by short-term GS

(see Figure 5).

Figure 5 – The GS structure sold on the primary market of Moldova in the period of June

2017– June 2020, %

(Source: Made by authors based on the data published by the Ministry of Finance of

Moldova)

As it can be seen from Figure 5, the treasury bills with a maturity of

364 days are ranked first in the category of the most requested short-term GS

(approximately 41% of the total GS traded as of June 30, 2020), these being

followed by those with a maturity of 182 days (about 38%) and 91 days

(12%). Less requested GS, as of June 30, are government bonds with a

maturity of 3 years, their share of the volume of GS traded in 6 months of

2020 being only 2.2 percent, which is an increase of 0,7 p.p. compared to the

similar period of 2019, but also a significant reduction (by about 3 p.p.)

compared to the period of 2017 - 2018.

An important moment to note is the fact that starting with 2018, the

Ministry of Finance of Moldova, as issuer of the GS, expanded the spectrum

of proposed securities, by initiating the issuance of government bonds with a

maturity of 5 years. The extension of the maturity term of the GS from 3

years to 5 years was aimed at expanding the maturity of the portfolio of

government securities in circulation, as well as reducing the risk of domestic

debt refinancing. As it can be seen from Figure 5, the share of government

bonds with a maturity of 5 years traded in 6 months of the current year

20,3%

31,7%

38,0%

1,6%

6,8%

1,6%

on 30.06.2017

91 days 182 days

364 days 1 year

2 years 3 years

16,0%

32,4%

35,4%

8,0%

6,0%

2,1%

on 30.06.2018

91 days 182 days

364 days 2 years

3 years 5 years

14,1%

36,2%

40,4%

3,9%

3,1%

1,5% 0,8

%

on 30.06.2019

91 days 182 days

364 days 1 year

2 years 3 years

5 years

12,4%

38,4%

40,9%

3,3%

2,2%

2,8%

on 30.06.2020

91 days 182 days

364 days 2 years

3 years 5 years



54

(a.2020) is relatively small, but which almost doubled compared to the

similar period of the previous year.

4. THE ATRACTIVENESS OF THE GOVERNMENT SECURITIES

IN THE REPUBLIC OF MOLDOVA

As an investment instrument, in addition to the maturity, another

important element of the GS is their interest rate. In the conditions of the

financial market of Moldova and of the existing spectrum of investment

opportunities, one of the main investment instruments that create a strong

competition for GS on the market are bank deposits. In this context, in order

to analyze the attractiveness of GS issued on the domestic market, further it

is proposed an analyze of their interest rate in relation to the interest rate on

bank deposits.

Thus, analyzing the statistical data (see Figure 6), it is observed that

during the analyzed period (March 2017 - June 2020) the interest rate on

treasury bills, especially those with a maturity of 182 and 364 days record a

higher interest rate compared to the interest rate on the banking system for

deposits up to 1 year.

Figure 6 – Dynamics of the interest rate on treasury bills in relation to the interest rate of

bank deposits during the period of March 2017- June 2020, %

(Source: Made by author based on data published by NBM)

A similar situation is attested in the case of long-term GS (see Figure

7). Starting with September 2018, the interest rate offered on government

bonds with a maturity of 2 years, 3 and 5 years is higher than the interest rate

registered on the banking sector for deposits with a term of 1-2 years and 2–

5 years.

We mention that in the period of March 2017 – December 2017, the

government bonds with a maturity of 5 years are indicated, in the above

figure above, with „0”, given that their issuance and trading started in 2018.

0123456789

91 days 182 dys 364 days Bank deposits for 1 year



55

Figure 7 – Dynamics of the interest rate on government bonds in relation to interest rates on

bank deposits in the period of March 2017– June 2020, %

(Source: Made by author based on data published by NBM)

At the same time, it is necessary to note that the reduction of the

interest rate both for government bonds and treasury bills in the first 6 months

of the current year is explained by the considerable volume of GS issued and

traded on the domestic market during this period. However, despite the given

reductions, GS remain a more attractive source of investment compared to

deposits in the banking system. In addition to the higher interest rate, a higher

attractiveness of GS in relation to bank deposits is also due to higher liquidity

as well as increased security as they are guaranteed by the government.

Regarding to the bank deposits, according to Law no. 575/2003 on deposits

guarantee in the banking system, starting with January 1, 2020, the bank

deposits are guaranteed only in the amount of 50 thousand lei regardless of

the value of the deposit.

5. THE SECONDAY MARKET OF THE GOVERNMENT

SECURITIES IN THE REPUBLIC OF MOLDOVA

According to the national law, transactions on the secondary market

with GS are carried out under the following conditions:

- in the case of treasury bills - they take place only outside the regulated

market (Stock Exchange) and outside of the multilateral trading system,

through primary dealers and other authorized institutions;

- in the case of government bonds - take place both, outside the regulated

market and outside the multilateral trading system through primary dealers,

as well as on the regulated market and within the multilateral trading system,

in accordance with the legislation in force.

The secondary market operates on the principle of direct trading and

is organized through the single E-Bond trading platform and the Single

Central Depository System of securities, where the trading of GS after

issuance on the primary market takes place.

0123456789

10

2 years 3 years 5 years

Bank deposits of 1-2 years Bank deposits of 2-5 years



56

Features of the electronic E-Bond trading platform:

- is implemented in Bloomberg, being an electronic system in which only

primary dealers and banks that do not have the quality of primary dealer can

participate;

- primary dealers can carry out transactions on the secondary market with

GS in their own name and on their own account, as well as in their own name

and on behalf of customers, at their request;

- investors, with the exception of banks that do not have the status of

primary dealer, can carry out transactions on the secondary market only

through primary dealers;

- primary dealers provide quotes for GS admitted to trading on the

secondary market;

- the quotations displayed are firm, the participant having the obligation to

conclude the transaction at the quoted price and within the volume offered if

it has been accepted.

The minimum daily quotation obligations on the single E-Bond

trading platform, which must be met cumulatively by the primary dealers,

according to the regulations approved by the Ministry of Finance of Moldova

jointly with the NBM, are the following:

- the provision of sales and purchase quotations for VMS, issued at the last

two auctions, for 4 hours, in the time interval of 10:00-14:00;

- the minimum volume of GS for which a sales and purchase quotation will

be published is of 100 thousand lei at the nominal value.

Based on statistical data published on the official websites of the

national authorities of Moldova, in October 2018-June 2020 on the secondary

market were traded GS in the amount of 395.8 million lei (according to their

nominal value).

6. CONCLUSIONS

As a result of the study, we find that the GS market in the Republic

of Moldova is constantly evolving, adapting depending on the needs of

financing the state budget balance. In this context, in order to achieve the

major objective of government debt management, national authorities are

looking for and applying new methods of internal debt management in order

to ensure the financing, in optimal cost conditions, of the budget balance. A

step in this direction was the initiation of issuance, in 2018, of the GS with a

maturity of 5 years.

However, in order to ensure the continuity of these measures, it is

necessary to continue to focus the authorities' attention on the development

of the GS market, which can be achieved by extending the maturity of

government securities issued on the market and gradually increasing the

share of long-term securities in circulation; the continuation of the issuance

of government bonds with a maturity of 2 years, 3 and 5 years, as well as the

implementation of the issuance of government bonds with a maturity of 7 and



57

10 years, as it is practiced other states; increasing the accessibility of

individuals to buying GS as saving tool, as well as diversifying the sales

channels of GS.

REFERENCES

Law no.419 / 2006 on public sector debt, state guarantees and state refinance

(Republished in the Official Gazette of Moldova, 2014, no.397-399,

art.704).

Law on the state budget for 2020 no. 172/2019 (Published in the Official Gazette of

Moldova, 2019, no. 393-399, art. 321).


Moldova, 2018, no. 504-511, art. 842).


Moldova, 2017, no. 464-470, art. 810).


Moldova, 2016, no. 472-477, art. 943).

Law no. 575/2003 on deposits guarantee in the banking system (Published in the

Official Gazette of Moldova, 2004, no. 30-34, art. 169).

The program „Medium-term state debt management (2020-2022)”, approved by

Government Decision no. 56/2020 (Published in the Official Gazette of

Moldova, 2020 no. 55-61, art. 127).

Regulation on the placement, trading and redemption of government securities in the

form of registration in the account, approved by the Decision of the

Executive Council of the NBM no.170/2018 and the Order of the Minister

of Finance no.129/2018 (Published in the Official Gazette of Moldova,

2018, no.277-284, art.1171).

*** Press releases of the Ministry of Finance „Information related to the activity on

the GS market”. Available online at https://mf.gov.md/ro/datoria-

sectorului-public/pia%C8%9Ba-primar%C4%83-a-vms/comunicate-

privind-plasarea-vms

*** Reports of the Ministry of Finance „Information on domestic government debt”.

Available online at https://mf.gov.md/ro/datoria-sectorului-

public/rapoarte/datoria-de-stat/datoria-de-stat-intern%C4%83

*** Reports of the National Bank of Moldova „Weighted average interest rates on

GS (primary market)”. Available online at

http://bnm.md/bdi/pages/reports/dop/DOP5.xhtml

*** Reports of the National Bank of Moldova „Average interest rates on credit and

deposit balances”. Available online at

http://bnm.md/bdi/pages/reports/dpmc/DPMC10.xhtml



58

TRENDS REGARDING THE MARKETING AND

CONSUMPTION OF PERSONAL HYGIENE PRODUCTS

Venera MANCIU1

Submitted: 11th February 2020 Revised:25th April 2020 Approved: 30th April 2020

Abstract

When we refer to the cosmetics industry, we mean profitable businesses with a very high

potential for development, given that people are increasingly aware of the need to take care

of their own health and hygiene. In the context of this need, the desire developed for an

individual to feel good by using these products, as they contribute to building a persons’

general well-being. This paper includes on the one hand theoretical approaches on the

importance of these products, as well as relevant statistical data on the development of the

industry and the analysis of the potential for future evolution. The last section includes a case

study carried out at local level, aiming to identify the consumption habits of the municipality

inhabitants.

Keywords: consumption, consumer behaviour, product, cosmetics industry, personal hygiene

JEL : D11, M39

1. THEORETICAL APPROACHES

The issue of personal care has concerned individuals since ancient

times, although there have always been differences between countries,

regions, social classes, categories of people (Asch, Wolfe, 2001). One of the

factors that has always played an important role in increasing the level of

interest in this aspect has been culture (Kotler, Keller, 2009).

The personal care industry is currently strong, with Europe being the

largest market for cosmetics and other personal care products in the world.

The market consists of segments such as oral care, hair care, face care, body

care, cosmetics, perfumes and health products.

Today, worldwide, the importance of personal hygiene is widely

promoted, as the population is increasingly aware of the benefits of a healthy

lifestyle. In this respect, we can even identify patterns of consumer behaviour

(economic, psychological, socio-cultural, etc.), which allowed the

development of large-scale studies, from multiple perspectives: as regards

personal hygiene products preferred by individuals, as well as from the point

of view of the amounts of money allocated for the purchase of such products

and of the correlation with the income level of the individuals, being also

investigated the differences of behaviour in acquisition and consumption

appeared between men and women.

1 Associate Prof. PhD., University ”Eftimie Murgu” of Reșița, Faculty of Economic Sciences,

Reșița, România, [email protected]

mailto:[email protected]



59

According to the Global Insight studies (2007), personal spending on

cosmetics varies from country to country. Zion Market Research expects that

by 2024 the highly profitable cosmetics industry will reach 863 billion dollars

worldwide, with products in this category being sold in various forms, both

in specialty stores and in supermarkets, pharmacies, online, etc., as there is a

growing demand. It is a massive increase, given that the information provided

by Euromonitor reports estimates for 2018 a value of 488 billion of this

segment.

Annually, according to reports prepared by the Personal Care

Products Council (2019), consumers spend an average of about $ 64 on

personal care products worldwide, with the US market valued at $ 48 billion

in 2018. Cosmetics Europe 2019 reports indicate Europe has a higher level

of spending in this regard, with an average of € 135 being spent annually on

personal care products, with even significant differences by age category.:

Figure 1 Average annual spending

(Source: Cosmetics Europe, 2019)

It is also an industry that generates many jobs (3.6 million, of which

over 2 million in Europe), especially for women (62%) and especially in

SMEs (France, Italy and the US). The United Kingdom has the largest

number of such enterprises, followed by Poland and Spain, respectively).

We must keep in mind that the cosmetics industry is one that involves

a great deal of science, being an innovative field that requires constant

investment and well-trained specialists. The largest exporters in Europe are

France and Germany, which account for about 50% of total exports of such

products, with investments in Europe amounting to about $ 2.35 billion with

research and development.

The massive development of the cosmetics and personal hygiene

industry has favoured the differentiation of consumers' preferences regarding

such products. Today, it is easy to make personalized care plans, depending

on multiple criteria, based on the individual's gender, age or the



60

characteristics of each individual's body, based on which to purchase

products. Of course, marketing, more precisely the promotion strategies,

some even aggressive, make an essential contribution in the development of

this industry. The complete circuit of these products was summarized in the

Ernst & Young reports by the following diagram:

Figure 2

(Source: Ernst&Young, (2019) Hygiene, personal care and specialty products industry.

Economic state of the industry report)

Understanding consumer behaviour is "the key to organizational

success" (Anute et al, 2015), education in this regard becoming essential,

however, for guiding consumers in the right direction on choosing the most

appropriate products for their needs.

Both theory and practice and numerous examples in the media

indicate the benefits of using natural products, even the so-called “green

cosmetics” (Chin et al, 2018), “the need of consumers for a healthy and

sustainable lifestyle” (Zhang , Zhou, 2019) causing an increase in the level

of demand for such products. However, the decision to use such products is

largely influenced by friends, family, acquaintances, reviews and online

articles.

The categories of personal hygiene products are numerous and

diverse. We are talking about commonly used products, such as soaps,

toothpaste, shampoos, which are essential elements for basic maintenance of

hygiene and thus health. At the same time, we refer to the second level

products, represented by perfumes, creams, balms, etc., whose consumption

is determined not so much by the basic need to ensure personal hygiene, but

they are part of the range of maintenance products, chosen optional by

consumers.

Age often becomes a decisive criterion in the acquisition of this

second category of products, as mentioned in the literature Kotler and Keller

(2009), who state that both food and clothing, music and recreational

activities are largely determined. to this extent, consumption is also

influenced by lifestyle and family.



61

Consumer preferences from this point of view are correlated both

with the level of their income and with the level of knowledge regarding the

composition, benefits, supplier brands, etc. Of course, from certain points of

view, ostentatious consumption also intervenes, when the relationship

between the disposable income, the quantity purchased, respectively the price

of the products is not a direct one and in the same sense, other determinants

intervene in the consumption decision.

We can also mention the group behaviour as a determinant of the

purchasing decision, here we can include the environment and lifestyle, the

entourage, the objectives of individuals, as determining factors. Also, the

impulsive act of purchase often takes place in the case of the mentioned

products, if we speak especially of the combination of the already existing

need with the sudden appearance of some promotions in the case of certain

brands.

2. STATISTIC DATA – BRIEF ANALYSIS OF THE

CONSUMPTIONS OF PERSONAL HYGIENE PRODUCTS

2.1. THE BEHAVIOUR OF THE ROMANIAN CONSUMER IN THE

PRE-PANDEMIC PERIOD - WHERE ARE WE?

As regards the consumption of personal hygiene products, Romania is

unfortunately on the last positions of the rankings made at European level.

Periodic surveys are conducted to monitor the level of use of these products,

but the situation does not change much from one year to another. Romanians

choose to spend rather little money on personal care, this is reflected in the

reports prepared at national level. And even if the number of products bought

in certain situations is close to a European average, the brands chosen by

Romanians are not always the highest in quality. Thus, broken down by

product category, we find that:

Toothpaste and soap – they are used by Romanians more often than

other personal care products, although not as often as they should.

Out of 10 Romanians living in urban areas, 7 state that they purchase

these products monthly, but 1% of Romanians do not buy or use them

at all, which still reflects the fact that there are regions or categories

of people with a low level of education in this respect.

Dental maintenance products (dental floss, mouthwash) are used by

a significant percentage of individuals (78%), but very few make

these purchases monthly (22%).

Body care products, such as shower gel, are often purchased on a

monthly basis, but there are differences between women's and men's

consumption habits. They are bought more by female consumers

(64%), and less by male consumers (54%).

Body care products, such as shower gel, are often purchased on a

monthly basis, but there are differences between women's and men's



62

consumption habits. They are bought more by female consumers

(64%), and less by male consumers.

Hair conditioners or masks, on the other hand, are purchased at a

much lower rate, with 39% of women buying such products monthly.

Products such as hairspray or hair mousse are not considered

essential, more than 36% of the population never buy such products,

49% being men.

