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Trade Openness, Inequality and Poverty in Latin American Countries
Get PDFGlobalization has quickened, especially during the past three decades, due to technological, institutional, legal and political developments in the world. During this process, many countries reduced or removed the barriers on the cross-country flows of goods, services and capital, and the global trade volume increased substantially. Therefore, openness-oriented policies have led many social and economic implications for the national economies. In this regard, this study investigates the interaction among trade openness, poverty alleviation and inequality in 11 Latin American countries by employing a panel data analysis. We revealed that trade openness and financial development affected inequality and poverty negatively in the long term, while inequality affected poverty positively
Concentration and Behavioral Biases in the Active Management of BRIC Funds
Get PDFThis study addresses two targets: first, the relationship between performance measurement and the focusing of fund investment strategies on local risk factors; second, the behavioral considerations which fall under this topic, in particular with regard to fund managers’ overconfidence.Brazil, Russia, India and China were supposed to represent a force of new demand growth and spending power, but the recent financial crisis in China (July and August 2015) and the former problems in the Russian economy, also caused by an embargo by other countries, have contributed to a shift which has occurred more quickly than expected. In this context, weak active management strategies, handicapped by behavioral biases, will be more evident and will cause more harm to the industry. Connections between these biases and the performance of funds are identified with the managers in charge, who are not only misguided by strong beliefs, but also take big bets on risky assets without producing significant alphas. To investigate the relationship between local bias and activism, we compare stock picking skills of local managers, the managing of domestic funds and non-local managers; therefore, we assume that local information can be exploited by a local manager with an active management strategy. It is also true that overconfident managers might be too focused on the specific stocks for which they believe to possess superior information. The results show that BRIC local managers are not closely tied to replication strategies of domestic indices and do not produce significant domestic alphas
Investment Portfolio Optimization by Applying a Genetic Algorithm-based Approach
Get PDFThe investment portfolio optimization issues have been widely discussed by scholars for more than 60 years. One of the key issues that emerge for researchers is to clarify which optimization approach helps to build the most efficient portfolio (in this case, the efficiency refers to the minimization of the investment risk and the maximization of the return). The objective of the study is to assess the fitness of a genetic algorithm approach in optimizing the investment portfolio. The paper analyzes the theoretical aspects of applying a genetic algorithm-based approach, then it adapts them to practical research. To build an investment portfolio, four Lithuanian enterprises listed on the OMX Baltics Stock Exchange Official List were selected in accordance with the chosen criteria. Then, by applying a genetic algorithm-based approach and using MatLab software, the optimum investment portfolio was constructed from the selected enterprises. The research results showed that the genetic algorithm-based portfolio in 2013 reached a better risk-return ratio than the portfolio optimized by the deterministic and stochastic programing methods. Also, better outcomes were achieved in comparison with the OMX Baltic Market Index. As a result, the hypothesis of the superiority of a portfolio, optimized on the basis of a genetic algorithm, is not rejected. However, it should be noted that in seeking for more reliable conclusions, further research should include more trial periods as the current study examined a period of one year. In this context, the operation of the approach in the context of a market downturn could be of particular interest
The Relevance of Remittances in Fostering Economic Growth in the West Balkan Countries
Get PDFThe remittances of diaspora workers, resulting from international migration, have attracted the attention of academics and policymakers for their role and importance in macroeconomic variables in their countries of origin. The purpose of the paper is to explore the effects of remittances and other variables, such as exports, capital formation, foreign direct investment, and labor force on economic growth in the six former Western Balkan communist countries (Albania, Kosovo, Macedonia, Montenegro, Bosnia and Herzegovina and Serbia). This study utilizes a strongly balanced panel data over the 2005-2015 period for the six Western Balkan countries using the ordinary least squares method (OLS), i.e., the Pooled Regression Model, to evaluate the parameters. According to the regression results, we can conclude that remittances have a positive impact on economic growth in the West Balkan countries, so remittances can foster economic growth in those countries. Also, we find a statistically significant positive relationship between economic growth and other variables included in the model, such as exports, capital formation, and labor. The relationship between economic growth and foreign direct investment has turned out to be statistically insignificant and negatively related
Limitations and Application Possibilities of the Monetory Unit Audit Sampling Method: Theoretical Aspects
Get PDFSampling presents an auditor with a possibility to collect evidence and make a conclusion after having tested only a part of population. Having selected a concrete method of sampling, an auditor evaluates whether the activity of an entity under audition, the nature of accounting and audit data approve this method and whether the results would be reliable. If the selected sampling method is unsuitable or applied incorrectly, there is a greater risk that the conclusions made by an auditor can differ if the same audit procedures would be applied to the whole population.The most widely used method of statistical sampling is monetary unit sampling. This method can be applied by every auditor, since no special knowledge or technical means are required. However, in some cases, the results can be inaccurate. The aim of the article is to examine the limitations of the monetary unit sampling method and to suggest a more developed formula of this method. In the process of investigation, it was defined that application possibilities of the monetary unit method are limited by the necessity to determine whether all items in the population are suitable for selection; also, the application of this method is aggravated by an existence of zero or negative values in population. What is more, if an auditor would lack information about the population under audit, we would suggest to apply a correction factor. It allows for evaluating the size of expected misstatement more precisely
A Description of Psychological Biases on the Currency Market
