South East European Journal of Economics and Business
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FORMAL INSTITUTIONAL FAILINGS AND INFORMAL EMPLOYMENT: EVIDENCE FROM THE WESTERN BALKANS
Full text linkInstitutional theory has explained informal employment to result from formal institutional failings. The aim of this paper is to identify the formal institutional failings associated with informal employment so that action can be taken by governments. Using the Tobit model for econometric analysis and reporting conditional and unconditional marginal effects of the 2021 Balkans Business Barometer survey conducted in six Western Balkan economies (Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Montenegro and Serbia), the contribution of this paper is to reveal that the perceived incidence and share of informal employment is significantly associated with businesses perceiving governance, public integrity and corruption as very negative or negative, the perception that the government does not consider business concerns and business dissatisfaction with public services. However, the perceived incidence and share of informal employment is not significantly associated with the views of business on tax rates and tax administration, or the perceived instability and lack of predictability of government. The theoretical and policy implications are then discussed
AN UP-TO-DATE OVERVIEW OF THE MOTIVATION-PERFORMANCE RELATIONSHIP: A STUDY ON THE BOSNIAN BANKING SECTOR
Full text linkThis study aimed to examine the effect of motivation on work performance. A quantitative research was conducted with the participation of 188 employees working at Ziraat Bank of Bosnia-Herzegovina through a questionnaire consisting of demographic information form, performance, and motivation scales.The study concluded that gender, age, and duration of service in the current institution did not significantly affect performance and motivation. However, education level, marital status, income level, and total work experience made a significant difference in task performance, motivation, intrinsic motivation, and extrinsic motivation, respectively.Moreover, while a moderately positive relationship was found between task performance and intrinsic motivation, contextual performance was determined to be associated with intrinsic and extrinsic motivation moderately and weakly, respectively. On the other hand, work performance had a moderate positive relationship with job motivation. According to the result of regression analysis, job performance is affected positively by intrinsic and negatively by extrinsic motivation
DOES DIGITALIZATION WIDEN INCOME INEQUALITY? A COMPARATIVE ASSESSMENT FOR ADVANCED AND DEVELOPING ECONOMIES
Full text linkThe paper raises two questions: (1) Does digitalization contribute to wealth and income inequality? (2) Does it affect inequality differently between advanced and developing economies? For the answers, the paper investigates the impact of digitalization on inequality for a balanced panel dataset of advanced economies and a balanced panel dataset of developing economies from 2002 through 2020. It applies the system- GMM and PMG estimators for estimation and robustness check. Some exciting results it provides. First, digitalization narrows inequality in developed economies and widens in developing economies. Second, the economic growth – income inequality relationship is U-shaped as real GDP per capita increases from low (developing economies) to high (advanced economies). Third, unemployment enhances inequality in two groups. The results note some necessary implications to develop digital technology and reduce income inequality in these economies
MEASURING CONCENTRATION AND EFFICIENCY IN BOSNIA AND HERZEGOVINA BANKING SECTOR USING DYNAMIC PANEL MODEL
Full text linkThis paper seeks to examine the determinants of the profitability of the B&H banking sector, using an empirical framework that incorporates the traditional SCP - structure conduct-performance and ESX efficiency hypothesis. The main goal of this paper is to measure the level of concentration and investigate how concentration and other determinants influence the profitability of the banking sector in Bosnia and Herzegovina for the period from 2008 to 2017. We also tried to determine whether the profitability of the banking sector is more contributed by concentration, i.e. enlargement of the banking market (SCP) rather than increased efficiency of banking organization (ESX). For this purpose, we use a sample of 26 banks from B&H, and our empirical research is based on panel data analysis. The performance of the banking sector is measured by the conventional return on assets (ROA). Besides concentration as a main industry-specific factor, profitability determinants include bank-specific and macroeconomic profitability factors. Obtained results reveal that concentration has positive impacts on B&H banking profitability. But when we talk about competing concentration hypotheses, the paper results here generally support the ESX efficiency hypothesis rather than the traditional SCP approach. It was confirmed that credit risk, deposit risk and cost to income ratio from bank-specific variables, and GDP growth rate from macroeconomic variables have a statistically significant influence on banking performance
INTERNATIONALISATION-LOCALISATION DEBATE IN CASE OF CROATIAN EXPORTERS’ INTANGIBLE-TANGIBLE ASSET INVESTMENT
Full text linkThis study analyses the role of investment in intangible and tangible fixed assets on firm internationalisation pace. Financial microdata of the largest 300 Croatian exporters for the period 2006-2015 were examined by system dynamic panel GMM. Results illustrate that investments in intangible assets significantly and positively increase export growth but not domestic revenue growth. The study also analysed differences in internationalisation and localisation growth depending on investments in intangible and tangible fixed assets. Investments in intangible assets positively affect firm internationalisation growth, while an increase in intangible assets negatively affects localisation growth. Significance of this study is twofold. Firstly, it provides evidence of the importance of investments in intangible assets for export growth and internationalisation growth. Secondly, it shows that investments in intangible assets are more important that investments in fixed assets, thereby providing practical implication for firms aiming to increase the pace of their international expansion
PERCEPTIONS OF CORRUPTION AND INFORMALITY AMONG BUSINESSPEOPLE
Full text linkThis research assesses perception of corruption in business-to-business and business-to-government inter- actions by using empirical evidence from Serbia. Based on the survey data, it captures the perceptions of corruption of business owners and managers of small and medium enterprises (SMEs) and examines their attitudes towards informal, licit, or illicit, business practices. The typology of SMEs according to their opinion on corruption- and institutional-related obstacles resulted in three different clusters, based on several variables. Moreover, empirical findings show that business is not much hindered by regulations but with a common lack of trust in institutions, crime, and perceived corruption. SMEs are perceived as particularly affected by a negative corrupt environment where large companies are seen as the source of corruption. The findings allow for the creation of lawful and incorruptible business policies, as well as ideas on preventing the common practice of illicit trading with job positions in the public sector
INSTITUTIONS AND FOREIGN DIRECT INVESTMENT: WHAT ROLE FOR INVESTMENT POLICY IN SOUTHEAST EUROPE?
