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The moderating effect of shareholder features on dividend disbursement: evidence from Indonesia

Author(s): Novi Swandari Budiarso,Winston Pontoh / Language(s): English / Issue: 3/2018

The objective of this study is to give an empirical evidence of relationship between features of ownership structures and dividend disbursement in context of bird in the hand and catering theories. The study uses 241 listed firms as the sample, which were drawn from Indonesia Stock Exchange during the period from 2010 to 2015. Under condition that dividend policy is not moderated by ownership features, dividend policy for firms with multi-institutional, single institutional, and state are fit in context of bird in the hand theory and catering theory. Under condition that dividend policy is moderated by ownership features, this study finds that dividend policy for firms with state ownership is not fit both in context of bird in the hand theory and catering theory. Specifically, the study finds that firms with features of: (1) multi-institutional, single individual, and public; (2) multi-institutional, multi-individual, and public; and (3) single institutional, and public are fit with bird in the hand theory. Furthermore, this study finds that catering theory is not fit for firms with basic features of multi-institutional and state ownership, but it is fit for firms with features of single institutional, single individual, and public ownership.

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The Monetary Aggregates and Current Objectives of European Central Bank

Author(s): Richard Pospíšil / Language(s): Polish / Issue: 105/2017

Current quantitative easing brought into monetary policy of central banks unprecedented influence on monetary equilibrium and monetary policy as a whole. The issue of money and establishing interest rates are the main activities of central banks. Through issuing of money, the central banks immediately influence the behaviour of households, companies, financial markets and the state with measurable impact on main economic outcomes. The monetary policy strategy of the EuropeanCentral Bank requires identification of a monetary aggregates which is a stable and reliable indicator of inflation over the medium term. This is closely related to growth of real GDP and the rate of unemployment. When monitoring the issue of money, it is necessary to focus not only on its volume, but also on the attributes and functions carried by money. The objective of the paper is to analyse the individual monetary aggregates of issued money in the eurozone, their different effect on economy with a major impact on medium term growth of real domestic outcome. The paper deals with the denomination of the aggregate to its various elements within European CentralBank, which is significant for fulfilling its monetary policy targets.

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The monetary policy and the financial stability in the context of globalization

Author(s): Angela Roman,Irina Bilan / Language(s): English / Issue: 1/2009

It is unanimously acknowledged at an international level that, for the long term, the stability of prices is the fundamental objective of the monetary policy of central banks. The international financial crises that have occurred in the context of financial globalization have determined central banks from various countries to give special attention to the promotion of financial stability. This attitude is due to the fact that a stable and solid financial system provides the prerequisites for the implementation of an efficient monetary policy, which contributes to the achievement of the fundamental objective, that of ensuring the stability of the prices. This paper aims at emphasizing the relationship between the stability of the prices and financial stability in the context of financial globalization, and the extent to which central banks can, via the monetary policy they promote, can contribute to the achievement of these objectives.

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The Month-of-the-Year Effect in Post-Communist East European Stock Markets

Author(s): Elena Valentina Tilica / Language(s): English / Issue: 1/2014

This paper studies the month-of-the-year (MOY) effect between 2004 and 2014, also considering the impact of the 2008 crisis. MOYis present in most East European countries, but the patterns changebetween countries and, also, as a result of the crisis.Thus, markets should be analyzed separately and periodically, especially after important events, as their behavior changes. It appears that some markets try to correct the observed pattern in the same year, by creatingan inverse one. This creates another opportunity for informed investors to create profitable strategies, a sign that the level of efficiency on the markets is low

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THE MULTIFACTORIAL PASTOR-STAMBAUGH MODEL: EXPLAINING THE IMPACT OF LIQUIDITY ON THE RATE OF RETURN BASED ON THE EXAMPLE OF THE WARSAW STOCK EXCHANGE