Hair dye is used regularly for 1-3 months by 20% of individuals,

while less than half do not buy such products.

Deodorants, on the other hand, are a type of product largely

purchased by Romanians, 56% buy them monthly. At the opposite

pole we find 2% of the population who do not use such products at

all.

Hand creams are popular, being used monthly both by men and

women, as well as body lotions.

2.2. THE GLOBAL IMPACT OF COVID-19 ON CONSUMER

BEHAVIOUR - AN OVERVIEW

The spread of Coronavirus cases in Romania since February - March

2020 has led to significant changes in the buying and consuming behaviour

of individuals. If until that period we could still talk about the observance of

the initial patterns of consumer behaviour, the spread of COVID - 19, in

combination with the accentuation of the feeling of fear and insecurity

generated changes and determined the increase of sales, both for hygiene

products and chosen for food.

A recent study by Accenture conducted in April 2020 indicates exactly

the fear of the world's population, although it relates more to the economic

dimension than to individual health. In comparison, 64% of the respondents

to the mentioned study indicate an increase in the level of fear regarding

health, while a similar percentage mention fears about their jobs, respectively

88% fear for the global evolution of the economy. From the point of view of

consumer behaviour, this fear is a "fuel" for making panic purchases, which

raises many challenges for both retail stores and manufacturers and suppliers,

respectively.

Also as a result, five new types of consumers have been identified

(Accenture, 2020) namely:

1. The concerned consumer - profile that describes 21% of the cases,

reflecting the characteristics of the age category between 56 and 69 years of

age, mainly men, people concerned about their health and aware of the news

and developments;

2. The individualistic consumer - a profile describing about 22% of the cases

and reflects the characteristics of the 18-24 age group, especially women, less

connected and empathetic with those around them, taking care mostly of

themselves;



63

3. The rational consumer - a profile that represents 39% of those interviewed

by Accenture, mostly women, a category that is aware of the importance of

maintaining hygiene, but who also exhibit a rational behaviour;

4. The activist consumer - profile represented by about 8% of the

respondents of the study, from the category of people who are 25 - 31 years

old, category of respondents who are active and help their peers;

5. The indifferent consumer - profile represented by about 11% of people, in

the category 40 - 55 years of age.

Global results show an increase of about 50% in personal hygiene

products for concerned consumers, compared to only 10.4% for indifferent

consumers, 42.5% for individualists, 27.4% for rational consumers, and

29.1% in the case of activists.

As for the relationship between the increase in consumption of

hygiene products and the prevention methods used by individuals, the

following graph is relevant, representing a 90% increase between the pre-

pandemic period and the current one, in terms of the act of hand washing.

Figure 3. The evolution of the number of hand washes

(Source: Accenture COVID-19 consumer pulse)

In this respect, it would be important and interesting to continue a

study in Romania, to observe the changes that have occurred in recent months

in terms of consumption of hygiene products. We therefore consider this

point of the paper as a starting premise for another article, focused on this

topic.

3. CASE STUDY ON THE CONSUMPTION OF PERSONAL

HYGIENE PRODUCTS

Beyond the statistical data provided by specialized bodies, it is

important to analyse the issues mentioned also from the objective perspective

of those who use them - the direct consumers.

In this respect, a direct research was carried out in Resita, using as

working tool a questionnaire with 13 closed questions, administered through



64

Google Forms. The administration period of the questionnaire was 1.10. -

31.10.2019, the structure of the questionnaire being simple, comprising 10

content questions and 3 questions for identifying the respondents.

The number of individuals who were to answer the research questions

was not established in advance, nor was their structure by age groups, sexes

or other criteria. Following the centralization of the answers, we therefore

found the following structure, the total number of respondents being 161:

By total number of

people in the

household

By age criterion Last school finished

12,4% one person

30,4% - two persons

57,1% - three or

more persons

98,8% - 18 – 65 years of

age

1,2 % - over 65

48,4% - university studies

13% - post-graduate

studies

33,5% - high school

studies

5,1% - other studies

(post-secondary, middle

school studies etc)

Figure 4 – sample

structure

Figure 5 – sample structure Figure. 6 – sample structure

(Source: elaborated by

the author)


author)


author)

The main objective of the study was to identify the factors that

contribute to the sales volume increase for the category of personal care

goods.

Following the centralization of the results, for each of the questions

proposed in the questionnaire we obtained the following conclusions:

Regarding the categories of personal care products used by the 161

respondents, their options can be summarized as follows:

- 86.95% of respondents currently use mainly products such as soap or

shower gel;

- 91.3% opt for products such as: toothpaste, toothbrush, respectively dental

floss;

- shampoos and conditioners are largely used by 73.91% of respondents;

- 48.44% of those surveyed frequently use detergent or laundry conditioner;

- cosmetics, deodorants, perfumes or roll-ons, creams, were mentioned by

59.62% of respondents.

Regardless of the type of personal care products used, the place

where respondents buy them varies from supermarket or pharmacy to stands.



65

Thus, out of the 161 participants in the study, 83.85% mainly opt for the

purchase in supermarkets, but the questions offer the possibility to give

multiple answers, some of these respondents are found in other situations

regarding the place of purchase. Thus, 50.31% prefer pharmacies, while

22.31% use (also) online stores.

As regards the current consumption of these personal care products,

76.4% of respondents use more than 10% of these personal care products,

while 13.7% of respondents use 10% of them. And from the point of view of

the important criteria in the acquisition process, 79.5% of the respondents

indicate the quality as the most important, while 8.7% mention the brand of

the products, to the detriment of the price of the products and the place of

origin respectively.

Figure 7 – Current consumption of

personal care products

Figure 8 – Important criteria in the

purchase process

Source: elaborated by the author Source: elaborated by the author

Also, out of the 161 respondents, 88.81% prefer natural products,

while 9.31% opt for treated products and 1.86% - for genetically modified

products.

Of course, there is the problem of the existence of counterfeit

products on the market, in this sense, 93% of respondents are aware of them

and of this problem which has become significant nowadays. 7.5% of the

respondents, however, do not pay attention to this issue.

The diversified choice of

products by the respondents

is made primarily according

to the quality of the product

(59%), but also according to

the price (18.01%), quantity

(13.66%), the way of

presenting the product (7%).

45%), and accessibility to

the product (1.86%).

Figure 9 – Criteria that determine the diversified

choice of products

(Source: elaborated by the author)

The choice of how often to use personal care products is one that

belongs only to each individual. Among the subjects surveyed, we identified



66

several categories, but 97.5% say they use such products daily. The rest up

to 100% state that they use such products once every 2-5 days, weekly or

even monthly, the percentages in this regard being approximately equal for

each such category.

Figure 10 – Frequency of

use

Figure 11 – Frequency of

purchase

Figure 12 – Quota allotted

from income


author)


author)


author)

Regarding the frequency of purchase of these product categories, out

of the 161 respondents, the majority state that they purchase these products

when needed (57.1%), while 24.8% buy them monthly, 17.4% weekly, and

0.7% - annually. At the same time, we tried to determine the percentage of

income allocated for the purchase of this type of product, a question to which

respondents answered differently, as follows: 42.9% of respondents allocate

about 15% of monthly income, while 37.9 % allocates 7% of income per

month. A lower percentage of 14.9% spends only 2% of their monthly

income on the purchase of these care products.

However, the percentage criterion for allocating an amount of

monthly income is not sufficiently relevant in the absence of other

calculations, as the exact level of the respondents' salary was not specified. It

would therefore be necessary to extend the research, which would involve

both a study of the distribution of respondents' income by product categories,

in comparison with the savings component, and a study of the main

psychological and cultural factors that would determine a certain type of

behaviour in the case of respondents.

CONCLUSIONS DRAWN FROM THE STUDY

From the study we remarked that currently supermarkets still have

the supremacy among shoppers when they choose to purchase personal care

products, while online shopping still occupies a rather low percentage. The

reason of this situation has different foundations from one person to another,

but in general we can remember the tendency to respect certain customs /

rules, respectively a high general level of distrust in the quality of products

purchased online. Here we face a wealth of information that is often not

provided correctly to users, and on the other hand, potential buyers are still

greatly influenced by the reviews posted.



67

It is gratifying that quality prevails in the purchase of personal care

products, a large part of the respondents considering this aspect as decisive

in the procurement process. However, a debate in this regard should be

mentioned at the same time as the brand of the products, which is a very

important element for some people when making the purchase decision. It is

a proven fact that the imposition and maintenance of a brand on the market

is supported by years of various studies and tests, which requires increased

attention when choosing by consumers.

It is at the same time a trend, in fact in vogue for several years, the

consumer's preference for organic products. Many individuals are at the same

time influenced by the recommendations of celebrities, who attach special

importance to this product segment. However, it is recommended to avoid

the use of the treated products.

Counterfeiting of goods is also a problem that the market in general

and consumers face, which is why the online environment is often bypassed,

with more tangible sources being preferred. The large number of counterfeit

products on the market, which often generates undesirable effects on health,

increases consumer distrust, especially since sometimes the label largely

coincides with the original ones, but the content is qualitatively different.

Beyond this aspect of counterfeiting goods, however, the period of

recent months has been one that has led to changes in the marketing of

personal care products. We cannot deny that the outbreak of the Coronavirus

pandemic in Romania in March 2020 produced significant changes in the

sales sector, which would require the resumption of such a study at a certain

relevant time in order to draw relevant conclusions about the behaviour of

individuals in such periods. Customer testimonials mention a significant

increase in prices in the context mentioned above, both pharmacies and

supermarkets end up selling certain personal care products at double or triple

price. Of course, customer reluctance to these increases has been great, and

the implementation of such pricing strategies in difficult macroeconomic

conditions leads to questions even about the ethical aspects involved in these

unjustified increases.

It is appreciated that some consumers are aware that there are

counterfeit products on the market, but communication becomes very

important in this regard, even if nowadays information is easy to access most

of the timw. It is also gratifying that this criterion of quality occupies a

significant place in the hierarchy of factors influencing the choice of a

product, but also the quality / price ratio should be an essential aspect in

choosing personal care products, prices often exceeding the budget allocated

to this type of shopping, and customers prefer to buy them only "when

needed”.



68

REFERENCES

Anute N, Deshmukh A & Khandagale A (2015). ”Consumer buying behaviour towards

cosmetic products”. International Journal in Management and Social

Science, vol. 3, issue 7: 25 – 34 available online at

https://www.researchgate.net/publication/338421485_Consumer_Buying_B

ehavior_towards_Cosmetic_Products

Asch D & Wolfe B (2001). ”New Economy – New Competition, the rise of the

consumer?”. Palgrave, New York

Chin J, Jiang B, Mufidah I, Persada S.F. & Noer B.A. (2018). ”The investigation of

consumers behaviour intention in using green skincare products: a pro-

environmental behaviour model approach„. Sustainability, 10, 3922

Kotler Ph.& Keler L. L. (2009). ”Marketing Management„. Pearson International

Edition, 13th Edition

Zhang J & Zhou M (2019). ”Factors influencing consumer purchasing behaviour of

natural cosmetics – a qualitative study in Uppsala, Sweden”. Uppsala

Universitet, Master Thesis

***Cefic (2020). ”2020 facts and figures of the European chemical industry”

*** Accenture (2020). ”How COVID-19 will permanently change consumer

behaviour. Fast – changing consumer behaviors influence the future of the

CPG industry”

***Ernst&Young, Accord Australia (2019). ”Hygiene, personal care and specialty

products industry. Economic state of the industry report”

***Cosmetics Europe, RPA (2019). ”Socio-economic contribution of the European

cosmetics industry 2019”

***Essity (2019). ”Annual and Sustainability Report. Breaking barriers to well-

being”

*** Euromonitor International (2019). ”Top 10 Global Consumer Trends”, available

online at https://www.ruminantia.it/wp-

content/uploads/2019/01/EUROMONITOR.pdf

***Global Insight (2007). ”A study of the European Cosmetics Industry”

*** Personal Care Products Council (2019). ”Creating a more beautiful world”, 2019

Sustainability Report

https://www.profit.ro/povesti-cu-profit/retail/obiceiurile-de-consum-ale-romanilor-

ca-ingrijire-si-igiena-personala-sapunul-este-favorit-apa-de-gura-mai-

putin-18973539

https://www.researchgate.net/publication/338421485_Consumer_Buying_Behavior_towards_Cosmetic_Products

https://www.researchgate.net/publication/338421485_Consumer_Buying_Behavior_towards_Cosmetic_Products

https://www.ruminantia.it/wp-content/uploads/2019/01/EUROMONITOR.pdf

https://www.ruminantia.it/wp-content/uploads/2019/01/EUROMONITOR.pdf



69

PROFITABLE BUSINESS VS. DESIRE OF WINNING.

GAMBLING-RELATED PERCEPTION IN RESITA

Venera MANCIU1

Submitted: 4th April 2020 Approved: 5th June 2020

Abstract

The importance of gambling in 21st century society has greatly increased, with opinions about

the effects, ethics and individual consequences in the short term being generally negative. This

paper is only a starting point in a broader research, aimed at determining the degree in which

these businesses are spread locally and the perception of individuals about this phenomenon.

The first part of the paper addresses this issue from a theoretical and statistical point of view,

while the case study conducted in the last section presents the results of an applied study with

great potential for future development.

Keywords: gambling, business, winning, motivation, profitability

JEL : M10, L83

Acknowledgement

This study is a continuation of a research conducted together with students from the Business

Administration in Tourism, Commerce and Services, enrolled in the second year of Master

Studies, in the period October - December 2019. Given the positive results and social impact,

we considered it appropriate to continue continuation and develop this study over a longer

period of time, for a better substantiation of the conclusions. We wish to thank the master

students involved for their contribution to the administration of the questionnaire and the

centralization of the results and we congratulate them for their special ability to raise

awareness among the authorities in order to take measures meant to improve the situation

locally.

1. THEORETICAL APPROACHES

The desire to win fast has always motivated people to gamble, which

also involves a high level of risk. Gambling has not appeared recently, it has

existed since ancient times and has varied in form over the centuries, now

becoming very popular with the help of the online environment and

technological progress, which allow also the distance participation.

Regardless of the presentation manner, the game schemes involved

or the level of attractiveness, the majority are based on mathematical rules

and logics.

Rizeanu and Săvoiu (2012) recall the definition formulated by the

Gamblers Anonymous Association (1998) which identifies gambling as “any

form of bet, significant or not, in which the win is uncertain or depends on

1 Associate Professor PhD, University „Eftimie Murgu” of Reșița, Faculty of Economic

Sciences, Romania, [email protected]



70

the chance or skills of the gambler”. Certainly, beyond the desire to win

quickly, the psychologists also identify some specific causes that determine

even addiction over time.

It is therefore considered that people who engage in such activities

seek to compensate for a number of other shortcomings, frustrations or

personal grievances. But this is a persistent aspect of human behaviour,

which has failed to be eliminated over time, being partially considered, at the

same time, a way to relax, socialize and spend spare time, even if it is not a

moral way or a legitimate entertainment (Kearney, 2005).

The negative social impact of these activities cannot be denied,

gambling turning in many cases into a vice that raises long-term problems

for individuals and multiple consequences, economic and social, professional

and psychological (Rickwood et al, 2010) or even familial in nature.

Some forms of gambling are perceived as more dangerous than

others, and the effects generated cannot be denied (Binde, 2011). Forms

considered dangerous gambling are: online gambling, casinos, slot machines,

certain illegal forms of gambling, while the lottery is seen as a seemingly

innocent form. A moderate level of danger is considered to be related to

sports bets, bingo, bets involving animals, the negative effects being related

to personality and predisposition to vice of the individual, these aspects being

mentioned by studies prepared by the European Commission.

On the other hand, there is always the question of the legality of

certain types of games, especially online (Wood, Williams), although these

types of games are seen as very profitable and have a great potential for

development in the future.

In 2019, the gambling market had over 13,000 street agencies or gambling

halls and over 70,000 devices, betting enthusiasts leaving in such locations

over 1 billion euros annually worldwide. The number of people who resort

to this type of activity is increasing, the game rooms are always full. In

Romania, the gambling market was 5.3 billion lei in 2019, over 29,000

employees working in this field.

There are specific conditions for setting up a business in this sector,

involving large investments and obtaining special licenses, but the amounts

invested are generally easily recovered, with each gambling machine

producing several thousand euros a year. The companies in the field are thus

very profitable, going through an ascending trend in terms of results,

increasing percentage between 25 - 50% annually.

2. STATISTIC DATA

The Statistical Yearbook of Romania indicates during 2018 a total

number of 675 enterprises in Romania, having as object of activity gambling

and betting, the total number of employees in this field being 27,133 people.

