European Financial Systems 2018 - Proceedings of the 15th International Scientific Conference

The Financial Analysis of the Education Support Fund: Recent Results from Slovakia

The Financial Analysis of the Education Support Fund: Recent Results from Slovakia
(The Financial Analysis of the Education Support Fund: Recent Results from Slovakia)

Author(s):Mária Barteková, Ľudomír Šlahor
Language:English
Subject(s):State/Government and Education, Socio-Economic Research
Page Range:16-23
No. of Pages:8
Keywords:student loans; financial ratios; Education Support Fund;
Summary/Abstract:The analysis of institutions providing financial services has always been particularly challenging because of the manner how the financial institutions operate and generate profit. The purpose of this study is to analyse the financial performance of the Education Support Fund – the institution providing state subsidised student loans in Slovakia. Tertiary students are eligible for the loan application from the Education Support Fund. All European countries realize that tertiary education is one of the driving forces of economic growth. The empirical part of the paper consists of the financial statement analysis focused on the performing ratios. Ratio analysis is one of the most widely used fundamental analysis technique. The most significant opportunity that emerged from our analysis is to reach the positive net profit as the evidence of financial sustainability and stability. We have identified the net interest margin, the loan-to-assets ratio, and the return-on-assets (ROA) ratio as the most reliable ratios for the financial performance comparison. In recent years, the slightly increasing values of the performing ratios have shown the financial stability of the Education Support Fund.

Life Insurance in the Czech Republic: New Challenges?

Life Insurance in the Czech Republic: New Challenges?
(Life Insurance in the Czech Republic: New Challenges?)

Author(s):Karina Benetti
Language:English
Subject(s):Financial Markets, Socio-Economic Research
Page Range:24-31
No. of Pages:8
Keywords:life insurance; development; gross premium written;
Summary/Abstract:Do the life insurance products offered on the Czech insurance market provide adequate insurance protection? Life insurance over the last decade has changed greatly, not only in the offer of products. Originally this type of insurance resulted to cover the consequences of the risk of death and life expectancy risk. Products of life insurance covering the risk of death should provide family of in case of death of the breadwinner, products aimed at the risk of life expectancy were mainly-saving products which should primarily secure the individual in old age. It was also possible to arrange a product called endowment assurance. It is worth mentioning that there are various modern variations and possibilities of arranging the different kinds of insurance within the life insurance of people. The product development is escalated in investment life insurance product, which has its strengths, but also weaknesses. It is a question if the situation on the Czech life insurance market with regard to the development and importance of the products of the investment life insurance for the insurance or especially financial market the opportunity or the threat.The main objective of this paper is to capture the main trends of gross life insurance premium, focusing on changes in gross premiums written by individual types of life insurance products including the analysis of selected parameters (number of insurance contracts, insurance penetration and other selected indicators). The software STATGRAPHICS Centurion will be used for this analysis.

Corporate Bankruptcies in the Czech Republic: The Development Over the Last Decade

Corporate Bankruptcies in the Czech Republic: The Development Over the Last Decade
(Corporate Bankruptcies in the Czech Republic: The Development Over the Last Decade)

Author(s):Karina Benetti
Language:English
Subject(s):Business Economy / Management, Economic history, Transformation Period (1990 - 2010), Present Times (2010 - today), Law on Economics
Page Range:32-38
No. of Pages:7
Keywords:corporate bankruptcy; corporate insolvency proposals; development; financial health;
Summary/Abstract:This paper deals with the analysis of development of corporate bankruptcies in the Czech Republic over the last decade. Corporate bankruptcies are an inherent element of the market economy. In the Czech Republic in 2006 was published a law no. 182/2006 Coll., On Bankruptcy and Its Resolution (Insolvency Act), which came into effect from January 1st, 2008. This law came into effect just at a time when the new financial crisis started getting stronger. This crisis has affected the development of corporate bankruptcies not only in the Czech Republic but also in other countries. Corporate Bankruptcies (Mączyńska, 2009) are the necessary selection mechanism in the world of business and have an important rationalizing function – they rid the market of entities that are unable to meet the appropriate efficiency requirements. The aim of this paper is to analyze the development of corporate bankruptcies – the comparison between the development of corporate insolvency proposals and corporate bankruptcies (using total and monthly data) in the Czech Republic over the last decade – in the period 2008 to 2017 with a forecast for 2018. The software STATGRAPHICS Centurion will be used for this analysis. The data needed to analyze the development of corporate insolvency proposals and corporate bankruptcies has been taken over from the company Creditreform, s.r.o. Czech Republic.

Retirement Decisions of Seniors in Poland in the Light of the Qualitative Research

Retirement Decisions of Seniors in Poland in the Light of the Qualitative Research
(Retirement Decisions of Seniors in Poland in the Light of the Qualitative Research)

Author(s):Kamila Bielawska
Language:English
Subject(s):Labor relations, Gerontology, Socio-Economic Research
Page Range:39-43
No. of Pages:5
Keywords:retirement; decisions; Poland; effective retirement age;
Summary/Abstract:Although the Polish economy, labour market and retirement system have been going through serious changes over the last thirty years, the effective retirement age in Poland is still relatively low. The aim of the paper was to evaluate if the main reasons to retire among Polish pensioners have been changing through time. The analysis is based on the qualitative research carried out in November 2017 in a form of individual in-depth interviews (IDI) with seniors in different age groups (65-74; 75-84; 85+) for whom the old-age pension is a main source of income. Preliminary results have shown that seniors, despite of their age, tended to retire as soon as possible. Respondents aged 65-74 often indicated that during retirement they were continuing economic activity for a few years and some of them, who quickly retired and did not continue their work, expressed the opinion that from the perspective of time it was a wrong decision. Seniors in older ages (75+) reported disability or health problems as an important reason of early retirement and leaving the labour market (transition from disability pension to old-age pension was treated as a natural path). This factor was less visible in opinions of younger retires. Few of them pointed out that they retired as they wanted to take the advantage of a leisure time. A retrospective look at pension decisions indicated as the results of the conducted study may provide some interesting conclusions for public policies in the field of pension systems.

Determination and Verification of the Key Assessment Indicators for the Insurance Market by Applying the Decomposition Multiattribute Methods and Regression Analysis

Determination and Verification of the Key Assessment Indicators for the Insurance Market by Applying the Decomposition Multiattribute Methods and Regression Analysis
(Determination and Verification of the Key Assessment Indicators for the Insurance Market by Applying the Decomposition Multiattribute Methods and Regression Analysis)

Author(s):Martina Borovcová, Adéla Špačková
Language:English
Subject(s):Methodology and research technology, Financial Markets
Page Range:44-52
No. of Pages:9
Keywords:multi-attribute methods; AHP; ANP; Key Assessment Indicators; Saaty Pair Comparison Approach; regression analysis;
Summary/Abstract:The insurance industry is one of the most important sectors of the economy. The insurance market is very much intertwined in the financial markets, therefore assessment of its level is important. The assessment and analysis of the insurance market is done by using selected indicators. The aim of the article is determination and verification of the key assessment indicators for the insurance market by applying the decomposition multi-attribute methods and regression analysis. This paper is focused on the description, verification and application of the multi-attribute decomposition methods AHP and ANP based on the Saaty pair comparison approach. The AHP and ANP methods are described, including the computation procedure. The applicability of the methods is presented at the preferences determination. The linear AHP and nonlinear ANP methods are applied. These methods are applied for insurance market assessment, particularly, for determination of preference indicators for the assessment of the insurance market. We consider importance of setting the ratio for evaluation indicators of the development of the insurance market by applying Saaty methods in the framework of decomposition methods AHP and ANP (insurance penetration ratio, claims frequency ratio, concentration ratio, premium indicator, benefit indicator, number of insurance company indicator and more). Subsequently, a custom regression model is created.

Fractal Dimension vs. Non-fractal Risk Measures – Correlation Analysis

Fractal Dimension vs. Non-fractal Risk Measures – Correlation Analysis
(Fractal Dimension vs. Non-fractal Risk Measures – Correlation Analysis)

Author(s):Rafał Buła
Language:English
Subject(s):Business Economy / Management
Page Range:53-60
No. of Pages:8
Keywords:fractal dimension; risk measurement; correlation analysis;
Summary/Abstract:In the presented paper the relationships between fractal dimension and chosen non-fractal measures of risk are analyzed and discussed. The main objective of the study is to reveal the nature of these dependencies. Moreover, the article is aimed at analyzing whether the abovementioned relations are stable independently of the length of investment horizon considered and of period chosen. In the article prices of shares listed on the Warsaw Stock Exchange are studied using methods of correlation analysis (various correlation coefficients). Calculated values and results of various statistical tests enable to draw a few conclusions. First of all, it must be noticed that the main scientific hypothesis in case of risk measures like standard deviation ought to be rejected, while e.g. for the omega or Farinelli-Tibiletti ratio we are unable to do it. Moreover, it must be concluded that this regularity is valid independently of the length of the investment horizon and analyzed period of time.

Measuring Efficiency in Clinical Departments Using the DEA Approach - A Case of the Polish Hospital

Measuring Efficiency in Clinical Departments Using the DEA Approach - A Case of the Polish Hospital
(Measuring Efficiency in Clinical Departments Using the DEA Approach - A Case of the Polish Hospital)

Author(s):Małgorzata Cygańska, Magdalena Kludacz-Alessandri, Dimitrios Syrrakos
Language:English
Subject(s):Methodology and research technology, Health and medicine and law
Page Range:61-69
No. of Pages:9
Keywords:clinical department efficiency; data envelopment analysis (DEA); input; output;
Summary/Abstract:Evaluating hospitals' efficiency in Poland is vital considering in the light of limited public funds dedicated to healthcare. As such, employing a mechanism capable of identifying inefficiencies by hospital administrators would be conducive to the quality of the services delivered. The aim of this article is to ascertain the merits of efficiency measures as instruments of monitoring and distributing resources, by focusing on the clinical departments of provincial specialist hospital in Olsztyn in Poland. The hospital under perspective, provides diagnostics, therapy, care, specialist advice, education prevention and health promotion. Efficiency of hospital departments was measured using Data Envelopment Analysis (DEA). The distribution of efficiency and the ranking of clinical departments was compared across surgical and non-surgical departments’ profile. Input and output data was collected from the hospital database for 19 578 patients admitted to 14 departments between January and June 2017. The research shows that only 5 clinical departments (35.71%) run efficiently. These were the Departments of Hematology, Gynecology, Vascular Surgery, Rehabilitation and Ophthalmology. Most of them provide surgical procedures. The least efficient was the Department of Transplantology and General Surgery. The paper’s findings could potentially inform manager’s choices in relation to increasing efficiency. Since hospital managers have more control over their inputs, they may devote more attention to the examination of total inefficiencies generated by excessive input usage.

The Impact of Educational Expenditures and Higher Education Attainment on Employment in V4 Countries

The Impact of Educational Expenditures and Higher Education Attainment on Employment in V4 Countries
(The Impact of Educational Expenditures and Higher Education Attainment on Employment in V4 Countries)

Author(s):Darya DANCAKOVÁ
Language:English
Subject(s):Labor relations, Government/Political systems, Comparative politics, State/Government and Education, Socio-Economic Research
Page Range:70-77
No. of Pages:8
Keywords:employment rate; education level; education; government expenditures on education;
Summary/Abstract:This paper provides an empirical analysis of the relationship between government expenditures on education and employment rates within V4 countries by comparison with European top performer: Germany. It is generally known that education is nowadays the most important weapon of nations, recognized as the key driver of productivity and economic growth in the knowledge-based economies. A framework for developing and well-skilled/educated workforce can be achieved through the motivation in the public sector to create, share and transmit knowledge. We start with the assumption that the higher level of education of the working age population may cause an employment growth and thus can have a significant impact on economic growth overall, since the sustainable development of economy and society is closely related to education. The goal of this study is to point out the relationship between government expenditures on education and employment growth with aim to estimate whether government spending on education and the higher level of educational attainment have a significant impact employment rates in selected countries.

Sustainable Finance Instruments' Risk - Green Bond Market Analysis

Sustainable Finance Instruments' Risk - Green Bond Market Analysis
(Sustainable Finance Instruments' Risk - Green Bond Market Analysis)

Author(s):Karolina Daszyńska-Żygadło, Jakub Marszałek, Krzysztof Piontek
Language:English
Subject(s):Energy and Environmental Studies, Physical Geopgraphy, Environmental and Energy policy, Financial Markets
Page Range:78-85
No. of Pages:8
Keywords:green bonds; eco-investments; global market; climate change; GARCH;
Summary/Abstract:Sustainable finance opportunities for retail investors such as green bonds are the example of instruments that are dedicated to transition of economy towards more sustainable model and are serving as a source of financing for large-scale investments. The paper aims at verification of volatility behaviour of green bond market and relationship of green bond market volatility and conventional bond market volatility. Our study sheds additional light to previous findings and extends the perspective, going beyond analysis of behaviour of S&P green bond index. Our study was conducted on a wider range of available green bond indices in order to draw more general conclusions. We studied daily rates of return in the period of 2014 – 2018 of the S&P Green Bond Index, Bloomberg Barclays MSCI Global Green Bond Index, ICE BofAM Green Bond Index, Solactive Green Bonds Index. Using multivariate GARCH framework we were able to verify and test volatility patterns and assess how the volatility of in the green bond market transmits to broader conventional bond market. Results of our study confirm that all green bond indices, experience large volatility clustering. We also found out that shocks in the overall conventional bond markets tend not to be echoed in the green bond market. Findings of this paper are significant from the perspective of providing informative insights for the investors risk and return characteristics. They also contribute to the development of sustainable finance and risk analysis of sustainable finance instruments.

Debt Literacy and Its Importance in the Czech Republic

Debt Literacy and Its Importance in the Czech Republic
(Debt Literacy and Its Importance in the Czech Republic)

Author(s):Bohuslava Doláková
Language:English
Subject(s):Present Times (2010 - today), Socio-Economic Research
Page Range:86-93
No. of Pages:8
Keywords:financial literacy; debt literacy; indebtedness; mortgages;
Summary/Abstract:This paper aims to show the importance of one part of financial literacy that causes most problems in the Czech Republic. According to the latest data, there is quite a lot of Czech overindebted – they borrowed too much money, lost jobs, found a very inconvenient loan, etc. Those people were not able to analyze their financial situation in the broad context of having a loan. As we know from the start of last big financial crisis risky loans (e.g., Mortgages) can cause a worldwide problem. In general people with lower levels of debt, literacy tends to transact in high-cost manners, incurring higher fees and using high-cost borrowing. Due to the New Consumer Credit Act from 2016, there was expected a change in the loan amounts and risk. It is too early to judge the impact of that act, but we can see a basic tendency that shows us people are still willing to go in debts. This makes debt literacy still very important as there are many overindebted people in the Czech Republic.

Patterns of Currency Co-movement: Changes in the Impact of Global Currencies

Patterns of Currency Co-movement: Changes in the Impact of Global Currencies
(Patterns of Currency Co-movement: Changes in the Impact of Global Currencies)

Author(s):Małgorzata Domańska, Ryszard Doman
Language:English
Subject(s):Supranational / Global Economy, Economic history, Present Times (2010 - today), Financial Markets
Page Range:94-101
No. of Pages:8
Keywords:exchange rates; global currencies; minor currencies; linkages; copula; Markov regime switching; tail dependence;
Summary/Abstract:In the paper, we analyze the pattern of currency co-movement and document the impact of global currencies (USD, EUR, GBP, JPY) on selected minor ones. The investigation of linkages in the currency market is more complicated than it is in the case of capital markets. The reason for this is that the analysis of co-movement between two currencies requires the consideration of exchange rates which are always calculated against a third currency. The choice of this third currency certainly influences the results of comparison. There prevails an opinion that the pattern of the co-movement in the currency market is significantly driven by the relative influence of the global currencies, mostly the US dollar and the euro, but to some degree also by the British pound and the Japanese yen. In the paper, we examine the dynamics of strength and areas of this influence in the global currency market during the period 2011-2018. We pay special attention to the changes in the pattern caused by the European debt crisis and the UK decision about Brexit. The dynamics of the linkages is modeled by means of Markov regime switching copula models, and the strength of the linkages is described using dynamic Spearman’s rho coefficients and the dynamic coefficients of tail dependence.

Motor Vehicle Insurance in SMEs

Motor Vehicle Insurance in SMEs
(Motor Vehicle Insurance in SMEs)

Author(s):Michal Fabuš, Viktória Čejková
Language:English
Subject(s):Business Economy / Management, Micro-Economics
Page Range:102-108
No. of Pages:7
Keywords:insurance; motor insurance; motor vehicle operation; compulsory contractual liability insurance; white card; green card;
Summary/Abstract:In the present paper we deal with the insurance of motor vehicles in small and medium-sized enterprises. We deal with legal aspects of insurance of motor vehicles, we characterize this type of insurance in the Slovak Republic. We analyze in more detail the compulsory contractual liability insurance for motor vehicle damage, as well as emergency insurance. We analyze the insurance of motor vehicles in the selected small business. In the last part, we deal with the development of motor vehicle insurance, problems in motor vehicle insurance and trends in motor vehicle insurance in the Slovak Republic.

