BH Economic Forum (E-Journal - Faculty of Economics University of Zenica)
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BILATERAL TRADE TRENDS AND PATTERNS OF BOSNIA AND HERZEGOVINA: CASE OF TRADE WITH TURKEY
Get PDFA country’s trade pattern reflects its supply (export) and demand (import) specialization indicating national performance and competitiveness in the foreign as well as in the domestic market. By applying two different concepts of trade specialization (one based on traditional trade theories of comparative advantages and the other based on modern trade theories), complemented with analysis of export-import flows and relations, the paper aims to identify characteristics of the position of Bosnia and Herzegovina (BiH) in its bilateral trade. The paper investigates trends, patterns and variations in trade of BiH with Turkey during the eleven-year time frame (2009-2019), with a special regard to identifying industries with revealed comparative advantages and industries with dominancy of IIT. The analysis employs different indicators such as indices of export composition, sectoral diversification/concentration, IIT intensity and structure, quality of exports and imports based on relative unit values and classification of industries by technological intensity. The research results indicated an unfavourable position of BiH in trade with Turkey, with no prominent changes in the observed period. Trade deficit is constantly present, with low export-import coverage and a declining export trend. The analysis revealed a higher level of export product concentration primarily on low value added products, and comparative advantages of BiH in fewer industries, mainly resource-based or medium-technologically intensive. Trade with Turkey is extremely inter-industry trade, viewed both at aggregate and industrial level, also pointing to BiH's low competitiveness in analyzed trade relations
RESEARCH ON THE IMPORTANCE OF PERFORMANCE OF BUSINESS EXCELLENCE OF HOTEL COMPANIES IN THE TIME OF GLOBALIZATION AND REGIONALIZATION
Get PDFThe focal point of the research in this paper is based on examining and evaluating the role and importance of performance of business excellence in the hotel industry in the time of globalization and regionalization. The research conducted in this paper included the views of hotel managers related to each performance of business excellence in Bosnia and Herzegovina. The situation with the application of the concept of business excellence in the practice of hotel companies in BiH is not particularly favorable, since this issue has not been addressed at all. Although we can see progress in improving the quality of service provision in BiH hotels, the concept of business excellence has not been sufficiently researched, and therefore not represented in the field of hotel business. Taking into account the previous, the authors came to the conclusion that everything points to the need for adoption and business according to the concept of business excellence, and that its application is necessary to ensure good business results, and thus achieve competitive advantage of each hotel company.Within the elaboration of the theoretical starting points of the observed problem, the methods of analysis and synthesis, i.e. induction and deduction, were used, with the necessity of using a systematic approach in the research. In the empirical part of the research, statistical methods of univariate analysis (descriptive statistical analysis), bivariate analysis and multivariate analysis were used. The collected data were processed with the help of SPSS Statistics 20.
PUBLIC DEBT AND ECONOMIC GROWTH: TWO PUBLIC DEBT MANAGEMENT SCENARIOS IN MONTENEGRO
Get PDFGrowing public debt is one of the biggest challenges faced by both developing and developed economies. Available research indicates the negative impact of public debt growth on economic growth. Applying the ordinary least squares method to the panel data for the countries of the Western Balkans and the period from 1998 to 2019, we found that one percentage growth in public debt leads to a decrease in the GDP growth rate by 0.036 percentage points. In addition, an increase in public debt by one percentage point leads to a decrease in the productivity growth rate by 0.079 percentage points.
The results of the research for Montenegro as a case (two scenarios of fiscal policy and the period 2021-2040), showed that, if expenditures remain intact, due to the small difference between the forecasted average GDP growth rate in the period 2021-2040 and interest rates (assumed constant), such a scenario will lead to a slower change in the public debt-to-GDP ratio (23% decrease in two decades). In addition, the cost of interest on public debt in this scenario over the entire period is higher than 2% of GDP. If the fiscal policy is changed toward a reduction in government spending, the short-term GDP growth rate would be slightly reduced, but both the expenditures for interest (less than 2% of GDP) and public debt (decrease of 63% in two-decades) would be reduced significantly.
Although reduced government spending will have a negative impact on GDP growth in the short run, the country will benefit in the long run as reduced public debt will have a positive impact on GDP and productivity growth
SPECIFICITIES OF CAPITAL VALUATION OF YOUNG COMPANIES BY YIELD BASIS METHOD
Get PDFThe capital valuation of young companies differs from the assessment of mature and developed companies. Namely, some of these companies achieve business results that are negative or at a low level. Even when they are able to generate a higher level of profit, the history of their existence is short, it depends on the possibility of borrowing capital, which makes the assessment through the yield method significantly more difficult than usual. Regardless of the industry in which they operate, the sector, the production and sales arrangement and the degree of innovation, these companies face not only the usual risk but also the risk of survival and uncertainty that the future brings.
