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Impact of Sovereign Credit Risk on the Lithuanian Interest Rate on Loans
Get PDFThe paper deals with banks’ interest rates on loans for non-financial corporations and households in Lithuania. It focuses on the influence of the sovereign credit risk on interest rates for loans. The paper presents an analysis of long-run and short-run relationship between interest rates on loans and the financial market indicators EURIBOR and CDS spread. The application of the cointegration technique has revealed that a change in the CDS spread by 100 basis points has an impact on changes in interest rates on loans by 42 basis points in the long run. No evident relationship between CDS spread and interest rates on loans in a short run has been detected. This shows that market conditions do not play a pivotal role for the banks in setting the interest rates on loans in a short run. Some communalities in interest rates on loans in the Baltic states have been established. The main finding is that the sovereign credit risk of Lithuania, expressed as a CDS spread, has a substantial impact on interest rates in the retail credit market of Lithuania in a long run
Reasons for Bankruptcy of Natural Persons in Lithuania
Get PDFIn Lithuania, bankruptcy of natural persons is a relatively new subject that has been scientifically only randomly dealt with. The bill of Bankruptcy of Natural Persons in Lithuania was proposed as early as in spring 2009 (No.XIP-450, 24.03.2009). The bill met with a considerable amount of criticism and was postponed for further improvement. By decree No. 413 of April 7, 2010, the Government of the Republic of Lithuania approved the concept of the bankruptcy of natural persons of the Republic of Lithuania. The principal goal of the concept was to consolidate the main provisions of the future law. The Law of Bankruptcy of Natural Persons of the Republic of Lithuania has come into effect since March 1, 2013.The authors of the article overview the concept and models of bankruptcy of natural persons and introduce the advantages and shortcomings of the institute of bankruptcy of natural persons. Based on scientific sources of Lithuanian and foreign authors, the article offers a theoretically systemized version of the main reasons determining the bankruptcy of natural persons. The reasons fall into two categories – economic and social. The article is mainly targeted at defining the reasons that determine the bankruptcy of natural persons in Lithuania. To achieve this goal, a quantitative survey of the questionnaires of natural persons affected by bankruptcy has been taken for the basis. In their questionnaires, the natural persons affected by bankruptcy have been asked to evaluate the reasons of bankruptcy. The results have been analyzed with the help of factor analysis and statistically processed using the SPSS statistical software package
Defining Belarusian Tourists’ Segment by the Example of Vilnius as their Destination
Get PDFThe paper is devoted to the analysis of the Belarusian tourist market on the example of Vilnius as a tourism destination. The main objectives of the article are: 1) to identify the dynamics of inbound tourist arrivals from Belarus to Lithuania for 2008–2013 and 2) to define preferences of tourists from Belarus and the main target audience on the Belarusian tourist market. The research has been conducted using such methods as secondary statistical data analysis of the main inbound tourism indicators and a survey using an online questionnaire. The paper has revealed that tourist arrivals from Belarus to Lithuania have been constantly growing, making up 1,045 million in 2013, which corresponds to 19.8% of all tourists that visited Lithuania that year. The empirical research has also found out that the prospective consumer of tourist services provided in Vilnius is a Belarusian aged 26–45, married, employed, with the average monthly income 501–1000 euro, has children, has been to Vilnius more than 4 times, prefers individual travelling, usually travels with family, visits Vilnius for shopping, events, excursions and transit purposes, stays in Vilnius for 2 days and spends about 340 euro. Taking into consideration the mentioned facts, the paper concludes that the development of marketing activities specifically tailored to the needs of Belarusian tourists will help to increase tourist arrivals and tourists’ expenses
Impact of the Board on Management of Lithuanian State Owned Enterprises
Get PDFThe article concentrates on the main challenge tackled by the state-owned enterprises (SOEs) reform initiated by the 15th government of the Republic of Lithuania – an attempt to improve the corporate governance practices and management efficiency of Lithuanian SOEs. According to the insights offered by the new public management (NPM) paradigm, resource dependency theory (RDT) and principal-agent theory (PAT), the present research seeks to identify a quantifiable relationship between the composition of the board (which is one of the core aspects of the Lithuanian SOE reform) and return on equity (ROE) in Lithuanian SOEs (which is selected to be the key variable defining management efficiency). Based on key relationships among the selected parameters of the board (e.g., size, political independency, gender diversity, other) and SOE management efficiency identified, this paper offers practical public policy recommendations in the field of SOE management efficiency
The Evaluation of Output Convergence in Several Central and Eastern European Ccountries
