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This text contains methodical and theoretical research of the influence of the public policy on regional development. The goal is an identification of the occasions and risks for regions.
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In the recent years ambitious targets to increase the share of renewable energy and reduce greenhouse gas emissions have been adopted by governments around the world. Variety of policies have been introduced. The question is what is the business potential and market response to that. This article adds a new perspective to the debate of business potential of investments in renewable energy sector. The aim of the paper is to focus on the venture capitalist interested in the new clean technology development and its diffusion. We analyze venture capitalists’ perception of investing in projects from that sector, possibilities of financing and barriers that they meet in the process. We conducted survey and field study with managers of private equity funds from Poland. Our research results show that in the overall business history of the surveyed entities 67% of funds invested in projects related to renewable energy sector. In order to assure specific competencies for investing in renewable energy sector they were using external experts in most cases or past experience. If they specialize in the RE sector investments they were likely to employ their own experts in the investment department While main reason for not investing in that sector was lack of competence, but also unstable situation in the sector.
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The steepness of the bond yield curve should be an excellent indicator of a possible future economic activity. A rise in the short rate tends to flatten the yield curve as well as to slow down real growth the near term. The relationship between the spread and future GDP activity was proved already before. One question remains – which spread is the best for the future prediction? Is it the spread between sovereign 10-year bonds and 3-month bonds or 30-year and 1- year or 10-year and 1-year sovereign bonds? This paper aims to analyze which spread is the most suitable for predicting of future economic growth in France, Germany and Great Britain between the years 2000 and 2016. The natural and probably the most popular measure of economic growth is GDP growth, taken quarterly. We have found out that the best predictive spreads in France, Germany and Great Britain are the spreads of 30-year and 1-year and 10-year and 1-year government bond yields. These findings might be beneficial for investors and provide further evidence of the potential usefulness of the yield curve spreads as indicators of the future economic activity.
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Within the world insurance market the processes associated with the globalization of markets and the integration of financial institutions concur. These processes have been affected by the outbreak, continuance and subsequent lingering of the global financial crisis. The financial crisis has manifested itself in various regions of the world insurance market in varying extent. The main objective of this paper is to assess the development of the financial health of the global insurance market during the lingering financial crisis and to adopt conclusions driven based on the analysis of the insurance sector.
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Money is an important topic for all generations. Young people are often stressed about money. They worry about not having enough money to retire or just to make it until the end of the month. In contrast to young people, old people often have a full understanding of the gravity of their financial situation. This paper analyzes the financial decision making in relation to the age in Germany. Within the paper we concentrate on the investment behavior in general and give an outlook to the retirement situation. The analysis is based on a logistic regression with data from an online survey in 2015. It includes data from 1,489 participants. The results of this analysis show that young people prefer secure financial investments like call money, fixed deposit, savings book, or building loan contract. In total, the participants save between 400 EUR and 500 EUR. Between 100 EUR and 200 EUR the save monthly for retirement.
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Rural economies in developing countries are often characterized by credit constraints. Various studies confirm that rural labor migration in developing countries is an outcome of capital market imperfections. Lack of easy accessibility to credit followed by exorbitant rate of interest charged by informal sources of credit worsens the condition of poor households. Uttar Pradesh is among few most backward states of India and exhibits highest rate of male out-migration among all states (NSSO). Although few attempt have been made to understand trends and patterns of male out-migration from Uttar Pradesh (UP), there is dearth of literature on linkage between credit accessibility and male migration in rural Uttar Pradesh. The current study tries to fill this void. Objective of the study is to assess the role of credit accessibility in determining rural male migration. To meet the objective and to have better understanding of the role played by credit constraints in migration decisions, the study undertake primary survey of 370 households in six villages of Jaunpur district in UP. Simple statistical tools and binary logistic regression model have been used. The result of empirical analysis shows that accessibility and various sources of credit play very important role in male migration in rural UP. Study also found that relationship between credit constraints and migration varies across various social groups in UP. Thus more financial inclusion shall be encouraged in rural Uttar Pradesh and an attempt shall be made to ensure easy access of credit to rural households. Various ongoing schemes on financial inclusion shall be more properly implemented and encouraged among rural households to prevent them from various kinds of exploitation by local moneylender.