It is a profitable activity, as indicated by the statistical data, the evolution of

the turnover volume indices in the period 2013 - 2018 being the following:



71

Figure 1 Evolution of turnover indices for gambling and other recreational activities

(Source: the authors’ processing, according to the information from the Statistical Yearbook

of Romania, 2019)

From the data presented we note that in general between 2014 and

2018 the evolution of business in the field is a positive one, exhibiting

increases in turnover indices, except for the period 2015 - 2016. The highest

percentage increase is recorded from 2016 to 2017 (23,8%).

3. CASE STUDY - RESEARCHING THE ATTITUDE OF THE

RESPONDENTS REGARDING THE SPREAD OF GAMBLING

OUTLETS IN RESITA

In order to investigate the attitude of the citizens of Reșița regarding

the scope of business in the field of gambling, a questionnaire-based study

was conducted between December 2019 and February 2020, the respondents

being residents of the city. The administration method was online, through

the Google Forms tool, the total number of respondents being 130. Of these,

the percentage representation by genders was: 53% men and 47% women.

The structure of the respondents by age categories, level of education and

field of activity is the following:

Sample structure by age

categories under 18 – 8% 18-24 years – 26%

25-34 years – 23%

35-44 years – 18 % 45-54 years – 19%

Sample structure by study

levels middle school 37%

high school 21%

post-secondary studies 6%

vocational studies 6%

higher education 27%

Sample structure by

fields of activity pupil/student/tourism/ trade/education/retired

transports/services

administration/ industry unemployed

-6,3 -2,59,5

-7,4

23,81,9

93,7 97,5109,5

92,6

123,8

101,9

-20

0

20

40

60

80

100

120

140

2013 2014 2015 2016 2017 2018

Evolution Turnover index



72

Figure 2


author)

Figure 3


author)

Figure 4


the author)

The questionnaire included a number of 17 questions, of which 13

content questions and 4 respondent identification questions.

In the category of gambling, a large part of the questions in the

questionnaire related to the field of sports betting. Thus, the conclusions

obtained from the centralization of the results were:

As regards the level of awareness of the respondents with the activity

of the gambling units in the municipality, we find that most of those who

answered the questionnaire (75.90%) are aware of the existence of these

businesses, but do not attend them. A percentage of 15.5% state that they are

largely familiar with the activity of these gambling units and frequent them,

and 8.6% have no knowledge about their activity.

Figure 5 – Level of

awareness of the activity of

gambling outlasts

Figure. 6 – The

frequency with which

respondents attend

gambling outlets

Figure 7 – The reason of

attending gambling outlets


author)


author)


author)

8%

26%

23%

18%

19%

0%6%

37%

0%

21%6%

3%

27%

6% 26%

4%2%11%4%

10%

10%

3%4%3%

23%

15%

76%

9%

Familiarizati in mare masura

Sunt familiarizat dar nufrecventez

Nu detin cunostinte si nufrecventez

84%

7%3%6%

Nu frecventez

Lunar

Săptămânal

zilnic

13%8%1%

78%

Dorinta de castig

Modalitate de petrecere atimpului liberDorinta de socializare

Nu sunt interesat de astfel deactivitati

Aware to a high extent

Aware, but not attending

Unaware, not attending

Not attending

Weekly

Monthly

Daily

Desire to win

Spare time spending

Desire to socialize

Not interested in such

activities



73

As for the frequency with which respondents use the services of

gambling facilities, we find that 83.6% do not attend such places, 6.9%

attend them monthly, 3.4% weekly and 6.10% daily.

Regarding the main reasons why respondents would frequent

gambling or other betting outlets, we note that in the first place is the desire

to win, a large part of those who frequent such places wanting to recover at

least the money invested. Secondly, this activity can be mentioned as

perceived as a way to spend free time, a smaller number of respondents

considering it as a way to socialize.

Given that a very large proportion of respondents do not have this

gambling habit, we have tried to determine the main reasons for this. Of the

130 respondents, 3.80% do not have enough information about gambling

outlets, 53.80% say they are not interested in such activities, and 43.4% have

a bad opinion about betting outlets, as well as of gambling in general.

Figure 8 – Reasons for

not attending gambling

outlets

Figure 9 – Reasons why

respondents would attend

gambling outlets

Figure 10 – Activities

considered interesting by the

respondents


the author)


author)


author)

Among the reasons that would lead respondents to use the services

of gambling units we find, in some cases, curiosity (9.5%), as well as the

desire to win (15.5%), the desire to socialize (1,70%). However, a very high

percentage are people who are not interested in such activities and say they

would have no reason to ever use these units (about 73%).

Asked about activities that they find interesting in a gambling outlet,

however, the 130 respondents provided different answers. Thus, in

proportion of 16.4%, respondents prefer sports betting, 1.70% are interested

in dog races, 4.3% in slot machines, 8.3% of the respondents opt for lottery-

4%53%

43%

Informatii insuficiente

Lipsa de interes

Opinie proasta

9%16%2%73

%

Curiozitate

Dorință de câștig

Dorință de socializare

Nu sunt interesat

17%2%4%8%7%

62%

Pariuri sportive

Curse de caini

Pacanele

Loto

Bingo

Niciuna

Insufficient

information

Lack of interest

Bad opinion

Curiosity

Desire to win Desire to socialize

Not interested

Sporting bets

Slot machines Bingo

Dog races

Lottery None



74

type activities, 6.90% consider bingo activities to be interesting, while a very

high percentage of respondents (62.4%) do not consider any of them

interesting.

Asked what amounts they are willing to bet in such gambling

facilities, the finding is that the availability of respondents at risk is very low,

most of those who answered in the affirmative to this type of activity

choosing to put very small amounts money at stake. A percentage of 79.3%

of those who answered this question say they would not take the risk at all of

betting a sum of money, no matter how low. 7.8% of individuals are willing

to bet amounts between 2 and 5 lei, 5% would bet between 6 and 10 lei, 5%

- between 11 and 100 lei, a lower percentage, of 3% declaring a risk

availability higher, being used to betting amounts between 100 and 500 lei.

Figure 11 – Amounts that respondents

are willing to bet

Figure 12 – Time spent in gambling units /

day

(Source: elaborated by the author) (Source: elaborated by the author)

When it comes to the time in a day spent by the respondents in the

gambling facilities, most of them do not attend them (73.6%), but

nevertheless, the number of those who spend between 10 minutes and 6 hours

a day in such locations is not low. Of the persons who answered the

questionnaire in this survey, 7.8% spend up to 10 minutes, 6.6% usually

spend between 10 and 30 minutes, and 5.5% spend between 30 minutes and

an hour. There are many situations in which respondents spend between one

and 3 hours in gambling units (4.5%), or even between 3 and 6 hours (2%).).

Moreover, when asked how much time they spend in such units

during a week, respondents again confirmed in large numbers that they do

not attend such facilities. However, we notice an inconsistency in the answers

provided, because in the case of this question, the option "I do not attend"

was selected by a percentage of 84.4% of respondents, higher than in the

previous question, where this option was selected by a percentage of 73.6%

8%5%5%3%0%0%

79%

Intre 2 si 5 leiIntre 6 si 10 leiIntre 11 si 100 leiIntre 100 si 500 leiIntre 500 si 1000 leiPeste 1000 lei

8%7%5%4%2%0%

74%

Până în 10 minuteÎntre 10 și 30 minÎntre 30 min și 1 oră1 oră - 3 ore3 ore - 6 ore

Between 2 and 5 lei

Between 6 and 10 lei




Over 1000 lei

Not betting

Up to 10 minutes

Between 10 and 30 min

Between 30 min and 1 hour

Between 1 hour and 3 hours

Between 3 hours and 6 hours



75

of respondents. Broken down in time intervals, we find that 7.8% of

respondents spend up to an hour a week in such locations, 3% spend between

1 and 3 hours, 2.8% - between 3 and 6 hours, 0.8% - between 6 and 12 hours,

while 1.2% of those who completed the questionnaire spend more than 12

hours in such facilities.

Most of the respondents (about 78%) know or have in their circle of

friends / acquaintances people who attend gambling outlets. The remaining

22% say they do not interact with people who frequent these locations.

The motivation for choosing one betting facility to the detriment of

another differs from person to person. Thus, respondents identify in

proportion of 4% the kindness of employees as essential, 5% choose a certain

location due to the wide variety of services, while the winning rate has a

higher share as a factor of influence (6.5%). 2.6% of respondents follow the

recommendations of friends when they make the decision to attend a

particular bookmaker.

Figure 13 – Time spent in gambling units /

week

Figure 14 – The motivation for choosing

a bookmaker

(Source: elaborated by the author) (Source: elaborated by the author)

The majority opinion of the respondents is that in Resita there are too

many betting or gambling facilities (97.4%)

CONCLUSIONS

This paper was elaborated with a very valuable help from students

enrolled in the Master Studies in Business Administration in Tourism,

Commerce and Services, who showed a special involvement in the

administration of the questionnaire, research mediatisation and centralization

of results, succeeding in raising the awareness of the local authorities in the

sense of carrying out an analysis regarding the business field previously

discussed. In the meetings of the Local Council, as a result of the awareness

8%3%3%1%1%

84%

Până într-o oră 1-3 ore

3-6 ore 6-12 ore

Peste 12 ore Nu frecventez

4%5%6%3%

82%

Amabilitatea angajatilorVarietatea mare a serviciilorRata de castigRecomandarea prietenilorNu frecventez

Employees’ kindness

Broad variety of services

Winning rate

Friends’ recommendation

Do not attend

Up to one hour

3-6 hours

Over 12 hours

1-3 hours

6-12 hours

Do not attend



76

of the existence of a high number of gambling facilities, it was discussed to

move them from the city centre, and from the main boulevards respectively,

these activities being recognized as a dangerous vice, with major social

impact, among adults, but especially among young people, and minors.

Currently, the state encourages such businesses, with many bookmakers

belonging to different businesses appearing.

As a synthesis of the conclusions highlighted in the content of the

paper, we can refer the following aspects:

- at present, on the territory of Resita there are a very high number of betting

and gambling outlets, the surplus of units being recognized by the citizens

and considered a categorically negative aspect at social level;

- although most respondents (over 75%) state that they do not attend such

places, the problem of the existence of a high number of such places remains

a very important issue;

- the main reason why respondents use these gambling units is the desire to

win fast;

- the fact that most respondents recognize they have in the circle of

acquaintances / friends people who attend betting or gambling facilities leads

to the conclusion that the danger of popularization of this phenomenon

persists;

- the time spent in these locations by those who frequent them is significant,

reaching up to 6 hours / day and even more than 12 hours / week, however

we notice a sense of caution in taking risks, most of the individuals betting

rather low amounts;

- a general negative feeling about these matters persists, with respondents

generally disapproving of such activities.

For the moment, attending betting and gambling outlets is perceived

in society as a vice. In this respect, there are no up-to-date official statistics

providing real information about people's habits of attending such facilities.

REFERENCES

Binde P. (2011). ”What are the most harmful forms of gambling? Analyzing problem

gambling prevalence surveys”. CEFOS Working Paper, 12, available online

at https://www.utbildning.gu.se/digitalAssets/1327/1327132_cefos-

wp12.pdf

Kearney M.S. (2005). ”The Economic Winners and Losers of legalized gambling”,

available online at https://www.brookings.edu/wp-

content/uploads/2016/06/200502kearney.pdf

Rickwood D, Blaszczynski A, Delfabbro P, Dowling N & Heading K (2010). ”The

psychology of Gambling”. APS Review Paper, available online at

https://psychology.org.au/getmedia/422d3add-d12a-4427-af57-

bf259b056d8d/APS-gambling-paper.pdf

Rizeanu S & Săvoiu G. (2012). ”Statistici ale activității jocurilor de noroc”. Revista

Română de Statistică, trim I. Supliment: 282 – 290



77

Wood R. & Williams R. ”Internet Gambling: past, present, future”. available online

at

http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.557.5205&rep=

rep1&type=pdf

*** Law no. 124 / 29 May 2015

***Swiss Institute of Comparative Law, Study of gambling services in the internal

market of the European Union, Final report, 2006

***European Gaming & Betting Association, Key Figures, 2018

***https://legalbet.ro/alegerea-editorului/tii-cate-case-de-pariuri-sunt-in-romania-

13-494/

***https://www.gambling.net/history/a



78

LOCATION AS A KEY FACTOR IN CLUSTER

DEVELOPMENT. FOCUS ON THE ITC SECTOR IN

ROMANIA

Mădălina Dumitrița MATICIUC1

Submitted: 1st March 2020 Approved: 6th May 2020

Abstract

The current economic paradigm comprises several key elements focused mainly on the

complexity of information technologies and their ability to integrate into new business models.

In this context, it becomes imperative to understand that if companies fail to adapt to the

current environment in real and useful time they will be destabilized and the repercussions

difficult to manage. Therefore, organizations approach strategic visions, to cope with dynamic

change, avoiding any disruption of the competitive advantage already gained. Thus, the

concept of clusters comes not only in the singular help for a type of organization or structure

in the society, but also in the help of all members of the ecosystem, through measures based

on the concept of synergistic development through innovation and involvement. This paper

aimed to identify the impact that the location in a certain area has on the development of

clusters in the sector, and the results demonstrated the emergence and growth of dedicated

ICT clusters in dynamic areas around large cities where there is potential for development of

nodal positions to guide the whole system.

Keywords: cluster, ICT sector, location quotient, spatial development

JEL : R11, R12

INTRODUCTION

The business environment has become increasingly complex,

changes occurring within it having a pronounced unpredictability, moving

from a management focused on physical resources to a knowledge

management. The supremacy of tangible capital is gradually being replaced

by that of intangible capital, with knowledge having exponentially higher

potential than physical resources and presenting advantages of the possibility

of use by several users without being consumed, and the synergy of

individual ideas creating surprising results (Băileșteanu & Burz, 2008). This

evolution meant an intensification of the degree of connectivity between the

various actors belonging to both the public and private environment.

The synergy resulting from these interconnections offers several

opportunities for innovation within the various forms of spatial organization,

but also a number of threats that may arise in the form of communication

gaps and environmental unpredictability.

1 Research Assistant, West University Of Timisoara- Faculty Of Economics And Business

Administration, Romania, e-mail: [email protected]



79

The special role of locating economic activities in crowded business

structures, as innovative forms of spatial organization, to ensure increased

efficiency and effectiveness of business through synergy between

organizations, arouses the interest of researchers in management.

In recent years, the management of organizations has adopted a new

behavior to cope with changes in the business environment, a behavior

focused on integrating companies into innovative forms of spatial

organization such as clusters.

The present paper started from what Moretti said: „More than

traditional industries, the knowledge economy has an inherent tendency

toward geographical agglomeration” (Moretti, 2012). The prosperity of a city

is very much tied up also to the fortune of the dominant industry which is

based on that city, so regional development generally follows the industry.

The choice of the place of operation and the way in which the interaction

with various partners will take place are elements that entrepreneurs often

consider when trying out activities. Proximity is also one of the factors not

neglected by entrepreneurs. Although transportation costs are often

negligible, distance to suppliers and long lead times can be a barrier for a

company to be flexible enough to react in real time and usefully to changes

in the market.

In this context, we notice that the emergence of clusters can be

influenced by industrial connections, but more than that, by the transfer of

knowledge, relationships, trust as facilitators for generating competitive

advantages. Clusters appear „in industries characterized by dominant

regional clusters, membership in a cluster is essential for sustained strategic

equality” (Tallman et al., 2004). The cluster approach associates the idea of

value creation with that of geographic location. So, this paper aims to analyze

the dynamics of agglomeration processes for ICT sector in the Romanian

regions and to connect the results with the process of gaining competitive

advantage through location.

1. LITERATURE REVIEW

Classical theories regarding agglomeration are those that explain the

evolution of the clustering phenomenon. A multitude of researchers have

sought to identify why certain economic activities are located in certain

geographical areas. These theories considered the importance of

accessibility, transport infrastructure and spatial distribution of land used by

various businesses. Theories about location were interested in finding a way

to explain why companies want to be in a certain geographical area.

Von Thünen is the one who in 1826 highlighted the importance of

the accessibility of the location, trying to explain the concentration of

economic activities around a central point, analyzing the rent of the location

according to the distance from the center, the sale price of production,

production cost and transport cost (von Thünen, 1826). This theory was later



80

upgraded by Alonso which also takes into account opportunity cost,

transaction costs, cultural costs, border effects and including costs associated

with communication (Alonso, 1964).

But until we get to the complexity of Alonso's theory, we consider it

important to remember Marchall's contribution. It also followed the business

localization process, making a fundamental contribution about

agglomeration forces. In his theory he considered the accessibility to human

resources, the reduction of transport costs by the proximity between supplier

and customer, but also the ease with which the company obtains new

information and knowledge (Marshall, 1890). A few years later, Weber

(1909) sought to significantly minimize transportation costs, after which

Christaller researched centralization, and his studies of German cities

suggested recommending the development of businesses located in central

areas to serve the surrounding areas and its customer does not have to cover

distances greater than 5 km for supply (Christaller,1933).