Get PDFThis article concentrates on the theoretical review of the behavior of market participants from the behavioral point of view. The focus is on currency market and its participants; thus, the most relevant behavioral inclinations are described in the article. In finance literature, behaviorism is heavily connected with the understanding rationale of the financial agents, acting on the financial markets, but for us to consider the broader picture, the behavioral aspect might be a very helpful tool for analyzing actions of economic agents on a more global scale. In this article, the main focus is on the currency market and its participants, namely the government and/or central bank as a policy maker and implementer on the one side of the market, and private rationale agents, concentrated purely on commercial return maximization and risk minimization, on the other side. Obviously, the private agents interact with each other and it forms a standard game theory framework, but more interesting is the relationship between the policy maker and the rest of the market, their incentives, perceptions etc., which are described in this article. The article strongly suggests that behavioral analyses should be one of the main pillars for analyses of the general economic environment and for currency crises analyses as well
Factors Behind Weak Tax Morale: the Case of European Union Countries
Get PDFThe purpose of the article is to analyse factors influencing the behaviour and decision-making of local tourists in choosing Azerbaijan as a destination. The main attributes, elements and types of tourism destinations are analysed. The understanding of consumer behaviour is defined and the peculiarities of decision-making process are presented. The main internal and external factors influencing tourist’s behaviour and decision-making are summarised. The current situation of tourism in Azerbaijan is examined. The analysis of social, cultural, personal and psychological factors influencing the decision-making of local Azerbaijani tourists to travel to various types of tourism destinations with different attributes like, attractions, available amenities, accessibility, image, price and human resources is done. The research includes both primary and secondary data. Secondary data is used to give insight to the topic and assess conclusions. Primary data is collected by surveying domestic travellers of Azerbaijan. Survey results are analysed by implying descriptive statistics, non-parametric tests and Factor analysis. The research results show that the age, monthly income and marital status of local Azerbaijani travellers affect their travel behaviour especially in the duration of their trip. Destination amenities, tourism infrastructure, environmental features, human resources and price are the important attributes for local tourists in choosing tourism destination.This article investigates the theoretical and practical aspects of tax morale among households in European Union countries. The attitude of households on tax payment is assessed quantitatively by employing a dichotomous logit-probit regression analysis. The research is based on household-level data received from the World Values Survey and the European Values Study. Weak tax morale among European Union households is mainly determined by the perception of corruption, disrespect to one’s own country and parliament. Additionally, a household’s tax morale depends on age, gender, religiousness, level of income and education. Based on the findings of this article, a more precise policy guidance is presented
Analyzing the Profile and Purchase Intentions of Green Consumers in Poland
Get PDFConsumers have started to search for green products and services as their environmental consciousness has been increasingly rising. As a result, companies have been forced to implement the strategies of green marketing, and marketers began to consider the differences existing between various segments of market in terms of green awareness. The aims of this study are to divide the market into specific consumer groups according to the environmental variables that have been viewed as important in the consumption process of the eco-friendly products; it is done so as to determine whether the significant differences between segments exist in terms of demographic variables and to discover a profile of green consumers in Poland. The self-administrated questionnaire sent via emails and networking websites served as a measurement instrument. As a result of the analyses, the environmental variables allowed for making a segmentation of consumers and discovering three groups: the Potential Greens, True Greens and Browns. Age and gender seem to be differentiating between greener segments and those consumer groups that are less environmentally conscious, while education and income are not statistically significant
Competition Measurement of Hospitals in Poland: the Herfindahl-Hirschman Index Approach
Get PDFThe purpose of this study was to measure the competition level of general hospitals in Poland. The Herfindahl-Hirschman Index (HHI) was used to investigate the concentration level of the general hospital sector in Poland, which is treated in the literature as a proxy of competition. To understand how general hospitals’ market has been structured and thus competitive, the data for general hospitals spanning all Poland for the period of 2005-2013 were collected. The concentration of hospitals was measured in each of the 16 provinces in Poland based on the aggregated data at the counties level. Data are collected from the public statistical system. The HHI indices support the assertion that in the period of analysis the entire general hospitals’ sector in Poland has been on average moderately concentrated and thus, moderately competitive with the growing tendency to higher concentration and less competition. Moreover, the concentration of hospitals’ services is diversified across the provinces and regions of Poland and it is quite uneven. The analysis also shows that changes in the health care market, which took place in the analysed period, especially statutory changes regarding hospitals in 2011, affected the level of concentration and thus competition. Including this introduction, this paper is organized into six sections. Section 2 outlines the Polish health care reforms especially those applying to hospitals. Section 3 and 4 presents the concept of empirical research, such as data and method. Section 5 provides results of empirical research and section 6 concludes
The Shadow Economy is Retreating: The Example of Georgia
Get PDFThe economy of Georgia had corruptive characteristics at the end of the last century and that has largely contributed to the existence of high-scaled shadow economy. Tax avoidance by entrepreneurs is onsidered to be the main cause of shadow economy (Gabidzashvili, Kbiladze, 2010). The methodological measurement and assessment of the shadow economy is characterized by certain peculiarities; therefore, we have aimed to examine and assess the scale of shadow economy and its impact on the overall economy of Georgia. The research shows several di_erences between real indicators, obtained by interviewers using hidden chronometry, and those indicators declared by entrepreneurs (the non-traditional method of research). The differences reveal unregistered micro-level economy, and provide the basis for determining the scale of shadow economy on the macroeconomic level. This problem was discussed several times by the president of Georgia. The research uses methods of average values, time series and the correlation-regression analysis of data. The study allowed us to identify the pattern of shadow economy reduction in Georgia during recent years and its shifting from the illegal to legal sectors, also, the maintenance of same trends before 2020