South East European Journal of Economics and Business
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INSTITUTIONS, AND FIRMS' PERFORMANCES IN TRANSITION COUNTRIES: THE CASE OF THE SELECTED CESEE COUNTRIES
No full textInstitutional reforms in the countries of Central Eastern and South Eastern Europe (CESEE) brought about a redefinition of the role of the state, the market and the business sector. We assess the effects of various dimensions of the institutional environment on the labour productivity of manufacturing firms in selected CESEE countries by employing a multilevel model. Our findings reveal that the curbing of corruption and the provision of inter-industrial externalities through the development of a commercial and professional infrastructure have beneficial effects on firm productivity. At the same time, a stricter political and legal framework and the provision of R&D infrastructure have an adverse effect. Such a finding is typical for producers of standardised products in countries with low levels of legal framework development for which R&D and legal adjustments incur cost disadvantages. The implication is that institutional development should be accompanied by a strengthening of firms’ absorptive capacity in order for businesses to benefit from such changes
(DIS)ADVANTAGES OF DECENTRALIZATION MODELS DRIVEN BY NON-ECONOMIC REASONS: THE CASE OF BOSNIA AND HERZEGOVINA
Get PDFThis paper uses a DEA-VRS methodology for the estimation of municipal efficiency to provide empirical evidence of the impact of decentralization in BiH under the Dayton Peace Agreement (DPA) on overall municipal efficiency. In particular, the paper focuses on the analysis of the overall efficiency of 33 new municipalities established under DPA. The findings suggest that the average municipal efficiency in BiH is rather low, and only 23 or 16% of municipalities in BiH are efficient. The average efficiency achieved is around 0.71. This means that with the same level of inputs (budget revenue) outputs may be increased by almost 30%, on average. The results of DEA-VRS efficiency estimation suggest that new municipalities have lower average efficiency (0.60) in comparison to “older” municipalities (0.74). In our sample, only six percent of newly created municipalities are efficient, 12% exhibit some level of efficiency, while the remaining 82% are inefficient, with significant share (39%) of very inefficient municipalities
BETA CONVERGENCE AMONG THE FORMER SOCIALIST COUNTRIES
No full textThe aim of the paper is to analyze the convergence process among the former Communist countries, the CEE-countries, the Western Balkans and the Eastern Partnership countries. Beta convergence is based on the neoclassical growth theory and tests the hypothesis that poor countries tend to grow faster than rich countries, in per capita terms, and can be absolute and conditional. There are two main hypotheses of this research. The first hypothesis is that the recent financial crisis negatively affected the absolute convergence process among the analyzed countries. The second hypothesis is that the recent financial crisis negatively affected the conditional convergence process among the countries. The relationships between the selected macroeconomic variables and per capita GDP growth rate are econometrically tested. Beta convergence is estimated for the period 2004-2016 and sub-periods; 2004-2008, the pre-crisis period and 2009-2013, the period of crisis. The empirical findings support the economic convergence hypothesis
MANAGERIAL CHARACTERISTICS AND EXPORT PERFORMANCE IN A TRANSITION ECONOMY
No full textGuided by managerial theory and behavioural economics, as well as the literature on exporting, this study combines the upper echelons perspective with the Melitz model to analyse the export behaviour of firms. Thus, it controls for the influence of managerial characteristics, neglected so far in the literature on firms’ export choice and degree in transition countries. The empirical analysis is based on a random sample of 500 Kosovan SMEs. Results provide support for the key hypothesis that both subjective and objective managerial characteristics are crucial for export decisions. In line with the strategic choice paradigm and behavioural economics, findings provide support for the influence of the habituation and rational expectations effect, as well as manager’s education and international exposure on export performance. Further, Kosovan firms are self-selective in their export behaviour in terms of productivity supporting the Melitz model. However, no evidence is found for the significance of institutional factors, even after performing factor analysis
DOES THE INTERNATIONAL TOURISM INDUSTRY RELAX SOVEREIGN CREDIT RATINGS: THE CASE OF SELECTED MEDITERRANEAN COUNTRIES
No full textSustainable tourism plays a dominant role in the economic well-being of the Mediterranean countries, especially small ones. Tourism earnings account for a significant proportion of their GDP, and they have an overwhelming reliance on tourism as a source of exports. The general trends in tourism earnings and volatilities in country risk ratings often go hand in hand, especially for small touristic countries in that region. The research presented in this paper provides a comparative assessment of the international country risk ratings and highlights the importance of the tourism earnings and export. This study employs the ordered response and Poisson count panel data model for a sample of ten Mediterranean countries. The aim of this study is to investigate whether the tourism determinants of sovereign credit ratings for Mediterranean countries vary between different rating agencies (Standard & Poor’s, Moody’s and Fitch’s). The key finding is that an increase in tourism earnings as a proportion of GDP and as the main export share in the total country export impairs the sovereign risk rating and turns out to be robust across the different methodologies.