Ratio Bias under Conditions of Uncertainty – Experimental Results

Ratio Bias under Conditions of Uncertainty – Experimental Results
(Ratio Bias under Conditions of Uncertainty – Experimental Results)

Author(s):Maria Forlicz, Tomasz Rólczyński
Language:English
Subject(s):Evaluation research, Socio-Economic Research
Page Range:109-115
No. of Pages:7
Keywords:decision under uncertainty; lottery; expected value;
Summary/Abstract:It has been found that when making decisions under risk regarding positive results (gains), people prefer lotteries with probabilities expressed as a ratio of large numbers (eg. the chance of winning is 30 to 1000) to lotteries with equal probabilities expressed as a ratio of small numbers (eg. 3 to 100)- it is a phenomenon called ratio bias (eg. Denes-Raj, Epstein [1994], Reyna, Brainerd [2008]). However, since it is usually impossible to know or to calculate probabilities of occurrence of various events, it seems plausible to claim that most decisions made in everyday life are decisions under uncertainty. That is why the aim of this article is to investigate people’s perception of chances to win in a lottery under conditions of uncertainty when for the same price they obtain fewer or more tickets (with equal prices and number of tickets obtained for all participants). It is important to know if buying 1 ticket for 1 euro is as attractive as buying 10 tickets for the same price while the (unknown) probability of winning stays the same. The aim will be achieved by conducting an experiment with real but non-monetary payoffs. Students will be given an opportunity to participate in a lottery in which one can win additional points to their final score in a subject. In Scenario I a student will be able to buy one lottery ticket for a small price, while in Scenario II 10 lottery tickets. In both scenarios the number of winning tickets will be the same. Along with ratio bias theory it is hypothesized that (with unchanged probability of winning) an increased number of tickets sold for a specified price will effect an increased demand for the tickets.

Actuarial Model for Pricing Disability Insurance Policy

Actuarial Model for Pricing Disability Insurance Policy
(Actuarial Model for Pricing Disability Insurance Policy)

Author(s):Ján Gogola, Lucie Kopecká
Language:English
Subject(s):Business Economy / Management, Methodology and research technology, Accounting - Business Administration
Page Range:116-122
No. of Pages:7
Keywords:disability insurance; Markov process; semi-Markov process; splitting of states;
Summary/Abstract:The main objective of our contribution is to apply stochastic processes for disability policy that gives annuity benefit in case of temporary or permanent disability. We apply durational effect to the disable state, by splitting it into several states. Using the data supplied by the Continuous Mortality Investigation (CMI) we calculate the single and annual premiums for that policy.

Effectivences of Commercial Banks in Poland versus Bank Tax

Effectivences of Commercial Banks in Poland versus Bank Tax
(Effectivences of Commercial Banks in Poland versus Bank Tax)

Author(s):Ewa Gubernat
Language:English
Subject(s):Business Economy / Management, Economic policy, Fiscal Politics / Budgeting
Page Range:123-127
No. of Pages:5
Keywords:bank tax; commercial banks; ROA; ROE;
Summary/Abstract:Effectiveness in the era of a market economy is one of the most important financial categories regarding the degree of achievement of the assumed priority. The same applies to banking operations, where efficiency management has already become a separate area of unit management. As part of the efficiency quantification process, there are used four groups of indicators: profitability, margins, workloads and employment efficiency. They are an important analytical instrument allowing to assess whether the bank's activity is conducted economically. The aim of the article is to assess the impact of a bank tax on the operational efficiency of commercial banks in Poland and the effects of its introduction on banking services for costumer. The author draws attention to insufficient research on the consequences of tax and the stability of the banking system, in particular in the context of low interest rates and increased burdens borne by banks. The author accepted the hypothesis that the introduction of a new tax burden resulted in lowering basic ratios of banks' profitability and an increase in costs incurred by clients in connection with the use of banking products. The analysis of aggregated financial data was used to verify hypotheses.

Bitcoin Compared on Price, Liquidity and Volatility: Crypto “Currencies” or an Asset Class of Their Own?

Bitcoin Compared on Price, Liquidity and Volatility: Crypto “Currencies” or an Asset Class of Their Own?
(Bitcoin Compared on Price, Liquidity and Volatility: Crypto “Currencies” or an Asset Class of Their Own?)

Author(s):Peter Haiss, Jakob Schmid-Schmidsfelden
Language:English
Subject(s):Business Economy / Management, Financial Markets, ICT Information and Communications Technologies
Page Range:128-138
No. of Pages:11
Keywords:blockchain; Bitcoin Cash; cryptocurrencies; liquidity; monetary velocity;
Summary/Abstract:In comparing Bitcoin to other cryptocurrencies, we analyze whether these can become a viable alternative to fiat currencies. In the theoretical part we assess if these embody the main functions of a currency (Krugman, 1984). The empirical part analyzes the price development, liquidity and velocity of Bitcoin in comparison to the major other cryptocurrencies in 2017. We conclude that Bitcoin Cash, a cryptocurrency that evolved during a hard fork of Bitcoin, may develop into sharing features of a global currency. Currently cryptocurrencies are rather tokens and a highly volatile asset class of their own.

Specifics of the Reporting under International Accounting Standard IAS 41 Agriculture and its Usage on the Central European Stock Exchanges

Specifics of the Reporting under International Accounting Standard IAS 41 Agriculture and its Usage on the Central European Stock Exchanges
(Specifics of the Reporting under International Accounting Standard IAS 41 Agriculture and its Usage on the Central European Stock Exchanges)

Author(s):Filip Hampl
Language:English
Subject(s):Agriculture, Financial Markets, Accounting - Business Administration
Page Range:139-146
No. of Pages:8
Keywords:agriculture company; biological assets; financial reporting; IAS/IFRS; stock exchange;
Summary/Abstract:Companies listed on stock exchanges in the European Union prepare and present their financial reports mostly in accordance with International Financial Reporting Standards (IAS/IFRS). International Accounting Standard IAS 41 Agriculture, prescribing the accounting treatment and disclosures related to biological assets used for agricultural activity, is an integral part of these standards. The need of the particular standard for agriculture stands from the specific character of agricultural activity based on the biological transformation of living organisms – plants and animal beings. This paper deals with the specific areas of the accounting treatment incorporated in the International Accounting Standard IAS 41. Furthermore, it examines whether there are agriculture companies reporting in accordance with IAS 41 among corporations publicly listed on the stock exchanges in the Czech Republic, in Slovakia, Poland, Hungary and Austria. Results show that only small number of agriculture companies is listed on the Central European stock exchanges. Therefore, there is the low usage of IAS 41. Although IAS 41 might seem redundant, it has its importance consisting in the specific accounting treatment that cannot by substitute by other standards.

Volatility Model Based GARCH Minimum Variance Hedging

Volatility Model Based GARCH Minimum Variance Hedging
(Volatility Model Based GARCH Minimum Variance Hedging)

Author(s):Haochen Guo
Language:English
Subject(s):Business Economy / Management, Methodology and research technology
Page Range:147-153
No. of Pages:7
Keywords:Volatility Model; GARCH Model; minimum variance; hedge ratio;
Summary/Abstract:In the risk management, volatility as the important parameter for estimation in the issue of hedging. Volatility model is the regression based forecasting model. GARCH (Generalized Autoregressive Conditional Heteroscedasticity) model is one of volatility model, it presents the variance rate at the current time step is a weighted average of a constant long run average variance rate, the variance rate at the previous time steps and the most recent information about the variance rate. Hence, there are many literatures supposed to use the GARCH minimum variance hedging the financial derivatives. Thus, the bivariate GARCH model provides a superior performance to other dynamic or constant hedge for financial derivatives. In the paper, it estimates the minimum variance hedge based on an advanced econometric model (GARCH model) with time varying minimum variance hedge.

Efficiency Hospitals in the Czech Republic: the Difference Between the Methods Used

Efficiency Hospitals in the Czech Republic: the Difference Between the Methods Used
(Efficiency Hospitals in the Czech Republic: the Difference Between the Methods Used)

Author(s):Taťána Hajdíková, Kateřina Trubačová
Language:English
Subject(s):Methodology and research technology, Health and medicine and law, Accounting - Business Administration
Page Range:154-159
No. of Pages:6
Keywords:hospitals; performance; financial health;
Summary/Abstract:In the Czech Republic and other countries, the effective use of funds from public sources in the health care sector is a long-term research topic. There is pressure to increase the efficiency of healthcare providers. The paper deals with the analysis of the methods used to determine the effectiveness of hospitals in the Czech Republic. Many tools of financial analysis are used to assess financial health. In particular, various ratios, but only those situations that relate to them. However, there are a number of methods dealing with a more comprehensive view of the overall effectiveness of the subject. The aim of the paper is to discuss and assess whether the detection of financial health by various methods will contribute to the improvement of the financial situation of Czech hospitals. For assessing the benefits, account is taken of the financial position of the investigated hospitals found in research and research by other authors. Contributions will be used by hospitals from the calculation of the Ohlson O-Score Index, the Financial Strength Index, the Polish Collective Index by A. Bem and H'index in 2013-2016. The output of the contribution is the H'index financial health information compared to other indexes.

Level of Industry Automation 4.0 in the Czech Republic and Impact on Unemployment

Level of Industry Automation 4.0 in the Czech Republic and Impact on Unemployment
(Level of Industry Automation 4.0 in the Czech Republic and Impact on Unemployment)

Author(s):Martina Hedvičáková, Martin Kráľ
Language:English
Subject(s):Labor relations, Human Resources in Economy, ICT Information and Communications Technologies, Socio-Economic Research
Page Range:160-167
No. of Pages:8
Keywords:Region; Industry 4.0; wages; cluster analysis; unemployment;
Summary/Abstract:The Czech Republic has the lowest unemployment rate throughout the European Union. According to Eurostat and the Czech Statistical Office, in March 2018, the unemployment rate in the Czech Republic reached 2.2%. Such a low unemployment rate causes an excess of demand over supply. Companies are looking for ways of meeting the demand of their customers. One of the possibilities is technological progress. For this reason, both the Czech Republic as well as the European Union are promoting the Industry 4.0 initiative and at the present time also the Work 4.0. The aim of the paper is to analyse the impact of Industry 4.0 and Work 4.0 on the labour market. The paper contains an analysis of the share of unemployed people in individual regions and the development of wages. The manufacturing industry is one of the key sectors of the Czech economy. The following hypotheses are tested: The impact of Industry 4.0 is markedly different in the Czech Republic regions and second As a result of the enforcement of Industry 4.0 (production automation), unemployment varies across regions.

Industry 4.0 Aimed at Accounting System

Industry 4.0 Aimed at Accounting System
(Industry 4.0 Aimed at Accounting System)

Author(s):Irena Honková
Language:English
Subject(s):Business Economy / Management, Accounting - Business Administration, ICT Information and Communications Technologies
Page Range:168-173
No. of Pages:6
Keywords:Industry 4.0;
Summary/Abstract:Industry 4.0 means a current trend of digitalisation and related automation of production and changes at the labour market brought together with the Industry 4.0. More and more internal as well as external integration occurs, more and more data is collected for analysis and decision making, top management requires access to data in real time, we transfer to unified protocols, the quantity of wireless communication devices grows and thus the level of isolation of company systems is considerably reduced. This text discusses the digitisation within the accounting sphere. With its case study it shows how the requirements on presentation and information sharing of accounting and taxation sphere change: options to send tax documents in electronic form, links to Internet banking, XML communication, Internet shops or accounting in mobile phones. This text aims to provide the view not only on the accounting software but also on work of book-keepers. Thus the text presents the view on the whole accounting system within the environment of Industry 4.0. The final part of this text discusses the readiness of companies to the Industry 4.0.

Capital Creation Factors in Selected Banking Sectors of Europe

Capital Creation Factors in Selected Banking Sectors of Europe
(Capital Creation Factors in Selected Banking Sectors of Europe)

Author(s):Ján Horvát
Language:English
Subject(s):Business Economy / Management, Economic history, Transformation Period (1990 - 2010), Present Times (2010 - today), Financial Markets
Page Range:174-179
No. of Pages:6
Keywords:financial crisis; bank capital;
Summary/Abstract:This article has the objective to examine the impact of the financial crisis on the banking sector, especially in terms of whether the change in approach to the regulation of banks contributed to the reduction of cyclical developments of the European banking sector. We analyzed the banking sectors of Germany, France and the Central and Eastern European banks for the period 2000-2013 (72 banks from Germany and France and 39 banks of Central and Eastern European countries). We have examined capital formation and pretax profit as a prerequisite for capital formation through panel regression. We used data from BankScope. We have come to the conclusion that there were different trends in capital formation in the countries of Western Europe on the one hand and in CEE countries on the other hand during the financial crisis.

Efficiency of Banks in Slovak Republic

Efficiency of Banks in Slovak Republic
(Efficiency of Banks in Slovak Republic)

Author(s):Eva Horvátová
Language:English
Subject(s):Business Economy / Management, Economic history, Transformation Period (1990 - 2010), Present Times (2010 - today), Accounting - Business Administration
Page Range:180-188
No. of Pages:9
Keywords:technical efficiency of banks; data envelope analysis;
Summary/Abstract:The objective of this article is to examine the efficiency of Slovak banks in the time period 2000-2013. Slovak banking system faced serious problems connected with the process of transformation of the Slovak economy. They were manifested by difficulties in obtaining of long-term resources, with keeping of capital adequacy requirements and with the rapid growth of the non-performing loans. Transformation and privatization of large banks led to improvement of financial stability and efficiency of banking sector. As first we used a combination of fixed assets and staff costs as input and net interest margin as output in terms of CCR and BCC-I models. In the next analysis we used the combination of three factors - fixed assets and loan-loss provisions as inputs and volume of credits as output in terms of CCR and BCC-I models. Both cases show that the banks in Slovakia have too many fixed assets and high personnel costs with respect to the measured outputs; to the loans and to the net interest margins.

Impact of Macroeconomic Factors on the Value of Loans Granted to Non-Financial Enterprises by Monetary Financial Institutions in the Euro Area Countries

Impact of Macroeconomic Factors on the Value of Loans Granted to Non-Financial Enterprises by Monetary Financial Institutions in the Euro Area Countries
(Impact of Macroeconomic Factors on the Value of Loans Granted to Non-Financial Enterprises by Monetary Financial Institutions in the Euro Area Countries)

Author(s):Agnieszka Anna Huterska, Robert Huterski, Justyna Łapińska
Language:English
Subject(s):National Economy, Supranational / Global Economy, Business Economy / Management, Economic history, Economic policy, Transformation Period (1990 - 2010), Present Times (2010 - today)
Page Range:189-195
No. of Pages:7
Keywords:loans; credit; monetary financial institutions; non-financial corporations; panel data model;
Summary/Abstract:The use of low interest rates by the European Central Bank as an instrument to counteract the effects of the financial crisis in 2008 seemed to create favorable conditions for a significant increase in demand from non-financial corporations for loans granted by monetary financial institutions. Indeed, the demand for loans in individual euro area countries reported by non-financial corporations is shaped by both conditions common for the entire euro area and numerous factors reflecting the specificity of a given national economy. The aim of the article is to assess the impact of key macroeconomic factors on the size of lending to non-financial enterprises by monetary financial institutions in the euro area countries. The macroeconomic factors examined include GDP growth rate, unemployment rate, wage growth, inflation and the long-term interest rate according to the Maastricht criterion. The survey covers the euro area countries in 2008-2015, without Estonia and Latvia due to incomplete data for these countries for the above period. The data comes from the databases of the European Central Bank and Eurostat. For the purpose of assessing the above-mentioned factors, an econometric model based on panel data will be created.

Convergence of the Government Bond Yields in Estonia, Latvia and Lithuania

Convergence of the Government Bond Yields in Estonia, Latvia and Lithuania
(Convergence of the Government Bond Yields in Estonia, Latvia and Lithuania)

Author(s):Jana Hvozdenská
Language:English
Subject(s):Economic history, Government/Political systems, Transformation Period (1990 - 2010), Present Times (2010 - today), Financial Markets
Page Range:196-201
No. of Pages:6
Keywords:β-convergence; bond yields; integration of bond markets;
Summary/Abstract:The aim of this paper is to analyse the influence of the European Union accession and financial crisis to convergence and integration of the bond yields and bond markets. The results show the deepening of bond market convergence after the European Union accession and the integration has continued until the end of the observed period. The chosen indicators are monthly mid-term bond yields (10-year bond yields). The period of 1/2000 to 12/2017 was chosen in order to show the impacts of the changes. The time period was divided into periods 1/2000 - 4/2004 (before the European Union accession), 5/2004 - 7/2007 (after the accession and before financial crisis), 8/2007 - 3/2009 (period of the deepest financial crisis), 4/2009 - 12/2016 (period after the financial crisis). Used methods are 1) spread between the 10-year bond yields of countries of Estonia, Latvia, Lithuania and German 10-year bond yield, 2) analysis of alignment, 3) β-convergence. These findings can be beneficial for the financial market observers.

