This study investigated the potential of a specific trend, defined as the relative change of accounting ratios for two consecutive years, to improve the classification accuracy and model performance of insolvency prediction models based on multivariate linear discriminant analysis. The results show that the respective trend can include information from both consecutive years, but this informational content could not be exploited to improve early detection of corporate crises and insolvencies.
COVID-19 represents not only public health emergency but has become a global economic problem. It has affected all economic sectors threatening global poverty. The important question that arises is what catalyses the spread of the disease? In this paper the relationship between population density and spread of COVID-19 is observed which is goal of the paper. For the purpose of the analysis the correlation between the population variables and COVID-19 variables on a global country level (209 countries) and regional level of individual countries with the most cases of infection is observed. The results have shown that on a country level variable population is statistically significant in all regression models for total cases, deaths and total tests variables whereas variable population density was not. The research results from this paper can be important and relevant for economic and health policy makers to guide COVID-19 surveillance and public health decision-making.
The world is battling out the pandemic of Covid-19. The World Health Organization (WHO) is jointly acting upon the same daily, which is evident from the ‘situation reports.’ The pandemic, which saw its origin in Wuhan, has spread across the world within a short span of under two months. While the pandemic has effectively instilled a situation of cordon sanitaire across the globe, the virus seems to show no respite. This study collates different sources and establishes the human tendency of knowledge hiding as the prime reason for the spread of such colossal magnitudes. The study underlines the notion by examining some of the critical cases and situations that have unfolded in the very recent past.
After its introduction in 1978, Data Envelopment Analysis (DEA) has instantly been recognized as a useful methodology for measuring the relative efficiency of different entities, called Decision Making Units (DMUs), given multiple criteria. Up until nowadays, the popularity of DEA has been growing and a significant number of bibliographical items was published, reporting on both theoretical and empirical results. However, the main applicative area of DEA remained the performance measurement in economics and business. On the 40 th anniversary of DEA, the aim of this paper is to present the DEA bibliography of Croatian scientists (up until June 2018). We consider six main categories of DEA-related publications, followed with key statistics and an overview of keywords and research areas. The whole list of DEA-related publications used in this analysis is published online. We believe this research will shed light on the state of DEA in Croatian science and motivate future researches.
The importance of the research is to identify the determinants of foreign direct investment in Algeria and to determine them accurately based on previous studies. We used a model of regression Multiple to identify significant determinants of FDI in the period 1990-2017. The results indicate having a positive and significant effect for both the GDP and economic openness on the outside world. Moreover, the effect negative significant for inflation and economic openness (LNINF ¹ LNOPNESSG). The effect was positive but not significant for the increase in population and GDP per capita. Some of the variables that could affect the results and give better results neglected and this is considered a deficiency in this research and could be problematic for future research. Decision-makers in Algeria can benefit from the results of this research to attract the most foreign direct investment. The study period and the method of estimating the model for the case of Algeria considered as a gap that can add new to the subject of foreign direct investment in Algeria.
In this paper, an econometric model of consumption in Bulgaria for the period 1997-2005 is constructed. The Error-Correction Model (ECM) approach is employed and long-run relationship between household consumption and income was found. The primary purpose of this empirical paper is to get a better understanding of the factors driving household consumption in Bulgaria and to estimate a consumption function to be used for medium-term forecasting. It is shown that all households behave in a Keynesian way, basing their consumption decisions on current income.
The analysis of the regularities characterizing the existing rate of female early-stage entrepreneurial activity, as well as the identification of reserves for female entrepreneurship growth is relevant nowadays. The purpose of the work is to assess the rates of entrepreneurial activity of women, their motivational preferences, and comparative analysis of female and male early-stage entrepreneurial activities. The study is based on the economic analysis of the data on 48 countries, presented in the Global Entrepreneurship Monitor report for 2018. Normal distribution density functions are used in the modeling process. The research reveals features of female entrepreneurship and the barriers to its development. The paper defines countries with high and low values of the considered indicators. The study estimates the existing rates of opportunity and necessity motivation of female entrepreneurs, presents the analysis of the ratio of female to male participation in early-stage entrepreneurial activity, and proves the hypothesis on substantial differentiation of these indicators across countries. The obtained knowledge can be used in future scientific research, in the educational process of bachelors and masters training. The scientific novelty lies in the study of the distribution of indicators characterizing female entrepreneurs’ motivation and the existing gender gap in early-stage entrepreneurship. The study proposes new methods and tools for the analysis and presents a comparative analysis of the development of female and male early-stage entrepreneurship.