Porter (1990) emphasized the geographical location of companies as

a factor of particular importance in the implementation of companies'

strategy. He also stressed the importance of bringing links in the value chain

in order to facilitate the flow of information from supplier to buyer, but only

inside the cluster, not outside it, thus guaranteeing the competitive advantage.

Almost a year after Porter, Krugman emphasized the importance of transport

infrastructure as a support for improving the accessibility and development

of a region. He argues that if economies of scale are taken into account,

regions with intense production activity will become more profitable and thus

attract more factors of production (Krugman, 1991).

The interest for locating the business was also manifested in the

works of Vicerman who considers the transport infrastructures at the

interregional level as a factor leading to the increase of the accessibility of a

location, the gains will still be higher in the rich areas. (Vinckerman et all,

1999)

It can be seen how, over time, the factors that have an influence on

the location of business have been identified in various contexts and in

various forms, research being often contradictory. However, studies have

highlighted the importance of location for a business location (Barlet et al.,

2013).

In the context of a hyper-competitive environment, the choice of

location considering the availability of as many resources as possible is

essential. Autio (2017) argued that start-ups based on predominantly digital

features will not be determined by the same factors in choosing a location,

given that digitization minimizes the importance of geographical distance

and allows for alternative forms of organization, often based on virtual

collaboration.



81

2. METHODOLOGY

Globalization has challenged the classic premise of spatial and

territorial proximity, emphasizing the existence of a technological and

entrepreneurial proximity between companies, without borders, focused on

the logic of society based on networks and knowledge.

Over the last three decades, research has provided important

developments in the field of industrial location and space economics. Based

on the theories previously presented, which detail the permanent link

between the state, human resources and production processes, spatial

agglomerations of cluster-shaped businesses have emerged.

After a multitude of definitions given to the most complex spatial

agglomeration, in 1998, Michael Porter defined clusters as „a geographic

concentration of interconnected businesses, suppliers, and associated

institutions in a particular field” (Porter, 1998).

The international literature focuses mainly on developed countries,

where clusters are analysed for years ago. For Romania and its regions, the

approach must be adjusted to the national and regional characteristics. Thus,

the paper aims to explore the attempts of analyzing the potential clusters in

the Romanian development regions using the Location Quotient method in

order to assess the dynamics of the agglomeration in ICT sector.

The analysis method includes an investigation of the current situation

of the Romanian businesses spatial agglomerations in the ICT sector, using

the location quotient for the 8 development regions that were approached in

a comparative way. Location Quotient (LQ) allows us evaluating the relative

degree of concentration of a given activity in a given region.

The dynamics of the number of employees in the ICT sector is

calculated using the (LQ) thinking at one Hypothesis: Does the ICT sector (a

pillar for the knowledge-based economy) demonstrate a higher concentration

and potential for higher agglomeration in the geographical regions where ICT

clusters have emerged?

I used the Location Quotient method for the ICT sector in all the

Romanian regions, using:

LQ = (ei/e)/(Ei/E)

Where:

ei = local employees in industry i;

e = total local employees;

Ei = total national employees in industry i;

E = total national employees.

This sector was chosen due to its inclusion in the Romania Smart

Specialization Strategy beeing one of the 10 key sectors proposed as can be

seend on the presentation. 10 key sectors :- information and communication

technology - tourism and ecotourism, - textiles and leather, - wood and

furniture, - creative industries, - automotive and components industry,, - food

and beverage processing, - health and pharmaceuticals, - energy and



82

environmental management, - bioeconomy (agriculture, forestry, fisheries

and aquaculture), biopharmaceuticals and biotechnologies.

3. RESULTS

The current situation in Romania, looks like According to the

„Global Innovation Index 2018” report, in terms of cluster development we

are ranked 107 in the world out of 126 countries analyzed in 2018, down with

12 positions from the report published the previous year. Declaratively, there

are over 70 clusters formed in Romania, but many of them are inactive, and

their contribution to exports is not official public information.

More than this, Romania ranks last in the EU in the share of human

resources employed in science and technology (S&T), with 27% (1 in 4

employees), compared to the European average of 46% (almost 1 in 2

employees), according to the latest official data of Eurostat.

As can be seen in Figure 1, the higher is the share of human resources

employed in science and technology, the GDP / loc. is higher. Although at

European level strategic efforts are made to reach the highest levels of

technology by concentrating human resources on technologically advanced

fields, in Romania employment in positions dedicated to science and

technology has a speed well below the average of other European countries.

Romania continues to emphasize the assimilation of theoretical knowledge

to the detriment of the applied ones, not being provided a plan to balance this

situation (Demyen, 2019).

Figure 1 - human resources employed in science and technology

(Source: https://inaco.ro/doua-propuneri-ale-inaco-pentru-ca-romania-sa-elibereze-ultimul-

loc-in-ue-la-ponderea-resursei-umane-angajate-in-stiinta-si-tehnologie/)

The results of LQ calculations show the variation of spatial

agglomerations in terms of employees’ number change in ICT sector between

2000 and 2018. Measuring an average location quotient index helped us in

providing an overview of the transformations regarding the evolution of



83

regional industrial agglomerations. The period was selected due to the

availability of data.

As can be seen, the ICT sector is the best represented in the capital,

Bucharest being on the first position in terms of LQ from until the end of

2018. On the 2nd and 3rd places in 2009 was the western region, respectively

northwest. This situation has changed since 2011 when the two regions

exchanged positions with each other, a situation that is maintained until the

end of the analysis period. It can also be seen that the LQ value for the Central

and North East regions positions the two regions in the middle of the ranking

throughout the analyzed period, and all 3 southern regions (except the capital

which is part of the South-Muntenia region) "are fighting”with each other for

the last 3 positions. A possible explanation for the evolution of this indicator

over time could be the presence of university centers in Bucharest, Cluj

Napoca, Timisoara and Iasi that run specialized programs for multinationals

that have co-located in these cities.

In recent years, we have seen a dynamic increase in terms of the

number of cluster initiatives in Romania, especially in high-tech industries,

for example ICT. This has been supported by European programs, in

particular aimed at the internationalization of cluster activities, which is a

source of many benefits for participating companies, connected, for example,

with greater access to technology or new markets. Table 1 Location Quotient – ICT

economic activities at level of CANE Rev.2 (ICT) and development regions

(Source: own calculation based on National Institute for Statistics – ROMANIA data)

For the time being, in the ICT industry, Romania has developed 11

clusters established in Bucharest, Cluj Napoca, Timișoara, Iași, Brașov,

Miercurea Ciuc and Craiova. Looking at the development regions, the

clusters are developed in 7 of them taking into consideration that South

Muntena don t have any ICT cluster but inside this development region is

included the Bucharest region. Informations about these clusters are obtained

from the main platform of cooperation, exchange of information and support



84

towards the development of the national cluster landscape based on

innovation and internationalization CLUSTERO.

Table 2 ICT Clusters in Romania

(Source: based on information from http://clustero.eu/)

What we have to take into consideration is that among these clusters,

iTech TranSylvania Cluster benefits from European secretariat for cluster

analysis of a Gold Label, ELINCLUS - Electronic a Silver Label, and Banat

Software a Bronze Label.

Nevertheless, the regional concentration of IT employees is a

relevant indicator for potential cluster building. Even if the upward trend of

this activity is visible in Romania, it is worth mentioning that the situation is

not comparable with other European locations with a high density of IT

activities. However, other regions in Europe have a much higher

concentration of employees in IT groups.

4. CONCLUSIONS

The results of the research show that most clusters have shown

growth and dynamism in those regions where there is latent potential that can

be activated and exploited. Also, the research has shown that the ICT sector,

through the synergistic potential of the companies that represent it, can be the

lever that Romania needs to aspire to obtain the sustainable competitive

advantage at both European and global level.

The results of the LQ calculations show the variation of spatial

agglomerations in terms of the number of employees in the ICT sector

between 2009-2018. The LQ measurement helped us to provide an overview

of the transformations regarding the evolution of regional spatial

agglomerations.

For the future, the analysis can be realized at the county level (NUTS

III) in order to have a better image of the clusters position inside the region.

At the same time, the analysis is to be extended through other analyzes that

include the other sectors of activity in Romania. The quantitative analysis

http://clustero.eu/



85

done by calculating the location quotient reveals that most Romanian

functional clusters within these industries are small and justify the beginnings

of this clustering phenomenon; however, the most important aspect is that

there is potential and it should be oriented, activated, and valorized.

REFERENCES

Alonso, W. (1964) „Location and Land Use”. Cambridge (Mass.), Harvard

University Press.

Autio, E. (2017) „Digitalisation, ecosystems, entrepreneurship and policy”. Policy

brief 20/2017.

Barlet, M., Briant, A., & Crusson, L. (2013). „Location patterns of service industries

in France: A distance-based approach” Regional Science and Urban

Economics, 43(2), 338–351.

Băileșteanu, G., & Burz, R. (2008) „Viitorul-mari provocări și megatendințe”.

Timișoara: Mirton

Christaller, W. (1933) „Die Zentralen Orte in Süddeutschland”, Jena, Gustav Fischer

Verlag. English translation: The Central Places of Southern Germany,

Englewood Cliffs (N.J.), Prentice-Hall

Demyen, S. (2019) „An Insight To Generation Z Perception About The Quality Of

Higher Education In Romania” Analele Universitatii'Eftimie

Murgu'Resita. Fascicola II. Studii Economice, (26).

Krugman, P. (1991) „Increasing returns and economic geography” Journal of

Political Economy, 99 (3), 483-499.

Marshall, A. (1890) „Principles of Economics” London: Macmillan.

Moretti, E. (2012) „The New Geography of Jobs” Boston: Houghton Mifflin

Harcourt.

Porter, M. E. (1990) „The competitive advantage of the nations” New York: The

Free Press.

Porter, M. E. (1998) „The Competitive Advantage of Nations” New York: The Free

Press

Tallman, S., Jenkins, M., Henry, N. and Pinch, S. (2004), „Knowledge, clusters, and

competitive advantage”, Academy of Management Review, Vol. 29 No. 2,

pp. 258-71.

Vickerman, R., Spiekermann, K., Wegener, M. (1999) „Accessibility and Economic

Development in Europe”, Regional Studies, 33:1, 1-15

von Thünen, J. (1826). The Isolated State. London: Pergamon

Weber, A. (1909) „Über den Standort der Industrien (On the Location of Industries)”

Tubingen: Mohr Verlag.

***Romania Smart Specialization Strategy

https://ec.europa.eu/regional_policy/en/information/publications/factshee

ts/2017/smart-specialisation-strengthening-innovation-in-romania

***Global Innovation Index 2018

***https://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2018.pdf

***National Institute for Statistics – Romania https://insse.ro/cms/en

***http://clustero.eu/

***https://inaco.ro/doua-propuneri-ale-inaco-pentru-ca-romania-sa-elibereze-

ultimul-loc-in-ue-la-ponderea-resursei-umane-angajate-in-stiinta-si-

tehnologie/



86

THE CONTRIBUTION OF INVESTOR PROTECTION TO

THE DEVELOPMENT OF THE STOCK MARKET AND

ECONOMIC GROWTH

Marius Cristian MILOȘ1

Laura Raisa MILOȘ2

Submitted: 25th July 2020 Approved: 2 August 2020

Abstract

In this paper, the authors outline the importance of the stock market for the economic growth,

the lack of interest for the Romanian stock market, as well as some important legal aspects

which may increase investor protection and consequently could lead to an increased market

participation. It is also revealed that financial education is one of the most important pillars

for realizing optimal financial portfolios, including equity traded on stock exchanges. MiFID

II is expected to enhance minority investor protection and with this, to boost stock market

growth.

Keywords: stock market, investor protection, economic growth

JEL: K00, G18, G19

1. INTRODUCTION

There is stated in the literature that financial education of citizens

may determine partially economic growth (Batsaikhan and Demertzis

(2018)). By considering financial education of citizens, we consider also the

savings and investments made by population. In order to improve the

financial behavior of the people, there is a need of properly financial

education acquired by citizens starting with young ages, before investments

can be self managed. Consequently, educational systems should be ready to

offer financial education courses including them in the mandatory curricula

of secondary schools and highschools.

Considering the Romanian case, we can say there has been a

functional domestic stock market beginning with 1995. Anyway, due to

several reasons, the role of the domestic stock market in the economic growth

lacked in consistency for a period of two decades and a half. This can

definitely be linked to financial education, to the trust of the investors in

trading financial instruments on the stock market and the lack of

communication between authorities (which regulate and supervise the stock

market) and the citizens. The stock market itself and the traded companies

1 Lect. PhD., West University of Timișoara, Faculty of Economics and Business

Administration, România, [email protected] 2 Lect. PhD., West University of Timisoara, Faculty of Economics and Business

Administration, România, [email protected]



87

couldn’t offer all the necessary incentives in order for people to manage their

own stock market investments. In this respect, considering Eastern European

countries, there is a significant difference concerning the number of

investors/1000 people, countries like Poland and Czech Republic surpass in

a large proportion the number of Romanian investors. In fact, in Romania in

the last three years (2016-2019), the number of active trading accounts was

less than 20.0001, some of these accounts belonging to the same investors. In

this way, other Eastern European countries reach a value which may be ten

times or more higher, in what concerns the existing trading accounts to 1000

inhabitants (for example, Poland reached about 250.000 active accounts in

20182). Never mention that Western stock markets reach higher percentages

of stock market capitalization in the GDPs of those countries, the market

capitalization being an important indicator of the stock market development

and consequently of its role in enhancing economic growth.

Without developing all the positive elements of the stock markets

within an economy, we just want to highlight that stock market could

represent one of the most important path for financing companies.

Companies manage to attract financial resources if there is an increased

number of investors willing to invest their capital by buying shares of the

companies listed on the Romanian stock market.

Further on, we will reveal some of the legal elements which have

been largely debated in the economic and law literature, which are directly

linked to the protection of minority shareholders and also to some possible

directions which make people reluctant to becoming investors on the

Romanian stock market.

2. THE ROLE OF STOCK MARKET IN ENHANCING ECONOMIC

GROWTH AND THE SIZE OF STOCK MARKET IN THE

EUROPEAN UNION COUNTRIES

One of the main determinants of the stock market development is the

financial education of potential investors. As people prove to be more

financially literate, they make better financial decisions, being able to hold

diverse assets in their portfolio (Batsaikhan and Demertzis (2018)).

There has been established financial literacy rankings within

European Union countries, revealing best-performers (like Sweden and

Denmark), but also countries placed below European Union average

(Romania ranking last). Nevertheless, it is worth mentioning the negative

relationship between financial literacy scores and inequality among EU

countries (Figure 1).

1 According to the Quartely Reports supplied by ASF 2 According to the statement of Adrian Tănase (General Manager Bucharest Stock Exchange,

https://www.bursa.ro/doresc-sa-avem-100000-de-investitori-activi-la-bursa-08040530

https://www.bursa.ro/doresc-sa-avem-100000-de-investitori-activi-la-bursa-08040530



88

Figure 1 – The connection between financial literacy and inequality in the European Union

countries

(Source: Batsaikhan and Demertzis (2018), pag.13)

The connection between the development of the stock market and

economic growth has been intensively debated in recent years (Levine and

Ross, 2004). Making a review of the functions of the stock market that

ultimately lead to improved resource allocation and economic growth, Levine

and Ross (2004) mentioned:

Dissemination of information and allocation of capital;

Monitorization of companies and improving corporate governance;

Decreasing risk;

Savings pooling;

Facilitation of exchange.

WFE (2017) also mentions the mechanisms through which the stock

markets are likely to affect economic growth, which in their opinion are the

following: first, the functional stock exchanges allow the mobilization of

domestic and foreign resources for financing the national economy; second,

they enhance the corporate governance at the level of the listed companies;

third, they allow the finance of SMEs, which can be in general limited due to

the difificulty of accessing bank loans.

The stock markets represent an important part of the financial

system, allowing for an improved distribution of resources that fosters

economic growth by directing capital from institutional sectors with excess

capital towards those sectors with a need of capital. The fact that the domestic

stock markets in the European Union countries had a growing role in the

financing of the economies is shown by the dynamics of the stock market

capitalization over time, which, with the exception of the financial crisis

period, shows in general an upward trend (Figure 2).