Relationship between Gender and Age Diversity among Board Members and Firm Performance

Relationship between Gender and Age Diversity among Board Members and Firm Performance
(Relationship between Gender and Age Diversity among Board Members and Firm Performance)

Author(s):Lenka Janošová, Petr Mikus
Language:English
Subject(s):Gender Studies, Business Economy / Management, Demography and human biology, Human Resources in Economy
Page Range:202-209
No. of Pages:8
Keywords:age diversity; gender diversity; Key Performance Indicators (KPI); ROA; ROS;
Summary/Abstract:This paper provides an evidence that age diversity in managing and supervisory boards among Czech joint-stock companies has impact on firm´s performance indicators. Age diversity is becoming widely discussed topic due to population ageing, which is reflected in corporate governance area as well. Age diversity can influence decision-making process, risk attitude or structure of assets, that´s why it has impact on overall profitability of businesses. The main goal of our paper is to test possible relationship between age composition of supervisory and executive board members in Czech stock companies and firm performance. The initial sample included 364 companies with Czech domicile operating in manufacturing industry, especially in IT industry. Randomly chosen sample is composed of 70 Czech companies from IT industry. For this sample we gained basic data describing the number of board members, their age, gender as well as current key performance indicators published financial statements (ROA, ROS, liquidity, indebtedness). We use these indicators to assess the relation between age diversity and profitability through basic statistic and mathematic methods.

The Influence of Government Support on the Crop Insurance Uptake

The Influence of Government Support on the Crop Insurance Uptake
(The Influence of Government Support on the Crop Insurance Uptake)

Author(s):Monika Kaczała
Language:English
Subject(s):Agriculture, Economic policy, Government/Political systems
Page Range:210-218
No. of Pages:9
Keywords:crop insurance; subsidies; demand; state intervention; Poland;
Summary/Abstract:Rationales for government intervention in agricultural insurance market are widely approved. The main aim of this study is to identify the relationship between the crop insurance uptake and different government intervention on the Polish market. The local legislation restrictions as well as data available have been analyzed. The measure of crop insurance uptake was the amount of insured arable land. The most important instruments identified are: insurance obligation, premium subsidies and the possibility of insuring crops against a single risk (abolition of risk packages).

Structural Evaluation of Securities’ Rates of Return in Selected Business Sectors on New York Stock Exchange

Structural Evaluation of Securities’ Rates of Return in Selected Business Sectors on New York Stock Exchange
(Structural Evaluation of Securities’ Rates of Return in Selected Business Sectors on New York Stock Exchange)

Author(s):Marcin Kalinowski, Grzegorz Krzykowski
Language:English
Subject(s):Business Economy / Management, Financial Markets, Accounting - Business Administration
Page Range:219-226
No. of Pages:8
Keywords:rate of return; market behaviour; stock market; NYSE;
Summary/Abstract:The share prices behaviour on the financial market is subject of numerous researches. Technical and fundamental analyses as well as theory of behavioural finance are attempting to demonstrate certain patterns in the share price behaviour of enterprises quoted on the stock exchange. The aim of this work is to evaluate the behavioural heterogeneity of rates of return on shares in selected sectors in the American market (NYSE). The research hypothesis of this work is the claim that share price behaviour, and rates of return on shares are sectors specific rather than global share market specific. Therefore, it is vital that we should conduct the analysis of the homogeneity of rates of return on shares of enterprises from diverse industries. The research is based on an enterprises representing four selected sectors from the American market (energy, trade, finance, health) has been instrumental in pursuing that goal. Detailed analyses have been conducted with the use of data mining methodology. The work has demonstrated the existence of behavioural heterogeneity of rates of return on shares in selected industries. The future research in this domain ought to concentrate on conducting a thorough analysis of homogeneity structure in selected industries so as to determine some regularities in the behaviour share prices in the particular industries.).

Stability Prerequisites of the Czech Republic Banking System (Cybernetic Point of View)

Stability Prerequisites of the Czech Republic Banking System (Cybernetic Point of View)
(Stability Prerequisites of the Czech Republic Banking System (Cybernetic Point of View))

Author(s):František Kalouda
Language:English
Subject(s):Business Economy / Management, ICT Information and Communications Technologies
Page Range:227-234
No. of Pages:8
Keywords:banking system; controller; stability; controlled system;
Summary/Abstract:The paper is devoted to further description and analysis the selected stability aspects of the Czech banking system (as a cybernetic system), with special focus to the influence of the managed or controlled system (commercial banks).The objective of the paper is to clarify the implications of the parameters of the regulator (Czech central bank) to behavior the managed/controlled system (Czech commercial banks). The paper draws on data published by the Czech National Bank (CNB, http://www.cnb.cz) as well as on data from literature and from previous studies of the author.Methodology of the paper is principally based on the economic cybernetics utilization in terms of study the stability of the Czech banking system as a cybernetic one. The usual description, literary research, comparison and analytic-synthetic methods are used here as well.The main expected results of the paper relate to the linkages between stability of the Czech banking system as a whole and behavioral parameters (characteristics) of the controlled system (commercial banks) - still not explored. Conclusions of the paper in a significant way redefine the options of the central bank in general (this means not only Czech central bank) concerning the stability control of the banking system.

How the Changes in Exchange Rate Affect the Turkish Economic Growth under Inflation Targeting Regime?

How the Changes in Exchange Rate Affect the Turkish Economic Growth under Inflation Targeting Regime?
(How the Changes in Exchange Rate Affect the Turkish Economic Growth under Inflation Targeting Regime?)

Author(s):Özcan Karahan
Language:English
Subject(s):National Economy, Supranational / Global Economy, Methodology and research technology, Economic development
Page Range:235-242
No. of Pages:8
Keywords:exchange rate; economic growth; Time-Series Model;
Summary/Abstract:In the literature, the conventional view argues that there is a positive relationship between exchange rate and economic growth since an increase in exchange rate stimulates the volume of net exports. However, Structuralist Economists show that there may be an inverse relationship between exchange rate and economic growth. Particularly in developing countries, the input structure of production depends on the imported capital and intermediate goods, so an increase in the exchange rate negatively affects the economic growth by making imported production inputs more expensive. Turkey, leaving exchange rates free to fluctuate, have adopted Inflation Targeting (IT) as a monetary regime since 2001 and thus exhibited a genuine experience to be analysed the role of exchange rate in economic growth. Accordingly, using quarterly data from 2002 to 2017 and employing Johansen cointegration and Granger causality tests, the nexus between exchange rate and economic growth has been investigated in this study. Empirical findings indicate that, as argued by Structuralist Economists, there is a negative causal relationship from exchange rates to economic growth. From the policy perspective, it can be concluded that monetary policy applications in Turkey should provide both price and exchange rate stability together under inflation targeting regime.

The Effect of Bank Credit on the Current Account Balance in Turkey

The Effect of Bank Credit on the Current Account Balance in Turkey
(The Effect of Bank Credit on the Current Account Balance in Turkey)

Author(s):Özcan Karahan, Metehan Yılgör, Hakan Öndes
Language:English
Subject(s):National Economy, Business Economy / Management, Economic history, Transformation Period (1990 - 2010), Present Times (2010 - today)
Page Range:243-250
No. of Pages:8
Keywords:bank credit; current account deficit; ARDL model;
Summary/Abstract:Like another developing country, one of the most important problems in Turkish economy is the large current account imbalance which continues permanently. Past experiences in the Turkish economy indicated that persistent large current account imbalances make financial system more fragile and cause serious currency crises. Therefore, examining the determinants of current account deficit in Turkey becomes a significant research topic. Accordingly, this study aims to analyse the impact of bank credit expansion on current account balance in Turkey. Covering the quarterly data between 2004 and 2017 the relationship between bank credit and current account balance has been investigated in the long run and the short run by ARDL Model. Empirical results show that there is a causal relationship from credit growth to current account deficit. It seems that credit expansion has been one of the leading reasons behind the growing current account deficits in Turkey. Thus, the results indicate that policy-makers in Turkey should take into account the credit expansion while keeping the current account balance as the primary objective to provide financial system soundness and economic stability.

Relations between IFRS Adoption and Financial and Non-financial Measures of Economic Entities, Empirical Results from the Selected Countries of Western Europe

Relations between IFRS Adoption and Financial and Non-financial Measures of Economic Entities, Empirical Results from the Selected Countries of Western Europe
(Relations between IFRS Adoption and Financial and Non-financial Measures of Economic Entities, Empirical Results from the Selected Countries of Western Europe)

Author(s):Marcin Kędzior, Dorota Kędzior
Language:English
Subject(s):Business Economy / Management, Economic policy, EU-Accession / EU-DEvelopment, Accounting - Business Administration
Page Range:251-258
No. of Pages:8
Keywords:IFRS adoption; European Union; financial ratios; non-financial ratio; accounting harmonization;
Summary/Abstract:The aim of the article was to analyze the relationship between the application of IFRS by economic entities and financial and non-financial measures of enterprises in the selected countries of Western Europe. 461 companies from Western European countries were analyzed. The article discusses the issues of preparing financial statements according to IFRS. The subject of the detailed analysis were correlations between the IFRS application and profitability, liquidity ratio, assets turnover, investment intensity, total debt ratio, company size, company growth, international activity, market share and industry concentration. The higher level of risk, lower liquidity, lower turnover of assets, higher capital intensity, higher company size, age of the business unit, broader international operations and higher market shares in companies applying IFRS in selected countries of Western Europe were verified empirically.

Comparison of Gulka’s Model and Model IN05 on Sample of Slovak Industrial Companies

Comparison of Gulka’s Model and Model IN05 on Sample of Slovak Industrial Companies
(Comparison of Gulka’s Model and Model IN05 on Sample of Slovak Industrial Companies)

Author(s):Natália Klempaiová, Mária Bohdalová
Language:English
Subject(s):Business Economy / Management, Methodology and research technology
Page Range:259-266
No. of Pages:8
Keywords:Index IN05; Gulka’s model; corporate financial health forecast; credit and bankruptcy models;
Summary/Abstract:In this paper, we analyse two modern bankruptcy models on samples of selected Slovak industrial enterprises. IN05 is a well-known model in Slovakia that gives a high percentage of reliability in predicting the financial health of Slovak companies. The Gulka’s model was created in 2016 and its popularity is rising. The aim of this paper is to compare IN05 and Gulka’s models and determine which of them is more suitable for Slovak enterprises. Analyses were based on real data from the latest available financial statements of industrial enterprises for five industries typical of Slovakia: Automotive, Electricity, Agriculture and Forestry, Construction, Mechanical Engineering. We have selected private domestic companies with limited liability. In the case of companies in bankruptcy or restructuring, we used the latest available financial statements before the date of bankruptcy or, respectively, management of restructuring. Using contingency tables, we compared the number of correct predictions for both models - the Gulka’s model, created by the logistic regression method (LOGIT model) and the IN05 index created by the Multidimensional Discrimination Analysis (MDA method). We predicted the correct forecast when the company was actually in bankruptcy and the model rated it or if the company was not bankrupt and the model ranked it as prosperous. Both models are very useful in the conditions of the Slovak Republic. For Slovak industrial enterprises, the Gulka´s model is more reliable. In general, the model's highest ability to leverage is in the country where the model was created or for the industry for which it was created.

The Efficiency of Health Systems in OECD Countries with Novel DEA Methodology

The Efficiency of Health Systems in OECD Countries with Novel DEA Methodology
(The Efficiency of Health Systems in OECD Countries with Novel DEA Methodology)

Author(s):Kristína Kočišová, Jakub Sopko
Language:English
Subject(s):Economic history, Methodology and research technology, Transformation Period (1990 - 2010), Present Times (2010 - today)
Page Range:267-275
No. of Pages:9
Keywords:public health; Data Envelopment Analysis; DNDEA; OECD; efficiency;
Summary/Abstract:The main purpose of this paper is to determine the relative scores of the efficiency of health systems in the OECD countries. The data used in the analysis of this paper has been obtained from the official OECD database and we have been analyzing the data between 2005 and 2015. We use the health indicators to point out the performance of healthcare systems of individual OECD countries. The efficiency results are obtained by Data Envelopment Analysis (DEA). DEA is an analysis of the efficiency of production units, which give us the efficiency score of the specified individual units. DEA is also used for the examination of the efficiency in the services sector. In this way, we can point to the level of efficiency of the health systems of the individual OECD countries. Traditional DEA methods are limited in some cases with regard to the nature of the selected variables. Emrouznejad and Amin (2009) point to the limitations of DEA models using the indicators expressed as ratio variables. In our paper, we will use the novel method for assessing efficiency – Dynamic Network Data Envelopment Analysis (DNDEA), applied by Ozcan and Khushalani (2016).

Household Deposits’ Availability for Credit Institutions during Tensions on Funding Markets – A Case of the Euro Area Countries

Household Deposits’ Availability for Credit Institutions during Tensions on Funding Markets – A Case of the Euro Area Countries
(Household Deposits’ Availability for Credit Institutions during Tensions on Funding Markets – A Case of the Euro Area Countries)

Author(s):Katarzyna Kochaniak
Language:English
Subject(s):Business Economy / Management, Economic policy, EU-Accession / EU-DEvelopment, Financial Markets
Page Range:276-283
No. of Pages:8
Keywords:banks’ liquidity; household deposits; banks’ debt funding;
Summary/Abstract:The EU regulations indicate household deposits as stable funding for credit institutions under stress and in the long run. However, the recent financial crisis revealed runs in the euro area, including ones that threatened financial stability. They encouraged to analyse the changes in the levels of deposits placed by households with credit institutions in individual member countries in the period of distress in funding markets. The study aims to analyse the fluctuations in the levels of household deposits and, in particular, to recognise regularities and irregularities in this respect. It applies regression models with time series data on household deposit totals for individual countries in the euro area. The results display considerable cross-country differences in the formation of deposit levels in the period analysed. For several member states, the trend could be recognised only in specified sub-periods. Only for some of the countries, the linear trend described a general long-term direction of changes in household deposit totals, confirming its stability in the entire period. In most member states, seasonal fluctuations in deposit totals occurred, but they related to various months. The study allowed identification of unexpected deposit outflows as well, which resulted, among other reasons, from financial problems of credit institutions. On the other hand, the adjustments in deposit guarantee schemes fostered households’ confidence in these entities and led to the unexpected increases of the deposits in selected countries.

Motives of Households for Saving in Poland

Motives of Households for Saving in Poland
(Motives of Households for Saving in Poland)

Author(s):Anna Magdalena Korzeniowska
Language:English
Subject(s):Socio-Economic Research
Page Range:284-291
No. of Pages:8
Keywords:saving motives; saving behaviour; personal saving;
Summary/Abstract:Saving is a process of putting away some resources to preserve them for future use. The process can be run either consciously or unconsciously. The latter occurs, e.g. when at the end of a certain period, some unplanned surplus is available. The saving process is the subject of intense consideration in different trends of economics. Many researchers and scientists are interested enough in saving and its motives to include it as part of their economic theories. Among them were J. M. Keynes, who focused on current income, F. Modigliani, the author of the life-cycle hypothesis of saving and M. Friedman, who worked on the permanent income hypothesis. J. Duesenberry and a large group of other researchers state that the saving behaviour of households is determined mostly by psychological and sociological determinants. Duesenberry emphasizes that saving behaviour of an individual is influenced by that person's peers. Others focus on personal traits such as aversion to risk, habits and attitudes as factors of saving. They often take into consideration socio-economical qualities of savers, e.g. gender, age, location, income, etc. These points of view were presented in the works of G. Katona, who also suggested that past experience in saving influences the likelihood of doing it in the future (Devaney, Anong, Whirl, 2007).