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Life of retired people cannot be financed from the public systems only. The attrition rate has been decreasing for many years and pension systems in many countries are at risk of bankruptcy. The author compares different kinds of investments possible to be made to finance the retirement period. The analysis of risk and return is conducted for typical retirement investments like bonds, stocks, or real estate. The paper aims at answering the question if it is possible to choose the best asset at any time as the retirement time investment. The study is done on the basis of the Polish investor and also contains the analysis of different types of risks concerned with analyzed kinds of assets.
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In recent years, EU banks have been faced with the challenge of applying tighter supervisory requirements, on the one hand, and on the other, adapting to changes in accounting legislation in the context of the mandatory application of IFRS 9 Financial Instruments. The main results and conclusionsof a theoretical-methodological and empirical study of the impact ant implementation of IFRS 9 to bank regulatory capital are presented. The complication of normative regulation for supervisory and reporting purposes raises a number of difficulties and questions for banks. A credible and timely assessment of the potential impact on regulatory banking capital resulting from the adoption of IFRS 9 Financial Instruments is required. In Bulgaria these issues are very important as an open European economy in order to create favorable conditions for a stable financial and banking system.
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The aim of the current report is to observe and explore the reasons for the banking crisis from mid-2007 from corporate governance perspective and how in its response the governing principles have evolved and improved on a global and European level, what lessons have been learnt and what course of action has been taken in the banking sector in the subsequent years of recovery. The study focuses on the current Bulgarian legal and "soft" framework (principles and by-laws) for corporate governance in the financial institutions and search to compare and contrast at what extend the notorious corporate governance documents such as the BIS Principles for enhancing corporate governance, the OECD Principles of Corporate Governance and the European directives are embedded in the national codes and acts and adopted by the banks. An emphasis is also put on the recent shock in the Bulgarian banking problems from the beginning of the second half of 2014.
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This paper reviews the bank supervision in the EU and the reflection of those mechanisms on the national financial systems and banks. Author outlines the importance of the banking sector for the EU’s financial system with having more than 8000 banking institutions registered. This has significance for the single market, the integration process within the economic and monetary union and non-performing financial institutions might pose a threat to the stability of the entire EU. The research discusses the European financial supervisory framework dating back in 2010 with the evolution of the European Banking Authority, European Securities and Markets Authority, European Insurance and Occupational Pensions Authority as well as the establishment of the European Systemic Risk Board.
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The year 2018 started with a dip and ended with a dip. While the first dip encouraged investors to buy, the second sowed fear. With fiscal problems in France and Italy, Brexit plans going round in circles and a headstrong US president, recession became the popular talking point of late 2018. The 2019 response to this was a turnaround in monetary policy in Europe and the United States. Central banks acted to keep the veil of prosperity firmly in place. However, as 2019 continued, problems could be glimpsed behind the veil.
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Purpose: The chapter examines the hypothesis that during the Covid-19 onset, the higher positive correlations between stock exchange indices persist, preventing the use of international diversification to reduce the volatility of global portfolio. Design/methodology/approach: The study focuses on CEE post-transition countries and their main stock exchange indices’ correlations with developed markets stock exchange indices. The data cover the period starting from January 8, 2004, until the end of October, 2020. The bivariate relationship between stock indices and VIX was measured by the Pearson coefficient of correlation. Findings: The findings of correlations estimation in three periods (long-term, Covid-19 on-set, and recovery) indicate that except for a period of large volatility measured by the VIX index lower relationships between developed and emerging stock markets persist. However, the results of the study concerning the shaping of correlation between the stock indices and the global risk shows a significant negative relationship between them, approaching very high levels close to 1 during the Covid-19 onset. All the CEE stock exchanges – even those low correlated in the longer term – behaved very similarly during the stock exchange crunch with its epicenter in March 2020. Practical implications: The answer to the research questions concerning the shaping of correlations on international markets is important for the portfolio theory itself in its international aspect, but also from the viewpoint of its applicability in practice. Huge market synchronization in terms of comovements in stock indices is troubling. It significantly reduces or even eliminates the benefits of international diversification during market crashes.