Author(s): Agata Gniadkowska-Szymanska / Language(s): English / Issue: 2/2017

Research background: The liquidity of assets in the financial market is under-stood gener-ally as costs, and the easiest way in which different types of assets can be converted into cash, or to put it simply, sold at the currently available price on the market. For a considerable period of time this category had not been duly considered in the framework of modern finance theory. As a result, a number of basic models constructed within the framework of this theory in its classical form did not include problems with liquidity. This applies to a number of aspects related to liquidity, with one of the most important being the relationship between the liquidity of trading in shares and the results obtained from these rates of return. Purpose of the article: The aim of the article is to determine whether the rate of return on shares increases with the increase in share liquidity and the incremental rate of return on this account decreases with increasing liquidity. The applied re-search methodology is similar to that described by Pastor and Stambaugh (2003). The model used in the empirical study is the expanded model of Fama and Francha (1993) for the liquidity factor. Methods: In this paper I present various factors which will affect the liquidity. The paper will also provide the results of research concerning the relations between spread and stock return on the Warsaw Stock Exchange (WSE). The evidence drawn from WSE stock returns over the period 2004–2012 indicates that Amihuda measure and other variables have a significant effect on stock return using the multifactorial Pastor-Stambaugh. Findings & Value added: In the case of the Polish market, it can be stated that in the analysis based on the Pastor-Stambaugh model not all the variables included in this model are statistically significant. However, directional parameters associated with liquidity risk were statistically significant in all analyzed periods, which allows us to confirm the hypothesis that liquidity has a significant influence on the rate of return on shares listed on the Stock Exchange in Warsaw.

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The National Culture Effect on the Adoption of Internet-Banking

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The National Culture Effect on the Adoption of Internet-Banking

Author(s): Vesselin Blagoev,Elena Shustova / Language(s): English / Issue: 6/2019

This paper analyses the relationship between the national culture (Hofstede’s cultural dimensions Individualism, Uncertainty Avoidance index and Power Distance index, as well as Minkov’s Indulgence vs Restrain index) and the adoption of Internet banking in 30 European countries. We presume, that if there is a strong correlation between them, some recommendations to the banking sector could be made to help them develop more effective marketing strategies to increase the adoption of e-banking, based on the cultural specifics in the particular country or clusters of countries. Our findings show that there is a strong correlation between those cultural dimensions and the adoption level of e-banking. In particular, it was found that the Individualism has a lead role in most of the cases. However, in the cases of a combination of high Uncertainty Avoidance and low Indulgence, the lead role of Individualism does not manifest.We also argue, that in the cultural combination of high Individualism, and high Uncertainty Avoidance index with low Indulgence vs Restrain index, the combination of Individualism and Restrain factors reduces the influence of Uncertainty Avoidance, no matter how high it is.We analyse and also discuss the influence of different other factors, which influence the adoption of Internet banking, looking for combinations which lead to specific effects.JEL: M14; M15; G21

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The National Deposit Insurance System: A Market Institution at the Crossroads

Author(s): Antoneta Geala / Language(s): English / Issue: 1/2009

The safety net provided by deposit insurance systems gain heavily in weight at times of crisis. The correct set of such a cushion is critical to its effectiveness. While it helps to prevent bank runs, the severe market distortions are of great concern. The short term benefit of public confidence can be, far and away, offset by its long run negative effects consisting mainly in increased moral hazard, heavy public costs and impaired competition.

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The Nature and Determinants of High-value Household Deposits in the Euro Area

Author(s): Katarzyna Kochaniak / Language(s): English / Issue: 15/2016

This paper analyses the occurrence and nature of high-value deposits in selected euro area countries and the determinants of a household’s propensity to possess them. The analysis is conducted on household-level data and based on logistic regression. Due to the rarity of high-value deposits in euro area households, the sample of households surveyed is balanced in accordance with G. S. Maddala’s approach. The results reveal considerable diversification in high-value deposits as a proportion of total deposits in euro area households. Some of the features of households and reference persons, such as attitudes to financial risk, saving aims, overall investment preferences, and the priority accorded to deposits compared to other financial assets, suggest that high-value deposits are of a long-term nature. The study finds that wealth, and certain socio-demographic characteristics, have a statistically significant influence on the likelihood of holding high-value deposits.

