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  Digitalization and foreign trade resilience under geopolitical shocks: the case of Georgia

  (Ivane Javakhishvili Tbilisi State University Press, 2026) Munjishvili, Tea; Shaburishvili, Shota; Sikharulidze, Davit; Kadagishvili, Leila; Gazdeliani, Irakli; Sigua, Zviadi

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  This study examines how digitalization and geopolitical shocks interact to shape Georgia’s foreign trade Dynamics and transit resilience within today’s fragmented global environment. The accelerating digitalization of international trade has fundamentally transformed the mechanisms through which trade flows are generated, transmitted, and stabilized– particularly under conditions of geopolitical conflict, sanctions, and supply-chain disruptions. The Russia– Ukraine war has sharply heightened transportation risks, disrupted Black Sea logistics, and accelerated the reconfiguration of Eurasian trade corridors, positioning countries such as Georgia in a strategically sensitive yet potentially advantageous role. In this context, geographic location alone is no longer sufficient to secure sustainable economic benefits; instead, trade resilience increasingly depends on institutional efficiency, digital infrastructure, and the capacity to absorb external shocks. The theoretical foundation of this research draws on both classical and modern gravity models of international trade, as developed by Anderson and van Wincoop and further extended in contemporary empirical literature. Traditional trade theories, including Ricardo’s principle of comparative advantage and the Heckscher– Ohlin model, explain specialization through factor endowments and productivity differences but remain largely static, unable to capture the dynamic effects of geopolitical risk and digital transformation. By contrast, the gravity framework offers a flexible and empirically robust structure for evaluating bilateral trade flows while accounting for both physical and institutional trade costs. In this study, the Standard gravity equation is augmented with indicators of digitalization, proxies for geopolitical risk, and measures of institutional distance to better capture the evolving determinants of Georgia’s trade and transit performance. Empirically, the study employs a multi-method econometric strategy. First, the Poisson Pseudo-Maximum Likelihood (PPML) estimator is applied to address heteroskedasticity and the prevalence of zero trade flows, which are particularly common under crisis conditions. PPML enables consistent estimation of gravity equations even when trade flows collapse due to conflict, sanctions, or logistical breakdowns. Second, the Generalized Method of Moments (GMM) is used to correct for potential endogeneity between trade flows and factors such as digitalization or institutional quality. Lagged values of economic and institutional indicators serve as instruments ensuring that estimated coefficients capture causal relationships rather than reverse causality. Third, the econometric analysis is complemented by author-designed simulation- based gravity models (SAQ1–SAQ4), which extend classical Tinbergen-type trade equations by incorporating variables related to digitalization, data flows, trade preferences, and geopolitical constraints. The SAQ modelling framework represents a key methodological innovation of the study. SAQ2 models bilateral trade volumes as a function of GDP, population, distance, borders, trade agreements, digitalization, and data flows, while allowing coefficients to be optimized through nonlinear simulation. SAQ4 extends this approach by incorporating trade concentration and trade intensity indices, including the QGTI index adapted from Georgian trade statistics. This enables the analysis to move beyond aggregate trade volumes and assess the structural quality and diversification of Georgia’s trade relations under varying geopolitical scenarios. The empirical findings are consistent across PPML, GMM, and simulation- based models. Digital trade facilitation– measured through electronic customs systems, digital logistics platforms, and data-flow intensity– significantly mitigates the adverse effects of geopolitical shocks on bilateral trade flows. Countries and corridors with higher levels of digital integration experience smaller declines in trade volumes during periods of conflict or sanctions, underscoring the stabilizing role of digital infrastructure At the same time, the results highlight that institutional distance and regulatory fragmentation substantially constrain Georgia’s ability to convert its geographic transit advantages into sustainable economic gains. Even when digital tools reduce administrative delays, weaknesses in governance quality, regulatory harmonization, and contract enforcement continue to elevate transaction costs. The DCFTA with the European Union plays a dual role in this context. While it provides a structural framework for regulatory convergence and market access, its short-term trade effects are constrained by adjustment costs and institutional asymmetries. The models suggest that without parallel investment in digital governance and trade facilitation, DCFTA-driven liberalization alone is insufficient to generate sustained trade expansion under conditions of geopolitical stress. The discussion underscores that digitalization functions as a critical mediating mechanism between geopolitics and trade. Digital platforms reduce informational asymmetries, enhance customs transparency, and enable firms to reconfigure supply chains more rapidly in response to shocks. Yet digitalization does not automatically guarantee resilience; it must be embedded within a broader institutional ecosystem that supports interoperability, regulatory trust, and cross-border data exchange. Georgia’s experience demonstrates that partial digitalization without institutional convergence yields only limited resilience gains. From a policy perspective, the findings imply that strengthening Georgia’s role as a Eurasian transit hub requires an integrated strategy that combines digital trade facilitation, institutional reform, and geopolitical risk management. Investments in electronic customs, digital logistics, and data-driven trade administration should be aligned with deeper regulatory convergence with the European Union and regional partners. Moreover, risk-management mechanisms must be incorporated into trade governance frameworks to ensure continuity under conditions of military conflict or sanctions. In conclusion, the study shows that digitalization significantly enhances Georgia’s trade resilience in the face of geopolitical shocks, but its full economic potentialმ can only be realized when supported by institutional convergence and coordinated governance. The combination of gravity-based econometric analysis and simulation-based modelling provides robust evidence that trade sustainability in the modern era depends not only on geography but increasingly on digital and institutional capacity.