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A standard approach to taxes and taxation is not appropriate for a market state. The paper shows how the classification of taxes according to the criterion of time more appropriately identifies the state and role of the tax system and tax policy. To show this, we analyzed the impact of the balance of payments of goods and services on tax revenues. The taxation of primary and secondary income is specifically regulated by Ttreaties for the avoidance of double taxation and is not the subject of this paper.The paper shows how, only through the approach of tax classification according to the criterion of time (taxes on the past, present and future), it is possible to assess whether and how much tax is exported or imported through the exchange of goods and services with foreign countries. The standard approach to taxes does not distinguish whether and to what extent tax revenues are the result of foreign exchange, but records tax revenues based on cash flow.The paper first specifies how taxes are imported or exported through the balance of payments of goods and services (macroeconomic approach). Based on the macroeconomic interpretation,a calculation was performed for Croatia, Slovenia and Serbia in order to show the unsustainability of the standard approach to tax revenues and tax burden in an open (market)country. These and such questions cannot even be asked on the basis of a standard approach to taxes and taxation. Slovenia has a surplus on the account of trade in goods and services, so it is a tax exporter. Croatia has the largest foreign trade deficit and the largest foreign trade surplus in services, thanks to tourism, which ultimately results in significant tax exports. Serbia records a smaller foreign trade deficit than Croatia, but also a much smaller surplus on the services account, so it has a balance of payments deficit compared to Slovenia and Croatia.The paper shows how the balance of payments of goods and services changes the tax burden in the observed countries. And even more so as the country is more open to exports.The findings of the analysis indicate that the most important economic goal in a market country is the current account surplus of goods and services. Balances on primary and secondary income of the balance of payments are considered to be a reflection of economic policy in the past, which means that the movement of the balance of payments is the starting point in the analysis of economic policy in a market country. While Slovenia, as the most developed country, takes care of the competitiveness of its own economy, in Croatia and Serbia the fiscal approach to the tax system dominates, which, in turn, reduces the competitiveness of these countries and reduces economic growth rates.At the end of the paper, the results are compared based on the standard approach and the time classification approach.
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Achieving economic growth is the basis for the development of society and improving the living standards of citizens. A high rate of investment is necessary to provide the conditions for rapid growth, especially for small economies. A positive investment climate is key to attracting foreign investment and stimulating domestic investors to invest additional funds to improve their business activities. The realization of the rapid growth of small economies is possible with internal and external sources of financing, and the choice between them depends on the potential that the observed countries possess as well as the degree of their development. The strength of financial markets and institutions is also extremely important for economic development. If there is a strong traditional commercial banking and capital market in the country then they jointly contribute to more diverse sources of financing the rapid growth of small economies. Observing the countries in the region shows the great bancocentrism of their financial systems and it is certain that the future development of the capital markets in these countries is the basis of their economic growth and overall prosperity of the region. In less developed countries, it is necessary to achieve much stronger economic growth than in developed countries in order for them to catch up with modern global processes of digitalization and economic reform processes around the world.
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Since the first case of the infection, the coronavirus has rapidly spread to almost all countries of the world, so the original health crisis soon became an economic crisis, and 2020 will be remembered as the year of the pandemic in which measures to prevent further spread of the virus greatly affected to almost all segments of life. Restricted movement, ban on crossing state borders and temporary ban on performing certain businesses have significantly affected the financial performance of companies, as shown by this analysis. In this paper, liquidity,profitability and solvency indicators for 119 companies listed on the capital markets in Bosnia and Herzegovina, Montenegro, Croatia, Northern Macedonia, Slovenia and Serbia are analyzed. The analysis was done for a three-year period, from 2018 to 2020, and shows that the most significant, negative consequences of the COVID-19 pandemic are in the transport and storage and hotel sectors.
