Public R&D support, financial instruments, and energy start-up ecosystems in Europe: Evidence on non-linear and delayed effects

In the process of small business establishment and development, it is very important to understand both the financial needs of entrepreneurs and the main obstacles and difficulties arising in the way of financing. Alternative sources of financial support, along with traditional ones, create opportunities to increase funds, but the solution to the issue of their attraction should be based on modern effective methods and decision- making technologies. The article uses the decision tree method to determine the optimal alternative to financial support of small business at the early stages of the life cycle. The results highlight the importance of alternative source of resources for small business entities, namely business angels’ means. The empirical and statistical analysis confirms that access to alternative sources of financing for small businesses in EU countries is improving, while in Ukraine, informal financing is a rather new and underdeveloped area. Based on the analysis of the advantages of using the business angels’ funds, it was concluded that they need to implement their potential in small business of Ukraine. The results show that the decision tree method is an effective tool for deciding on the prioritization of a financial alternative to the small business, and is characterized by ease of use, forecast precision and problems solution novelty.

The article proposes a way of determining the future directions of financial support for the social development needs. To this end, the Tintner method of consecutive differences is used. The practical application of this method allows for pre-selecting the best curve that describes the level of financial support for social needs. The model off inancial support for local self-government is determined. The adequacy of funding for the needs of local budget social development is analyzed. The share of expenditure of local budgets in Ukraine on health care, intellectual and physical development, education, social protection and social security is described. A number of challenges when it comes to financial support are considered, both from a theoretical perspective and those confirmed by actual calculations.

Type of the article: Research Article

Abstract
The COVID-19 pandemic, the energy and inflation shock, and the Russian–Ukrainian war have challenged macroeconomic stability in European countries while exposing the limitations of traditional, single-indicator assessments. This study aims to analyze the evolution and structural drivers of macroeconomic stability across successive crisis regimes in European countries by applying a pentagon-based composite index that captures the joint interactions among growth, inflation, fiscal balance, labor-market conditions, and external positions. The empirical analysis is based on annual macroeconomic data for European countries over 2019–2024 and employs policy-consistent distance-to-target normalization combined with a non-additive pentagon-area aggregation method. The results indicate that macroeconomic stability was relatively high before the shocks, with an average index value of approximately 0.61 in 2019, reflecting broadly balanced macroeconomic conditions. In 2020, stability collapsed to an average of about 0.15, driven primarily by the near-universal contraction in GDP growth and the deterioration of fiscal balances. A partial recovery followed in 2021, when the average index increased to around 0.35, but persistent fiscal imbalances prevented a full return to pre-crisis stability. In 2022, macroeconomic stability deteriorated again, with the average index falling to roughly 0.21 as inflation moved far outside the tolerance corridor in more than 90%. The subsequent period was characterized by heterogeneous and incomplete adjustment. By 2024, overall stability improved to an average of approximately 0.41 following the normalization of inflation. However, countries with chronic fiscal and external imbalances continued to exhibit low levels of stability, underscoring the non-compensatory nature of macroeconomic stability.

Acknowledgment
This study was conducted within the framework of the MSCA4Ukraine project 06030419, funded by the European Union. Views and opinions expressed are, however, those of the author(s) only and do not necessarily reflect those of the European Union, the European Research Executive Agency or the MSCA4Ukraine Consortium. Neither the European Union, the European Research Executive Agency, nor the MSCA4Ukraine Consortium, nor any individual member institution of the MSCA4Ukraine Consortium can be held responsible for them. The publication of this paper was funded by EKA University of Applied Sciences (Latvia) and Daugavpils University (Latvia).