89

Figure 2 - Dynamics of stock market capitalization in the EU countries (% in GDP)

(Source: Word Development Indicators (2020))

However, not all the European Union countries, have the same level

of development of the stock market, and consequently not all the stock

markets perform the same role in enhancing the economic growth of the

countries. One of the measures of the stock market development proposed by

Levine and Zervos (1996) is stock market capitalization in GDP. We can see

that, in general, the stock market capitalization of the European Union

countries (as % of GDP) is higher in the old member states of European

Union (with an average of 64,8 % in GDP), while in the new member states

it is significantly lower (with an average of 18 %). Romania ranks slightly

over the EU-13 average, but still lags behind the developed European

countries (Table 1).

Table 1 Stock market capitalization (% in GDP) in 2018

Countries Stock market

capitalization (% in GDP)

Countries Stock market

capitalization (% in GDP)

Austria 25,6 Bulgaria 24,4

Belgium 59,1 Croatia 33,6

Denmark 104,4 Cyprus 13,3

Finland 101,1 Czech Republic 24,8

France 84,9 Estonia 9,9

Germany 44,4 Hungary 18,3

Greece 17,6 Latvia 2,5

Ireland 28,8 Lithuania 7,4

Italy 30,7 Malta 34,6

Luxembourg 69,8 Poland 27,3

Netherlands 108,3 Romania 19,2

Portugal 25,7 Slovakia 5,4

Spain 50,9 Slovenia 13,5

Sweden 123,1

UK 97,0

EU-15 64,8 EU-13 18

(Source: realized by authors, data provided by World Development Indicators

Note: For Czech Republic, the data is for 2017



90

3. PROTECTION OF MINORITY INVESTORS IN ROMANIA –

ESSENTIAL CONDITION IN DEVELOPING THE ROMANIAN

STOCK MARKET

At the moment, in Romania, the following regulations represent the

framework in which stock market transactions are taking place: Law no.

31/1990 of companies, Law no.24/2017 of financial instruments and market

operations and the recent Law no. 126/2018 which transposed the MiFID II

directive1.

Further on, we will make a short legal analysis just to show some

considerations which hinder minority investors to increase their holdings on

the Romanian stock market, but also which disincentives other citizens to

become investors on the Romanian stock market.

Considering the theoretical background, we consider the

following situations where the minority investors are prejudiced:

non-payment of dividends for several financial years and the

formation of annual benefit reserves. This is the case when the

accumulated reserves considerably exceed the size of the legal

reserves and there is no reason to initiate prudent policies for the

development of the company in the economic environment in which

it operates. Minority shareholders may file an action for anullment,

but the court may not interfere with the functioning of the company,

but may only decide on the merits of the decision in the event of the

reinvestment of the capital without a justification for that decision

affecting the minority shareholders;

the reduction of the share capital by renting assets at low prices, the

sale of assets at undervalued prices, in order to promote the interests

of majority shareholders held in other companies;

capital increase in the form of contributions in kind, with over-valued

assets, in fact existing an interest of significant shareholders in

reaching a certain threshold of holding in a company;

shareholders may often have their own interests in the company,

therefore, the abuse of a dominant position does not penalize the conflict

of interest that naturally arises, but only the situations when a decision

would be of the sole benefit of the majority, affecting the social interest.

Recently, by the introduction of Law no. 24/2017 of financial

instruments and market operations and also the Law no.126/2018

regarding financial instruments, there have been ruled several measures

by which minority shareholders are being protected. As an example, we

mention the abuse of a majority shareholder, which is being punished

1 Directive 2014/65/UE of the European Parliament and of the Council of 15 May 2014 on

markets in financial instruments and amending Directive 2002/92/EC and Directive

2011/61/EU



91

either by the annulment of the general meeting of shareholders’ decision,

or by the payment of damages by shareholders who committed abuses

(Bodu, 2018). Referring to the comments of Bodu (2018), there have

been observed the following situations in which the judicial practice

revealed abuses regarding the voting rights of the majority shareholders:

non-distribution of dividends without an economic reason;

contributions in kind to the share capital of a company controlled by

the same majority shareholder, after the majority shareholder voted

in previous years against distribution of dividends, the assets being

directed towards other companies whih were also controlled (owned)

by the same shareholder.

According to art. 152 from Law no. 31/1990, in the case in which

the managers sign contracts which prejudices the company, any of the

minority shareholders has the right to act on behalf of the company in

order to regain prejudices. So, minority investors have the right to act by

themselves for regaining prejudices recorded by the company as a whole.

This is based on the social interest of the legal acting of the minority

shareholder and not on his personal interest.

Besides the main regulations regarding the stock market, there

are also particular regulations provided by the Romanian Financial

Supervisory Authority (ASF). According to Calin (2014), one of the main

functions implemented by ASF is the surveilallance of the stock market. This

is based mainly on the necessity of investor protection against unfair

practices, in order to ensure a fair and transparent functioning of the market,

but also in order to prevent the manipulation of the stock market.

In the case of any practices which could influence the prices of

shares, all the information regarding these practices should be

transmitted by the boards of companies in a very short period of time (of

maximum 24 hours) after the event took place to ASF and to the market

operator (art. 234 from Regulation ASF no.5/2018). Furthermore, the

issuer should make public the information in such a way that the

shareholders with own interest in the company can get direct access and

determine a correct evaluation of such obtained information. We give

some requirements to which art. 234 of ASF Regulation no.5/2018 refer:

the convening of the general meeting of shareholders;

the failure of adoption of decisions because of the lack of

quorum;

changes regarding the control in the board of the issuer;

the change of the financial auditor of the issuer;

litigations in which the issuer is involved;

cessation of activity of the company or the restart of some

activities;



92

significant changes in the assets’ value owned by the issuer;

acquisitions or sales of assets.

Regulated stock markets, through their operators, are required to

ensure investor protection by providing detailed information in order to

grant market transparency (Gheorghe, 2018). Under the MiFIR

transparency rules, market operators and investment firms managing a

trading venue must disclose the current purchase and sale prices and the

volume of trading expressed in those process. Market operators and

investment firms make public this information to investors on a

continuous basis during normal trading hours1.

We focus further on the inside information that can have adverse

effects on shareholders, and in particular on minority investors.

According to Directive no.2003/6/CE on market abuse, the inside

(privileged) information has a precise content which has not been made

public, which considers one or more issuers or one or more financial

instruments, and which, if it were to be passed to the public, it could

affect the price of financial instruments. According to Șerban (2016),

privileged information means also existing events or the informations

according to which one event has not taken place or will not happen in

the future.

4. CONCLUSIONS

To conclude, there is a large potential for the Romanian stock

market to develop in a very short period of time. This assumption is based on

the large gap existing between the Romanian stock market and other regional

European stock markets. There are some triggers which may determine such

an evolution, such as the recent adopted European regulations, as well as the

recent upgrade of the domestic stock market to the “emerging” market status,

which draws the attention of potential issuers, as well as institutional

investors. However, in order to determine this positive dynamics, improving

financial education would be an important milestone for the future.

REFERENCES

Batsaikhan and Demertzis (2018) “Financial literacy and inclusive growth in the

European Union”, available online at: https://www.bruegel.org/wp-

content/uploads/2018/05/PC-08_2018.pdf

Bodu, S. (2018) “Piaţa de capital. Legea nr.24/2017 privind emitenţii de instrumente

financiare şi operaţiuni de piaţă”, Ed. Rosetti International

Dragoș, C (2014), Regimul juridic al societăților de investiții, Ed. Hamangiu,

București

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Gheorghe, C. (2018) „Piața de capital – Fundamente juridice”, Universul Juridic,

București

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American Economic Review, vol. 88, no.3: 537-558

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Universul Juridic, București

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https://unctad.org/en/PublicationsLibrary/WFE_UNCTAD_2017_en.pdf



94

EUROPEAN TRENDS ON THE AUTOMOTIVE MARKET

Mirela MINICĂ1

Florin Ionuț AZUGA2

Submitted: 9th July 2020 Approved: 30th July 2020

Abstract

This article aims to synthetically present the state of the automotive market, focusing on the

European market, to highlight the main evolutions and trends foreseeable for the coming years

as well as the major challenges facing this industry - a key branch for the economic

development due to its huge driving effect on other sectors. A special attention is given to the

importance of the research and development in the automotive industry.

Keywords: market, cars, EU, research and development, EASCY

JEL: L16

INTRODUCTION

In order to understand what he automotive market means, it must be

stated that the automotive industry includes a wide range of companies and

organisations involved in the design, development, production and

commercialization of automobiles. This is one of the most important

economic sectors according to income but it does not include the industries

dedicated to the maintaining of automobiles’ maintenance after their delivery

to the final user, such as auto workshops and petrol-filling stations.

The word automotive comes from the Greek word autos and the

Latin word motivus (of movement) referring to any form of motor vehicle.

This term, proposed by Elmer Sperry (1860-1930), was used for the first time

referring to automobiles in1898.

The United States have led the world production of automobiles for

decades. In 1929, before the big depression, in the world there were

32,028,500 automobiles in use and the automotive industry of USA has

produced around 90% of them. At that moment the USA had an average of a

car to 4.87 people. After the Second World War, the USA owned ¾ of the

world automotive production.

1. GENERAL CONSIDERATIONS REGARDING THE WORLD

AUTOMOTIVE MARKET

The European auto industry looks totally different today than ten

years ago. The polarization of the market and the geographical

1Associate Professor PhD, University Eftimie Murgu of Reşiţa, România, e-mail:

[email protected] 2 Master student, University „Eftimie Murgu” of Reșița, Romania,

[email protected]



95

reconfiguration of the production chains are key elements which stay at the

basis of the evolution of the European automotive market.

According to the data of the European Automobile Manufacturers

Association, in 2018 79 million cars were sold in the world, less 0.8% than

in 2017. Out of these, there were 80% automobiles and 20% commercial

vehicles. In 2018 at European level there were roughly in use around 317

million automobiles, an increase with 1.02% as compared to 2017.

According to the dates of the association, 17 million automobiles

were produced in the European Union (UE) in 2017, and at world level, 24%

out of the total vehicles are produced in the European Union, while Europe

covers 18% of the total produced at world level. In EU there were 227

factories where they produced and assembled automobiles. The cars which

use fuel such as Diesel fuel and gas are still in the top sales in EU with over

49%.

The European automotive was profoundly affected by the crisis at

the end of the year 2000, a real come back was felt only in 2015. In 2017, the

level of matriculations was still with 2.9% smaller than in 2007 (Figure 2.1),

the beginning of 2018 announcing already a significant slowing down of the

positive dynamics in the last years and thus, the end of the coming back post-

crisis period. The demand for new automobiles seems to be limited at around

15.5 million per year which really suggests that the last crisis has structurally

affected also on long term the European auto market.

Figure 1. The European automobiles market, 2007 vs. 2017

(Source: ACEA)



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Despite all these, according to the ACEA data, the automotive

industry generates a commercial surplus of 90.3 billion euro, including the

export of 5.9 million vehicles delivered in 2017.

The situation for the auto industry is today more complicated than

any time, not few observers insisting that on long and average terms, the

technological and adjusting evolutions which are already in development will

change from the bottom the functioning way of the whole auto ecosystem –

from production to sales and daily use of automobiles.

Regarding the evolution of the auto industry on long term, the

estimates are that during the years 2018-2030 there will be a substantial

modification of the market as a consequence of the impact of political-

economic decisions but also the modification of the behavioural patterns of

the new generations.

The challenges to which the European automotive market must

answer are mainly connected to the reduction of the polluting emissions that

the automobiles give out in the atmosphere but also the way the individuals

perceive the manner to use the vehicles.

2. THE MAIN TRENDS ON THE EUROPEAN AUTOMOTIVE

MARKET

Presently we talk about automotive from another perspective: that of

the challenges to which the sector must answer. And mainly, these are

circumscribed to the new concept of urban mobility which is approached on

all the profile media.

Observing the environment requests, the awarded subsidies for the

greening of products - from the creation of the hybrid automobiles which can

travel without polluting emissions on short distances, in the urban areas, until

the creation of the completely electrical automobile and the restrictive

regulations in the field of street traffic in the urban area require considerable

investments to which a substantial volume of investments for the

achievement of the autonomous automobile, a major objective which has as

aim to contribute to the fluidization of the street traffic, to the reduction of

the number of accidents and the improvement of the comfort of the people in

the automobile. An ultimate objective of the auto construction become the

simplification of the driver’s task, the more so as the knowledge and

experience gained in the field have proved that in many cases the automatized

vehicle makes better decisions than the human being.

The market has new expectations regarding the future of the

automobile: the vehicle which “will lead itself and park itself”, on automatic

pilot. Reflecting an acute need to reinvent, in order to satisfy the increasing

expectations of the buyers concerning the automobile of the future, which

should be carbon-free and satisfy the requirements regarding the environment

protection and population’s health and meanwhile to become a means of

autonomous transport, the auto industry, older than a century, has entered an



97

ample process of technological transformation. Nowadays, it is faced with

the challenges generated by the special processes and achievements in the

field of artificial intelligence, whose implementation in the field of the

automobiles construction will lead to the achievement of mainly new cars,

with innovating economic and technical-functional features.

2.1. ELECTRICAL MACHINES

Being given the place of auto industry in the European economy, the

European Commission has highlighted the importance of a fast transition

towards “the new industrial age” in order to maintain the technological

advance that the European producers still have on the external markets (and

especially in China) and in order to protect the European market against the

foreign companies (again, especially the Chinese one) which presently invest

massively in the development of new auto technologies. The European

Commission estimates that the world market of electrical automobiles will

reach 339 billion dollars in 2030, while the market of autonomous vehicles

will reach 273 billion. With an already decreased profitability in Europe, the

risk is considered a major one in the case in which the European industry

does not succeed to capture the technological potential as much as possible.

In this context, the environment regulations at European level can be

considered as being in fact beneficent for industry, forcing the producers to

innovate and adapt in advance to the need to reduce emissions which will

become worldwide in the next two decades. Until 2050, the European

Commission estimates that the auto market in Europe will be completely

electrified, meaning that all new vehicles sold will be purely electrical -

vehicles with battery, without thermic engine; the same in the case of the

Chinese market and in time for all the other markets at world level.

The predictions for 2050 seem easier to be traced than the scenarios

referring to the next decade. As proof, there are a multitude of estimations

pretty different of the market rate of electrical machines, going from 7 to 20%

for the purely electrical vehicles until 2025 and from 6 to 27% for the hybrid

(figure 3.1.1). This diversity is due to the persistence of more ultimate

unknown quantities in the establishment of the way and rhythm in which the

transition will take place towards an electrified auto market. It is especially

about the cost of batteries which for the moment do not allow a viable mass

commercialization for the electrical automobiles and the loading

infrastructure which require investment of billions of dollars chiefly from the

part of public authorities.



98

Figure 2. Predictions referring to the market rate of electrical machines in 2025

(Source: Syndex)

2.2. CONNECTED AND AUTONOMOUS MACHINES

Even in the scenarios with the most powerful impact of the vehicles’

electrification, the basis of the auto industry stays the same, a thing which is

not at all valid for the scenarios referring to the impact of the connected and

autonomous vehicles. Regarding the connectivity itself- the capacity of

vehicles to communicate with the environment, between them and with the

users and other objects – the transition is already partly achieved, a PWC

study showing that in 2017 over 89% of the new automobiles were

connected, until 2022 there will be 100%. Therewith, they will be generalised

passing from innovations reserved to the premium ranges to integrant parts

of the standard packages of class A, B and C vehicles. The generalization of

the connected machines will generate more and more data regarding the

vehicles and the users, data which can be used in industrial and commercial

purpose by the producers, providers or third parties. All these innovations

have already extended the borders of the value chain of the auto industry

between software and data management, activities that both the builders and

traditional providers/suppliers seem to prefer to develop internally in a great

extent to limit the possibility of entering the market some extremely potent

competitors such as the IT giants.

The change can be much more significant especially due to

autonomous machines which represent the technological peak in the field of

auto connectivity. Even if the really autonomous machines do not arrive on

the streets in the following 10 years, the drivers’ assistance and the partial

autonomy are already realities for the premium models and they will be

integrated in time in the standard packages of the inferior prices ranges



99

vehicles. The higher risk for the auto industry is represented by the

proliferation of the autonomous shared mobility and the replacement in time

of the standard vehicle with human driver and which are in the individual

property of the vehicles’ users with digital driver which are in the property

of the providers of the shared mobility. In a scenario in which all the auto

market would be cornered by such “robo-cabs”, PWC estimates a decrease

of the auto park up to 14% of the present level and a reduction at half of the

sales (and implicitly of the production).

Together with the electrification of the motorizations, the technology

of connected and autonomous machines has given a push to the major

investments in research and development of the auto companies which

doubled in Europe between 2010 and 2017 (from 27 to 54 billion euros

yearly) consolidating the leader position of the auto industry among the other

sectors (figure 3.). Lately, the investment in research and development of

autonomous machines and electrical machines has reached 180 billion dollars

worldwide.