In estimating the value of the capital of young companies, standardized and traditional valuation methods can be used, and thus the yield basis method. Regardless of the chosen method of assessment, the assessor faces a lack of information about the history of “existence”. For this reason, for the purposes of the assessment, all parameters involved in the capital evaluation process must be adjusted.
The subject of this paper is the capital valuation. The aim of this paper is to show how it is possible to estimate the value of capital using the yield method and to point out the specifics of this procedure. The object of research are young companies. In this paper, we will first present the characteristics of young companies, and then the possibilities of estimating their capital by discounting cash flows as a type of yield basis method of capital valuation
ASSESSING THE EUROPEAN CENTRAL BANK’S UNCONVENTIONAL MEASURES - A RECURSIVE VAR APPROACH
Get PDFMSc. Filip Peovski[1]
PhD. Gjorgji Gockov[2]
ASSESSING THE EUROPEAN CENTRAL BANK’S UNCONVENTIONAL MEASURES – A RECURSIVE VAR APPROACH
ABSTRACT
Unconventional monetary measures utilization has proven to be of great importance in maintaining monetary and economic stability after the Great Recession. However, we aim to test this conclusion through the impact of the quantitative easing implemented by the European Central Bank. Observed through generated shocks in the balance sheet of the Eurosystem as our main variable, we tested whether quantitative easing reestablished economic growth and rose price levels, mainly through lowering borrowing costs for banks, thus helping in the post-crisis recovery. To prove our hypotheses we construct a recursive VAR model estimated in levels using 2014M05-2018M12 data. The model incorporates variables such as the industrial production and the HICP, as output and price level proxies, and financial components such as the EONIA-MRO spread and the CISS index. The results show that the expansion shocks of the consolidated balance sheet have a positive temporary influence on industrial production and the HICP, but the reaction of the former seems to be 2.24 times greater. On the other hand, we find out that quantitative easing has an expected negative impact in widening the EONIA-MRO spread. Furthermore, we could not confirm the theoretically expected accommodative impact on financial stress.
Keywords: Unconventional monetary measures, price stability, policy interest rates, recursive VAR model
JEL Classification: C32, E43, E52, E58
[1] Teaching and Research Assistant, Faculty of Economics – Skopje, “Ss. Cyril and Methodius” University, e-mail: [email protected]
[2] Associate Professor, Faculty of Economics – Skopje, “Ss. Cyril and Methodius” University, e-mail: [email protected]
THE ROLE AND THE IMPORTANCE OF COMPETENCIES FOR THE EMPLOYABILITY OF UNIVERSITY GRADUATES
Get PDFThe goal of this work is to explore the effects of various factors that affect the employmentof graduates of the University of Zenica. Additional analysis of variablesas well as the links between variables will offer the input information that can contributeto the decision-making process in the development of new curriculums. The surveywas conducted in Zenica-Doboj Canton, which involved n = 47 respondents. Toprocess data, the following programs were used: Microsoft Excel, SPSS and SmartPLS3 - SEM program. The verification of the validity and the reliability of the measuringscale was carried out by calculating the Cronbach's Alpha coefficient. Thereview of the set of the hypotheses was carried out by the Regression analysis. Thefindings revealed that three hypotheses were accepted and one of them was rejected.The set hypotheses confirmed that the adopted expertise of graduates, the level ofacquired skills and cooperation of the University with companies has a statisticallysignificant impact on the employability of graduates. The organizational skills ofgraduates do not have a statistically significant impact on the employability of theUniversity of Zenica graduates
FROM COMPETITIVENESS TO SUSTAINABILITY: IS THE INNOVATIVENESS THE ANSWER?
