South East European Journal of Economics and Business
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THE BOONE INDICATOR AS DETERMINANT OF CROATIAN INSURANCE MARKET SOUNDNESS
Get PDFThis paper deals with the influence of competition on soundness of Croatian insurers using the Boone indicator when measuring competition. The authors analyse Croatian insurers that operated over the pre-EU accession period 2008 – 2012 as well as in the period 2013 – 2017, i.e. after the accession to the EU. Several firm-level, industry-level and macroeconomic variables are used in the research. The findings of the analysis are twofold. Specifically, the Boone indicator reveals the impact of competition on the performance of efficient insurers in post-EU accession period only accounting for the reallocation effects proving that efficient insurers make higher profits. Regarding the determinants of the insurers’ soundness, premium to surplus ratio and inflation rate play significant role in pre - EU accession period whereas reinsurance and GDP growth rate are statistically significant after EU accession. Moreover, the competition increased in the years after the EU accession. Robustness check provides similar results
ATTRACTIVENESS MODELING OF RETAIL ON EMOTIONAL FATIGUE OF CONSUMERS
Get PDFDemand for high-quality shopping service has seen continuous growth in the recent years, allowing retail chains to achieve sustainable competitive advantage, increase number of loyal customers. This in-turn results in demand boosting and image of the firm. To analyze and achieve this emotional reactions of customers while shopping becomes important. The paper attempts to evaluate the effect of emotional fatigue on purchase process and uses neuromarketing tool – Galvanic skin reaction analysis to do so. Changes in the buyer emotional reaction of consumers was observed through more than 150 experiments at 15 different retailers. The results showed that retailer selection depended on emotional fatigue of the customer. Different types of retailers create different emotional fatigue which affects the footfall
MEASURING THE EFFICIENCY OF POLISH MUNICIPALITIES IN TERMS OF SUSTAINABLE DEVELOPMENT – DATA ENVELOPMENT ANALYSIS APPROACH
No full textThe aim of the paper is to evaluate the efficiency of Polish municipalities.The research study involved a DEA (Data Envelopment Analysis) approach – in order to achieve the goal of sustainable development and to improve the quality of life of society. Conducted research study covered 2044 Polish municipalities for the year 2016. Using DEA model the ranking of Polish municipalities was prepared and a model Decision Making Unit (DMU) has been selected. It is possible to set goals for inefficient DMUs which should follow and regularly evaluate the progress in aims implementation. Inefficient municipalities can improve their efficiency following the technological example of chosen benchmarks
THE IMPACT OF BANKING SECTOR COMPETITION ON BANKS’ RISK-TAKING IN TRANSITION ECONOMIES OF CENTRAL AND SOUTH-EASTERN EUROPE
Get PDFThis paper uses the Panzar-Rosse H-statistic to provide empirical evidence on the impact of competitive behaviour of banks on risk-taking, using the Fixed Effects Vector Decomposition Method on panel data of banks in 15 Central and South-Eastern Europe countries during the period 1999-2009. The findings suggest that banking sector competition has had a negative impact on banks’ risk-taking implying that competition contributed to the improvement of the loan-portfolio quality. However, the results differ significantly when distinguishing between the EU and non-EU countries of the CESEE region. While for the EU countries the relationship between banking sector competition and risk-taking remains negative, this relationship is positive for the non-EU countries of the region, suggesting that an increase of competition in the non-EU countries may be detrimental for the stability of the banking sector in these countries. These results are robust to different model specifications and measures of competition
EMPIRICAL ANALYSIS OF THE IMPACT OF BREXIT REFERENDUM AND POST-REFERENDUM EVENTS ON SELECTED STOCK EXCHANGE INDEXES
Get PDFThe paper studies the impact of political turbulence in the United Kingdom in 2016 and 2017 on selected relevant stock indexes. The empirical analysis consists of unit breakpoint tests. The potential points of structural break are determined based on an overview of occurrences of political instability from the Brexit referendum to the snap Parliamentary election of 2017. The paper concludes that the outcome of the referendum on Brexit caused a structural break that was visible in every stock index studied. On the other hand, the paper fails to find any evidence of a structural break caused by subsequent events, namely the decision to call the snap election or the outcome of the election itself. This implies that investors have accepted the UK decision to leave the EU and there was no further destabilization of the stock markets. It can be further concluded that the United Kingdom and the European Union need to address a deep political divide and find a way to coexist and mutually benefit in the period of negotiations and after the Brexit takes place
DO ENVIRONMENTAL TAXES PAY OFF? THE IMPACT OF ENERGY AND TRANSPORT TAXES ON CO2 EMISSIONS IN TRANSITION ECONOMIES