The Relationship between Saving and Debt in Polish Households

The Relationship between Saving and Debt in Polish Households
(The Relationship between Saving and Debt in Polish Households)

Author(s):Anna Magdalena Korzeniowska, Wojciech Misterek
Language:English
Subject(s):Socio-Economic Research
Page Range:292-298
No. of Pages:7
Keywords:personal finance; credit instruments; saving level;
Summary/Abstract:It can be assumed that having saving and credit is mutually incompatible, because the logics requires paying down of any debt if one has financial surpluses. This is because the cost of servicing debt is much higher than the benefits of interest on saving. As the observation of real household behaviour proves the opposite, the aim of this paper is to analyse the relationship between saving and debt of households, which is illustrated by the case of citizens of Lubelskie Voivodeship (Poland). The research conducted on a group of 223 working representatives of households shows that more than 50% of persons with bank loans also have saving that exceeds in its amount a 3-month income of a respondent. It is worth noting, however, that among persons assessing their financial situation as good or very good, the percentage of such persons is higher than in the case of people assessing their financial situation as bad or rather bad. In the latter group, many more people are holding only credit products. The research has also shown that people with saving are more likely to use car loans and credit cards, while people who do not save are more likely to use cash credits and cash loans. In both groups, the percentage of people with mortgages is comparable.

The Selected Aspects of Foreign Trade in Central European Countries

The Selected Aspects of Foreign Trade in Central European Countries
(The Selected Aspects of Foreign Trade in Central European Countries)

Author(s):Jaroslav Kovarnik, Eva Hamplova
Language:English
Subject(s):National Economy, Business Economy / Management, Economic policy, International relations/trade, Economic development
Page Range:299-306
No. of Pages:8
Keywords:Central Europe; Czech Republic; export; foreign trade; import;
Summary/Abstract:This article deals with the selected aspects of foreign trade development in the countries from central Europe, namely the Czech Republic, Poland, Slovakia, Hungary, where these countries belong into Visegrad Four, and Germany, because countries of V4 have usually strong connections with Germany. The article continues with analysis from other articles presented on other conferences, and it analyses development since 2000, and it focuses on selected aspects of foreign trade development, because foreign trade is crucial part for sustainable development for almost all countries around the world (it is part of GDP formula in open economy). The article analyses development of foreign trade with goods and with services, where have been discovered relatively surprising results (the weakest economy in terms of services has been Germany), but consequently the article analyses relations between export development, foreign trade development, and GDP development. In theoretical point of view, export is considered to be independent on domestic product, and economically weak countries are usually considered to be more dependent on export (in terms of GDP development). This fact has been proved during analysis, where especially V4 countries are strongly dependent on export. However, the final impact of net balance of foreign trade on GDP is relatively weak in all V4 countries, which is relatively surprising fact again. Detail description of results is in this article.

Labour Taxation in the European Union. Comparative Analysis and Conclusions for Poland

Labour Taxation in the European Union. Comparative Analysis and Conclusions for Poland
(Labour Taxation in the European Union. Comparative Analysis and Conclusions for Poland)

Author(s):Anna Krajewska, Anna Krajewska, Magdalena Kapela
Language:English
Subject(s):Labor relations, Economic policy, Fiscal Politics / Budgeting
Page Range:307-314
No. of Pages:8
Keywords:labour taxation; personal income tax; social security contribution; tax wedge; redistribution of income;
Summary/Abstract:Labour tax burdens consist of two main elements: personal income tax and social security contribution. Both have been subjects of multiple changes in European Union countries. The aim of the article is: 1) to present main directions of those changes, 2) to show their influence on tax wedge in different EU countries, 3) to show specification of labour taxation in Poland. Tax wedge in Poland demonstrates very low progressivity, that means it does not take into consideration income and family situation. Internal structure of tax wedge is also untypical because of great share of social security contribution. In the article there has been undertake an attempt to present causes of tax wedge otherness in Poland and resulting economic and social fallouts. Also, there are postulated directions of changes. In the paper analysis were based on Eurostat and OECD statistics and research on labour taxation carried out in Poland.

Taxation of Consumption in Poland. Redistribution and Fiscal Effects

Taxation of Consumption in Poland. Redistribution and Fiscal Effects
(Taxation of Consumption in Poland. Redistribution and Fiscal Effects)

Author(s):Anna Krajewska, Katarzyna Osiecka
Language:English
Subject(s):National Economy, Economic policy, EU-Accession / EU-DEvelopment, Fiscal Politics / Budgeting
Page Range:315-322
No. of Pages:8
Keywords:consumption taxes; VAT; excise; redistribution; shadow economy;
Summary/Abstract:Consumption taxes constitute important source of budgetery revenues. In time of crisis the role of those taxes had raised – the rates of VAT and excise rose. The aim of this paper is to present those tendencies, and next to show their redistribution and fiscal results, mainly on Polish case. Redistribution tax effects are verified by 1) presentation of empirical research findings concerning VAT and excise burdens on households in Poland, in cross-section decyl groups and distinct social-economic groups. 2) comparison Gini’s coefficient before and after taxation and transfers in Poland and in secected EU countries. Analysis of fiscal effects of consumption taxation is based on 1) demonstration of correlation between contribution of indirect taxed in GDP and shadow economy in EU countries, 2) showing dependency between level of taxes and shadow economy by the example of tobacco market in Poland. Last chapter of the article shows actions taken in Poland aimed on insulating tax system.

Problems in the Banking Sector

Problems in the Banking Sector
(Problems in the Banking Sector)

Author(s):Jan Krajíček
Language:English
Subject(s):Business Economy / Management, Accounting - Business Administration
Page Range:323-327
No. of Pages:5
Keywords:bank; loans; revenue; risk;
Summary/Abstract:The paper dedicated to some problems in the banking sector. Banks have different problems. Are some different between great, middle and small banks. Conditions that affect it and the possibilities for further development. Emphasis placed on the development of interest rates and their impact on the economy and management of banks. The decline in interest rates would itself be a problem for banks such as resources grow in the banking sector. Growth in deposits not only in banking, but in the financial sector, and has its consequent reflection in both the declining risk aversion and the need to create new products and services. The decline in risk aversion also reflected in the design of new products, where risk is transferred to raise immediate profits problems are dependent on the size of the bank. Large banks have different problems than medium and small banks, due to their client focus.

The Impact of Behavioral Finance on the Financial Performance of an Enterprise

The Impact of Behavioral Finance on the Financial Performance of an Enterprise
(The Impact of Behavioral Finance on the Financial Performance of an Enterprise)

Author(s):Peter Krištofík, Michaela Novotná
Language:English
Subject(s):Business Economy / Management, Accounting - Business Administration, Socio-Economic Research
Page Range:328-333
No. of Pages:6
Keywords:behavioral economics; behavioral finance; deviations from rationality; regression models; financial performance of enterprises;
Summary/Abstract:Behavioral finance is an increasingly accepted approach to explaining human behavior in the market. Traditional financial theories treat financial markets and their participants as rational subjects. This paper focuses on behavioral finance and its impact on Slovak medium and large enterprises. It points to different perceptions of rationality in classical economics and behavioral economics. The aim is to create a linear regression model and to investigate the impact of deviations from the rationality on the company's financial performance, measured through ROA and ROE. The paper employs a primary data source: a questionnaire survey, completed by 33 corporate managers. It tests six linear regression models. These show that deviations from rationality, and age affect the financial performance of enterprises.

Using of Non-financial Data in Predictive Models

Using of Non-financial Data in Predictive Models
(Using of Non-financial Data in Predictive Models)

Author(s):Zuzana Kubaščíková, Miloš Tumpach, Zuzana Juhászová
Language:English
Subject(s):Business Economy / Management, Methodology and research technology, Accounting - Business Administration
Page Range:334-340
No. of Pages:7
Keywords:financial statements; financial analysis; neural network; deep learning; data mining;
Summary/Abstract:Forecasting the company's future economic situation arose in the early 20th century. First of all, a multidimensional discriminatory analysis was used to construct prediction models, later replaced by logistic regression. The new challenge in predicting financial development is neural networks representing a more reliable financial forecast compared to mathematical and statistical methods. The neural network, by mimicking the capabilities of human brain neurons, is capable of modeling the course of dependencies between individual indicators and results. A disadvantage of the original prediction models is also the low range of empirical accounting data and the fact that they are focused only on financial data. The introduction of the financial statements registers led to the possibility of free access to full data from the financial statements, which opens the door to new possibilities in scientific research. For the purpose of this paper an annual report of 20 selected companies were tested. The aim of this paper is to accept or reject the claims that non-financial „narrative” data could be also used for the assessment of the financial position and financial performance of the companies. The results of our sentiment analysis supported the hypothesis that financially distressed companies use a different tone of language in their annual reports compared to financially stable companies. These findings confirmed the relationship between the tone which managers use in constructing annual report narratives, and the financial performance of the company. Therefore, it is advisable to incorporate non-financial data into the forecasting models.

The Role of Apparent Signs of Financial Distress in Test Samples and Verification Samples of Bankrupt Models

The Role of Apparent Signs of Financial Distress in Test Samples and Verification Samples of Bankrupt Models
(The Role of Apparent Signs of Financial Distress in Test Samples and Verification Samples of Bankrupt Models)

Author(s):Michal Kuběnka, Renáta Myšková, Josef Novotny, Vít Jedlička
Language:English
Subject(s):Business Economy / Management, Methodology and research technology, Present Times (2010 - today)
Page Range:341-347
No. of Pages:7
Keywords:bankrupt models; financial distress; prediction;
Summary/Abstract:Financial bankrupt models are characterized as quite accurate and above all very fast tools for quantitative evaluation of financial health of company. The creators report the accuracy of the predicted bankruptcy usually in the range of 70 to 90%. But the problem of bankruptcy models is the test sample on which the models were created. The sample affects the predictive power of these models. Usually indicated accuracy rate differs from the real predictive power of these models. The financial distress of certain businesses may be obvious even without the use of bankruptcy models. Apparent signs of financial distress may be insolvency, negative equity, VAT unreliability, negative economic result for several years in a row. Survey conducted by more than 270 companies has shown that more businesses with apparent signs of financial distress in the sample increase the reported accuracy of the bankruptcy model. The research carried out also has determined the real accuracy of selected bankruptcy models on the standard sample of Czech firms and also on a sample of companies where companies with obvious signs of financial distress were eliminated. Due to the modification of the test sample subsequently the accuracy of the selected models changed radically.

The Anti-Tax-Avoidance Measures in the EU – from Denials to Wide Acceptance

The Anti-Tax-Avoidance Measures in the EU – from Denials to Wide Acceptance
(The Anti-Tax-Avoidance Measures in the EU – from Denials to Wide Acceptance)

Author(s):Jana Kubicová
Language:English
Subject(s):Economic policy, Law on Economics, EU-Accession / EU-DEvelopment, Fiscal Politics / Budgeting, EU-Legislation
Page Range:348-354
No. of Pages:7
Keywords:tax avoidance; exit tax; Court of Justice of the European Union; harmonization;
Summary/Abstract:In July 2016 the European Commission adopted the Anti-Tax Avoidance Directive (ATAD). The Directive lays down common harmonized rules of several kinds of anti-tax avoidance measures. Those rules are not brand new, in contrast, they have been well known for years in the national tax systems around the world. This paper presents survey of the former key decisions of the Court of Justice of the European Union concerning national exit taxation provisions and compares them to the current ATAD exit taxation provisions. The legal analysis suggests that several former Court of Justice of the EU decisions considerably differ from the adopted ATAD exit taxation rules. This shift might suggest that judgements of Court of Justice of the European Union and tax policy of the European Union institutions might not provide enough consistency and legal certainty. The paper hypothesizes four unspoken reasons which might lay behind introduction of the common harmonized exit taxation rules in the EU.

Financial Crisis Influence on Tax Mix Changes

Financial Crisis Influence on Tax Mix Changes
(Financial Crisis Influence on Tax Mix Changes)

Author(s):Gabriela Kukalová, Lukáš Moravec, Jakub Ječmínek, Barbora Martásková
Language:English
Subject(s):Economic history, Economic policy, Transformation Period (1990 - 2010), EU-Accession / EU-DEvelopment, Financial Markets, Fiscal Politics / Budgeting
Page Range:355-363
No. of Pages:9
Keywords:tax mix; tax structure; tax policy; EU; financial crisis;
Summary/Abstract:The aim of the study is to evaluate the reaction of tax policy makers to financial crisis in the short term based on the statistical analysis of consequent tax mix changes in the EU member states. The paper describes the changes in tax structure of EU members, particularly focusing on the period 2008 – 2009. The analysis verifies the statistical significance of the financial crisis influence on the changes in tax structure of the EU member states. The post crisis changes statistical significance evaluation is realized particularly by using the paired t-test for defined groups of taxes and levies comparing the development nature in the period before and after the financial crisis in 2008 based on the data issued by EUROSTAT following the methodology ESA 95 valid in the period analyzed. The Statistica 12 software is used. The results show the statistically significant changes in tax mix as result of the slowed down economies in 2008 and also as the result of the stress on different group of taxes, applied by the policy makers, based on the tax avoidance resistance of different group of taxes.

Environmental Risk Insurability Issues – the EU Perspective

Environmental Risk Insurability Issues – the EU Perspective
(Environmental Risk Insurability Issues – the EU Perspective)

Author(s):Malwina Lemkowska
Language:English
Subject(s):Energy and Environmental Studies, Environmental and Energy policy, EU-Accession / EU-DEvelopment
Page Range:364-371
No. of Pages:8
Keywords:environmental insurance; environmental risk; insurability of risk;
Summary/Abstract:The aim of this paper is to evaluate insurability of environmental risk. Juxtaposition of the attributes of both environmental risk and insurance market against risk insurability factors will be the evaluation criterion. Two groups of insurability criteria have been identified: endogenous and exogenous ones. Exogenous criteria of insurability refer to the attributes of the risk itself. Exogenous ones are connected with the features of the insurance market and its participants, especially the ability of the insurance companies to deal with the specific risk. The level of environmental risk insurability is relatively low. It is because of the problem with fulfilment of both endogenous and exogenous criteria. The occurrence, which results in environmental damage is very often not sudden, random and extraordinary. The probability of accident and probable maximum loss are difficult to estimate. Additionally, environmental risk results often in catastrophic loss. Although insurance companies provide relatively high capacity, they have problem to create sufficiently large insurance portfolio.

Assessment of Factors Influencing of Final Corporate Income Tax Liabilities in Selected Sectors in the Czech Republic

Assessment of Factors Influencing of Final Corporate Income Tax Liabilities in Selected Sectors in the Czech Republic
(Assessment of Factors Influencing of Final Corporate Income Tax Liabilities in Selected Sectors in the Czech Republic)

Author(s):Karolina Lisztwanová, Iveta Ratmanová
Language:English
Subject(s):Business Economy / Management, Economic history, Transformation Period (1990 - 2010), Present Times (2010 - today), Fiscal Politics / Budgeting
Page Range:372-379
No. of Pages:8
Keywords:corporate income tax; tax base; pyramidal decomposition; functional method; individual sectors;
Summary/Abstract:The Czech government uses corporate taxation to support desirable corporates` behaviour, for example the willingness to invest or the elimination of impact of corporates` risk etc. The object of the paper is to assess the impact of changes of the statutory tax rate, to emphasize the impact of the items reducing tax base and the influence of the tax discounts on the total tax liability. First of all, main attention is devoted to the evaluation of the impact of tax losses, research and development expenses, expenses connected with donation activities and investment incentives of the selected sectors during period 2005-2016 with using data provided by Ministry of Finance of the Czech Republic. The method of pyramidal decomposition of the final tax liability is used, so that we could state and compare the changes of above-mentioned items moreover functional method is applied in case of identification of multiplicative relationship among defined individual items. As far as our results are concerned, we are able to emphasize the items that influenced the changes of the corporate income tax liability of the selected sectors the most. We can state that the changes of the individual adjustments of tax base are the most significant in the case of all sectors, but on the other hand, when it comes to the rest of the items their impact differs

Financial Performance of Czech Privately-Held Firms with Multiple Owners

Financial Performance of Czech Privately-Held Firms with Multiple Owners
(Financial Performance of Czech Privately-Held Firms with Multiple Owners)

Author(s):Ondřej Machek, Aleš Kubíček
Language:English
Subject(s):Business Economy / Management, Micro-Economics
Page Range:380-386
No. of Pages:7
Keywords:multiple owners; performance; privately-held firms; Czech Republic;
Summary/Abstract:Privately-held firms represent the vast majority of firms worldwide. When owned by multiple shareholders, the owners become a social group who interact with each other, which affects the behavior of the firm and its financial performance. The goal of this paper is to explore the financial characteristics of Czech privately-held firms with multiple owners. Using a sample of 28,972 Czech limited liability firms, and after controlling for firm size, age, and industry affiliation, we found that the presence of multiple owners has a negative effect on asset turnover. However, the number of shareholders as such seems to have no effect on profitability, debt use, and liquidity. Instead, sole proprietorships seem to be empirically different from firms with two or more owners, as they have a significantly greater liquidity.