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The research was conducted with the aim of determining the possibility of using the model for predicting the financial failure of small and medium-sized entities in transition countries.Altman 's, Chesser' s, Kralicek 's and Fulmer' s models were tested, as well as the Analysis of the return on assets and financial position of companies on a sample of 392 entities. The obtained results show that the statistical models used in the countries of the developed Westcan be applied with much less reliability in the countries in transition.
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The coronavirus pandemic has threatened the functioning of many world economies, including the economies of the Western Balkans. The world's leading economies are recording a decline in economic activity and they are preparing the necessary remedial measures to mitigate the consequences of the decline in economic activity. Also, the consequences of the global crisis caused by the coronavirus are evident in the largest capital markets in the world,because they are recording a decline in trade and falling securities prices. Within this paper,we studied the effects of the coronavirus pandemic on the insolvency of listed joint stock companies on the Banja Luka Stock Exchange. The aim of the paper is to show the coronavirus pandemic effects on the functioning of economic activities in Republic of Srpska. The results of the research confirmed that the coronavirus pandemic in 2020 did not have a significant effect on the insolvency of companies in the Republic of Srpska.
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Contemporary logistics companies are a set of functionally diversified business entities, the essence of which is focused on the provision of physical availability to various resources in the following dimensions: time, space and efficiency, assistance in forecasting and planning activities, and ensuring fast and effective information flow in business units, etc. Regardless of whether they are considered in the context of small or medium-sized shipping and transport enterprises, warehouse centers, or specialized logistics operators, the main purpose of their operation on the capital market is to strive to ensure the continuity of existence and maximize economic benefits for their owners. (stakeholders). The results of its operation, which are reflected in the financial result of a logistics company, as well as the analysed methods and tools for their implementation, constitute the main subject of comments, judgments and assessments formulated by various groups of stakeholders of this unit. Among the management staff, it may be tempting to intentionally shape the reported level of profit (loss) and to present the financial achievements of the entity “in a better light” in the eyes of interested persons. The main goal of the article is to show the degree and directions of accounting and material profit management in logistics companies listed on the Warsaw Stock Exchange. Empirical research was carried out among those public companies whose shares were traded for at least ten years in the 2007–2018 horizon. An additional criterion for selecting enterprises for research was the availability of annual separate financial statements.
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The aim of this study is to propose new directions of changes in research methodology, which are necessary due to the statistical quality of analysis and, at the same time, to take into account and adapt to the evolutionary changes in the Polish banking and financial sectors. An important criterion for the proposed recommendations is to maintain continuity and comparability of results in the period both before and after considering the new methodology. In this study, two subject areas are covered: (i) assessment of the sample selection, and (ii) an overview of the proposed evolution of the survey. With regards to the first area, the main focus of analysis is placed on the decrease in the number of banks in the sector (including the aspect of statistical representativeness of the study). In the second case, focus is shifted towards the rising importance of other non-bank institutions in the financial sector as well as their impacton the national economy. The development of a new survey is accompanied by three key considerations. First, it is a premise for maintaining continuity and comparability of historical data with that new. Secondly, the questions asked in the survey were reviewed and critically selected. Some questions, which were asked 20 years ago, are now not only less relevant, if not meaningless. On the other hand, recent developments in the banking sector are significantly different to the ones occurring 20 years ago. As such, it is now necessary to review the posed questions and ensure that they survey covers a wide spectrum of new issues reflecting these developments. Finally, the need to extend the sample to other financial market segments poses a challenge of unifying the survey to cover specifics of a number of individual market segments while, at the same time, obtaining comparable market data.
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In this paper, the results of empirical research are presented regarding the most commonly used macroeconomic indicators of business cycles together with the Research Institute for Economic Development (RIED) Business Tendency Surveys data in output gap estimation. As a tool for determining business cycle, principal component analysis (PCA) is used. The empirical evidence allows to confirm the usefulness of qualitative RIED indices in modelling the output gap and, at the same time, support the conclusions made by Roeger, McMorrow, Hristov and Vandermeulen (2019) that inflation and the current account balance do not perform well as indicators of the cycle in Poland. The cyclical component obtained using PCA is highly correlated with the cyclical component of the RIED barometer and real GDP change.
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