Get PDFWe live in a rapidly changing global society, where no one can predict the outcome of the economic, social, and political structures of the world. Changes in science, technology, and economics are particularly noticeable and are closely linked to human life. These changes create new opportunities but also challenges in new areas of everyday activity in order to achieve sustainable development. For countries to compete with each other, they must be creative and innovative in all fields to cope with domestic, national, and global issues. Current economic competitiveness is based on the capabilities of a country and their respective companies to be and stay innovative. This is the main reason why many governments place innovativeness at the center of their growth strategies so that they can foster economic progress and global competitiveness in general. The recognition and need for identification of innovation as a driver of change are evident on a company level as well. This study will use secondary data collected this year from the World Economic Forum to identify critical challenges and opportunities for B&H competitiveness. Also, the results of this research identified enabling environment and markets impact the innovation ecosystem. Practical contribution relates to concrete implications and recommendations that can be used for the improvement of Bosnia and Herzegovina innovativeness
RELATIONSHIP BETWEEN NON-PERFMORMING LOANS AND FINANCIAL STABILITY: EVIDENCE FROM BOSNIA AND HERZEGOVINA BANKING SECTOR
Get PDFLatest financial crisis resulted in non-performing loans growth what causes a lot of problems in financial stability of banking systems all around world. This paper examines the impulse response function of financial stability measured by capital adequacy ratio and non-performing loans in Bosnia and Herzegovina banking sector. Vector autoregression analysis was employed in order to explore how the Bosnia and Herzegovina banking sector financial stability responds to the impulse of changes in non-performing loans. Before running the vector autoregression analysis, the determination of appropriate lags length through the Akaike Information Criterion, Schwarz’s Bayesian Information Criterion and Hannan and Quinn Information Criterion was carried out. Quarterly data for capital adequacy and non-performing loans for the period 2000-2017, were used. Main goal of this research is analysis of financial stability response on changes in non-performing loans. Therefore, purpose of this paper is modelling relations between non-performing loans and financial stability. The study shows that financial stability of Bosnia and Herzegovina banking sector, measured by capital adequacy ratio, negatively reacts to changes in non-performing loans. Regression model have shown that increase in non-performing loans leads to deterioration in financial stability of the banking sector. Results indicate on long-term and short-term connection between these variables and causation of changes in financial stability from non-performing loans. These results indicate on importance of non-performing loans monitoring as one of the main sources of systematic risk which could threaten banking sector financial stability.
 
INNOVATION IN PUBLIC SECTOR INSTITUTIONS IN THE FEDERATION OF BOSNIA AND HERZEGOVINA
Get PDFInnovation has become a necessity in order to overcome some challenging times in the rapid changing world. The world’s paradigm is shifting towards sustainable development and shared values. Even though numerous benefits of innovating the public sector (PS) have been recognised worldwide, the concept of public sector innovation (PSI) is still new for Bosnia and Herzegovina. The complex and stratified structure of the Federation of Bosnia and Herzegovina (FBiH) and its PS has been forever standing in the way of any larger progress. The purpose of this paper is to contribute to the development of PSI in FBiH as an opportunity to enhance the performance of public services, increase their efficiency, and decrease the costs.
The research was completed by using a mixed-method approach in order to analyse the concept of innovation in the PS. The primary data was collected through semi-structured interviews with the management and a survey with close-ended questions which was completed by the employees of the public sector institutions in FBiH. The method of structural equation modelling was used in order to test the research hypotheses.
A part of this paper is analysing the main PSI drivers and challenges. The results show that the main obstacles to PSI are the institutional system and the regulations in the FBiH. On the other side, the manager and employees are considered the largest drivers of public sector innovation in FBiH. The paper concludes with several recommendations on how to overcome the main barriers of public sector innovation in FBiH.
Keywords: Innovation management, R&D, Innovation incentives, e-Government, Institutional culture.
JEL: O38, O32, O31, H11, H4
FINANCIAL REPORTING INCENTIVES: TAXATION AND EXTERNAL FINANCING NEED
Get PDFEarnings management literature extensively explores tax regime and debt contracting as possible incentives in financial reporting. Firms engage with aggressive financial reporting to bias earnings in periods when the need for external financing increases. Contrary to this, the tax burden represents incentive for more conservative reporting.
We argue that the level of firm’s financial reporting aggressiveness is not constant but rather floating from period to period, directly effecting quality of financial reports. We assume that firm’s management on its own discretion determines level of conservatism balancing between these two incentives. The prevailing of two incentives, the need for external financing and the tax burden, determines level of conservatism in particular reporting period.
We hypothesised that the reduction in tax burden incentive overcomes the debt contracting incentive in years of decreasing external financing need, implying more conservative accounting to balance between economic and taxable income. The total accruals are used as a measure of earnings management reflected to working capital accruals.
The data analysis conducted on financial reports of 297 firms in the time-series of five years shows significant correlation between total accruals, external financing needs and the difference between economic and taxable income