Changes in understanding and interpretation of decision-making processes have shed more light on complex interplay given the different settings, and different actors. The limitations in human decision-making and their significance and long-term implications on organizational management or policy making inspired a large body of evidence and research. Exploration of decision-making processes spans over decades, and is closely connected to the role of power; the amount of power in organizations is usually joined by the knowledge and prior experience, which together play a significant role in decision-making process, as well in selection of candidates for the job. However, there is an evident void concerning publications on decision-making processes in academic institutions, and it rapidly becomes the focus of interest due to a specific opposition contained in its core; positions of high level administrators are held by the university professors with no mandatory previous experience and/or knowledge in organisational management.
Social media has phenomenally changed the communication landscape. Particularly social network sites have received enormous popularity and user acceptance globally. The business model of many social network sites is based on advertising. The survival of these social network sites depends on the user acceptance of advertising appearing on these websites. Users usually accept the advertising which is consistent with their motivations for using social network sites. The current study examines the underlying dimensions of entertainment motivation for using social network sites and their impact on user acceptance of social network advertising. Analysis of data from 450 university students show entertainment motivation for using social network sites a multidimensional (SNSs) construct consisting of enjoyment, social escapism, relaxation and pass time factors. Furthermore, the results exhibit that SNSs entertainment motivation partially impacts user acceptance of social network advertising.
This study examines the role of information and communication technology (ICT), access to electricity and transport infrastructure in reducing poverty and promoting inclusive growth in Nigeria for the period 1980-2014 using the error correction modeling approach (ECM). The results indicate that access to electricity and transport infrastructure is negative and statistically significant in both the incidence and the depth of poverty reduction and therefore conclude that this lead to inclusive growth. In particular, we show that access to ICT negatively influences the incidence of poverty, but the relationship is not robust when the measure of poverty is the poverty gap.
Despite considerable improvements in electricity coverage, millions of people are still lacking the access to electricity. Residential electricity access is a prerequisite for numerous aspects of increased well-being and quality of life. The aim of this paper is to identify key household characteristics that are linked to the energy poverty measured as access to electricity. Literature on financial and general poverty showed mixed results on household size and characteristics as a driver of poverty. We argue that household size and proportion of children in households are key variables associated with energy poverty in developing countries with lowest levels of electricity coverage. Our research approach treats electricity access as economic good and focuses on demand side – households. By utilizing census microdata across 69 non-OECD countries, our research provides large-scale analysis on household size and characteristics as a driver of energy poverty. We found that, in majority of low-income countries, same principles for general or financial poverty apply to energy poverty which is represented by negative effect of household size and proportion of children on energy poverty.
Access to finance for small and medium enterprises still represents one of the biggest problems that entrepreneurs face when launching their business or when they want to enhance their production capacities in other stages of the enterprise life cycle. Entrepreneurs generally use informal sources of financing when starting their business (3F: family, friends and fools) if they do not have other available sources of financing. There is a common classification in the literature that divides the sources of financing to: informal investors, debt financing, equity financing, government support programs and the entrepreneurs’ own sources. The purpose of the survey conducted for this paper is to determine the sources of used finance of Croatian SMEs and the main problems that SMEs encountered while accessing finance. The second main goal of this article is to identify future needs for financing with potential financing problems that may occur. We gathered data from Croatian SMEs about the sources of funding used over the past three years and about the funding sources that they intend to use in the next three years. In last part of the paper we analyze the results from the survey and from that draw the implications for policy makers and market participants.
Accession of Croatia to the EU brought legal, regulatory and market changes for the insurance companies. The question that arises is whether the new environment in which the companies operate has improved their efficiency. Accordingly, the aim of this paper is to separately estimate the efficiency of non-life and life insurance industry in Croatia and to compare it through the period before (2009-2012) and after (2013-2018) Croatian accession to the EU. The research is based on the Data Envelopment Analysis and the obtained results indicate an average increase in overall technical efficiency in both, non-life and life sector in period after Croatia’s accession to the EU. Still, this increase was not proved to be significant. Additionally, although increase in pure technical efficiency was significant in non-life sector, an insignificant slight decrease is recorded in life sector. Finally, insurers conducting (non)life business activities are mainly operating at increasing returns to scale.