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The Neo-Classical Perspective and Marxian Prediction of the Global Financial Meltdown

Author(s): Imoisi Anthony Ilegbinosa / Language(s): English / Issue: 7/2019

Neoclassical economists backs the views of the classicists that the capitalist economic system has an inbuilt mechanism' to correct the ills of any economy that adapts this system. The Marxists, on the other hand, opposed the capitalist system and maintained that the former has the seed of its own destruction inherent in the system. Marx himself predicted that capitalism was full of crisis and since his prediction, three major crises had taken place and all had their origin in the United States. The first one took place in the 1830s and was limited to some European countries, The second one took place in the 1930s and was described as the Great Depression - with a greater spread because of improvement in communication. The most recent one which started in 2008 is described as the Global Financial Meltdown and has the greatest spread because of the impact of globalization. Because of this particular crisis, die-hard capitalist countries are now thinking in the direction of socialism and it is not uncommon to hear of terms like Regulation, Nationalization, Stimulus Packages, Reforms, and Government Intervention, among others. Some recommendations have been made as to how Nigeria could come out of the biting financial crisis.

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The New Democracy and Market Reforms in Latin America

Author(s): Andrew TOLETT,Ioana Albu / Language(s): English / Issue: 17/2008

Cet article propose un débat sur la démocratisation de l’Amérique Latine, débat que l’on ne peut pas séparer des circonstances historiques particulières de l’époque d’après la Guerre froide, lorsque la gauche politique de l’Amérique Latine essaye de s’imposer et de vaincre les forces globalistes. La gauche politique est “privilégiée” dans notre approche de l’Amérique Latine, grâce au rôle central qu’elle joue dans la société et dans la politique. Pendant les dernières décennies l’Amérique Latine est devenu un “champ d’essai” pour les politiques néo-libérales de la globalisation et de la démocratie; la consolidation de la société civile et la privatisation stimulant une renaisance aux niveaux politique et intelectuel.

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The Nexus between Bank Sources and Firms Capital Expenditures in SEE Countries

Author(s): Pranvera Dalloshi / Language(s): English / Issue: 5/2018

Considering that financial sources and investment opportunities are the starting point of the business decision to invest, this research focuses on answering whether a country's financial system contributes to the growth of firm investment, with regard to the endogenous economic growth theory based on which the financial system affects economic growth through capital accumulation. To test the impact of external funds on the value of capital expenditures, the linear regression model is used, and the results support the hypothesis that bank loans have a positive impact on the value of new fixed assets. For robustness check, the logistic regression is utilized. In this model the dependent variable is dichotomous, considering the fact if the business in the respective year had purchased fixed assets or not, while as an explanatory variable, among others, are bank loans representing the fact if the business in the same period had a credit or not with any commercial bank. The results show a positive and significant connection between the bank loans and the newly purchased fixed assets. These finding simply that firm investments in SEE countries are not financially constrained from banks.

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The Nexus between Sovereign Default Risk and Bank Fragility: Evidence from China

Author(s): Oleg Deev,Martin Hodula / Language(s): English / Publication Year: 0

In this paper we investigate the interdependence of the sovereign default risk and its domestic banks on the example of China during the time period of 2003-2011using credit default swaps as a proxy for default risk. China’s banking industry has predominantly remained state-owned, even after a series of significant reforms in the last two decades. We employ bivariate vector autoregressive (VAR) and vector error correction (VECM) framework to analyze the short- and long-run dynamics of the chosen data series. To

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The nexus prevalent in nonlinear finance and growth in the presence of macroeconomic instability in Turkey: Does the stock market really matter?

Author(s): Emrah Gulay / Language(s): English / Issue: 1/2019

The link between stock market and economic development has become a significant volatile issue over the past few years. Our major contribution in the debate concerning the nexus between finance and growth is to bring to the fore the asymmetric effects of stock market development on economic growth under macroeconomic instability. Hence, towards this purpose, the stock market development index and the macroeconomic instability index, which are both constructed by incorporating the exchange rate and unemployment rate, are built based on principal component analysis. Utilizing the nonlinear autoregressive distributed lag model (NARDL) within the framework of a time series approach, we provide evidence that there is an asymmetric relationship between economic growth and the development of the stock market in Turkey.