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  The genesis of the world monetary order from “Paris” to “Post-Jamaica” (historical-logical analysis)

  (Ivane Javakhishvili Tbilisi State University Press, 2026) Papava, Vladimer; Mekvabishvili, Elguja

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  The article argues that the old world order is rapidly being replaced by a new one. The previous order, established after World War II, was shaped by the global rivalry between two superpowers with opposing political and socio-economic systems: The United States and the Soviet Union. In the early 1990s, the collapse of the USSR, and, with it, the so‑called “socialist camp,” gave rise to a unipolar world order dominated by the United States, replacing the former bipolar system. At the heart of any world order lies the global economic order, understood as the systemic unity of rules, laws, norms, and the supporting infrastructure of supranational organizations that define and regulate economic relations among states. The unipolar order that emerged carried a distinctly liberal character, sustained by a global economic framework rooted in free trade. The article conceptualizes the international economic order as the integration of global trade, financial, and monetary systems. It traces the historical development of the global monetary order, from the Paris monetary orderto the post-Jamaica monetary order, emphasizing how each subsequent order arose as an attempt to resolve the systemic contradictions inherent in its predecessor while maintaining essential connections to the previous system. Before the COVID‑19 pandemic, the US‑led unipolar world order propelled a phase of hyperglobalization, reinforcing the central role of the US dollar in the global economy. In this context, the dollar’s clear dominance in both international trade and global foreignexchange reserves can be described as “monetary globalization.” However, Western sanctions imposed on Russia began to challenge this dominance. The outbreak of Russia’s war in Ukraine ushered in a phase of confrontational globalization, accelerating the shift toward a multipolar structure: a transformation that inevitably impacted the global monetary order. Currency geopolitics, where geopolitical factors increasingly shape both the currencies used in international trade and the composition of foreign exchange reserves, is not a new phenomenon. Since the First World War, geopolitical motives have played a significant role in determining the choice of international currency. Although the geopolitical dimension remains influential in the era of currency globalization, it does not fully dominate the system. This suggests that currency globalization and currency geopolitics are complementary forces, with one generally prevailing over the other at any given historical moment. In the current uncertain geopolitical landscape, coupled with the risks stemming from Western sanctions against Russia, two notable developments are emerging: the accumulation of gold as an alternative reserve asset, and the growing use of diverse currencies in international trade. The euro, however, cannot be regarded as a reliable universal reserve asset. Structural and political limitations within the European Union, particularly the absence of coordinated fiscal policies among member states, undermine its stability and diminish its appeal as a viable alternative to the US dollar. China’s expanding role in global trade has fueled the rise of the yuan as an international currency. Nevertheless, objective constraints, such as strict government controls on capital flows, limited transparency in financial markets, and the centralization of one‑party political power, make many countries hesitant to adopt it as a reserve currency. The BRICS nations have announced plans to establish a new reserve currency, backed by a basket of their national currencies and gold. Yet unresolved institutional, organizational, and technical challenges leave that initiative far from realization. Three key conclusions emerge. First, a new world monetary order is taking shape, combining elements of monetary globalization and currency geopolitics, with the latter assuming a dominant role. Second, the growing geopolitical dimension of currency cannot be ignored. Third, while the future global monetary system is likely to be multipolar, the US dollar will, at least in the short to medium term, continue to hold its position as the primary instrument of international trade settlement and the world’s principal reserve currency.