In this paper, we investigate whether the differences in the current account balance and export performances for a new EU countries are a result of exchange rate policies. The analysis shows that countries with a flexible exchange rate have better export performances and the current account balance in the pre-crisis period. The obtained results show that movements in the current account balance are mainly driven by domestic variables. In the countries with a flexible exchange rate, real and nominal depreciation affects export positively although the magnitude of these effects is tiny and limited to the crisis period. These results point to a higher significance of non-price competitiveness on export which should be a future research topic.
Due to negotiations on accession to the EU, the new EU member states from Central and Eastern Europe went through the financial opening. In the pre-crisis period followed by high liquidity in global markets, most of the EU new member states experienced rapid credit growth, which conditioned the appreciation of the exchange rate. External imbalances and vulnerabilities built up. Countries experienced deterioration in their current accounts. This paper investigates the link between financial openness, real effective exchange rate, financial crisis and current account balance within the Panel Auto-Regressive Distributed Lag (ARDL) framework for 11 new European Union members during the period from 1999 to 2016. The results obtained by the use of pooled mean group estimator (PMG) show that in the long run, financial openness has a significant negative impact on the current account balance. In the short run, crisis significantly influences the current account balance having a positive sign.
This study explores the association between earning management practices and financial distress in commercial banks. Earning management is measured through discretionary loan loss provisions and non-discretionary loan loss provisions. Modified Altman’s Z-score has been used as a proxy for financial distress. Panel regression with fixed and random effect has been employed for empirical analysis. The study finds a significant positive association between DLLP, NDLLP and financial distress in terms of the Altman Z-score. In the case of NDLLP, liquidity reduces the probability of financial distress. Whereas, a bank’s SIZE, LEVG and AQ enhance the likelihood of financial distress. The robustness tests were applied to find the association between NDLLP and FD using logistic regression to validate baseline estimates results of the random effect model. The findings of this study have implications for the policymakers, regulators and internal stakeholders to devise effective regulatory measures for well-informed investment decisions.
Central and Eastern European countries undergo many political, structural, social and economic changes. In the past decades such countries, like Croatia and Poland, witnessed a fundamental transformation of their societies and economies, which impacted accounting systems as well. The mail goal of the paper is to research the main differences in accounting systems in the Republic of Croatia and Poland. The research methodology is based on a critical analysis of scholarly literature done by the bibliometric analysis, analysis Polish and Croatian accouting standards and legal acts. Based on inductive and deductive reasoning, the paper reveals key determinants and differences of accounting frameworks in Croatia and Poland. The paper proves that it is crucial to consider economic and cultural differences in comparative international accounting research. Research results of the paper will contribute the international accounting literature but also have an impact on the European Union accounting harmonisation references.
The objective of the conducted research includes examining importance of financial statements and financial statements analysis in business decision-making process. Conducted empirical research is focused on analysis of determining and evaluating the frequency of using accounting data and annual financial statements within the business decision-making process. According to obtained results, it can be concluded that more than 60% of examines frequently use accounting information and information available from annual financial statements within business decision-making process, and that they are familiar with methods of using technics of financial statements analysis for purposes of evaluating financial position and business efficiency.
The study of public health investment, human capital accumulation, and labour productivity are essential in formulating policies that drive economic development. This study examines the individual and interactive effects of public health investment and human capital accumulation and the interactive effect of human capital accumulation and financial opportunity on labour productivity in West Africa from 1992 to 2020, respectively. The interactive effect of human capital accumulation and financial opportunity has not been given any attention in the literature. The following findings are apparent in the study: One, public health Investment and human capital accumulation positively affect labour productivity in the short and long run. Two, the interactive effect of human capital accumulation and public Health Investment positively and significantly affect labour productivity in the short and long run. Lastly, the interactive effect of human capital accumulation and financial opportunity positively and significantly affects labour productivity in the short and long run. Hence, we suggest that economic policy be formulated to ensure that affordable healthcare and financial opportunity are available, together with human capital accumulation, to fast-track the normalization of the economy.