Get PDFIn this paper we investigate the impact of environmental taxes on CO2 emissions in the context of emerging market economies. An attempt has been made to identify what role environmental policy and specific tax policy measures play in understanding the relationship between economic development and environmental degradation. The empirical analysis covers ten Central and Eastern European countries in the period from 1995 to 2015. The latest data on environmental taxes are available only from 1995. We contribute to recent literature in two respects. First, we study this relationship within a dynamic framework in which we take into account the issues of serial correlation and endogeneity in the regressors due to the cointegration relationship. Specifically, we rely on the fully-modified least squares (FM-OLS) estimation technique to model the long-term relationship between income and carbon-dioxide emissions. Second, this paper advances our understanding on the effectiveness of tax policy measures in curbing CO2 emissions, on which we have scarce empirical evidence. The results of this analysis provide rather strong evidence in support of an inverted U-shaped relationship between economic growth and the environment. However, environmental taxes do not seem to be effective in modifying the behaviour of economic agents and in protecting the environment. The results are robust to different models
CROSS-CULTURAL VARIATIONS IN CONSUMER BEHAVIOR: A LITERATURE REVIEW OF INTERNATIONAL STUDIES
Get PDFThe purpose of this paper is to present a review of 85 international studies of cross-cultural variations in consumer behavior, conducted in 2000–2016; to systemize conceptual and methodological approaches to research of cross-cultural variations in consumer behavior; to identify conceptual and methodological gaps and empirical issues in these studies; to pose research questions; and to set directions for future research. This literature review reveals the lack of a unified conceptual approach to defining cross-cultural variations and the absence of a unified terminology related to cross-cultural research. It also highlights methodological areas susceptible to common method bias, which hinders the establishment of equivalence in studies of cross-cultural variations in consumer behavior. This review accentuates the “cross-cultural variations” concept in consumer behavior research covering both differences and similarities, which are the subject of cross-cultural studies
FEEDBACK TRADING STRATEGIES: THE CASE OF GREECE AND CYPRUS
Get PDFThis paper examines whether or not feedback trading strategies are present in the Athens (ASE) and Cyprus Stock Exchanges (CSE). The analysis employs two econometric models: the feedback trading strategy model, introduced by Sentana and Wadhwani (1992), and the exponential autoregressive model, proposed by LeBaron (1992). These two theoretical frameworks, separately, were joined with the FIGARCH (1, d, 1) approach. Both models assume two different groups of traders – the “rational” investors that build their portfolio by following the firms’ fundamentals and the “noise” speculators that ignore stock fundamentals and focus on a positive (negative) feedback trading strategy. The empirical results revealed that negative feedback trading strategies exist in the two underlying stock markets
INVESTIGATING INDUSTRY DYNAMICS IN A RECESSIONARY TRANSITION ECONOMY
Get PDFThe paper investigates the statistical regularities of industry dynamics in a transition economy and its manufacturing industry over a six-year period of recession. The static analysis of distributions supports several established stylized facts on firm size and growth-rate distributions. The growth rate distribution featured a sequential, year-by-year procyclical change of the left side of distribution, suggesting that the more years an economy spends in a recession, the greater the decline in the revenue of its firms. On the “growing” side, the recession opened increasing growth opportunities for a small subset of small firms, while it diminished growth opportunities for medium and large firms. The segregation of sectors by technological intensity gives evidence that the high-tech sectors show upward trend of the growth rate distributions’ right side of as the recession unfolded. Sectorial concentration ratios mostly increased, while changes in the unimodality of the firm-size distribution occurred at the end of the economic downturn
INFORMAL ECONOMY IN BOSNIA AND HERZEGOVINA - AN EMPIRICAL INVESTIGATION
Get PDFThis paper explores the size of informal economy in Bosnia and Herzegovina (BiH) over the period 1998-2016, based on an indirect method of measurement known as MIMIC approach (Multiple Input Multiple Causes). As the underlying determinants of informal economy in BiH we include tax burden, the level of unemployment, the size of agricultural sector and the level of government subsidies. We estimate that the average informal economy for the observed period was 34% of GDP, being the largest in 1998 (43%) and the smallest in 2009 and 2016 (30%). There is a modest decreasing trend of the size of informal economy over time. Our model identifies two structural brakes over the observed period; the first positive one is linked to the introduction of the value added tax in 2006 (a decrease in 2007-2009 follows) and, the second one captures a short-run negative effect of the latest global economic crisis in 2009 (an increase 2010-2011). To further asses these results and check their consistency with available primary data, we investigate the size of the undeclared work, assess tax morality and additional income of families coming from informal sector; these indicators provide consistent results with the MIMIC outcomes