Spatial Inequality in Ownership and Activity of Banking Sector: Case of Russia

Spatial Inequality in Ownership and Activity of Banking Sector: Case of Russia
(Spatial Inequality in Ownership and Activity of Banking Sector: Case of Russia)

Author(s):Marina Yuryevna Malkina
Language:English
Subject(s):Business Economy / Management, Micro-Economics, Transformation Period (1990 - 2010), Present Times (2010 - today)
Page Range:387-394
No. of Pages:8
Keywords:region; banking system; unevenness; assets; convergence;
Summary/Abstract:Our study is aimed at evaluation of spatial inequality in ownership and activity of commercial banks of Russian Federation in 2001-2016. The level of interregional inequality in banking sector was assessed for its assets, financial results, attracted deposits and provided loans, which were calculated both per capita and as their ratio to GRP of regional economies. To eliminate the effect of price level on the variables in time series we determined their real values using the cumulative GRP-deflator indices. The inequality in spatial distribution of assets, liabilities and financial results of banking sector was evaluated by means of the weighted coefficients of Gini and variation and tested for - and -types convergence. We found significant growth of the spatial concentration of ownership and management of assets in Russian banking sector accompanied by low and cyclical concentration of financial results (net profits) within the sector, which meantime increased noticeably last year. At the same time, banking activity demonstrated much lower and sometimes diminishing regional disparities. First of all, we observed decrease in spatial inequality in the level of lending to enterprises and population, and the both types of convergence were proved for them. This trend was opposite to the growth of interregional disparities in the average personal deposits and almost nil change in inequality of the deposits of enterprises. We concluded that discrepancy between distribution of ownership on assets and actual implementation of banking activity, in combination with high interest rate (cost of capital), contributed to further redistribution of financial resources of the periphery in favor of the center and prevented the improvement of financial position of backward regions.

The Use of Backtesting in Assessment of the Value-at-Risk on Unites States, Great Britain and German Capital Markets

The Use of Backtesting in Assessment of the Value-at-Risk on Unites States, Great Britain and German Capital Markets
(The Use of Backtesting in Assessment of the Value-at-Risk on Unites States, Great Britain and German Capital Markets)

Author(s):Tomáš Meluzín, Marcin Fałdziński, Michał Bernard Pietrzak, Adam P. Balcerzak, Marek Zinecker
Language:English
Subject(s):National Economy, Business Economy / Management, Transformation Period (1990 - 2010), Present Times (2010 - today), Financial Markets, Globalization
Page Range:395-401
No. of Pages:7
Keywords:capital market; value-at-risk; backtesting; DCC-GARCH model; conditional variance;
Summary/Abstract:For many years, a progressive globalization process has been observed, which translates into an increase in interdependencies between world economies. This growing level of interdependence affects the functioning of economies significantly. The greatest impact of mutual connections can be observed on the world capital markets. Therefore, the issue of the identification and measurement of market risk becomes an important problem related to the functioning of capital markets. Value at Risk is a metric that allows the risk of loss for selected assets to be assessed. The research objective of this article is to assess the quality of Value at Risk applied to measure the risk of the DJIA, DAX, and FTSE stock indices. The VaR estimation was carried out in the time period 2000-2012, where the DCC-GARCH model with the conditional Student’s t-distribution was used. To evaluate VaR quality, the backtesting procedure was used, within which we used the Juc, Jind, and Jcc tests.

Changes in Consumer Credit Market in Slovakia

Changes in Consumer Credit Market in Slovakia
(Changes in Consumer Credit Market in Slovakia)

Author(s):Michal Mešťan, Maroš Malíček, Matej Žofaj, Ivan Králik
Language:English
Subject(s):Business Economy / Management, Financial Markets, Socio-Economic Research
Page Range:402-409
No. of Pages:8
Keywords:banks; non-banks; annual percentage rate of charge; interest rates; consumer credit;
Summary/Abstract:Slovak households have been among the fastest-growing debtors of all EU countries in the past 10 years. Consumer credit regulation in Slovakia over the last 3 years has considerably tightened the terms of consumer credit provision not only for banks but especially for non-bank entities that have had to undergo relicensing. In this article, we focus on the analysis of consumer behavior and the structure of consumer credit granted to households by banks and non-bank entities, taking into account the volumes of new loans and their prices, expressed in interest rates and annual percentage rate of charge. At the same time, we evaluate the real effect of the tightened regulation on the consumer credit market for households in Slovakia.

The Relationship between Debt and Equity in Social Economy Organizations – Polish Case

The Relationship between Debt and Equity in Social Economy Organizations – Polish Case
(The Relationship between Debt and Equity in Social Economy Organizations – Polish Case)

Author(s):Grzegorz Michalski
Language:English
Subject(s):National Economy, Evaluation research, Management and complex organizations, Socio-Economic Research
Page Range:410-419
No. of Pages:10
Keywords:equity; capital structure; nonprofit organizations; efficiency of social economy organizations;
Summary/Abstract:In that paper is presented the model based on data about debt to equity relationship, collected from 5500 Polish social economy organizations in comparison to data from over 112000 European social economy organizations. Capital structure is an indicator that testify about level of financial risk. Polish social economy entities covered by Amadeus database, reports different debt to whole capital relationship customs. The levels of debt to whole capital reported in financial statements covered by Amadeus database in social economy entities in V4 and European countries were higher in the time financial risk 2007 - 2012 period than in Polish social economy entities. Polish social economy organizations are important part of general social policy in Polish economy. They realize important aims in healthcare, in education and many other socially important areas. Considering efficiency of social economy organizations, should be remembered that from the donor perspective, is important the way the managing team uses resources of the social economy organization and if it is used in the most effective way. The social economy organization efficiency should be considered in the context of the risk. The one from the most important way to be out from business is the debt to equity relation. In paper are considered relations between debt measures and efficiency measures. That relation is also illustrated for Polish social economy organizations data.

Determinants of Public Healthcare Units Indebtedness – the Case of Public Hospitals in Lodz

Determinants of Public Healthcare Units Indebtedness – the Case of Public Hospitals in Lodz
(Determinants of Public Healthcare Units Indebtedness – the Case of Public Hospitals in Lodz)

Author(s):Katarzyna Miszczyńska
Language:English
Subject(s):Public Administration, Government/Political systems, Health and medicine and law, Accounting - Business Administration
Page Range:420-426
No. of Pages:7
Keywords:health economics; indebtedness of hospitals; econometric modeling; healthcare in Poland;
Summary/Abstract:The performance of healthcare in Poland, compared with the EU countries, is far from satisfactory. The indebtedness of hospitals is one of the major problems to be solved by public administration. Hospitals as autonomous healthcare units are public units and are not subject to market mechanisms. Legal regulations widely determine their independence but limit responsibility for its implementation, which leads to their uncontrolled indebtedness. That indebtedness adversely affects not only the development of healthcare but also quality of provided medical services. Constant indebtedness of the units creates a need for finding its determinants. The aim of the research is an attempt to define some factors which determine indebtedness of public healthcare units (hospitals) in Poland. The study will cover units with a similar and thus comparable profile. The study was conducted between years 2007 – 2015 with help of econometric modeling. It should be stressed that the level of indebtedness of healthcare units, and at the same time, the efficiency of their performance vary. Based on preliminary research on determinants of indebtedness there should be mentioned the following most crucial factors: hiring medical personnel, average remuneration, bed occupancy, average stay in hospital, average number of patients per bed, days of treatment per person, founders.

Profitability Forecast for Assessment of Investment Project in Banking

Profitability Forecast for Assessment of Investment Project in Banking
(Profitability Forecast for Assessment of Investment Project in Banking)

Author(s):Piotr Miszczyński
Language:English
Subject(s):Business Economy / Management, Evaluation research, Accounting - Business Administration
Page Range:427-435
No. of Pages:9
Keywords:simulation metamodel; profitability prognosis; investment valuation; bank project evaluation;
Summary/Abstract:The aim of this paper is to present the results of evaluation of a bank investment project. The main result of investment in a new banking project is the so-called a customer portfolio that has a suitable risk structure and profitability. Therefore it is important to estimate the profitability of current sales of currently developed banking products. Thanks to the fast and accurate ex ante profitability estimation tool, an ongoing assessment of the profitability of new banking products, especially loans, is possible. On this basis, price and risk pricing decisions allows to create a reasonably profitable portfolio that affects the value of the bank being built. In the paper there are the sample results of the metamodel profitability simulation tool presented and the accuracy measures of the obtained results.

Effects of Financial Accounting Harmonization on Agribusiness

Effects of Financial Accounting Harmonization on Agribusiness
(Effects of Financial Accounting Harmonization on Agribusiness)

Author(s):Lukáš Moravec, Jana Hinke, Gabriela Kukalová, Zuzana Tichá
Language:English
Subject(s):Business Economy / Management, Agriculture, Transformation Period (1990 - 2010), Present Times (2010 - today), Accounting - Business Administration
Page Range:436-444
No. of Pages:9
Keywords:accounting; agriculture; changes; harmonization;
Summary/Abstract:Financial accounting is the most important tool for determining the financial position and performance of agricultural business. However, this is increasingly subject to the harmonization process. The first effort to harmonize financial accounting in Europe took place in the 1950s after the signing of the Treaty of Rome, and has been ongoing since then. Harmonization is currently being promoted through EU directives that are changing national legislation. The aim of this contribution is to quantify the impact of important changes (in financial accounting between 2004 and 2017) on the financial position and performance of agricultural business. The impact of the changes was quantified using the average values of a sample of 100 selected entities across the Czech Republic (i.e., joint stock companies, limited liability companies and cooperatives with primary agricultural activity). Average values are presented in the tables so that the effect of the change on the balance sheet and profit can be demonstrated. The data were obtained from the collection of commercial register documents. Important changes (specific for agriculture) have been found: valuation of assets, reporting of preferential limits, depreciation of permanent crops on foreign land and valuation of inventories of own production, reporting a change in their amount.

Financial Market Implied Industry Classification

Financial Market Implied Industry Classification
(Financial Market Implied Industry Classification)

Author(s):László Nagy, Mihály Ormos
Language:English
Subject(s):Business Economy / Management, Methodology and research technology, Financial Markets
Page Range:445-453
No. of Pages:9
Keywords:Cluster analysis; market classification; GICS; machine learning;
Summary/Abstract:This paper introduces the financial market implied industry classification standard. Besides current industry classifications we propose a spectral clustering based quantitative methodology. The main drawback of current standards come from their qualitative classification techniques which can be eliminated in this purely mathematical concept. Calculating the market implied clusters and compering them with global industry classification explores that market implied classification provides better statistical results. However it also turns out that different clustering techniques provide similar classifications, moreover, both methods determine “Real Estate” as a cluster.

The Role of Corporate Income Tax Differences on the Profit Shifting Behavior: Evidence from the Czech Republic

The Role of Corporate Income Tax Differences on the Profit Shifting Behavior: Evidence from the Czech Republic
(The Role of Corporate Income Tax Differences on the Profit Shifting Behavior: Evidence from the Czech Republic)

Author(s):Danuše Nerudova, Veronika Solilova, Marian Dobranschi, Marek Litzman
Language:English
Subject(s):Business Economy / Management, Economic policy, Comparative politics, EU-Accession / EU-DEvelopment, Fiscal Politics / Budgeting
Page Range:454-461
No. of Pages:8
Keywords:profit shifting; tax differential; semi-elasticity; effective CIT rate; tax avoidance;
Summary/Abstract:The aim of this paper is to investigate the profit shifting behavior of Czech subsidiaries owned by parent companies placed in top five EU investor countries in the Czech Republic. We analyze the sensitivity of profit before taxation to the corporate tax differences between Czech subsidiaries and other subsidiaries owned by the same Multinational Enterprise. We expect that the profit shifting behavior of the Czech subsidiaries to be less significant compared to the existent estimates by the literature. This hypothesis arises from the particular tax advantageous position of the Czech Republic relative to the top five EU investor countries high corporate tax rates. We adopt the Hines-Rice approach to analyze the semi-elasticity of profits before taxation to the corporate income tax differences.

Monetary Policy Normalization of the European Central Bank

Monetary Policy Normalization of the European Central Bank
(Monetary Policy Normalization of the European Central Bank)

Author(s):Aleksandra Nocoń
Language:English
Subject(s):Business Economy / Management, Economic policy, Financial Markets
Page Range:462-469
No. of Pages:8
Keywords:monetary policy normalization; exit strategies; European Central Bank; tapering;
Summary/Abstract:Monetary policy normalization of modern central banks is the process of ending non-standard monetary policy initiatives and its return to the pre-global financial crisis framework. On the other hand, it may mean a transformation of monetary policy towards a new quality, a new monetary architecture, hitherto unknown to central banks - referred as “new normal”. The lack of previous experience of central banks in implementation of normalizing activities is undoubtedly a factor hindering their realization. Literature studies indicate a small number of scientific studies and publications in this research area. Therefore, appropriate definition and implementation of the exit strategies’ assumptions is extremely difficult in the lack of theoretical framework. In turn, normalization without clearly formulated assumptions, implemented ad hoc, may destabilize banking sector, and finally the whole financial system. Detailed guidelines are also crucial for the effectiveness of the process. Appropriate identification of the normalization process, undertaken early enough - even during unconventional policy, will avoid the negative effects of the "exit" and support positive results, generated during the implementation of non-standard monetary policy. The main aim of the study is identification of possibilities of monetary policy normalization of the European Central Bank. The central bank of the Eurozone still implements extraordinary instruments (enter strategy) - in the form of quantitative easing and zero interest rate policy, while the major central banks of the global economy have developed detailed exit strategies assumptions. Thus, the article attempts to specify detailed guidelines of the ECB normalization process, paying particular attention to balance sheet normalization.

Determinants of Non-Life Insurance Consumption

Determinants of Non-Life Insurance Consumption
(Determinants of Non-Life Insurance Consumption)

Author(s):Tomáš Ondruška, Zuzana Brokešova, Erika Pastoráková
Language:English
Subject(s):Demography and human biology, Financial Markets, Socio-Economic Research
Page Range:470-478
No. of Pages:9
Keywords:consumer; insurance market; insurance consumption; determinants;
Summary/Abstract:The paper examines various personal, demographic and economic factors and their impact on the non-life insurance consumption in the Slovak Republic. Non-life insurance is complex and abstract service that has become an increasingly important part of the protection of individual’s property by providing a wide range of policies for consumers. What are the key determinants associated with the non-life insurance consumption? Our results have identified most robust predictors of the non-life insurance consumption that could be used in predictions of consumer’s consumption of property insurance. These results can help insurers to better understand their potential consumers and to improve their acquisition and segmentation techniques.

Decomposition of ROE to Selected Financial Analysis Indicators

Decomposition of ROE to Selected Financial Analysis Indicators
(Decomposition of ROE to Selected Financial Analysis Indicators)

Author(s):Denisa Oriskóová, Renáta Pakšiová
Language:English
Subject(s):Business Economy / Management, Accounting - Business Administration
Page Range:479-486
No. of Pages:8
Keywords:return on equity; corporate finance; impact of financial indicators;
Summary/Abstract:The existence of company in a rapidly varying environment is conditioned by the ability to respond properly to challenges arising from changing business environment and customer requirements. Decisions on the future direction of a company eventually are translated into financial form and affect the financial health of company. Assessment and prediction of financial health is key to the company's management. Data sources for assessment of financial situation for internal users are not only financial statements but also various internal reports. However, to external users are available only published financial statements and annual reports, which are the resources of information for financial situation assessment as basis for decision making. The picture of the company's financial performance is supplemented by financial analysis indicators, which should be evaluated in their mutual contexts. Evaluation based on one indicator can lead to incorrect conclusions, so for this reason in this paper is investigated decomposition of the return on equity (ROE) to selected indicators. The aim of the paper is to quantify the impact of indicators, such as tax burden ratio, interest burden ratio, earnings before interest and tax (EBIT) margin, asset turnover and financial leverage, on ROE development. In the paper are used statistical methods, specifically regression and correlation analysis, which were applied on the sample of the Slovak Republic engineering industry company's. By linear regression model were found out that to the development of ROE the most significant impact has tax burden indicator and asset turnover, while the equity multiplier has the least significant impact.

Internet shopping in the Czech Republic with the focus on the types of bought goods and services by consumers

Internet shopping in the Czech Republic with the focus on the types of bought goods and services by consumers
(Internet shopping in the Czech Republic with the focus on the types of bought goods and services by consumers)

Author(s):Gabriela Oškrdalová
Language:English
Subject(s):Business Economy / Management, ICT Information and Communications Technologies, Socio-Economic Research
Page Range:487-494
No. of Pages:8
Keywords:e-commerce; e-shops; internet shopping; goods; services;
Summary/Abstract:The internet shopping has been developing not only all over the world but in the Czech Republic too in the last years and it is possible to expect a future expansion. The aim of this paper is to describe the development of the internet shopping in the Czech Republic, introduce and interpret results of a part of own quantitative research in the field of knowledge, skills and behaviour in the internet shopping of consumers with the focus on the types of bought goods and services and compare these results of own research with the results of the Czech Statistical Office’s research for the Czech Republic in the internet shopping field with the focus on the chosen types of bought goods and services by consumers. The paper’s aim is reached by using of general science methods, primarily description, analysis, comparison, synthesis and deduction, and by using statistics methods (methods of descriptive statistics). On the basis of data gained by the own questionnaire research we can state, 99,4 % respondents have bought goods or services on the internet in the last year. The most respondents have bought clothes, shoes and dress accessories on the internet in the last year. If we focus on services, the most respondents have bought tickets on cultural events.