Community-based tourism is recognised as being a potentially important means by which economic development can take place in rural Myanmar. One particular project in this vein is the dolphin-based tourism organized at six villages on the River Ayeyarwaddy in the northern Mandalay division. Qualitative research featuring personal interviewing of international tourists and service providers in the region indicated the potential for this project but also the formidable problems of poor connectivity and service provision that will need to be overcome to achieve success. The threats to the dolphins concerned and the indifference with which they are treated by many community members suggest real threats to the sustainability of the project as a whole.
Capital structure refers to the delicate balance between equity and debt that a company uses to finance its assets. It is typically expressed as a debt-to-equity or debt-to-capital ratio, with the components usually located on the right side of the company’s balance sheet. Capital structure can exert great influence on the company’s risk profile and ability to leverage its operations. For this reason, the authors conducted an investigation of the capital structure of 16 joint stock companies listed on the Zagreb Stock Exchange comprising CROBEX, the equity index of Croatia for a three-year period starting in 2015 and ending in 2017. The study demonstrates that many CROBEX-listed companies are very risk averse and choose to remain debt-free. Some are, however, starting to discover the potential offered by financial leverage and have slowly started adjusting their capital structure. In conclusion, capital structure is slowly becoming an issue worthy of discussion on the corporate agendas in Croatia.
The aim of this paper is to identify the determinants of the effective tax burden of companies in the activity division Telecommunication in the Republic of Croatia. The research covers the time interval from 2008 to 2017. Dynamic panel analysis was used to conduct the research. Microeconomic data were obtained from the databases of the Financial Agency, and macroeconomic data from the Central Bureau of Statistics. The results indicate that the effective tax burden of companies in the activity division Telecommunication is affected by the effective tax burden from the previous period, company size, leverage, inventory intensity, profitability and economic cycle. While capital and labour intensity didn`t prove statistically significant. The main limitations of the research lie in the impossibility of generalizing the stated results to all companies from the observed activity, using only one evaluation model, and being a cabinet-type research, without confirmation of the results obtained by companies. The research received several scientific contributions: this is the first study of the determinants of the effective tax burden conducted in the Republic of Croatia; the research covers an entire activity whit different companies sizes, and not as in most previous research, which mainly include only large companies listed on the stock exchange; unlike previous studies that used a balanced sample, and in most cases static panel models, this study used an unbalanced sample and a dynamic panel model.
Increasing competitiveness of small and medium enterprises, especially in the situation of growing economic globalization in the member countries of European Union and internationalization of activity of such enterprises, requires overcoming numerous obstacles the enterprises have to face. One of the most substantial of them is deficiency of means for the enterprises’ growth, particularly the means earmarked for innovative activity. This is mainly the consequence of lack of knowledge about how the enterprises could gain financial means from the alternative financing sources. This hinders establishing the optimal configuration of financing for an enterprise. Consequently, the purpose of the paper to improve enterprises’ access to external capital so as to be able to carry out the investments oriented towards strengthening of the enterprises and launching innovative products and services. The main result of research (sample of Polish SME) is preparing of advanced system of financing including alternative forms of financing of SME on each stages of their life cycle, connected with multicriteria forms of their assessment.
This paper analyses the link between working capital management and profitability of firms in the context of developing economies. A balanced panel consisting of eleven (11) manufacturing firms listed on the Ghana Stock Exchange covering the period of 2011-2017 was used. The link between working capital management and profitability was examined using dynamic panel regression (Arellano-Bond Estimation) technique. The study revealed that there is a significant positive linear relationship between working capital management and firms’ profitability. The findings also reveal the existence of a concave quadratic relationship between working capital management and firms’ profitability. There is an optimal level at which working capital management maximises firm’s profitability, therefore, managers need to ensure that they operate within the limits of the optimal level by implementing an effective and efficient working capital management policy. The study concludes that, the practice of an aggressive working capital management policy maximises a firm’s profitability.
This study investigates technical efficiency of health production function in Sub-Saharan Africa. For this purpose, a stochastic production frontier model is estimated using fixed-effects panel data method over the period of 2000-2007. More specifically the impact of economic, social, and environmental factors in determining life expectancy at birth, as the dependent variable, is measured and evaluated. Overall, the results justify the important role of policymakers, who their proactive approaches should be given to activities that go beyond the health system to influence the main determinants of health i.e. socioeconomic and environmental factors in preventing infectious diseases, improving life expectancy and aid populations to access available resources.