Get PDFThe main objective of this study is to check the convergence in output for six countries from Central-Eastern Europe that are also members of the European Union. A slow convergence was obtained only for Greece during 2003–2012, for the rest of the countries (Bulgaria, Croatia, Hungary, Poland and Romania) the divergence being observed. The regression coefficients were estimated using bootstrap simulations in order to solve the problem of a small data set. However, the graphical representations suggested a convergence for Bulgaria and Romania, the assumption proved also by the application of the Augmented Dickey Fuller unit root test. There is no evidence of the convergence of each country towards Greece, this country having a specific evolution of its GDP with higher values than the rest of the countries
SUBPRIME MORTGAGE CRISIS IN THE UNITED STATES IN 2007–2008: CAUSES AND CONSEQUENCES (PART I)
Get PDFThe main purpose of this article is to determine which factors and how contributed to the subprime mortgage crisis in the United States in 2007–2008, what their causal links and effects on the markets and the whole economy were, and to assess what actions could have been taken by the Federal Reserve and the Government in order to mitigate or prevent the consequences of subprime mortgage crisis and housing bubble. In order to obtain the research results, the authors performed a qualitative analysis of the scientific literature on the course of events and their development that led to the subprime mortgage crisis, and focused on the insufficiently regulated home mortgage market expansion, the impact on the subprime mortgage crisis of financial innovations and financial engineering, poorly evaluated systemic risks and policy undertaken by both the U.S. Government and the Federal Reserve before and after the crisis. The quantitative research focused on two main parts: firstly, analysis of the dependence between the causes of subprime mortgage crisis and the consequences, using a statistical and regression analysis, and secondly, an alternative path the Government and the Federal Reserve could have taken in their policy actions and the results they could have produced. The authors believe that the results of the research could give useful guidelines to the central bankers and government officials on how to make long-term decisions that can help in preparing for the financial distress, mitigating the consequences when the crisis strikes, accelerating the recovery and even preventing the crisis it in the future. The second part of the qualitative research will appear in the next issue of the journal.The main purpose of this article is to determine which factors and how contributed to the subprime mortgage crisis in the United States in 2007–2008, what their causal links and effects on the markets and the whole economy were, and to assess what actions could have been taken by the Federal Reserve and the Government in order to mitigate or prevent the consequences of subprime mortgage crisis and housing bubble. In order to obtain the research results, the authors performed a qualitative analysis of the scientific literature on the course of events and their development that led to the subprime mortgage crisis, and focused on the insufficiently regulated home mortgage market expansion, the impact on the subprime mortgage crisis of financial innovations and financial engineering, poorly evaluated systemic risks and policy undertaken by both the U.S. Government and the Federal Reserve before and after the crisis. The quantitative research focused on two main parts: firstly, analysis of the dependence between the causes of subprime mortgage crisis and the consequences, using a statistical and regression analysis, and secondly, an alternative path the Government and the Federal Reserve could have taken in their policy actions and the results they could have produced. The authors believe that the results of the research could give useful guidelines to the central bankers and government officials on how to make long-term decisions that can help in preparing for the financial distress, mitigating the consequences when the crisis strikes, accelerating the recovery and even preventing the crisis it in the future. The second part of the qualitative research will appear in the next issue of the journal
Subprime mortgage crisis in the United States in 2007–2008: causes and consequences (part II)
Get PDFThis is the second part of the qualitative and quantitative research on the subprime mortgage crisis in the United States in 2007–2008. The main purpose of this research is to determine the factors and how they contributed to the subprime mortgage crisis, what their causal links and effects on the markets and the whole economy were, and to assess what actions could have been taken by the Federal Reserve and the Government in order to mitigate or prevent the consequences of the subprime mortgage crisis and the housing bubble. In order to obtain the results, the authors performed a qualitative analysis of the scientific literature on the course of events and their development that led to the subprime mortgage crisis and focused on insufficiently regulated home mortgage market expansion, the impact on subprime mortgage crisis of financial innovations and financial engineering, poorly evaluated systemic risks and policy undertaken by both the U.S. Government and the Federal Reserve before and after the crisis. The quantitative research focused on two main parts: firstly, the analysis of dependencies between the causes of subprime mortgage crisis and the consequences using the statistical and regression analysis; secondly, an alternative path the Government and the Federal Reserve could have taken in their policy actions, and the results they could have produced