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  Waste management as a prerequisite for the development of the green economy in Georgia

  (Ivane Javakhishvili Tbilisi State University Press, 2026) Kobakhidze, Elene

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  This article examines the current state of the waste management system in Georgia within the broader context of green economy development and sustainable development goals. Waste management is approached as a multidimensional challenge that combines ecological responsibility with economic rationality. From an environmental standpoint, inefficientმ waste management contributes to land, water, and air pollution, greenhouse gas emissions, and long-term ecological degradation. From an economic standpoint, waste is increasingly regarded as a resource within the circular economy model, where materials are reused, recycled, or recovered to reduce dependence on primary resources and enhance economic efficiency. The theoretical foundation of this study rests on the principles of the green and circular economy. The green economy emphasizes sustainable growth, resource efficiency, and environmental protection, while the circular economy advocates for closed-loop systems in which waste generation is minimized and materials remain in productive use for as long as possible. The article highlights the importance of institutional reforms in Georgia, particularly the adoption of the Waste Management Code and the National Waste Management Strategy (2016–2030). These initiatives aim to align national legislation with European Union directives and international environmental standards. Together, they establish the institutional framework for transforming Georgia’s waste management system from a linear “produce–consume–dispose” model into a more sustainable and resource-efficient structure. The empirical component of the research employs a quantitative methodology. Data were collected through a structured online questionnaire distributed across multiple regions of Georgia, involving 1,167 respondents. The dataset was processed using descriptive statistical methods and analyzed through percentage distribution. The empirical analysis explores demographic characteristics (age, gender, and regional distribution), levels of awareness regarding green economy concepts, knowledge of legal and strategic waste management documents, behavioral practices related to waste separation, perceptions of recycling, and the identification of key barriers that hinder active participation in waste management processes. The findings reveal that awareness of the term “green economy” is relatively high among respondents, with the majority reporting familiarity with the concept. Nevertheless, a significant gap persists between general environmental awareness and knowledge of formal institutional frameworks. Awareness of the Waste Management Code and the National Waste Management Strategy remains comparatively low, indicating limited public communication and insufficient integration of environmental policy information into public discourse. This discrepancy underscores the need for stronger institutional outreach and enhanced environmental education. In terms of behavioral practices, the results show that household waste separationis not yet a consistent or widespread habit. While some respondents report always or frequently separating waste, a considerable proportion do so only occasionallyor not at all. This suggests that positive environmental attitudes do not automatically translate into stable behavioral patterns. The inconsistency of waste separation practices reflects structural limitations within the system rather than a lack of environmental concern. A central analytical focus of the study is the identification of barriers to household waste separation. The most frequently cited obstacle is the lack of adequate infrastructure, particularly limited Access to separate waste collection containers and organized recycling systems. This finding highlights the structural nature of the challenge, as behavioral change is unlikely to occur without fundamental infrastructural support. Time constraints and inconvenience emerge as another significant barrier, indicating that waste separation is often perceived as an additional burden rather than an integrated aspect of daily routines. Limited information and insufficient environmental awareness further contribute to low participation rates. In addition, motivational factors play a role, with some respondents expressing skepticism about the effectiveness of individual efforts in influencing broader systemic outcomes. The study also explores public perceptions of recycling in relation to economic development. A substantial majority of respondents regard recycling as important or very important for economic growth. This perspective reflects a growing recognition of recycling as a driver of job creation, local industry development, reduced dependence on imports, optimization of municipal expenditures, and more efficient resource utilization. The findings suggest that waste management is increasingly understood not only as an environmental necessity but also as a strategic economic opportunity within the broader green transformation agenda. The discussion highlights the structural and institutional challenges that continue to hinder the effective implementation of sustainable waste management practices. Although legislative and strategic frameworks have been established, their practical application remains uneven. Regional disparities, inadequate infrastructure, limited enforcement mechanisms, and gaps in public awareness persist as barriers to systemic progress. The research underscores the need for a comprehensive policy approach that integrates infrastructural development, institutional strengthening, and environmental education to achieve meaningful and lasting improvements in waste management. In conclusion, the article demonstrates that effective waste management is a critical prerequisite for ensuring environmental safety, advancing economic sustainability, and achieving a successful green transformation in Georgia. The transition towards circular economy requires coordinated efforts across both institutional and societal levels. Expanding infrastructure, improving communication of legal frameworks, strengthening public awareness, and fostering citizen engagement are essential steps in building a sustainable waste management system. The empirical findings offer valuable insights for policymakers and contribute meaningfully to the broader discourse on green economy development in transitional economies.