The Termination of Foreign Exchange Interventions and the Balance Sheet of the Central bank

The Termination of Foreign Exchange Interventions and the Balance Sheet of the Central bank
(The Termination of Foreign Exchange Interventions and the Balance Sheet of the Central bank)

Author(s):Dalibor Pánek
Language:English
Subject(s):Business Economy / Management, Economic history, Economic policy, Present Times (2010 - today), Financial Markets
Page Range:495-499
No. of Pages:5
Keywords:Central bank; non-standard monetary policy instrument; exchange rate intervention; the balance of the central bank; the banking sector; the reserve banks; foreign exchange reserves;
Summary/Abstract:The aim of the text is an analysis of the changes of selected items of the balance sheet of the Czech national bank in the course of and after completion of foreign exchange intervention as a monetary policy instruments and the context in the banking sector. The analysis of the manifestations of foreign exchange intervention in the central bank's balance sheet was carried out on the basis of the data for the years 2012 – 2017. This period includes the progress of the use of this tool of monetary policy and the state after its completion. The text characterizes the effects of the active and passive sides of the balance sheet of the central bank and assesses the achievement of the objectives set. Analysis of selected items of the balance of the central bank was made on the basis of theoretical knowledge of the resources listed and the practical knowledge of the author. In conclusion, the author presents his views on the use of this tool of monetary policy, especially in the period after his termination. For text processing were used methods of description of the theoretical and practical parts, methods of comparison, analysis and prediction in the part of the text following the development of the on-balance sheet items in the course of and after completion of foreign exchange intervention.

Investors’ Expectations, Price-Dividend Dependence and P/E Ratio for Common Stock: Specifics of Well-Developed Markets and Emerging Markets

Investors’ Expectations, Price-Dividend Dependence and P/E Ratio for Common Stock: Specifics of Well-Developed Markets and Emerging Markets
(Investors’ Expectations, Price-Dividend Dependence and P/E Ratio for Common Stock: Specifics of Well-Developed Markets and Emerging Markets)

Author(s):Sergey Petrov, Nadezhda Yashina, Oksana Kashina, Natalia N. PRONCHATOVA-RUBTSOVA
Language:English
Subject(s):Methodology and research technology, Financial Markets
Page Range:500-508
No. of Pages:9
Keywords:Discount model for common stock pricing; price-dividends dependence for welldeveloped and emerging markets; econometric analysis of stock price and dividends; stockholders’ expectations evaluation;
Summary/Abstract:It is well known that a role of dividend payments as a criterion for the effectiveness of portfolio investments increases with the rise in their time horizon. The comparison of share price performance and dividend payments in more than a hundredyear retrospective had allowed to find out the phenomenon of anomalous volatility for stock prices. The result had a powerful influence on the concept of risky asset evaluation. The authors of the paper proposed to study time series of stock prices and dividend payments in a somewhat different frame of reference. The aim of the paper is to examine investors’ perception of growth prospects for equities based on the investigation of share price dynamics compared to annual dividend payments. The proposed theoretical model uses an original procedure of continuously growing dividend discounting with arbitrary investment period. The research deals, but not limited to, with the shares of American and Russian corporations from 1985 till 2016. The central issue of the research is to compare the observed price-dividend dependence for the share with the one corresponding to classical dividend discount model assuming that the growth of dividend is uniform and the period of investment is infinite. The result of the analysis carried out is that both in well-developed and in emerging markets authors' technique allows to gain an insight (for many securities) into the primary motive for “representative shareholder” to evaluate a security: is it an income from share price growth or a willingness to receive stock dividends. Similar diagnostics is of undoubted interest for portfolio management; it is more exact for developed markets that have longer history and are less volatile. We show in the paper that the proposed method makes it possible to define the concept of earnings shares and growth shares more concretely.

Long-term Stock Returns of Companies Implementing Diverse Dividend Policy: Evidence from Poland

Long-term Stock Returns of Companies Implementing Diverse Dividend Policy: Evidence from Poland
(Long-term Stock Returns of Companies Implementing Diverse Dividend Policy: Evidence from Poland)

Author(s):Aleksandra Pieloch-Babiarz
Language:English
Subject(s):Business Economy / Management, Economic policy, Financial Markets
Page Range:509-517
No. of Pages:9
Keywords:dividend policy; stock returns; buy-and-hold abnormal returns; capital gain; the Warsaw Stock Exchange;
Summary/Abstract:The aim of this article is to examine whether there is a statistically significant relationship between the type of dividend policy and the long-term stock returns. Considering the diverse dividend policy of companies, I am particularly interested in the role of constant dividend per share policy, constant payout ratio policy, extreme dividend policy, residual dividend policy and hybrid dividend policy in shaping the market share price of companies listed on the main market of the Warsaw Stock Exchange in the years 2001-2016. I conduct the research employing the buy-and-hold abnormal return, Fisher’s LSD test and OLS regression model. The main results of my empirical study indicate that the buy-and-hold returns for the companies implementing a specified dividend policy are higher than the buy-and-hold returns for the WIG index. Moreover, regardless of the type of dividend policy, abnormal stock returns increase along with an increase in the number of years of the regular dividend payouts. The main conclusion from my analysis is that conducting the specified dividend policy has a significant impact on the long-term market share price behavior. I observe that the diversity of dividend policy is accompanied by the diverse stock returns achieved by the stock market investor. The scientific research presented in this paper seems to be valuable due to the lack of academic studies on the impact of implementing the different types of dividend policy on achieving the long-term abnormal stock returns.

The Issue of Responsibility for Financial Security in Old Age and Additional Retirement Saving

The Issue of Responsibility for Financial Security in Old Age and Additional Retirement Saving
(The Issue of Responsibility for Financial Security in Old Age and Additional Retirement Saving)

Author(s):Sylwia Pieńkowska-Kamieniecka
Language:English
Subject(s):Labor relations, Socio-Economic Research
Page Range:518-524
No. of Pages:7
Keywords:responsibility; saving; retirement; old age;
Summary/Abstract:In connection with the lowering benefits from public pension systems responsibility for financial security in old age should become more individualized. People should take greater responsibility for future benefits and standard of living in old age. The objective of the article is to assess how perception of who should take care of financial security during old age impacts the decision regarding additional retirement saving. The article presents the data of the research conducted by the Social Insurance Institution in 2016 on a representative for the whole population of Poland sample of 1,030 people. The main conclusion which may be drawn from the research is that when individuals think that it is mainly the State's responsibility to care of retirement security, they save less for old age.

The Efficiency of Health Care Systems in OECD Countries. Does it Make a Difference?

The Efficiency of Health Care Systems in OECD Countries. Does it Make a Difference?
(The Efficiency of Health Care Systems in OECD Countries. Does it Make a Difference?)

Author(s):Anatoliy Pilyavskyy, Lucie Kopecká
Language:English
Subject(s):Health and medicine and law, Transformation Period (1990 - 2010), Present Times (2010 - today)
Page Range:525-530
No. of Pages:6
Keywords:Health care system; OECD countries; Efficiency; Data envelopment analysis;
Summary/Abstract:The main aim of this article is to compare the Efficiency of Health Care Systems in 35 OECD countries during period 2008 – 2015. The efficiency of health care system is discussed topic in many articles and it is very difficult task to find the right methods according to which to measure health care efficiency. In our case for the comparing of the efficiency of health care systems we use nonparametric method, namely Data Envelopment Analysis (DEA). Two different output oriented models are used. The first one is with one output: life expectancy at birth and three inputs: health expenditures, total health and social employment and number of hospitals. The second one is with two outputs: all causes of deaths and infant mortality and three inputs like in the first model. All indicators are obtained from OECD database. Comparing results for these two models, that are very similar, show that both developing and developed countries can be effective.

Going Public in Selected CEE Capital Markets: Empirical Evidence on IPO Volumes and Drivers

Going Public in Selected CEE Capital Markets: Empirical Evidence on IPO Volumes and Drivers
(Going Public in Selected CEE Capital Markets: Empirical Evidence on IPO Volumes and Drivers)

Author(s):Sylvia Plottová
Language:English
Subject(s):National Economy, Economic history, Present Times (2010 - today), Financial Markets
Page Range:531-535
No. of Pages:5
Keywords:IPO; gross domestic product; interest rates; industrial production; CEE region;
Summary/Abstract:The article is focused on the quantitative analysis of development of IPOs on the capital market of the Czech Republic, Poland, Slovenia and Hungary over the period between 2010 and 2016. A number of significant changes took place on the world markets mainly the global economic crisis which had significant impact on the IPO activity. It is a well-known fact that IPO numbers in Central and Eastern European capital markets are far below the IPO volumes of their Western counterparts. This article´s objective is to look at the most influential external IPO drivers such as development of interest rates, industrial production rates, gross domestic product growth rates and the local stock exchange indices. In order to determine the impact of such IPO drivers the regression analysis was used.

Capital Market Determinants of Going Public: The Evidence from CEE Capital Markets

Capital Market Determinants of Going Public: The Evidence from CEE Capital Markets
(Capital Market Determinants of Going Public: The Evidence from CEE Capital Markets)

Author(s):Sylvia Plottová
Language:English
Subject(s):National Economy, Economic history, Present Times (2010 - today), Financial Markets
Page Range:536-542
No. of Pages:7
Keywords:capital markets; CEE region; market capitalization; initial public offerings;
Summary/Abstract:Capital markets within CEE region have shown that in case of new investment opportunities they are still significantly underdeveloped. This research is focused to examine the influence of the local capital market indicators on IPO emergence. The data sets for the capital markets of Czech Republic, Poland, Hungary and Slovenia has been analyzed over the period between 2010 and 2016. The following capital market indicators and their impact on the IPO volumes were examined: market capitalization as percentage of GDP, turnover as percentage of GDP, turnover velocity and number of listed companies. To analyze the data the quantitative approach was applied as well as in depth comparison of capital market specifics. The regression estimation model is applied to identify the impact of the capital market determinants on the number of primary issues and the value of capital raised by IPOs. The data is evaluated at the significance level of α=5%. Results show that in Poland and Hungary the capital market determinants show certain degree of influence on IPO activity.

Non-financial Information according to the Act on Accounting in the Czech Republic

Non-financial Information according to the Act on Accounting in the Czech Republic
(Non-financial Information according to the Act on Accounting in the Czech Republic)

Author(s):Veronika Popelková
Language:English
Subject(s):Business Economy / Management, Accounting - Business Administration
Page Range:543-549
No. of Pages:7
Keywords:accounting; non-financial reporting; Key Performance Indicator (KPI); corporate performance management;
Summary/Abstract:The Directive of the European Parliament and the Council of the EU on the reporting of non-financial information of some large enterprises and groups was implemented in the Czech accounting legislation. This Directive aims to achieve greater transparency and comparability of social and environmental information between undertakings from different sectors and the different Member States. For the first time in the year 2017, entities and groups will be required to report non-financial information by the wording of the Accounting Act. This contribution arises in response to current issues and, through a survey of publicly available information in ten public interest entities, presents the likely future development of a non-financial disclosure solution under the Accounting Act and the European Directive for the financial year 2017. This disclosure of non-financial information will bring significant administrative burdens, but it can also help reduce costs and increase efficiency. The paper also deals with the importance of this information for management and measuring of the corporate performance.

Evaluation of Expense Ratio of Insurance Portfolios Belonging to Selected Insurance Companies Operating on Czech Insurance Market

Evaluation of Expense Ratio of Insurance Portfolios Belonging to Selected Insurance Companies Operating on Czech Insurance Market
(Evaluation of Expense Ratio of Insurance Portfolios Belonging to Selected Insurance Companies Operating on Czech Insurance Market)

Author(s):Lenka Přečková, Eva Vávrová
Language:English
Subject(s):Business Economy / Management, Financial Markets
Page Range:550-558
No. of Pages:9
Keywords:bancassurance; expense ratio; insurance market;
Summary/Abstract:The paper focuses on evaluation of insurance portfolios belonging to the insurance companies ČSOB and Komerční pojišťovna from the vantage point of growth rate of premium written and expense ratio of the insurance portfolio. The aim of this paper is to ascertain whether the selected insurance companies experience lower expense ratio of their insurance portfolio than what is the average expense ratio of insurance portfolios on the Czech insurance market. The reason for doing this research is in the fact that the insurance companies ČSOB and Komeční pojišťovna are entities with a developed bancassurance model. As the authors discovered in their earlier research, insurance companies using this model experience lower expense ratio. This paper analyzes the selected insurance companies on Czech insurance market considering the cooperation between the bank and insurance company. It analyzes the volume of premium written concluded through the distributional channel of bancassurance, and eventually compares expense ratios of the selected insurance companies with the average value on Czech insurance market between 2012 and 2016. Expense ratio of life insurance in both insurance companies shows lower values than the average value on the Czech insurance market. The same applies to total insurance. The research confirms that Komerční pojišťovna shows lower average value of expense ratio than ČSOB pojišťovna.

Comparison of Analysis Deviation Methods for the Multiplicative Operations

Comparison of Analysis Deviation Methods for the Multiplicative Operations
(Comparison of Analysis Deviation Methods for the Multiplicative Operations)

Author(s):Barbora Ptáčková, Dagmar Richtarová
Language:English
Subject(s):Business Economy / Management, Methodology and research technology, Accounting - Business Administration
Page Range:559-565
No. of Pages:8
Keywords:financial performance; analysis of deviations; pyramidal decomposition; return on equity;
Summary/Abstract:This paper is dedicated to comparison of analysis deviation methods for the multiplicative operations. Evaluation of financial performance belongs to key activities of each company. The importance of the performance concept is widely recognized, it is one of the tools, knowing which helps to manage a company efficiently. Decomposition analysis is also very important. Decomposition analysis helps to analyze the factors affecting selected key measures and quantify their impact on the key measures. In this paper five basic methods of analysis of deviations will be compare – gradual change method, decomposition method with a residue, logarithmic method, functional method and integral method. The aim of this paper is to compare analysis deviation methods for the multiplicative operations used for quantification of the influence of the component indicators to base indicator and verify if using of these five methods leads to the same results. Methods of analysis of deviations will be applied to return on equity (ROE) indicator of manufacturing industry of the Czech Republic and according these five methods main factors will be find and influence of these factors will be quantified. Annual data will be taken from Ministry of industry of the Czech Republic.

Beliefs in Cryptocurrency: Exploring the Relationship between Sentiment and Bitcoin

Beliefs in Cryptocurrency: Exploring the Relationship between Sentiment and Bitcoin
(Beliefs in Cryptocurrency: Exploring the Relationship between Sentiment and Bitcoin)

Author(s):Zuzana Rakovská
Language:English
Subject(s):Business Economy / Management, Financial Markets, ICT Information and Communications Technologies
Page Range:567-574
No. of Pages:8
Keywords:Bitcoin; sentiment; Sentix; cryptocurrency; impulse-response;
Summary/Abstract:The rise of the Internet changed the way how financial markets work. Due to user generated content, quite everybody might contribute to the large set of information and the exchange of news happens faster than ever. An important variable in such new era is sentiment, which causes market participants to act on noisy signals from Internet as they were valid inputs. Importantly, sentiment is considered the crucial ingredient in price formation of now increasingly attractive digital currencies. Investors' beliefs affect exchange rates of those currencies considerably simply because of lack of fundamentals and regulation. In this paper we will examine the relationship between sentiment and price of the most popular cryptocurrency, Bitcoin. We will employ three measures of sentiment constructed by Sentix survey with aim to explore the effect of both institutional and individual investor's sentiment as well as overall sentiment of the community.

The Current Problems of the Eurozone and the Future Transformation of the European Union

The Current Problems of the Eurozone and the Future Transformation of the European Union
(The Current Problems of the Eurozone and the Future Transformation of the European Union)

Author(s):Oldřich Rejnuš
Language:English
Subject(s):Business Economy / Management, Economic policy, EU-Accession / EU-DEvelopment, Fiscal Politics / Budgeting
Page Range:575-579
No. of Pages:8
Keywords:European Union; Eurozone; fiscal and monetary regulation; central banks;
Summary/Abstract:The paper deals with the problems of contemporary management of the European Union, with focus on economic development of countries, associated in the European Economic and Monetary Union, using common currency. Its goal is to evaluate the ways of fiscal management of the European Union and monetary regulation, carried out by the European Central Bank, with focus on their efficiency and achievements. As there are, apart from economic problems, a number of other problem zones, directly or indirectly connected with analyzed economic problems, they are briefly specified in the paper, too. In conclusion, the influence of current way of management of the European Union on the development of individual states, with special focus on European Economic and Monetary Union states, so called “Eurozone” is evaluated. We are not going to evaluate only economic situation of individual countries; we want to assess a number of other factors, interconnected with economic development and significantly influencing compactness of European Union countries.