Keywords: tourism earnings, sovereign credit ratings, Mediterranean countries, ordered response panel mode
DYNAMICS OF FINANCIAL DEVELOPMENT, ECONOMIC GROWTH AND POVERTY ALLEVIATION: THE INDONESIAN EXPERIENCE
Get PDFAlthough the poverty rate in Indonesia has been declining in the last several years, the rate of poverty decline is slowing down. In order to achieve its poverty reduction target within the stipulated time period, the government has stepped up efforts to enhance the contribution of the financial sector towards poverty reduction. This study aims to empirically explore the interlinkages between financial sector development and poverty reduction in Indonesia. Focusing on annual data covering the period from 1980 to 2015, the study adopts the Autoregressive Distributed Lag (ARDL) cointegration approach to examine the long-run relationship between the variables. The study found that there is a long-run relationship between financial development, economic growth, and poverty reduction in Indonesia. It also documented a unidirectional causality running from the financial sector to poverty reduction and a bidirectional causality between economic growth and poverty reduction. Therefore, policies to ensure the conducive growth of the financial sector would go a long way in promoting the economy, creating employment opportunities, and consequently accelerating poverty eradication
WE ARE HAPPY HERE AND WE WILL STAY, WHAT ABOUT YOU? THE CROSS-LEVEL IMPACT OF EMPLOYEE LOYALTY AND PERFORMANCE ON STUDENT LOYALTY
Get PDFThe purpose of this study is to examine links between, on the one hand, employee satisfaction, loyalty and performance, and on the other, the relationship between customer satisfaction and loyalty, as well as their inter-relationship. We conducted a study with employees (53 employees) and students (262 students) across seven departments of a private university in a developing European country. In order to test the cross-level effects of employee-level constructs on student-level constructs, a multilevel analysis was conducted using hierarchical linear modeling. The results confirmed the positive effect of employee satisfaction on employee loyalty and employee performance, but not the impact of the employees’ loyalty on their performances. At the same time, the results showed that students’ satisfaction was positively related to loyalty. Finally, the results showed that, unlike employee performance, employee loyalty at the level of the department had a positive and significant impact on the students’ loyalty and also enhanced the effect of students’ satisfaction on student loyalty
EXPLAINING AND TACKLING UNDER-DECLARED EMPLOYMENT IN FYR MACEDONIA: THE EMPLOYERS PERPSPECTIVE
No full textTo explain and tackle employers who illegally under-report their employees’ salaries to evade paying the full tax and social contributions owed, these employers have been conventionally explained as rational economic actors doing so when the benefits outweigh the costs, and thus the solution is to increase the sanctions and/or probability of detection. An alternative social actor approach, however, explains employers as under-reporting salaries because of their lack of both vertical trust (i.e., their beliefs are not in symmetry with the laws and regulations) and horizontal trust (i.e., they believe many others are non-compliant). Reporting a 2015 survey of 450 employers in FYR Macedonia, the finding is that there is no strong association between employers under-reporting salaries and their perceived level of penalties and risks of detection, but a strong significant association with both their level of vertical and horizontal trust. The theoretical and policy implications are then discussed.