Full text linkInstitutions are generally perceived as an important determinant of Foreign Direct Investment (FDI). Which institutions matter and why for FDI, remains however one of prominent questions in public policy debate amid complexities related to different institutional dimensions, and incomplete or even vague understanding of underlying mechanism(s) at work. In this paper we account for these ambiguities, and focus on institutions that reveal government efforts to design proper institutional and policy framework to attract FDI, as opposed to considering institutions in broader sense. Specifically, we contribute to FDI policy debate by analysing the impact of institutions measuring Investment policy and promotion on inward FDI flows in South East Europe (SEE). To this end we use a unique dataset that is comprised of specific, FDI related institutional indicators developed and published by the OECD. The results of this empirical investigation deeper our understanding on whether differences in FDI policies and institutional set-up across South East European (SEE) countries explain variations in inward FDI flows relaying on bilateral FDI flows and the gravity modelling technique. We bring novel evidence that investment policy efforts seemingly do pay off, highlighting the importance of progress and reforms embodied not only in FDI regulation, but also in FDI policy variables including FDI Promotion and Facilitation, Transparency, Privatisation policy and Public Private Partnership in attracting FDI in SEE. The analysed institutional effect properly accounts for the possible time-variant and context-dependant effect of institutions. The suggested importance of FDI policy variables seem valuable in terms of general FDI policy issues and trade-offs.
 
ARE TWO HEADS REALLY BETTER THAN ONE IN INTRA-HOUSEHOLD FINANCIAL MANAGEMENT? EVIDENCE ON THE FINANCIAL BEHAVIOUR OF COUPLES IN POLAND
Full text linkResearch shows that involvement in intra-household financial management fosters the development of financial literacy and sound financial behaviour. However, little is known about how different intra-couple financial management styles (sole versus joint management) affect the way consumers act when confronted with typical financial matters. Using a simple classifier allowing to distinguish households in which both partners undertake financial activity from those in which only one partner is involved in managing household finances, we applied statistical tests of significant differences and multiple linear regression models to determine whether the financial behaviour of joint participants is distinct from that of sole participants in Poland. Mann-Whitney U test showed that significant differences exist in credit management behaviour, with individuals who share participation performing better behaviour in this domain compared to sole managers. Credit management also appears to be the most problematic domain of household financial management where undesirable behaviour is the most likely. However, closer inspection with linear regression revealed that these differences can be attributed to socio-demographic variables such as age, place of residence, income, and number of dependent children
THE IMPACT OF KNOWLEDGE MANAGEMENT ON THE ECONOMIC INDICATORS OF THE COMPANIES
Full text linkThis paper analyzes the impact of knowledge management on the organizational performance of compa- nies measured through previously defined economic indicators. Knowledge management in the company is observed through the factors that make up a knowledge management system, namely: business processes, people (employees), and information technology, while the same has been done for economic indicators through indicators of liquidity, indebtedness, activity, economic efficiency, and profitability. Knowledge management as a variable is described by ordinal data, while the business indicator variable is described by quantitative, real data. Research shows that most large companies have built-in elements of knowledge management, some medium-sized companies are involved in this process, and most small companies have not developed management strategies in which knowledge management exists as an important factor. The research also proves that there is a positive correlation between knowledge management and economic in- dicators, i.e., in other words, the research shows that knowledge management has a positive impact on reducing indebtedness and increasing liquidity, activity, economic efficiency, and profitability
EVALUATING MONETARY POLICY EFFECTIVENESS IN NORTH MACEDONIA: EVIDENCE FROM A BAYESIAN FAVAR FRAMEWORK
Full text linkThis paper has adopted a Bayesian FAVAR approach to examine the monetary transmission mechanism in North Macedonia. The model is based on a broad data set that encompasses 140 monthly time series spanning between January 2010 and January 2019. In particular, the impact of policy on bank portfolio variables, and the impact of policy on economic activity variables have been evaluated. Our findings show that monetary tightening, causes a fall in output, inflation rate, employment, bank lending, the stock of government securities held by banks, and equity prices. On the other hand, it increases short-term money market rates, lending rates, deposits, and only in the immediate aftermath of the key policy rate rise, the share of non-performing loans in the loan portfolio. The study is expected to provide useful input to monetary policy implementation in North Macedonia. The study as well enriches the literature in this domain by discussing the challenges facing monetary authorities of small open economies with fixed exchange rate regimes in understanding how their policy instrument work through the economy