Comparative Analysis of Financing Sources in Domestic and Foreign Enterprises in Poland

Comparative Analysis of Financing Sources in Domestic and Foreign Enterprises in Poland
(Comparative Analysis of Financing Sources in Domestic and Foreign Enterprises in Poland)

Author(s):Jerzy Różański
Language:English
Subject(s):Business Economy / Management, Accounting - Business Administration
Page Range:583-590
No. of Pages:8
Keywords:financing sources; domestic and foreign enterprises; parent company; daughter company; criteria for financing sources;
Summary/Abstract:Scope of activity of domestic enterprises and foreign enterprises is different. The foreign enterprises act in more than only one country and that is why they have specific capital structure and specific sources of financing. It confirms polish and international literature. The aim of this article is to compare sources of financing in domestic and foreign small and medium enterprises in Poland. The point is whether the differences between the structure of the financing sources of enterprises operating on an international scale and enterprises operating only within the borders of one country give the first group of enterprises a competitive advantage over the latter. The research was conducted in years 2008-2017 in 300 branches of international enterprises in Poland and in 300 domestic enterprises, using documents prepared by enterprises and questionnaire of inquiry. The research procedure was as follows. After a random selection of enterprises (stratified random sampling with division into small and medium enterprises) and collecting basic data on the selected enterprises from the register of enterprises, a specialized unit dealing with interviews and surveys of enterprises was engaged. Next, employees of this unit met with the managers appointed by the management board of the selected companies and helped them to complete the questionnaire prepared by the author in each company's headquarters. This resulted in 100% of responses in the selected companies that were representatives of the larger group. The empirical findings suggest the differences between sources of financing. The average, in this period, foreign enterprises used mainly two basic sources of financing bank credit and funds created by mother enterprise. They took into account financing by retained profit and venture-capital funds.

Profitability of Selected Technical Analysis Indicators

Profitability of Selected Technical Analysis Indicators
(Profitability of Selected Technical Analysis Indicators)

Author(s):Pavla Říhová, Milan Svoboda
Language:English
Subject(s):Methodology and research technology, Transformation Period (1990 - 2010), Present Times (2010 - today), Accounting - Business Administration
Page Range:591-598
No. of Pages:8
Keywords:Markov chain analysis; technical analysis; MACD; OBV; RSI;
Summary/Abstract:This empirical study is another part of our long-term research that deals with stochastic modelling of a short-term share price development. We use Markov Chain Analysis (MCA) to predict the share price development. The principal of this method consists in finding such states in which there is a high probability of changing the tertiary trend. These states are then used to generate buy and sell signals. The aim of this study is to compare the profitability of a business strategy using MCA with varying state space with the selected indicators of technical analysis. The indicators that are often recommended in traders´ articles, i.e. MACD, RSI and OBV, have been selected for this comparison. The basic success rate of individual methods is to overcome the profitability of the Buy & Hold (B&H) passive strategy, profitability of which is calculated as well. The study was performed using historical daily prices (open and close) of the ČEZ´s shares for a period of 12 years; from the beginning of 2006 until the end of 2017 (3 010 trading days). Based on the results of some selected technical indicators it can be stated that none of them outperforms the B&H strategy in the long term, while the models based on MCA are able to outperform the B&H strategy. If we include fees, the trading strategy using the MCA is unprofitable. Only trading based on the RSI would bring a positive appreciation and slightly outperform the B&H strategy.

The Influence of Accounting for Goodwill on the Bottom Line of Business Corporations

The Influence of Accounting for Goodwill on the Bottom Line of Business Corporations
(The Influence of Accounting for Goodwill on the Bottom Line of Business Corporations)

Author(s):Jaroslav Sedláček, Filip Hampl, Elena Láncošová
Language:English
Subject(s):Business Economy / Management, Transformation Period (1990 - 2010), Present Times (2010 - today), Accounting - Business Administration
Page Range:599-607
No. of Pages:9
Keywords:correlation; Czech Accounting Standards (CAS); goodwill; intangible assets; International Financial Reporting Standards (IFRS);
Summary/Abstract:The paper is dedicated to methods of accounting for goodwill and their relationship to the bottom line of business corporations. Methodically it is based on the comparison of Czech and international accounting rules. Empirical research is conducted on business companies operating in the Czech Republic in the period from 2007 to 2016. Differences and connections between intangible assets including goodwill and performance indicator represented by earnings before interests and taxes (EBIT) reported in accordance with the Czech Accounting Standards (CAS) and the International Financial Reporting Standards (IFRS) are examined. Particularly, Spearman’s correlation coefficient and F-test are used for hypothesis testing. It was identified a lagged relationship between EBIT and the index indicator of acquired intangible/tangible assets and concluded that approach of CAS and IFRS regarding revaluation of goodwill is not comparable in terms of variability and predictability.

General Data Protection Regulation in the Context of Municipalities

General Data Protection Regulation in the Context of Municipalities
(General Data Protection Regulation in the Context of Municipalities)

Author(s):Pavel Sedláček, Miroslav Svoboda
Language:English
Subject(s):Public Administration, EU-Accession / EU-DEvelopment, Accounting - Business Administration
Page Range:608-612
No. of Pages:5
Keywords:GDPR; data protection; EU; regulation; municipality;
Summary/Abstract:The aim of this paper is to analyse the impact of General Data Protection Regulation (GDPR) and implementation costs concerning municipalities. This regulation enforceable on 25th May 2018 aims primarily to provide control to EU citizens over their personal data, unifying the regulation within all EU members. This regulation aggregates new costs and duties for all subjects gathering personal data. This paper depicts the duties and changes newly commencing and possibilities of their implementation. Changes are demonstrated on an example of one municipality, particular needs of change and total costs of implementation are estimated for this subject. Comparing this subject to others, we can make an assumption of total costs of GDPR implementation in Czech Republic in the field of municipalities.

Syndicated Loan Market Germany: Deep Dive into Role Allocation

Syndicated Loan Market Germany: Deep Dive into Role Allocation
(Syndicated Loan Market Germany: Deep Dive into Role Allocation)

Author(s):Ilja Schaab, Eric Frère, Alexander Zureck
Language:English
Subject(s):Transformation Period (1990 - 2010), Present Times (2010 - today), Financial Markets
Page Range:613-620
No. of Pages:8
Keywords:Syndicated Loan Market; Mandated Lead Arranger; Bookrunner; Determinants Role Allocation;
Summary/Abstract:The selection and mandate of capable partners in a syndicate loan transaction is essential to a successful realization. However, financial managers have not only to decide which banks but also how many banks should be involved in the transaction at hand to generate an optimal cost-benefit-ratio. While other studies have investigated the impact of arranger reputation on the syndicate structure, this paper focuses on the identification of significant transaction-related determinants of mandate allocation on the syndicated loan market in Germany. The analysis of the 2,161 data sets from transactions between 2001 and 2017 is conducted by the ordinary least squares method. The findings show that the transaction volumes have a significant positive impact on the number of mandated banks, whereas the complexity of the transaction, represented by the number and type of facilities as well as the total allocation of arranger titles, has a significantly negative impact on the mandate allocation. Furthermore, the study reveals a structural break in the strategy of role allocation in the market which occurs in the year 2009 during the financial crisis. Ever since, the allocation of MLA and Bookrunner titles increased significantly.

Backtesting Expected Shortfall – Is There a Method Suitable for Middle-sized Banks?

Backtesting Expected Shortfall – Is There a Method Suitable for Middle-sized Banks?
(Backtesting Expected Shortfall – Is There a Method Suitable for Middle-sized Banks?)

Author(s):Eugenia Schmitt
Language:English
Subject(s):Business Economy / Management, Transformation Period (1990 - 2010), Financial Markets
Page Range:621-628
No. of Pages:8
Keywords:risk management; regulation; expected shortfall; backtesting; tail risk;
Summary/Abstract:The financial crisis 2008 revealed weaknesses in the valuation and capital backing for market risks. The new regulatory requirements, the Fundamental Review of the Trading Book (FRTB), is a reaction of the Basel Committee on Banking Supervision and should create transparency based on a unification of market risk criteria to be met by all banks. One of the novelties is the move from Value at Risk (VaR) to Expected Shortfall (ES) as the standard for measuring risk and calculating capital. It is motivated by better theoretical properties of ES as a risk measure. Especially, VaR doesn’t account for “tail risk”. ES in contrast captures high-value low-probability events and has other advantages too. At the same time, ES has been criticized for unavailability of simple tools for its validation, for possibilities of backtesting. Because backtesting is one of the key quantitative tools used to assess the conservativeness of the risk measurement methodology, estimation techniques are being constantly improved. This article shows the current, new methods for backtesting ES reviewed in literature and discuss which methods are appropriate to implement in middle-sized banks. ES will be necessary for internal validation and for regulatory control. Hence, practical methods for backtesting the ES are of particular interest.

Profitability of Sector Mutual Funds and ETFs during Market Development

Profitability of Sector Mutual Funds and ETFs during Market Development
(Profitability of Sector Mutual Funds and ETFs during Market Development)

Author(s):Martin Širůček, Jan Vystoupil, Petr Strejček
Language:English
Subject(s):Business Economy / Management, Health and medicine and law, Financial Markets, ICT Information and Communications Technologies
Page Range:629-638
No. of Pages:10
Keywords:ETF; mutual fund; Sharpe ratio; standard deviation; tracking error;
Summary/Abstract:Paper is focused on the profitability of investment into IT, finance, healthcare and consumer goods oriented active and passive mutual funds and ETFs and its profit/loss on growing, stagnant and decreasing market. Attention is also focused on purpose to set a recommendation for investors what instrument bring higher return/lower loss on growing or decreasing market and if investor can expect different results according to the sector orientation, like what sector is more sensitive on bullish or bearish trend. Our result show that ETF nor passive mutual funds wasn´t able to beat the market, where sector index brings in all situations better results than these investments. On bearish trend all sector ETFs and passive mutual funds bring same results as sector index, better results bring only active managed mutual funds. The lowest loss during this period brings healthcare active managed mutual funds. On bullish/stagnant market was pretty the situation the same, but on the growing market passive funds and ETF are more profitable than active mutual funds.

Legal Background for a Different Expert Assessments of a Business Enterprise Belonging to a Commercial Company and of a Business Share in a Commercial Company

Legal Background for a Different Expert Assessments of a Business Enterprise Belonging to a Commercial Company and of a Business Share in a Commercial Company
(Legal Background for a Different Expert Assessments of a Business Enterprise Belonging to a Commercial Company and of a Business Share in a Commercial Company)

Author(s):Roman Skalicky
Language:English
Subject(s):Business Economy / Management, Commercial Law
Page Range:639-645
No. of Pages:7
Keywords:expert witness valuation; business enterprise; business share; corporate name; brand;
Summary/Abstract:The role of an expert witness is to provide the court with an independent and neutral assessment (e. g. valuation) based on his expertise. The aim of this paper is to define legal background of a business enterprise (belonging to a commercial company) and a business share (in a commercial company) valuation within the legal system of the Czech Republic. For this purpose, the paper examines the legal nature of a business enterprise and a business share and the case of their purchases that might require an expert valuation, compares them and defines the differences between them influencing expert assessments so that it can subsequently result in a reliable valuation by an expert witness. The most significant differences are apparently associated with public claims and a corporate name.

The Financialization and Operating Performance of Non-financial Companies Listed on the Warsaw Stock Exchange

The Financialization and Operating Performance of Non-financial Companies Listed on the Warsaw Stock Exchange
(The Financialization and Operating Performance of Non-financial Companies Listed on the Warsaw Stock Exchange)

Author(s):Błażej Socha, Dariusz Urban
Language:English
Subject(s):Business Economy / Management, Economic history, Present Times (2010 - today), Financial Markets
Page Range:646-652
No. of Pages:7
Keywords:financialization; ratios of financialization; operating activity performance;
Summary/Abstract:This paper deals with the issue of financialization of companies. The financialization reflects the growing asymmetry between production and exchange processes, in particular regarding the financial component of the exchange process. This asymmetry was revealed along with gradual changes in the financial behavior of nonfinancial enterprises, banks and households. The indication of this transformation process has been increasing the profit generated through financial transactions instead of operating activities. The main goal of this article was to answer the question about the coefficient between the level of financialization and the operating performance of companies from Poland. The research sample consists of the listed non-financial companies and the research period covers 2011-2017. The authors used calculated on their own synthetic indicators of company financialization reflecting their financial as well as investment performance and financial indicators measuring operating activity performance. In order to achieve the research goal, a standard statistical analysis of results was performed and correlation coefficients were used to measure the strength and the direction of association that exists between the level of financialization and the operating performance of companies. The empirical findings suggest the existence of differences in terms of operating activity performance (e.g. EBITDA Margin, EBITDA/Total Assets, Assets Turnover, Revenue/Working Capital) among companies with different level of financialization. It also suggests that financialization reflecting investment performance interact with operating activity performance differently to financialization reflecting financial performance.

The Effect of the Accounting Hocus–Pocus on the Management Earnings Forecast Precision in the IPO

The Effect of the Accounting Hocus–Pocus on the Management Earnings Forecast Precision in the IPO
(The Effect of the Accounting Hocus–Pocus on the Management Earnings Forecast Precision in the IPO)

Author(s):Tomasz Sosnowski, Anna Wawryszuk–Misztal
Language:English
Subject(s):Business Economy / Management, Transformation Period (1990 - 2010), Present Times (2010 - today), Accounting - Business Administration
Page Range:653-661
No. of Pages:9
Keywords:IPO; forecast error; real earnings management; discretionary accruals;
Summary/Abstract:Issuers of initial public offerings can make a voluntary decision to post the earnings forecast in the prospectus. This paper explores whether managers of IPO firms take intentional action in the form of earnings management to reduce the forecast error and thereby improve the quality of such forward looking financial information revealed in the going public process. Using a sample of 87 IPOs from Warsaw Stock Exchange between 2006 and 2015 we find that, generally, managers of the new listed companies use discretionary accruals and abnormal cash flows from operations in the periods around the IPO to improve the accuracy of the earnings forecast disclosed in the IPO prospectus. Real earnings management is likely to take place in the year preceding IPO and accruals-based earnings management is used in the IPO and following year.

Preliminary Results of Non-bank Consumer Credit Providers in the Professional Qualifications Test by the Act No. 257/2016 Coll., on Consumer Credit

Preliminary Results of Non-bank Consumer Credit Providers in the Professional Qualifications Test by the Act No. 257/2016 Coll., on Consumer Credit
(Preliminary Results of Non-bank Consumer Credit Providers in the Professional Qualifications Test by the Act No. 257/2016 Coll., on Consumer Credit)

Author(s):Ivan Soukal, Eva Hamplova
Language:English
Subject(s):Financial Markets, Socio-Economic Research
Page Range:662-669
No. of Pages:8
Keywords:consumer credit; act no. 257/2016 Coll.; qualification test; non-bank financial institution;
Summary/Abstract:The new Act No. 257/2016 Coll., on consumer credit states obligatory duty for consumer credit providers and intermediaries to ensure and prove the professional qualification level of all employees involved in the provision and intermediation of a consumer credit. Qualification can be proven by the Act No. 257/2016 Coll only at accredited institutions. Such institutions provide a testing based on questions prepared by the market regulator and supervisor – the Czech national bank. No one is allowed to provide or intermediate a consumer credit without a successful test pass at an accredited institution. We analyzed the test results of 287 employees of two medium-sized non-bank financial institutions who took the final qualification test at an accredited institution. The goal is to present the test results so far and to find whether gender and age are factors of the test score. We set four main and three auxiliary hypotheses regarding an effect of gender and age variable on the test performance. We find that neither of the variables is a factor. Although some level of variance is present in a more detailed analysis, it is not statistically significant. Therefore, we claim that regarding the test by the act no. 257/2016 Coll. on Consumer Credit the results are independent of age or gender of an employee. Our result was unexpected concerning the age variable. In a discussion, we explain that results might be biased by “early-takers” employees. Therefore, we expect an increase in test results variance and change in the test result distribution skewness in a future as more regular employees will participate.