Figure 3. Research-development expenses at European level (billions of euros)

(Source: WEF)

2.3. THE DIGITIZING OF THE PRODUCTION CHAIN

The third major technological tendency which is said to be the most

essential changer in the way the auto industry works is the general advance

of digitization. If the production itself does not figure among the essential

topics in the debates about electrical machines or about those connected or

autonomous, in the digitization case, the production process plays a main

role. In the auto industry, the transition towards the so-called „Industry 4.0”

(another way to talk about digitization and automation) is in development but

the change is not out and away so revolutionary as the connected and



100

autonomous machines could be, not even the electrical ones. In the most

futurist scenarios, the digitization would affect totally the whole production

chain, from logistics to sales, leading finally to a quasi-total automation,

allowing a reduction of losses (ideal time, inefficient use of production

capacities etc.) and an almost perfect adaptation to the clients’ needs and to

the always changing market trends. The digital technologies would allow the

very exact coordination of the suppliers and builders, the generation of data

in production would allow the reduction of defects and the generalization of

the predictive maintenance of equipment and the artificial intelligence and

the new generations of sensors would allow the development of some robots

able to replace a good part of the manual work of the employees. In the auto

industry, these ideas are not new at all, in fact staying at the basis of the

paradigm of flexible production (just in time, lean), dominant for this

industry even since the 1980’s.

3. CONCEPT EASCY

The five letters which will model the future of the automotive market

in Europe are EASCY: electrified, autonomous, shared, connected, yearly

updated.

The future of mobility will be easier, more flexible and more

individualized for the users. The vehicle of the future will be used on request

and owned conjointly.

The vehicle of the future will have the following characteristics:

• It will emit less noxae and noise in its environment because it is electrical.

• It will take less of our personal time and space because it moves

autonomously.

•It will be more accessible because the users will not need a driving licence

in order to use it.

• It will be more accessible because it must not be bought effectively but

instead you could pay for it in small sums according to your use.

Based on the demographic trends, we should take into account the

way in which the users’ behaviours regarding mobility could be changed and

what effects it could have.

The transition to the individual mobility without noxae emissions

would be hard to achieve without the traction electrification. Nowadays the

cars emit only low levels of noxae, dust and noise. In the future the electric

energy used for the vehicles’ charging will come from renewable sources in

order to ensure mobility without emissions of carbon monoxide.

The fast progress achieved in fields such as artificial intelligence,

automatic learning and profound neural networks make possible the

achievement of what seemed not long ago as a utopia – namely, the

development of the autonomous vehicles which do not require any human

intervention even in complex traffic situations.



101

The vehicles will be shared. While these are nowadays unfolded as

pilot projects or citizens’ initiatives, the sharing concepts will become viable

from the economic point of view by the introduction of autonomous vehicles.

It will not be necessary to search for a shared vehicle in the neighbourhood:

instead it will be possible to order vehicles anywhere the user is, by a

convenient service „on request”.

The fourth dimension of ”EASCY” is the inter-connection of the car

with the surrounding world – summed up in the concept of the Connected

Machine. This term represents in fact two concepts in one. On the one hand,

it refers to the communication vehicle to vehicle and vehicle to the

environment which means the connection of the car with other cars or the

transport infrastructure (such as traffic lights). On the other hand, the term

also covers the interconnection with the occupants of the vehicle in the

surrounding world. In the future, they will be able to communicate, work,

access the internet or access the multimedia services during travelling.

The topics connected to the development of electrification,

autonomy, connection and sharing will lead to a clear increase of the

innovation rate in auto industry. The models based on cycles of 5 to 8 years

which were always common in this sector, could be soon out of date. Instead

the range of models will be annually updated in order to integrate the most

recent developments of hardware and software. Because the clients will not

naturally want to buy a new vehicle every year because of the high acquisition

costs, the short cycles of innovation will enter the market mainly through

periodical modernization of the shared vehicles.

CONCLUSIONS

The traditional way to own and use a vehicle (personal property and

individual use) will lose ground in a considerable extent (halve) while the

solutions for modern mobility (car-sharing, ride-sharing, autonomous

vehicles in personal property or even renting will gain ground). The total auto

park will decrease on the basis of accelerated elimination of

old/polluting/equipped vehicles with internal combustion engine). Despite all

these, the production of vehicles will register a slight increase on the

background of the explosion of alternative propulsions (electric, hybrid,

hydrogen). Likewise, the autonomous vehicles, despite the technological

effervescence will not have a higher percentage than 10 – 15 % of the total

park.

Until 2040, the mobility services according to the estimations will

represent a business of 200 billion euros. Why the big producers of vehicles

purchase car-sharing, ride sharing companies, which is one of the trends at

world level, is explained by this high tempting sum.



102

REFERENCES

Cartas, M. (2017). ”Evoluţii recente şi provocări majore pe piaţa auto europeană”,

EUROINFO, 1(4)

Guga, Ș. (Syndex) (2018). ”Industria auto, încotro? Tendinţe globale, perspective

periferice” available online at http://library.fes.de/pdf-

files/bueros/bukarest/15195.pdf

Minică, M. (2019). ”The role of international trade in creating jobs within the

European Union”, Annals of „Eftimie Murgu” University Reșița. Fascicle

II. Economic Studies, vol. XXVI

Voro, L. (2019). ”Industria auto față în față cu viitorul” available online at

https://www.transilvaniabusiness.ro/2019/01/17/industria-auto-fata-in-

fata-cu-viitorul/ accesed on 17.01.2019

***World Economic Forum (2019). ”Agile Governance for Creative Economy 4.0”,

Breafing Paper

***World Economic Forum (2020). ”Taking the Pulse of the New Economy”, Chief

Economists Outlook

***World Economic Forum (2019). ”Policy Pathways fot the New Economy.

Shaping Economic Policy in the Fourth Industrial Revolution”

***https://en.wikipedia.org/wiki/Automotive_industry

***https://www.acea.be/uploads/statistic_documents/Economic_and_Market_Repo

rt_full-year_2018.pdf

***https://www.acea.be/uploads/publications/ACEA_Report_Vehicles_in_use-

Europe_2019.pdf



103

DEVELOPMENT AND COOPERATION POLICY OF THE

EUROPEAN UNION

Mirela MINICĂ1

Alexandra SIVULCA2

Submitted: 9th July 2020 Approved: 3 August 2020

Abstract

The present paper aims to present the development and cooperation policy initiated by the

EU, the first chapter, presents and highlights the role played by the EU on a global level,

respectively of its objectives for the new millennium. The work starts with a brief overview of

the EU's commitment, of the issues that are at the heart of this policy: poverty eradication. In

the last chapter, a series of general conclusions are presented.

Keywords: development, legislative framework, FED, IDC

JEL: F35, F63

INTRODUCTION

The EU is a huge giant in the world economy - it works hard, training

all the means it has for ensuring balance in the world, world peace, creating

a stable and conducive environment for all countries, integrating

underdeveloped countries into the "stage" respectively, under development.

The EU is the most important aid financer - by starting different

partnerships, development programs and projects, respectively cooperation.

Each policy pursued by the European Union aims to eradicate poverty. When

we refer to development and cooperation, our brain connects several

synapses, which involuntarily lead us to one of the major problems of the

century, namely poverty. This topic has become one of global interest - not

only the countries directly affected by this 'phenomenon', but also the rest of

the world, so the importance of its eradication is crucial, and as George

Bernard Shaw said over a hundred years ago "The greatest of the worst and

the most serious crimes is poverty". Therefore, since 1880 this subject has

been treated seriously, thus giving rise to three different definitions or

perspectives of the phenomenon.

1. DESCRIPTION OF THE POLICY AND ITS EVOLUTION OVER

TIME

This policy, like many other policies, is based on a number of

principles of the Union, which were established on the basis of the treaties

1Associate Professor PhD, University Eftimie Murgu of Reşiţa, România, e-mail:

[email protected] 2 Master student, University „Eftimie Murgu” of Reșița, Romania,

[email protected]



104

that were the basis of the constitution of the European Economic Community

and subsequently the EU Constitutional Treaty. These principles are: the

principle of proportionality; the principle of subsidiarity; the principle of

regulation.

Table 1 The course of the policy over time

Year

Event description

1957 The treaty that founded the foundation for the establishment of the

Development and Cooperation Policy is the Treaty of Rome. The

same treaty constituted the EDF (European Development Fund). By

1969 inclusive, the EDF had already completed the first 3 life

cycles.

1971 This is the period when the GSP / Generalized System of

Preferences was set up. This system offered some additional

benefits on the European Union markets to developing countries

(179 states).The benefits are granted only after meeting very clearly

established requirements for the less developed countries. These

refer to the observance of labor, health, environmental norms, to

measures aimed at stopping drug trafficking. The negotiations cover

a diversified range of products classified on the basis of two main

criteria: sensitivity and non-sensitivity. There are also products that

do not benefit from these ,,facilities”, namely ammunition,

weapons.

1972 It represents a first attempt to connect the Union with the new

commission set up at that time and known as ASEAN, and in 1980

a cooperation partnership was signed.

1973 The European Union also extends its field of interest to the Pacific,

African and Caribbean states, thus establishing the ACP group.

1975-

1990-

1995

The EDF cycles 4, 5 and 6 take place

1995-

2000

The European Union threatens to withdraw its financial support to

the ACP group, as a result of human rights violations, democracy.

In 1996, a definitive and extremely complex strategy was used,

which aimed at balancing the balance between the actions to remedy

the crisis situations and those of the European Commission, of the

partner countries, based on an interinstitutional dialogue entitled:

“Connecting aid, rehabilitation and development. '' The impasse

was to some extent overcome, in 2000, because the Commission

together with the Council created a document that very precisely

regulated the framework for establishing and implementing

strategies, development projects. This document is known as the

European Community's Development Policy. In 2000 the main

agreement to designate the relations between the EU and the ACP

will be the Cotonau Agreement.



105

2001-

2005

The Commission shall conduct a thorough evaluation of the means

used to disperse the disparities between development support and

emergency aid. Thus, the three major institutions of the European

Union agree (the European Parliament, the European Commission

and the Council of Ministers) and create a document called

"European Consensus on Development". (Source: table created by the authors)

2. THE MAIN PILLARS THAT SUPPORT THE LEGAL

FRAMEWORK OF THE POLICY

2.1. Primary legislation. Treaty of Rome, of Maastrich, Amsterdam and

Lisabona

The Treaty of Rome was made in 1957 and came into force one year

later (1958), but its rules and regulations were not expressly bent on

development based on cooperation, but there are certain articles that refer to

this aspect, such as for example, in the fourth part of the treaty - "Association

of overseas territories and countries", articles 131 and 132. The first article

sets out the reasons underlying the cooperation with these overseas regions /

countries - establishing strong communication networks that facilitate

economic, commercial, information and technological exchanges between

them and the Community. The second article sets the objectives proposed,

referring to: providing a financial impetus for ensuring sustainable

development in several areas, ensuring a commercial system that facilitates

the integration of these countries in the market, which ensures the equality of

all parties involved in the economic activity.

The Treaty of Maastrich was born in 1992 and we find several

references to development cooperation in title 17 of the document, article

130, respectively 130V, 130W, 130X.

Table number 2: Entries of articles 130U -130Y

Number

of article

Mentions

130U This policy must be on the same wavelength as the policies

initiated by the partner states, so it will support and promote:

- A progressive, sustainable economic development of the

poor or developing countries

- Ensure their integration in an easy way, to obtain a

maximum effect with a minimum of effort

- A program to eradicate the biggest problem of the

century - poverty

- Equality, respect for human rights, its main freedoms

- Democracy

- The European Union has the obligation and

responsibility to comply with the above points



106

130V The EU takes care when implementing any policy whose area

of implementation extends to underdeveloped / developing

countries, always keeping in mind the goals set out in the

previous article

130W This article contains 3 points, namely:

- On the basis of the decisions set out in Article 189C, the

Council has the role to take the most favorable measures, for the

fulfillment of each objective in part of Article 130U - measures

that can be implemented in the form of multiannual programs,

but without obeying the other treaty regulations.

- The European Investment Bank / EIB, founded since

1958, can participate in achieving the objectives, through the

implementation of the measures, but without exceeding its

attributions

- The provisions of this article should not prejudice the

cooperation with the ACP group states

130X The article addresses the following:

- The European Union and the Member States coordinate

their policies, constantly consulting on the various assistance

plans and programs, including in international organizations and

international conferences.

- Member States contribute to the implementation of the

measures, with a view to implementing the Community

assistance programs. (Source: table created by the authors)

The Treaty of Amsterdam was born in 1997 and entered into force

two years later, does not bring changes to the chapter Cooperation for

development, but requires certain changes in the section "Association of

Overseas Countries and Territories". These changes refer to customs duties,

establishing their threshold. Within this treaty, the so-called Petersburg

Missions are also rooted - a series of humanitarian actions, which the EU has

the power to initiate.

The Treaty of Lisbon was signed on December 13, 2007 and entered

into force on December 1, 2009, its main purpose being to make the EU a

more democratic, more effective system, capable of adapting to changes in

the environment. , giving them much greater control and power to address

issues globally. A new title - Title 3, entitled "Cooperation with third

countries and humanitarian aid", was introduced in the section dedicated to

"Cooperation for development", emphasizing the importance of poverty

eradication. In Title 1 - "General provisions on action" external sections of

the European Union '', there are other sections that refer to development,

cooperation and humanitarian aid. These are: "Economic, financial and

technical cooperation with third countries and" Humanitarian aid ".



107

2.2. Second legislation it also plays an important role, which ensures the

stability of the policy. Within it, we can identify a number of specific tools.

Table 3: Types of instruments

Category

Instrument name

Geographic

Instruments

- EDF / European Development Fund

- IDC / Cooperation Development Tool

- IEVP / European Neighborhood and

Partnership Instrument

Thematic tools

European Instrument for Democracy and Human Rights /

EIDHR

- EU Food Facility

- The Instrument for Stability and Peace / ICSP

- Instrument for Cooperation for Nuclear Safety / ICSN

- The ICD is divided into the following thematic sub-

instruments:

DCI Non-state actors and local authorities in development;

DCI Food safety; DCI Migration and asylum; ICD

Environment and the sustainable management of natural

resources; ICD Investing in People;

ICD Restructuring of sugar production. (Source: table created by the author)

Table no. 4: Types of instruments and budget for 2007-2013 and 2014-2020

Name Content Buget

2007-

2013

2014-

2020

IEVP - Supports projects aimed at

achieving the Millennium Goals

- It was based on two means of

achieving relations between the Union

and the beneficiary countries, namely,

those that ensure cooperation in public

areas (TWINNING) and those for

cooperation and development (TAIEX-

Technical Assistance and Information

Exchange).

- Supports democracy and its

integration, namely promoting a market

accessible to all

11,2

mld.euro

15,4

mld euro

IEDDO - It is an instrument characterized

by the force it has, it has a certain

freedom in terms of funded projects (ie it

does not need the approval of the

Government to start them)

1104

mld euro

1,3

mld.euro



108

- Periodically certain agreements

and partnerships between it and various

NGOs and / or UN are born.

ICSP - Applies only to non-

industrialized countries, having been

activated since 2007

- It has the role to replace other

specialized tools on crises, crime

- The objectives are some set for

short periods of time

2062

mld.

Euro

2,3

mld.euro

ICSN - It aims to eliminate nuclear

waste, trafficking with biological agents

524

mld.euro

225

million

European

Food

Facility

- is found in the ACP group and in

countries of Latin America, Asia, the

Gulf area

- represents a link between aid for

cooperation and development and

humanitarian aid.

1 mld -

(Source: table created by the author)

2.3. EDF and IDC

EDF - this fund was created through the Treaty of 1958 in Rome. The

EDF is not included in the EU budget, ie it is of an extra-budgetary nature,

and its implementation is managed by the European Commission, through

EuropaAid. It supports the ACP area and the OCTs (overseas countries and

territories), being made up, financed from the amounts offered by the

Member States, and each EDF runs for a period of five years.

Table no 4: The areas financed by the EU through the EDF in the period 2008-2013

Areas for Development Cooperation Amount

allocated (millions of euros)

Governance and support for economic

and institutional reforms

426

Trade and regional integrity 228

Infrastructure and transport 795

Water and energy 243

Social cohesion and employment 46

Human and social development 186

Rural development, territorial

planning, agriculture and food security

355

Environment and sustainable

management of natural resources

105

Conflict prevention 126

Many areas 992 (Source: table created by the authors)



109

IDC was created 12 years ago (2007), to facilitate humanitarian aid

and not only, extending on 2 main levels covering the following regions:

Latin America, Asia, South Africa, the Gulf area ( geographical programs)

and the group of ACP member states and a level that is addressed to all

developing countries.