have been explored. The authors believe that the results of the research could give useful guidelines to the central bankers and government officials on how to make long-term decisions that can help in preparing for the financial distress, mitigating the consequences when the crisis strikes, accelerating the recovery and even preventing the crisis in the future.This is the second part of the qualitative and quantitative research on the subprime mortgage crisis in the United States in 2007–2008. The main purpose of this research is to determine the factors and how they contributed to the subprime mortgage crisis, what their causal links and effects on the markets and the whole economy were, and to assess what actions could have been taken by the Federal Reserve and the Government in order to mitigate or prevent the consequences of the subprime mortgage crisis and the housing bubble. In order to obtain the results, the authors performed a qualitative analysis of the scientific literature on the course of events and their development that led to the subprime mortgage crisis and focused on insufficiently regulated home mortgage market expansion, the impact on subprime mortgage crisis of financial innovations and financial engineering, poorly evaluated systemic risks and policy undertaken by both the U.S. Government and the Federal Reserve before and after the crisis. The quantitative research focused on two main parts: firstly, the analysis of dependencies between the causes of subprime mortgage crisis and the consequences using the statistical and regression analysis; secondly, an alternative path the Government and the Federal Reserve could have taken in their policy actions, and the results they could have produced have been explored. The authors believe that the results of the research could give useful guidelines to the central bankers and government officials on how to make long-term decisions that can help in preparing for the financial distress, mitigating the consequences when the crisis strikes, accelerating the recovery and even preventing the crisis in the future
Asymmetry in the functioning of Ukrainian and foreign banking systems in the conditions of globalization
Get PDFThe article concentrates on the empirical substantiation of manifestations of asymmetry in the functioning of banking systems of different countries in the conditions of globalization, focusing attention on the functioning features of the banking system of Ukraine. According to the materials from the World Bank, asymmetric effects have been revealed in the functioning of national banking systems in terms of the indicators of their activities (capital ratio to assets, a share of nonperforming bank loans, interest rates on loans, and interest rate spread) as well as the percentage of the private sector bank crediting towards the GDP. The attention is focused on the fact that the effective functioning of the banking system of Ukraine is limited by high credit risks, ultra-high interest rates which, in addition to the political and economic instability in Ukraine, do not contribute to the post-crisis recovery of the national economy. The measures for overcoming the significant asymmetries in the functioning of the banking system of Ukraine in comparison with the banking systems of the developed countries have been offered
A comprehensive publication (“Finansinė analizė“ [“Financial Analysis”], a textbook, by Prof. Dr. Habil. J. Mackevičius, PhD L. Giriūnas, PhD R. Valkauskas)
No full textNot only the competitive and dynamic but also the complex and challenging business environment of the world and the European Union markets triggers the need to easily measure and comprehend the available business information as well as to communicate it in a clear manner. The language of business is most commonly the language of numbers, the skillful command of which is based on the fundamental principles of informatikon gathering, processing, perception, and use. [...]Not only the competitive and dynamic but also the complex and challenging business environment of the world and the European Union markets triggers the need to easily measure and comprehend the available business information as well as to communicate it in a clear manner. The language of business is most commonly the language of numbers, the skillful command of which is based on the fundamental principles of informatikon gathering, processing, perception, and use. [...
A Comparative Analysis of Foreign Direct Investment Factors
Get PDFThe paper identifies factors affecting the foreign direct investment (FDI) inflow. It analyzes the determinants of FDI in recent empirical evidence as well as determines differences among FDI factors in Greece, Ireland, and the Netherlands. The determinants being examined are the gross domestic product (GDP) per capita, exchange rate, unit labor costs, trade openness as well as inflation. The analyzed period is 1974–2012. Data were collected from the World Bank and the Organization for Economic Cooperation and Development (OECD) databases. With the help of the VAR model it was determined that only the exchange rate had a significant impact on FDI in Greece. Exchange rate, trade openness and inflation had a slight impact on FDI in Ireland. GDP per capita, unit labor costs and inflation had a slight impact on FDI in the Netherlands. The introduction of euro and the financial crisis had a significant impact on FDI only in Greece. Furthermore, after comparison of public debt, the ease of doing business ranking, budget deficit and the corruption index among the countries, it was determined that the low level of FDI in Greece was caused by the unfavorable investment climate