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The Normative Defense of Free Market Capitalism: Did the Free Market Cause the Financial Fiasco?

Author(s): Tibor R. Machan / Language(s): English / Publication Year: 2011

Machan’s book advances an indispensable normative case for the free market system of economy. He addresses the different approaches taken to showing the superiority of the system to others and also discusses the charge that the recent financial fiasco was caused by “market fundamentalism,” as the likes of Paul Krugman keep claiming. This is a vital entry into the on-going debate about whether the economic system based on the principles of freedom of economic conduct, free exchange, private property rights, etc., is better than one regimented from the top, either by some czar or a democratic assembly. Anyone who is concerned with both the productivity and decency of an economic system needs to address Machan’s arguments.

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The notion of tax-legal culture

Author(s): Olena Khandii / Language(s): English / Issue: 2/2018

In the article the notion of tax-legal culture is analyzed from the world-outlook and methodological positions of anthroposociocultural approach and application of the instruments of system analysis. The concept of system of financial law by P.Patsurkivskyy and the system of paradigm constants of financial law by R.Havrylyuk were extensively applied. With the help of them civilizational determination of the contents and the scope of the notion of tax-legal culture was grounded, the system nature of tax legal culture as a social phenomenon and its determination by respective sociocodes of the society as a self-regulating processual system of social cooperation of individuals. It is shown that tax culture is an unalienable part of the culture of the people at large, its character, psychological, behavioral patterns, which formed the people as a united whole. Special attention is drawn to the understanding of civilizational face of tax-legal culture of Ukrainians by different researchers, who applied not only different, but the opposite instrumentarium to the research of it. It is concluded that tax is one of the most unique phenomena of human civilization. Having emerged simultaneously with it, the tax has transformed into one of the key factors of the mankind evolution, has become the system core of special tax-legal culture. Tax-legal culture is ontologically embedded, mentally and officially envisaged system of special sociocodes as fundamental anthroposociocultural values that define the individuals and their societies’ behavior in relation to satisfying their public needs. Anthroposociocultural approach to the research of tax-legal culture on the basis of the instruments of system analysis and synthesis is relevant to the anthropocentric nature of tax-legal culture.

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The observational equivalence of natural and unnatural rates of interest

Author(s): Victor Bystrov / Language(s): English / Issue: 3/2019

The results of the study presented in this paper demonstrate that a structural model of the natural interest rate, which is consistent with the standard assumptions of the natural rate theory, admits an interpretable, observationally equivalent representation in which a redefined, ’unnatural’ equilibrium rate is different from the natural rate in the original model. The alternative representation was obtained by an invertible transformation implemented in the minimal state-space form of the natural-rate model. The identification theory for state-space models is used in the paper to prove the observational equivalence of these two representations. In the alternative representation, the equilibrium interest rate fails to meet the assumption of the natural rate theory, because it depends on past demand shocks. The alternative model, being observationally equivalent, has different implications for the conduct of monetary policy. The problem of observational equivalence arises in relation to natural-rate models because of the inherent unobservability of the natural interest rate; a potential solution to this problem could be the augmentation of the information set which is used to identify and estimate the natural rate.

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The Operational Risk Management in Banking – Evolution of Concepts and Principles, Basel II Challenges

Author(s): Mirela-Anca Schwartz-Gârlişte / Language(s): English / Issue: 1/2013

The operational risks in the banking sector are undeniable realities of contemporary specific environment and their correct treatment is now both a necessity and a prerequisite for effective overall management process. Operational risk management brings a double challenge for banks. On the one hand the need to align with regulations in order to meet the requirements of the system’s regulators, on the other hand turning these requirements into a business opportunity. This paper is meant to provide an overlook on the operational risk management specific to the banking sector. The study briefly defines operational risk in banking and reviews the evolution of the good practices principles regarding operational risk management in banking. In the last part the paper paper deals with the approaches used for establishing the regulatory capital for operational risk as they were set by the Basel Committee for Banking Supervision: basic indicator approach, standardized approach and advanced measurement approach.