Figure no.1: IDC financing area

(Source: figure created by the authors)

Figure no.2: IDC funds according to the programs granted


Table 5: EDF and IDC Funds 2007-2013 and 2014-2020

Instrument Buget

2017-2013 2014-2020

IDC 10,057 mild.euro 19,7 mil.euo

EDF 22,7 mild.euro 30 mld.euro


2.4. International legislation consists of the Cotonau Agreement, the

Millennium Goals and the Development Summit - Agenda 2030.

Table no. 6: The three links of international law

Name Description

The Cotonau

Agreement

The bridge of cooperation between the Union and the

member countries of the ACP group is represented by the

Cotonou Agreement signed on June 23, 2000, in Benin. This

agreement covers a much wider area than previous

agreements, targeting both the political and economic

dimensions of development and cooperation relations.

Relations between the Union and some member countries of

the ACP group also existed before the aforementioned

agreement was signed, more precisely, in 1957, through the

Treaty of Rome - so it is possible to speak of a relationship

of more than five decades of cooperation on projects.

Development. Due to the Treaty of Rome, the European

Development Fund, also known as the EDF, was born, its

role being to provide technical and financial assistance to

African countries and beyond.

Programs started in the ACP group

Geographic programsThematic programs for developing countries

7%

60%33%

0%50%

100%

Programs for the ACP

group

Gheographic programs Thematic programs



110

The EU-ACP partnership follows certain directions,

namely: Security of cooperation relations, political

dimension; Poverty reduction; Reaching the Millennium

Goals; Training of all economic-social sectors (civil society,

various non-state economic agents and the private sector);

the last mentioned sector, the private sector is considered to

be the most important, a vital instrument through which

sustainable, real development can be ensured and which

benefit from access to financing through the European

Development Bank; Existence of a favorable framework for

economic, commercial cooperation (the EU is the main

trading partner for most ACP countries); Establishing a

flexible program, rationalizing financial resources.

The Millennium

Goals

They find their applicability in the ACP countries

especially; the economic-political-social situation of these

states made it necessary to establish a set of objectives

regarding the development, of the directions that should be

followed, the identification of the measures that should be

implemented in order to solve the problems of the

millennium. Therefore, these objectives have become a

project of global proportions.

These goals came into being at the UN Summit on

September 8, 2000. It was held in New York, where the

"Millennium Declaration" was adopted, an act comprising

eight articles, these being: The first article referred to the

eradication of extreme poverty and hunger; The second

article stated the importance and necessity of unrestricted

access to primary education; the third one was about gender

equality, its promotion; Fourth, he emphasized the reduction

of infant mortality; The fifth article focused on improving

maternal health; The sixth article, aimed at combating

diseases, serious diseases: AIDS, HIV; The seventh article

emphasized the need to create a stable, sustainable

environment; The last article focused on an active

participation in the development partnership.

The

Development

Summit and the

2030 Agenda

Morgens Lykketoft, president of the United Nations

General Assembly, at the opening of the 70th session stated:

“The summit is just the beginning. Urgent action is needed

based on the three pillars of the United Nations (peace and

security, development and human rights), and the session of

the General Assembly offers ample opportunities. An

ambitious universal agreement on climate change is an

absolute necessity and a true test of the international

community's ability to provide the necessary political tools

for sustainable development.

The 17 agenda items refer to: No poverty; No hunger;

Ensuring health and well-being; A quality education; Gender

equality; Drinking water and sanitation; Clean and

affordable energy; Decent jobs and growth; Industry,

innovation and infrastructure; Reducing inequalities;



111

Sustainable cities and communities; Responsible

consumption and production; Climate action; Aquatic life;

Earthly life; Peace, justice and strong institutions;

Partnerships for achieving the objectives. (Source: figure created by the author)

CONCLUSIONS

The EU pays greater attention to underdeveloped countries, which

are provided with financial support and not only, however, there should be a

fair balance between the funds allocated to regions outside the Union and

those within it.

Over the last decade, the growing interest of the EU in countries

such as Africa and Asia has been observed, as a result of the resources

available to each and of the huge potential for development. From another

point of view, we can conclude that Europe feels threatened by the economic

growth of countries like Chiana, Japan and Turkey.

Finally, we Europeans are turning our faces to our neighbor. The

truth is that no country can be isolated from the others, there are connections

that cannot be cut due to conflicts of power, competitive strategies ... we all

live on the same planet. As we well know, history confirms it, a single trigger

is required for the entire economy of the world to be shaken from the ground

up.

REFERENCES

European Union policy guide no. 2. (2012) "Development cooperation policy and

Humanitarian aid policy", European Institute of Romania, Bucharest

European Commission (2010). "Partnership for change", European Union Ed., 2010

Minică, M.; Franț, F.; Zaberca, V.M. (2010) ”European Economy", Ed. Eftimie

Murgu, Reșița

Neal, L. (2007). “The Economics of Europe and the European Union”, New York,

Cambridge University Press

Pinder, J.; Usherwood, S. (2013). “The European Union. A very Short Introduction'',

Oxford University Press

***http://ec.europa.eu/budget/graphs/revenue_expediture.html

***www.ier.ro/sites/default/files/pdf/politica_aud_brosura_nr.2_.pdf

***https://europa.eu/europeanunion/sites/europaeu/files/docs/body/treaty_on_euro

pean_union_en.pdf

***https://europa.eu/european-union/law/treaties_ro

***https://eurlex.europa.eu/legalcontent/RO/TXT/PDF/?uri=OJ:C:2007:306:FULL

&from=RO

***http://www.europarl.europa.eu/ftu/pdf/ro/FTU_5.3.1.pdf

***https://eurlex.europa.eu/legalcontent/RO/TXT/?uri=LEGISSUM:r12102

***https://ec.europa.eu/europeaid/sites/devco/files/publication-acp-partnership-for-

change-2010_ro.pdf



112

DIRECTIVES, STRATEGIES, PLANS, PROJECTS VERSUS

REALITY ABOUT WASTE MANAGEMENT IN EU AND

ROMANIA

Csaba NAGY1

Submitted: 21st July 2020 Approved: 6th August 2020

Abstract

Waste management, also known as waste management, refers to education on waste

collection, transport, treatment, recycling and storage. Usually, the term refers to materials

resulting from human activities and reducing their effect on human health, the environment,

or the appearance of a habitat. Waste management also aims to save natural resources by

reusing recoverable parts. Managed waste can be both solid and liquid or gaseous, as well as

with various properties, requiring treatment methods specific to each. In Romania, the waste

management activity is based on Law 211/2011, which implements a series of Council of

Europe directives. The coordination of this activity is the responsibility of the Ministry of

Environment and the National Agency for Environmental Protection (ANPM). From an

economic point of view, the waste management activity in Romania has a share of EUR 10

billion.

Keywords: Waste management; Management plans; Integrated management; Sustainable

development; Waste Management Plan

JEL : Q01, Q53, F64

INTRODUCTION

Assessing the current situation of waste management, the medium-

term tasks and priorities of waste management are formulated in accordance

with the specifics of the country (region, settlement), management plans,

environmental protection programs and the environmental and social vision

of the affected population. They plan the order of their implementation, the

necessary major investments, their resources and the efficient division of

labor between the actors involved in the implementation (professional bodies,

authorities, local government, public utilities, citizens and NGOs).

The Brundtland report of the World Commission for Environment

and Development (World Commission for Environment and Development -

WCED) entitled "Our Common Future" Strongly emphasizes that sustainable

development can only be achieved if society at large and industry in general

particularly they have learned to produce "more from less"; more goods and

services with fewer resources and less pollution and waste.

1 Lecturer PhD., University Eftimie Murgu of Reşiţa, Romania, [email protected]



113

1. INTEGRATED WASTE MANAGEMENT SISTEMS

Integrated waste management systems combine waste streams,

collection waste, treatment and disposal methods in a waste management

system that has as a goal sustainable development, acceptable economic and

social efforts for any region specific. This is achieved by combining waste

treatment options including waste reduction, reuse, recycling, composting,

anaerobic fermentation, heat treatment and controlled storage on the ground.

The key is not how many waste management options are used, even if they

are used at the same time but how they are optimally combined as part of a

comprehensive approach. Integrated waste management considers the whole

system and looks for the best combination methods to minimize costs and

maximize environmental protection and social benefit.

The most significant change of the last planning period is the

establishment and operation of the organizations coordinating the utilization.

There is a danger to a well-functioning product fee system in setting up KTAs

based on producer responsibility, unless accompanied by adequate state and

social control. Our concerns have been confirmed in many aspects. Today, it

is almost a form of tax evasion to set up a coordinating organization, with 6-

7 parallel such companies being set up for several waste streams. Of course,

this does not increase competition, nor does it improve the efficiency of

utilization - in fact, it seems to be collapsing. In many cases, there is a great

deal of overlap between the owners and the obligors of the coordinating

organizations, and this is fundamentally incompatible. We reduce the

involvement of the state in setting and monitoring recovery fees, and the

control role of NGOs is minimal. The advisory bodies of public utilities play

a formal role in the vast majority of cases, and they do not have a say in the

control of collection / recovery or in the setting of the recovery fee. This is

basically due to the uncritical level of ministerial legislation on the subject.

The recovery infrastructure has developed little, if so, without state

aid, on its own. The system that supported selection instead of utilization

capacities was fundamentally flawed. Due to the weak role of the state, the

background fights of competing entrepreneurs, faulty planning and public

resistance, many projects have been delayed for years, some to date.

Geographically incoherent, logistically nonsensical associations were formed

because they were tailored to the areas of operation of the entrepreneurs

behind the projects. Small municipalities were diverted into legally well-

secured associations without substantial state intervention from which it was

almost impossible to get out. The handed over disposal works are presumably

satisfactory from an environmental safety point of view, but their

geographical distribution is not very fortunate. We have no idea about the

capacities and their future depletion, the strategies developed on the fly

provided contradictory data on this. Due to the increased transport distances,

the depreciation of the built-in equipment and the concentration of the

market, the rapid increase of garbage transport charges has already started,



114

which was not accompanied by the proportionation and differentiation of the

charges.

The European Parliament and of the Council provides that the

competent authorities of the Member States shall have one or more waste

management plans prepared. That plan, individually or in combination, is

concerned they must cover the entire geographical area of the Member State.

Romania has a the National Waste Management Plan. The Plan sets out

measures to protect the environment and human health by preventing or

reducing the harmful effects of waste generation and management, and by

reducing the global impact of resource use and improving the efficiency of

that use.

Figure 1 - Integrated waste management system

(Source: https://link.springer.com/article/10.1007/s11157-014-9352-4)

Directive 2008/98 / EC of the European Parliament and of the

Council on waste and repealing certain Directives ("WFD") requires the

competent authorities of the Member States to draw up one or more waste

management plans.

2. THE SYSTEM OF WASTE HIERARCHY

One of the most important pillars of the new regulation is the

conceptual system that permeates waste management as a whole. In order to

ensure uniform application of the law, the concepts must be consistent, well-

interpreted and precise so that law enforcers know and understand what the

legal norm is, how they should act in a given situation, what they should and

should not do. After the entry into force of the Act, a new era has begun, and



115

the goals and guidelines set out in the Ht. However, given that Ht. the

frameworks set out in the regulations are filled with content by the

implementing regulations, the concepts used in the law and the regulations

must be consistent with each other.

The system of the waste hierarchy: is based on a system of waste

hierarchies, which stipulates that a priority must be given to the exercise of

waste management activities. This means that, with some exceptions,

prevention is the best solution, but if this is not possible in certain

circumstances, re-use as well as recycling should be applied to as many

wastes as possible, and waste should only be incinerated or land filled as a

last resort.

Figure 2 - Waste management pyramid

(Source: https://www.researchgate.net/publication/259308943_Resource-efficient_Ireland_-

_Biodegradable_Plastic_from_Farm-waste_Plastic/figures?lo=1)

Prevention is a measure taken before a substance or product has

become waste that reduces it:

1. the amount of waste, including through the re-use of products or the

extension of the life of products,

2. the adverse effects of the waste generated on the environment and human

health, or

3. the hazardous substance content of substances and products.

A Ht. one of its most important objectives is to prevent or reduce

waste. To this end, the OMP is part of this document.

The principles of integrated waste management are:

• integrated waste management makes it possible for decisions to be based

on transparent best practices and costs. The lower the amount of waste



116

produced, the lower the costs to the waste generator. This provides incentives

for the user to reduce the amount of waste they generate;

• integrated waste management takes into account all options (collection,

recycling, composting, anaerobic fermentation, heat treatment with heat

recovery and controlled landfill) for the entire municipal solid waste stream;

• division of responsibilities. Producers, distributors, retailers and

consumers have a responsibility to support integrated waste management.

Each group is responsible for the correct management of the waste they

produce;

• three criteria are considered: action on the environment, economic

efficiency and social acceptability;

• flexible application to different communities and regions;

• transparent costs for waste management;

• market-oriented recovery and recycling;

• continuous assessment to accommodate changes in the quantity and

quality of the waste stream. Integrated waste management is a concept that

has different local applications and depends on many variables such as waste

stream composition, infrastructure, markets for recyclable materials, budget,

local legislation and land availability for storage. Integrated waste

management seeks the best options for waste management with an emphasis

on evaluating all available strategies to provide more sustainable systems.

3.WASTE MANAGEMENT IN EU AND ROMANIA

The framework of the domestic waste management system has been

completed, its elements are being activated continuously, but due to the short

time since the introduction of the new elements and the inertia of the system,

the state of waste management is still measurement of its effects, uncertainty

of appropriate indicators.

The principle of prevention has generally not become an integral,

planned part of production and consumption, and the attitudes and mindsets

of economic operators and a significant part of the population are still moving

towards increasing production sales and consumption. The conditions

promoting prevention have not appeared, the principles of green procurement

have not been applied in either private or public procurements, the system of

rules for the re-use and re-marketing of used products and their usable

components is disorganized.



117

Figure 3 - Waste generation 2016 in EU

(Source: Eurostat)

The planned measures can be implemented with a very wide range

of tools, from specific waste management investments and developments,

through the definition of the conditions of each activity to the means of

education and attitude formation.

Waste collection, recycling and treatment represent priority actions

provided in the National Waste Management Plan - national stage plan,

approved by Government Decision no. 1470/2004. These actions are in

accordance with the provisions of the European Waste Management Strategy.

At this time, the Ministry of Environment and Sustainable Development has

fully transposed European legislation in the field of waste, thus implementing

an integrated waste management system.

According to the negotiation documents, the implementation of the

system for the selective collection of packaging waste must follow the

following program:

- 2004-2006: experimentation (pilot projects), public awareness;

- 2007-2017: extension of selective collection at national level;

- 2017-2022: implementation of selective collection in more difficult areas

(collective housing, dispersed rural environment, mountain areas).

The recovery and reuse of materials bring substantial benefits to the

environment and society. Recycling reduces the need to open new

warehouses, prevents pollution, saves energy, supplies the industrial sector

with valuable raw materials, creates new jobs, reduces greenhouse gas

emissions, stimulates the development of "green" technologies and conserves

resources for future generations.



118

Figure 4 - Waste generation by economic activities and households EU 28 in 2016

(Source: Eurostat)

Until June 30, 2007, the selective waste collection system was

implemented in a number of 149 localities, as well as in sectors 1, 3, 4, 5, 6,

being assigned to the selective collection service of the total population. The

recovery and reuse of materials bring substantial benefits to the environment

and society. Recycling reduces the need to open new warehouses, prevents

pollution, saves energy, supplies the industrial sector with valuable raw

materials, creates new jobs, reduces greenhouse gas emissions, stimulates the

development of "green" technologies and conserves resources for future

generations.

The latest statistics on municipal solid waste management in the EU

show that there are large differences between Member States. The most

striking difference is when comparing the percentage between storage and

recycling. Landfilling, which is the worst management option in the waste

hierarchy, continues to be, unfortunately, the main means of waste disposal

in some Member States. According to the "Resource Efficiency" waste

disposal must be practically reduced to a minimum by 2020.

Because the national practice is to collect mixed waste (about 96%

of household and similar waste) without separating recyclable materials at

source. And at the same time the treatment of waste is done to a small extent

and only for certain waste streams. The responsibility for the management of

municipal waste belongs to the local public administrations, which, by their



119

own means or by the concession of the sanitation service, must ensure the

separate collection, transport, treatment, recovery and final disposal of this

waste.

Figure 5 - Waste management hierarchy (European Comission)

(Source: https://link.springer.com/article/10.1007/s11157-014-9352-4)

Waste management activities are regulated in Romania, as in all

European countries, by law. The need for regulation derives from the

potential conflict assumed by the properties of the residue mixture.