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  On the issue of investment efficiency in securities

  (Ivane Javakhishvili Tbilisi State University Press, 2026) Gogokhia, Maya

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  A financial market is a specialized sphere of monetary operations where transactions channel surplus funds from households, corporations, and government entities into financial assets, benefiting the recipients. Its primary purpose is to ensure the steady flow of capital investments into enterprises within the real sector of the economy. Each year, countries increase their borrowing in financial markets. Most firms engaged in securities operations are well-established and hold strong positions in the stock industry. Nevertheless, the functioning of stock markets is ultimately shaped by diverse business sectors and government policies. Investors seek security, high returns, and liquidity for their investments, yet economic principles rarely allow these conditions to coexist fully. At present, foreign currency–denominated bonds, held by a broad range of investors, demonstrate significantly higher liquidity compared to bonds denominated in Georgian Lari (GEL), which are primarily concentrated among a few institutional investors. Over the past decade, Georgia’s corporate bond market has grown substantially, with the expansion of retail investor participation seen as essential for its continued progress. This article explores the role of investment bankers, the importance of specialized investment funds, the Dynamics of active and passive portfolio management, and diversification – one of the central concepts in modern portfolio theory. Special attention is devoted to foreign Exchange risk in relation to foreign securities, hedging strategies, and influencing factors. The considerable impact of taxation and inflation on investment decisions and outcomes is highlighted, with emphasis on the need for comprehensive research into the relationship between interest rates and inflation. The article also underscores reforms in Georgia’s securities market regulatory framework and amendments to the Tax Code introducing tax benefits for debt and equity instruments. The growing interest in investment – both globally and in Georgia – particularly in corporate bonds, reflects increasing confidence in local companies. Moreover, the establishment of the International Securities Central Depository (ISCD) in Georgia is expected to significantly enhance international investors’ Access to the Georgian capital market. The conclusion affirms the effectiveness of international diversification: while full interconnection of national economies would cause stock markets to move uniformly, limiting potential gains, in practice international diversification remains profitable. Recommendations are offered to safeguard investors’ interests. These include restoring the provision in the Securities Market Law that required public securities trading exclusively on the stock exchange, since off- Exchange fixing rendered information less reliable and often artificial, hindering market development in Georgia. The creation of an investor protection corporation is also proposed, tasked with insuring broker clients’ and Exchange members’ accounts against losses from brokerage insolvency. Finally, the introduction of electronic trading platforms is deemed crucial, as they would enhance pre- and post- trade transparency, reduce bid- ask spreads and commissions, and make bonds more accessible and tradable for investors.

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  Economic and statistical study of alcoholic beverage consumption among students in Georgia

  (Ivane Javakhishvili Tbilisi State University Press, 2026) Gelashvili, Simon; Mindorashvili, Marine; Abesadze, Nino; Dzebisauri, Lia