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The opportunities of engaging FinTech companies into the system of crossborder money transfers in Ukraine

Author(s): Yuriy Petrushenko,Liudmyla Kozarezenko,Aldona Glińska-Neweś,Maryna Tokarenko,Maryna But / Language(s): English / Issue: 4/2018

Despite the increasing role of cross-border payments within the globalization processes and rapid growth of venture sector, an issue of its implementation remains to be a debatable point for many countries. The paper identifies disruptive challenges for financial institutions need to adapt. The research investigates the value and the investment flows structure as most obvious indicators of FinTech and describes types of payments relationships there. The paper considers relationships between enterprises, financial institutions and individuals, which are formed in digital payments. To understand the difference between regular cross-border money transfers and P2P crossborder money transfers with TransferWise, both mechanisms were researched and the benefits underlined. For Ukraine, the improvement of existing cross-border payments system with FinTech is a crucial challenge. That is why it is important to focus on providing knowledge for people, supporting start-ups in the sector and learning the best implementation practices. A great example of cross-border payments of FinTech in Ukraine is TransferWise. The difference between regular cross-border money transfers and peer-to-peer (P2P) money transfers appears in its benefits, such as lower and more expectable transfer fee, mid-market exchange rate, less transaction period. By transforming existing cost structures and mitigating market imperfections, they provide innovative services that meet the users’ needs for speed, trust, low cost, usability, security and transparency. The results show high potential of FinTech for cross-border payment processing.

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The Optimized Indicators of Technical Analysis by Anticyclic Assets

Author(s): Martin Širůček,Karel Šima / Language(s): English / Publication Year: 0

The paper is focused on using the technical analysis and its indicators. It deals with the evaluation of investment strategies based on the optimized parameters of technical analysis indicators. The analysis focuses on using selected indicators of the technical analysis in the period from 11/1/2013 to 10/31/2014. The empirical analysis includes a back-test of optimized indicators, the results of which are compared with the recommended setting of these indicators, held in the period from 11/1/2014 to 10/31/2015. The optimization and the back-test were realized on anticyclical stocks, represented by the index S&P 500 Consumer Staples. The main aim of the paper is to bring to the speculators a higher investment return based on the change of the recommended (default) setting of these indicators.

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THE OUTBREAK OF A NEW CONFUSED CENTURY, MONETARY AND FINANCIAL CHAOS, RECONSIDERED

Author(s): Mario Pines / Language(s): English / Issue: Special/2018

The forced overthrow of the historic meter of commercial development, the monetary Gold Standard, as adopted originally in the USA on the first of August 1914’s, triggered, and led during the next decade, the great inflations in France, Germany, Russia and almost all other European Countries. The ensuing convulsions of the social order, the rise of the speculator opportunities, the obliteration of the savings of the laboring and middle classes, based on fixed incomes, produced directly and afterwards, the rise of Bolshevism, Fascism, and Nazism. They were follow-ups of the floating European currencies, perennial budgetary and balance of payments deficits, Central banks’ emergency money printing, currency wars and the neo-mercantilism practices.After Nixon 15 August 1971 second American repudiation of the new Gold Exchange Standard, we entered a slow replay of the first experience, trough inflation, large monetary quantitative expansions and, through bursting bubbles, recessions and stagnations and, finally, new consequent barriers and tariffs perspectives. The most relevant comment, I always share in my speeches is this, coming from a statement on the 100th anniversary of the birth of Jacques Rueff. The comment address has been formulated by Lewis E. Lehrman, at the parliament of France (Assemble Nationale), on November 7, 1996: “Money will decide the fate of mankind, because individual liberty is only possible - or even thinkable - when confined within the boundaries of a collective discipline, calculated to curb the disorders that uncontrolled action is bound to provoke”. (Rueff, 1971).

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