Household waste contains components that can be decomposed biologically,

as well as chemically and / or physically reactive. That is why there is a

danger of damaging the environment and the living area during improper

waste transport. Damage to the population by pathogens from organic

material from household waste, from slaughterhouses and hospitals in the

open air is as dangerous as, for example, the effects of waste gases on the

climate. That is why the data needed to protect health and the environment

must be regulated by law. Thus, through the activities of the state within the

preoccupation for ensuring the quality of life, norms for waste management

are born directly, respectively indirectly through the norms of the tangent

fields. The basis for building the legal framework of waste management is

formed by the legislation for public administration and the concern for

ensuring the quality of life and health.

CONCLUSIONS AND RECOMMENDATIONS

The first condition would be not to focus on the management of the

generated waste, but to finally go beyond its own shadow, taking into account

the interests of society as a whole, integrating the aspects of different sectors,

revealing the causes of the processes intervene, focus on PREVENTING the

problem.

Secondly, the responsibilities of each social group should be defined

much more precisely, starting from the obligations imposed on the country,

to make it clear who should be involved in prevention and treatment.



120

Third, a fundamental change of approach and a paradigm shift in

terms of goals and tools would be needed. There is a need to finally move

from "farming" at the end of the pipeline to preventive interventions.

Fourthly, the issue of the institutional system and funding cannot be

trivialized in this way. As long as we look at these issues in this way, we

cannot expect politicians to take the plan seriously.

Fifth: Without a comprehensive and consistent attitude-forming

apparatus, there will be no change. It is in vain for the public administration

and the waste profession to develop if members of society do not understand

or do not want to understand the basic connections and are unwilling to accept

what is being done as valid for themselves.

REFERENCES

Antonescu N. N., ş.a, (2006). ”Gestiunea si tratarea deseurilor urbane. Gestiunea

regionala”, Ed. MatrixRom, Bucureşti,.

Bold O.V., Maracineanu G.A. (2004). ”Managementul deseurilor solide urbane si

industriale”, Ed. MatrixRom, Bucureşti,.

Capatina C., Racoceanu C., (2015). ”Deseuri”, MatrixRom, Bucureşti,.

Comisia Europeană (C.E.) – COM 2014 – Comunicarea Comisiei „Spre o economie

circulară: un program „deșeuri zero” pentru Europa” din 2 iulie 2014, - COM

(2014) 398 final, [accesed 16 martie 2020].

Ianculescu, O., (2004). ”Solid waste engineering”, Ed. MatrixRom, Bucureşti

MM, (2017). ”Ministerul Mediului”, Planul Național de gestiune a deșeurilor,

[accesed 28 May 2020].

Paunescu I., Atudorei A., (2004). ”Gestiunea deseurilor urbane”, Ed. MatrixRom,

Bucureşti

Voicu Ghe., Paunescu I., (2006). ”Procese si utilaje pentru ecologizarea

localitatilor”, Ed. MatrixRom, Bucureşti,

***Országos Hulladékgazdálkodási Terv 2014-2020

https://www.kormany.hu/download/d/a6/d1000/OHT%2020142020_egys%

C3%A9ges%20szerkezetben.pdf [accesed 28 May 2020].

https://www.kormany.hu/download/d/a6/d1000/OHT%2020142020_egys%C3%A9ges%20szerkezetben.pdf

https://www.kormany.hu/download/d/a6/d1000/OHT%2020142020_egys%C3%A9ges%20szerkezetben.pdf



121

ROLE OF OCCUPATION IN CONSUMER BEHAVIOUR

MODELLING

Diana TĂNASE 1

Adrian TĂNASE2

Iasmina ȘTEFANOVICI3

Submitted: 23 July 2020 Approved: 4th August 2020

Abstract

We are living in a society in which competition is increasingly strong on almost all markets,

a world in which the supply of products and services is more and more generous, and the

consumer has a wide choice. In the race for profit, companies must meet the demands of the

consumer, but in order to achieve this, first of all, they must understand how the demanders

actually manifests themselves in the market. Attracting and retaining consumers requires a

careful study of the factors that act on the consumer and, without trying to make a hierarchy

of these factors, it must be said that they have a different influence, depending on the

circumstances. Based on these considerations, this paper aims to determine the influence of

occupation on purchasing and consumer decisions.

Keywords: consumer, purchasing processing, occupation, influencing factors

JEL : D11, D12

INTRODUCTION

Any company, regardless of its field of operation or size, cannot exist

if it fails to meet the needs of a certain category of consumers. Nowadays

more than ever, there are countless university centres and economics

specialists that study consumer behaviour and develop various marketing

strategies in order to help companies identify their potential customers and

achieve their goals. A company that does not take into account and fails to

invest in the research of the market and consumers it wants to attract will find

it very difficult or and will fail to survive in a market where competition is

constantly growing.

Studying consumer behaviour contributes to the long-term planning

of the company's activity and provides an insight into market dynamics. A

great advantage over the competition lies with the companies that not only

study the current requirements, but are also attentive to changing market

trends and act in this regard.

In this context, consumer behaviour, although not a new topic,

remains always relevant. This topic has been in the spotlight of economists

since the eighteenth century, when A. Smith (2003) stated that "the only

1 Associate Professor PhD., University Eftimie Murgu of Reşiţa, Romania, [email protected] 2 Associate Professor PhD., University Eftimie Murgu of Reşiţa, Romania, [email protected] 3 Student, University Eftimie Murgu of Reşiţa, Romania, [email protected]



122

purpose of production is consumption", studies in this field being continued

by other authors such as Veblen (1953) who addresses, among others, the

subject of ostentatious consumption, or Keynes (1970), who introduced

function of consumption in the economic theory.

Preoccupations regarding the study of consumer behaviour are also

found in the works of Engel and Blackwell (1982), Becker (1994), Didier

(1994), Zaltman (2007) and many others, but also of Romanian authors such

as Boier (1994), Miron (1996), Plăiaş (1997), Dobre (1995, 2000), Catoiu

and Teodorescu (1997, 2004), Manciu (2012), Lala (2014), Tănase (2013,

2014), „in the writings of these authors the consumption being analysed, from

an economic point of view, but also sociologically, culturally and

ideologically” (Tănase, 2019).

The complexity of consumer behaviour is given by the multitude of

endogenous and exogenous variables that act on the demander, about the role

of occupation, as a factor influencing consumer behaviour, writing much less

compared to approaches to other factors.

The evolution and creativity of mankind have allowed the discovery

and formation of a very large number of types of occupations, regardless of

the fields to which they belong.

According to the saying “choices define us”, occupation is also a

defining choice that a person makes, depending on several criteria and their

context. In general, people opt for a career that suits the skills and abilities

they possess and, especially, with their level of training. But there are also

less happy cases, in which people do not succeed in finding the occupation

they want and are satisfied, at least temporarily, with the other possible

options.

Given these considerations, the objective of this paper is to identify

the role of the occupation in the process of modelling consumer behaviour in

Romania and, in particular in Reşiţa.

1. RESEARCH METHOD AND SAMPLE SIZE

Research can be defined as an investigation that aims to collect

marketing data, economic phenomena and processes, consumer attitudes and

preferences, all these data will be analysed and interpreted to help solve

problems in the field of marketing or in-depth knowledge of to a certain

phenomenon.

Marketing research has the following roles:

It identifies and analyses economic phenomena and processes;

It gets to know the environment in which the economic entity carries

out its activity;

It observes the behaviour and attitude of consumers towards a certain

brand or product;



123

It helps to form a forecast of the economic situation and market

trends;

It contributes to decision-making processes within organizations;

It identifies the existing opportunities and threats.

The field of research is a complex one and includes many techniques

and methods that can be applied depending on the purpose and objectives of

the research.

The questionnaire survey consists of collecting primary data, directly

from the respondents, by applying a set of questions.

The questionnaire is one of the most commonly used tools in

quantitative and / or qualitative marketing research and involves formulating

questions for a particular randomly selected sample, the answers to which are

to be interpreted and analysed. The purpose of analysing a questionnaire is

to identify a certain type of behaviour or an existing problem. Professor

Septimiu Chelcea defines the questionnaire as “a logical and psychological

succession of written questions or graphic images with stimuli function, in

relation to the research hypotheses, which by administration by survey

operators or by self-administration, determine a behaviour on the part of the

respondent verbal or nonverbal, to be recorded in writing” (Septimiu

Chelcea, 1975).

The data collected through the questionnaire are both objective

(related to gender, age, occupation, income) and subjective (detection of

attitudes, motivations and consumer perception of the phenomenon studied).

The questionnaire was applied online, through Google Forms, on a

sample of 182 people, 35.2% men and 64.8% women. The questionnaire

includes 15 closed questions, 5 questions used to identify the respondent and

10 content questions. Each question has two or more answer options, from

which the respondent will select the option with which he or she best

identifies.

Following the collection of the answers given by the subjects of the

sample, they will be analysed and interpreted in order to identify the degree

of influence exerted by the occupation on the buying and consuming

behaviour.

2. RESEARCH RESULTS

1. The first content question in the online questionnaire is to

determine the extent to which respondents are influenced by their occupation

of purchasing brand products to the detriment of substitutable products.



124

to a very high extent

to a high extent

at a medium level

to a low extent

to a very low extent

Figure 1 – The influence of occupation on the purchase of brand products

Most respondents (36.8%) consider that their occupation influences

them in purchasing brand products at a medium level. A percentage of 20.3%

of the respondents claim that they are influenced by the occupation to a small

extent, 19.8% consider that their occupation influences them to a high extent

and 12.6% are influenced to a very high extent in the purchase of brand

products. The lowest percentage (10.4%) belongs to respondents who say that

their occupation influences them to a very low extent.

2. The following question captures the extent to which respondents

believe that changing the current occupation would bring about changes in

the type of products they usually consume.


to a high extent

at a medium level

to a low extent


Figure 2 – Influence of occupation on the change of type of products consumed

When asked this question, 32.4% of respondents answered that

changing occupation would change the type of products they usually buy to

a low extent. The same percentage of 21.4% is obtained by people who claim

that the change of occupation will influence them to a medium level in

changing the type of products consumed, and on the other side we find the

respondents who claim to be influenced to a very low extent. A percentage

of 20.3% of the respondents consider themselves influenced by the change

of occupation to a high extent, while 4.5% of them state that the change of

occupation is likely to change their consumption habits to a very high extent.



125

3.As for the degree of influence that the environment and work

colleagues have on consumer behaviour, we note that 29.1% of respondents

say they are influenced at a medium level by these criteria. With a very close

percentage, there come the people who consider that they are influenced to a

low extent (26.9%) and to a very low extent (26.4%) respectively. A lower

percentage of respondents (12.1%) state that they are influenced to a high

extent by the environment in which they work, and 5.5% of them consider

that they are influenced to a very high extent when it comes to purchasing

certain products.


to a high extent

at a medium level

to a low extent


Figure 3 – Influence of work environment on consumer behaviour

4. In order to determine the role of the occupation in making the

purchasing decision, we asked respondents whether they noticed any changes

between their consumption habits before the current occupation and the

current consumption habits.


to a high extent

at a medium level

to a low extent


Figure 4 – Change of current consuming habits

To this question, 26.9% of the interviewees responded that

consumption habits changed to a low extent, and 22.5% of them remarked

various changes in consumption behaviour to a high extent. An average level

of changes in consumption habits was reported by 21.4% of respondents,

while 20.9% of them consider that their consumption habits have undergone

changes to a very small extent. Also, 8.2% of respondents say that they have



126

changed their consumption habits to a very high extent as a result of obtaining

their current job.

4. Income is a very important criterion when it comes to choosing the

products we consume. The influence that an occupation providing a higher

income can have on purchasing decisions can be observed by analysing the

answers received in the questionnaire. Thus, most respondents (31.9%)

claimed that an activity that will bring a higher income will change

consumption habits also to a high extent, 16.5% believe that the type of

products or brands consumed will change to a very high extent, and 24.2%

of respondents believe that the change in consumer behaviour would occur

at a medium level. A much lower percentage, namely 15.4%, is represented

by people who would be influenced by a higher income to a low extent, and

12.1% by people who would be influenced to a very low extent.


to a high extent

at a medium level

to a low extent


Figure 5 – Influence of income on consuming behaviour

6. When asked “Did you notice any similarities between your

consumption habits and the habits of your colleagues at work?”, more than

half of the respondents (67.6%) stated they noticed some similarities, 15.4%

remarked numerous similarities, whereas 17% of the total respondents did

not observe similarities in consumption habits.

Figure 6 – Similarities of consuming habits

Yes, I remarked numerous similarities

Yes, I remarked several similarities

No, I remarked no similarities



127

7. Following the analysis of the answers received, we can see the

existence of a degree of influence that the occupation has even on food

consumption. Of the total surveyed sample, 29.1% consider that their

occupation influences their consumption of a certain type of food at a

medium level, 23.1% state that they are influenced to consume certain

products to a high extent, and 9.9% of the respondents are influenced in

making these consumer decisions to a very high extent. At the same time, in

percentages of 21.4% and 16.5%, there are people who consider themselves

influenced to a low extent and to a very low extent. It should be noted that

the greatest influence on the consumption of certain categories of food lies

with the occupations that require a certain diet, imposed for various reasons

(sports, model etc.).


to a high extent

at a medium level

to a low extent


Figure 7 – Influence of occupation on food products consumption

8. There are many occupations that do not require and do not impose

the observance of a certain clothing style. However, there are also

occupations that emphasize the image and impression formed by the people

in question or involve a certain dress code. Whether there is a need to

purchase clothing products for the workplace (doctors' gowns and

equipment), or it is important to stand out in certain areas (artists, public

figures), we cannot deny that occupation can influence the decisions to

purchase certain clothing products to some extent. Thus, 29.1% of the

respondents claim that they are influenced by the occupation when it comes

to the purchase of clothing to a high extent. Also, 27.5% consider themselves

influenced at a medium level, and 14.3% are influenced to a very high extent.

A percentage of 16.5% of the respondents consider themselves influenced by

their occupation to a small extent and only 12.6% are influenced to a very

low extent.



128


to a high extent

at a medium level

to a low extent


Figure 8 – Influence of occupation on clothing purchase

9. As regards the purchase of durable products (furniture, appliances,

cars, etc.), the highest percentage (26.4%) is represented by people who

consider that occupation influences these purchasing decisions at an average

level, 25.8% of respondents remark this influence to a high extent, and 13.2%

to a very high extent. Only 18.1% of the subjects consider that occupation

influences their purchase of long-term products to a low extent, and 16.5%

consider that the influence of the occupation is exercised to a very low extent.


to a high extent

at a medium level

to a low extent


Figure 9 – Influence of occupation of purchasing durable goods

10. The last question is meant to determine how occupation can cause

respondents to purchase various luxury products.


to a high extent

at a medium level

to a low extent


Figure 10 – Influence of occupation on luxury goods purchase



129

According to 26.9% of the respondents, occupation influences the

purchase of luxury products at a medium level. Out of the total sample, 18.7%

consider that occupation influences their purchasing decisions to a high

extent, and 13.7% are influenced by occupation to a very high extent. In a

considerable percentage of 23.6% we find the people who are influenced to

a low extent and 17% consider that they are influenced to a very low extent.

CONCLUSIONS

The role played by occupation in making purchasing decisions is

indisputable. Each field of activity implies a higher or lower level of

influence on consumer behaviour, but its existence makes this endogenous

factor relevant for determining the optimal marketing strategy, as well as for

the placement and promotion of products and services.

There are many factors that affect consumer behaviour. On today's

market, products and services are increasingly diversified and even

customized according to their needs and requirements. Thus, knowing the

causes that determine a certain type of behaviour or making purchasing

decisions can make the difference between the success and failure of a

company in the market. Talented entrepreneurs will always be one step ahead

of the competition grace to their visionary attitude and, last but not least,

through continuous research and study of consumer trends and behaviour.

From the research we can see that in most cases there is a certain

level of influence exerted by the respondents' occupation on their consumer

decisions and behaviour. The starting hypothesis was demonstrated by the

answers given by the subjects in the sample - 182 people, confirming that

occupation can change both lifestyle and consumption habits.

The influence that occupation has on the consumption behaviour can

vary depending on the type of products consumed.

From the interpretation of the answers obtained through the online

questionnaire, we found that the impact of occupation on the purchase of food

is much lower than in the case of clothing or luxury products. Also, most

respondents stated that there are similarities between their consumption

habits and those of colleagues at the place of work, which proves the

existence of a pattern that occupation forms within an organisation.

Therefore, in order to improve the quality of the products offered,

the attention of the marketing departments within each company should be

focused more to the real needs of consumers and to the strategies meant to

pleasantly surprise them by exceeding their expectations.

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· 2020. 9. 1. · 2 despre revistă… analele universităţii „eftimie murgu” reşiţa,...

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