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  The article addresses one of the pressing global challenges of modern times – the consumption of alcoholic beverages among young people. Georgia is no exception to this trend, which underscores the undeniable relevance of the topic. The study aims to conduct a comprehensive economic and statistical analysis of alcohol consumption among students and its impact on their socio-economic status. To achieve this objective, the following tasks were undertaken: Development of a detailed research questionnaire; ● Collection of data and establishment of the necessary information base; ● Organization of the collected data into separate blocks according to various statistical characteristics; ● Identification of factors influencing students’ alcohol consumption and assessment of their impact; ● Calculation of relevant quantitative and qualitative indicators; ● Comparative analysis of the calculated indicators and formulation of conclusions. The research methodology employed both quantitative and qualitative approaches; however, statistical methods were predominantly applied. These included selective statistical observation, the use of relative and average values, the index method, as well as specific techniques of variation and correlation analysis. A quantitative database on the research topic was established through selective research. The collected information was subsequently cleaned, resulting in a dataset suitable for analysis. To ensure representativeness, the required sample size was determined to be 384 respondents. In practice, 452 completed questionnaires were received, of which 403 were fully completed and error- free, making them suitable for analysis. According to World Health Organization (WHO) data for 2024, Georgia ranks 66th globally and 2nd in Europe in terms of per capita alcohol consumption over the past 15 years. On average, nearly 8 liters of alcohol are consumed per person annually in Georgia, with wine accounting for 50%, spirits for 33%, and beer for 17%. The study revealed significant variation in alcohol consumption among students according to demographic, social, and economic characteristics. More than half of the respondents were female; however, males predominated in the 18-year-old group (59%). Notably, 18-year-olds represented the largest share of respondents overall, accounting for 32%. Patterns of regular and occasional alcohol consumption differed across all age groups. The highest rates of regular consumption were observed among respondents aged 25 (99%), 18 (35%), and 21 (29%). Importantly, students from all age groups reported having tried alcohol at least once, though with varying levels of intensity. Socio-economic background also played a decisive role. Among the respondents, 23% came from low-income households, 52% from middle-income households, and 25% identified as high-income. Students from low- and middle-income families typically had 5–10 GEL available per day, while those from higher-income families reported 10–20 GEL or more. Housing conditions reflected these differences: most low-income families lived in shared housing with grandparents, whereas middle- and high-income students were more likely to reside in rented housing, with parents, or independently. Specifically, 7% lived in shared housing with other students, 37% in rented housing, and 31% alone. Interestingly, a majority of students from high-income households lived with their parents. A noteworthy gender distinction emerged: in cases of low family income, none of the female students reported alcohol consumption within the past month or year, whereas male students, despite similarly limited resources, continued to consume alcohol. The majority of regular alcohol users – approximately 80% – live with their mother. Other living arrangements include 33% with grandparents, 40% alone, 33% in a rented apartment with their parents, 5% in a rented apartment with other students, and 20% with their parents. Paradoxically, the highest prevalence is observed among those living with their mother. However, within the past 30 days, the largest share of alcohol users (33%) was respondents living with their grandparents. In terms of household income, 35% of students from high-income families (earning 3,000 GEL or more) are regular alcohol users. Among respondents from average-income households (1,500–3,000 GEL), 25% consume alcohol regularly, while only 12% of those from low-income families (up to 1,500 GEL) report regular use. Across all categories, higher household income is associated with increased alcohol consumption. Nevertheless, members of low-income households also demonstrated notable levels of alcohol use over the past year. Interesting findings emerged when analyzing the education level of students’ parents. The study revealed that 28% of respondents whose fathers have higher education and 21% whose fathers have secondary education regularly consume alcohol. Similarly, 27% of respondents in the same category reported mothers with higher education, while 20% reported mothers with secondary education. Overall, students students who regularly consume alcohol predominantly come from families where parents hold higher education degrees. A more detailed gender-based analysis showed that among male respondents who regularly consume alcohol, the education level of their parents is generally secondary – 36% for fathers and 41% for mothers. Additionally, 30–31% of these respondents reported mothers with higher education. In contrast, among female respondents, whose parents’ education level is below higher education ranges between 9–11%. Notably, for female students who have tried alcohol at least once, 82% reported that both parents have higher education, a figure significantly higher than that observed among those with parents holding only secondary education. An analysis of students’ academic performance level (GPI) revealed that regular alcohol use is more prevalent among those with lower GPI scores, though the pattern varies by gender. For instance, 50% of respondents with a low GPI (0.5) reported regular alcohol use. Among female students, those with a GPI of 1 exhibited the highest rate of regular consumption, at 67%. Interestingly, the proportion of regular alcohol users among students with GPI scores of 1 and 3 is equal, at 43%, suggesting that both ow- and high-performing students demonstrate a relatively high intensity of alcohol consumption. However, this trend differs among female respondents, as increases in GPI do not correspond to higher rates of alcohol use. Notably, among male students with the highest GPI (4), the rate of regular alcohol consumption is nearly zero, whereas among female students with the same GPI, 15% reported regular use. An analysis of the reasons for alcohol consumption among students revealed noteworthy patterns. Half of the respondents (50%) were unable to identify a specific reason for their drinking. Meanwhile, 32% indicated that alcohol enhances their communication in social settings. Gender differences were evident: 33% of male students reported that alcohol helps them communicate more effectively, while 31% of female students stated that it makes them more sociable. Additionally, 21% of male respondents attributed their increased self-confidence to alcohol use. For female students, however, this factor was far less significant – only 6% believed alcohol made them more confident, and just 4% felt it made them more attractive. The study also examined students’ attitudes toward giving up alcohol. Among those who had tried alcohol, 34% reported no intention of quitting. Only 2% expressed a willingness to stop drinking based on relatives’ advice, and 5% cited deteriorating health as a reason. Gender differences again emerged: 39% of male students and 30% of female students stated they do not intend to give up alcohol. Furthermore, 44% of males and 61% of females reported having no clear position on the matter.

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