The Role of Nonfinancial Indicators in the Process of Credit Risk Assessment

The Role of Nonfinancial Indicators in the Process of Credit Risk Assessment
(The Role of Nonfinancial Indicators in the Process of Credit Risk Assessment)

Author(s):Martina Sponerová, Miroslav Svoboda, Miroslav Sponer
Language:English
Subject(s):Business Economy / Management, Present Times (2010 - today), Financial Markets
Page Range:670-680
No. of Pages:11
Keywords:credit risk; bankruptcy prediction; SME; nonfinancial indicator;
Summary/Abstract:Credit risk management is closely related to the bankruptcy prediction and even it was intensively investigated by the banking industry it is still at the forefront of researchers. There is a pressure on financial institutions to still improve their credit risk management system to eliminate credit risk which is one of the most significant financial risks in the banking industry. Many research studies, scientific articles and publications are still trying to find the best method to predict bankruptcy through different bankruptcy models. The reviews from the last years show that using only financial data is not sufficient to predict bankruptcy precisely and some of the researchers also include nonfinancial indicators to their models. The aim of this article is to find which of the nonfinancial indicators have the most significant prediction power to predict failure of Czech small and middle enterprises (SMEs) based on the exclusive nonfinancial data from a bank. We have investigated around 1000 companies from the SMEs segment, of which 100 failed during the period 2010 – 2016. The most important nonfinancial indicators from the credit risk point of view were found by using logistic regression.

The Recent History of E-commerce in Poland and the Perspectives for Online Sale Growth in Future.

The Recent History of E-commerce in Poland and the Perspectives for Online Sale Growth in Future.
(The Recent History of E-commerce in Poland and the Perspectives for Online Sale Growth in Future.)

Author(s):Anna Sroczyńska-Baron
Language:English
Subject(s):Business Economy / Management, ICT Information and Communications Technologies
Page Range:681-688
No. of Pages:8
Keywords:e-commerce; online shopping; TOPSIS;
Summary/Abstract:We have just entered an epochal period of change in the word of traditional markets - the period that is characterized by the great development of e-commerce. Thanks to the great development of IT technologies, the concept of e-commerce got a new importance. Online shops and online auctions are the significant part of e-commerce. They are more and more popular all over the world. There are a lot of advantages of this form of shopping for both clients - for example time saving or just cheaper price, and sellers - for example cost reductions or bigger number of potential clients. Of course there are also some important disadvantages but it is visible that the problems are being solved slowly. The main aim of this work is to examine the position of e-commerce in Poland, to observe the changes in its structure in a few last years and to understand the influence of some factors on the dynamics of online sale growth with the use of statistical tools. The examination shows that Poland is not even in respect of opportunities for e-commerce but the differences between leaders and the rest of the country are decreasing. Money, access to Internet and computer are not decisive for the development of online shopping.

The Financial and Institutional Environment for Sustainable Economic Growth of Developing Countries: the Case of Western Balkan

The Financial and Institutional Environment for Sustainable Economic Growth of Developing Countries: the Case of Western Balkan
(The Financial and Institutional Environment for Sustainable Economic Growth of Developing Countries: the Case of Western Balkan)

Author(s):Jelena Stanković, Evica Petrović, Ksenija Denčić-Mihajlov
Language:English
Subject(s):National Economy, Developing nations, Economic development
Page Range:689-696
No. of Pages:8
Keywords:financial development; institutional development, sustainability; economic growth; developing countries;
Summary/Abstract:The economic growth and its sustainability have attracted significant interest of academics and policy makers in recent decades. Faster economic growth observed in developing countries has been associated with capital mobility. Therefore, the first aim of this study is to examine the finance-growth link and effectiveness of financial systems in promoting sustainable economic growth in developing countries. On the other hand, developing countries have experienced vast changes in their economic and institutional environment in order to integrate with the world economy. Thus, the second aim of this study is to examine the quality of the institutional environment and its role in providing conditions for sustainable growth in developing countries. The proposed analyses are conducted on the sample of Western Balkan countries using indicators provided by the World Bank database. According to the results of panel data analysis the level of financial development, especially the level of banking sector development, significantly influences the level of economic growth. It can be concluded that international capital flows are not the main determinant of the growth rate of GDP in observed developing countries as well as that financial development leads to economic growth.

Call to Theorize Digital Information Technology Due Diligence: Analysis of Research Gaps for the Subject of Information Technology Due Diligence in Mergers and Acquisitions

Call to Theorize Digital Information Technology Due Diligence: Analysis of Research Gaps for the Subject of Information Technology Due Diligence in Mergers and Acquisitions
(Call to Theorize Digital Information Technology Due Diligence: Analysis of Research Gaps for the Subject of Information Technology Due Diligence in Mergers and Acquisitions)

Author(s):Dirk Stein, Alexander Zureck, Tina Jäger
Language:English
Subject(s):Business Economy / Management, ICT Information and Communications Technologies
Page Range:697-707
No. of Pages:11
Keywords:information technology; due diligence; Merger & Acquisition; corporate valuation; risk management; digital due diligence;
Summary/Abstract:The role of information technology in mergers and acquisitions has gained increased importance in recent times due to digitalization. Beside its importance for value creating processes within an organization, information technology can be more and more regarded as a core asset, for which sound valuation is necessary in order to determine any risks and support of assessing a adequate acquisition price for information or digital technology in merger and acquisition transactions. This paper identifies five dimensions of a due diligence for information technology. These dimensions for assessment for the research gap are the technological scope setting and the respective planning and execution process for a information technology due diligence, the dimension of the interrelation to other due diligence audit fields as well as the assessment of previous research approaches in the information technology due diligence audit field and the potential impact of digitalization on planning and execution of information technology due diligence. The before mentioned five dimensions represents the research analysis grid of this article and elaborates issues in this regards the current state of research on the topic as the main result of this article.

Influence of Capital Market on the US Unemployment and GDP

Influence of Capital Market on the US Unemployment and GDP
(Influence of Capital Market on the US Unemployment and GDP)

Author(s):Erik Suchý, Michal Šoltés
Language:English
Subject(s):National Economy, Economic development, Financial Markets, Socio-Economic Research
Page Range:708-714
No. of Pages:7
Keywords:capital market; stock market; stocks; unemployment; GDP;
Summary/Abstract:In this paper we analyze the size of the US capital market and its attributes. Following the 2008 economic crisis, many countries’ economies or even whole European Union and US were in recession. Unemployment rate increased, GDP declined and some businesses bankrupted, mainly banks. In order to support economic growth, countries have taken various steps such as quantitative easing, interest rate cuts, investment incentives etc. The US market has recovered from the crisis sooner than rest of the world, even though the trigger for the crisis was in the US. The US economy is considered to be the most developed, as it has a huge banking and capital market. The banking sector or mortgages market to be concrete was the trigger for the crisis, but the capital sector can be considered as a support system in the rebuilding of the US economy. In our paper we deal with the US capital market, which is the largest in the world and supports the US economy and therefore employment, GDP, economic growth, capital inflows and more. The size and usability of the US capital market is unparalleled and therefore its aspects need to be further explored. The European Union has one of the main objectives of building a capital markets union on the US image where capital markets operate at a much better level. For this reason, our research addresses various indicators of the US capital market and their impact on unemployment and GDP in the US.

Identification of Financial Strategy in E-commerce

Identification of Financial Strategy in E-commerce
(Identification of Financial Strategy in E-commerce)

Author(s):Veronika Svatošová, Sylva Chalupová, Petra Dvorakova
Language:English
Subject(s):Business Economy / Management, ICT Information and Communications Technologies
Page Range:715-724
No. of Pages:10
Keywords:e-commerce; financial strategy; situational and financial analysis; Vensim program; financial strategy model;
Summary/Abstract:The researches and practice declare the strategic key factor of long-term business success is considered to be strategic approach to financial management along with proposing and implementing financial strategy. However, this area explored is often among businesses deeply underestimated. The current researches focus on the modern aspects of e-commerce, nevertheless, no impact is given to financial strategy in e-commerce. Therefore, this paper deals with determining the financial strategy in e-commerce. The main objective of paper is to identify the financial strategy of selected enterprises primarily focused on e-commerce. The research sample of enterprises involved to the survey is selected based on the following restrictive criteria: headquarter of enterprise in the Czech Republic, legal form of business joint stock company, existence of enterprise in e-commerce minimum 5 years, main business area B2C market, enterprises trading mostly electronically selling goods. The main research methods are following: analysis of financial statements of selected enterprises, selected methods of situational analysis and financial analysis and selected methods of descriptive statistics and financial strategy model simulating in Vensim program. Input data is used for the year 2016 compared to the year 2011, i.e. observing the development in 5 years. Findings identified the selected enterprises apply in most cases a conservative financial strategy (i.e. strategy of maximum liquidity). The conclusion of paper is based also on proposing the series of recommendations for effective creating and implementing financial strategy in e-commerce with a help of dynamic financial strategy model that could support the long-term competitive development of business in e-commerce. This model simulates changes of conservative financial strategy into aggressive financial strategy focusing on maximizing profitability during next 5 years, especially during the period of rapid economic growth and massive e-commerce development.

Qualitative Indicators (Soft-facts) in Internal Rating Systems

Qualitative Indicators (Soft-facts) in Internal Rating Systems
(Qualitative Indicators (Soft-facts) in Internal Rating Systems)

Author(s):Martin Svítil
Language:English
Subject(s):Business Economy / Management, Evaluation research, Accounting - Business Administration
Page Range:725-732
No. of Pages:8
Keywords:Rating; Risk Management; Soft-Facts; Qualitative factors;
Summary/Abstract:The article builds on last year's work, which compared internal rating systems of three banks from the German-speaking region. This year's paper deals in detail with the analysis of qualitative indicators (soft - facts), which is one of the two main components of rating systems of banking clients. The qualitative indicators (soft - facts) have different wage in the considered rating systems, although in all of them the wage is lower than 50% and / or the ability of soft-facts to change the overall rating score is limited. On the other hand, in all cases the importance of qualitative factors is significant enough to pay attention to them. The research is focused on the rating of business entities, more precisely the corporate, (especially limited liability companies or joint-stock companies). It does not deal with the rating of natural persons or non-profit organizations, municipalities etc. The procedure of collecting empirical data as well as data from relevant literature, their assessment according to the criteria of verifiability and relevance and the application of the induction method was used and a generalization of conclusions was subsequently made. The result of the research shows that two categories of qualitative indicators (soft - facts) are present in all considered rating systems: (i) quality of company’s management and / or strategy and (ii) market, where the evaluated company is present. Another regularly present qualitative indicator is (iii) accounting or related indicators like information system or audit quality. On the other hand, the use of the factor (iv) relationship with the bank (or similar) is quite different across the surveyed rating systems. The roles of members of staff in making of the rating are also mentioned.

Interest Rate Risk in the Banking Book (IRRBB) – Comparing Variance/Covariance with Historical Simulation and Several Copula Functions with Focus on the Actual EBA Guidelines

Interest Rate Risk in the Banking Book (IRRBB) – Comparing Variance/Covariance with Historical Simulation and Several Copula Functions with Focus on the Actual EBA Guidelines
(Interest Rate Risk in the Banking Book (IRRBB) – Comparing Variance/Covariance with Historical Simulation and Several Copula Functions with Focus on the Actual EBA Guidelines)

Author(s):Martin Svoboda, Svend Reuse, Annika Rüder, Noel Boka
Language:English
Subject(s):Business Economy / Management, Accounting - Business Administration
Page Range:733-742
No. of Pages:10
Keywords:Value at Risk; Copula; EBA; IRRBB;
Summary/Abstract:Interest rate risk and its measurement are important for banks worldwide. Strategic maturity transformation positions in combination with the historical low level of yields leads to the question, whether the standard risk measurement models as variance/covariance or historical simulation lead do adequate results. This article answers this question and offers an empirical analysis in which several alternative Copula functions are used to quantify interest rate risk. The results are compared to the EBA guidelines on IRRBB. The aim is to show if the six interest rate risk scenarios that are defined by the EBA are an adequate measurement method.

Random Strategy Versus Technical Analysis Strategy: The Case of GBP/USD Intraday Trading

Random Strategy Versus Technical Analysis Strategy: The Case of GBP/USD Intraday Trading
(Random Strategy Versus Technical Analysis Strategy: The Case of GBP/USD Intraday Trading)

Author(s):Miroslav Svoboda, Tomáš Plíhal, Pavel Sedláček
Language:English
Subject(s):Economic policy, International relations/trade, Financial Markets
Page Range:743-748
No. of Pages:6
Keywords:technical analysis; investment decisions; foreign exchange markets; currency markets; random strategy; backtesting;
Summary/Abstract:This paper provides a comparison between the strategy based on technical analysis and the strategy based on random trading on a highly liquid GBP/USD foreign exchange market. We analyze six months of data, and in every intraday trading session, only a single position will be opened. Technical analysis strategy uses essential indicator relative strength index (RSI). Every trading position will have the risk-reward ratio (RRR) 3 to 1. In addition, another trading positions on the GBP/USD currency pair will be opened at the same time each day, without technical analysis. The time of entry into position will be indicated by past high liquidity on a given currency pair at a given time with a similar risk-reward-ratio (RRR) 3 to 1. We want to answer the question whether it is preferable to use the technical analysis indicators or to open a trading position randomly in intraday trading. In other words, this article aims to compare the strategy of technical analysis and the random strategy in intraday trading concerning the profitability of these trades. On the basis of our preliminary results, we expect that the random strategy will show us higher profitability or lower loss ability than the strategies based on the technical analysis indicators in the observed period.

Business Entities and Loans in the Czech Republic

Business Entities and Loans in the Czech Republic
(Business Entities and Loans in the Czech Republic)

Author(s):Libuše Svobodová, Jaroslava Dittrichová
Language:English
Subject(s):Business Economy / Management, Present Times (2010 - today)
Page Range:749-756
No. of Pages:8
Keywords:comparison; development; loan; statistics; value;
Summary/Abstract:The aim of the article is to monitor and to analyze value and types of loans in the Czech Republic as a source of financing for business entities. The first section focused on statement of problem briefly describes the situation on the loan market. Main part is focused on results that analyzes the development of provided loans to entrepreneurial subjects in the Czech Republic. Interest is focused on the value of loans in the Czech currency and in foreign currency. Values and ratios of both sources of financing are compared in the article. Subsequently, the value of loans according to type of loan are analyzed. Data from the Czech National Bank were used to process the article. The results are clearly presented in processed graphs. Results show that entrepreneurs have used in the biggest value long-term loans instead short-term and medium-term loans to finance liabilities in recent years. Even in the context of increased foreign trade, the share of foreign currency financing is growing. Medium term loans have from 2010 the biggest ratio between Czech and medium currencies.

Recent Changes in the Polish Deposit Guarantee Scheme

Recent Changes in the Polish Deposit Guarantee Scheme
(Recent Changes in the Polish Deposit Guarantee Scheme)

Author(s):Łukasz Szewczyk
Language:English
Subject(s):Supranational / Global Economy, Financial Markets, EU-Legislation
Page Range:757-763
No. of Pages:7
Keywords:deposit guarantee scheme; global financial crisis; resolution; financial stability;
Summary/Abstract:Deposit guarantee scheme is an important pillar of every modern financial safety net. During the global financial crisis, those schemes have undergone significant changes, which were the result of the need to cope with challenges caused by the recent crisis. In Poland, deposit guarantee scheme, which was established in 1994, plays an important role in providing financial stability in the financial system. In the new financial rules, introduced by the EU Deposit Guarantee Scheme Directive (2014/49/EU), some important changes have been introduced into its functioning, to provide greater level of harmonization of solutions between systems within EU. The main objective of this study is to present the most important changes introduced into Polish deposit guarantee scheme and to show some of the possible consequences of these changes for the Polish banking sector. A main research method used in this paper will be critical analysis of the literature connected with this subject and reports issued by the Polish deposit guarantee scheme. Results of this research will help to understand current problems of deposit protection in the Polish banking system.

Profitability Determinants of Polish Outsourcing Service Enterprises from the Point of View of Top and Middle Management

Profitability Determinants of Polish Outsourcing Service Enterprises from the Point of View of Top and Middle Management
(Profitability Determinants of Polish Outsourcing Service Enterprises from the Point of View of Top and Middle Management)

Author(s):Rafał Szmajser, Mariusz Andrzejewski, Marcin Kędzior
Language:English
Subject(s):Business Economy / Management, Accounting - Business Administration
Page Range:764-772
No. of Pages:9
Keywords:corporate profitability; outsourcing service enterprises; technological factors; human factors; process factors; Poland;
Summary/Abstract:The aim of the article was empirical verification of the most important operational, human and technological factors affecting profitability of Polish outsourcing service enterprises from the point of view of top and middle management. The most important factors of their profitability were discussed and characterized. Among the statistically verified factors of profitability the following ones were differentiated: providing services from different geographical locations in the world, supporting business by technological solutions in a scope of automation and analytical solutions, a proper level of employee abilities and competences and their position classification determining profitability of outsourcing centers in the financial service sectors, programs of continuous process improvement (e.g. lean, six sigma), developing and procuring talents inside an organization, a greater possibility of scalability of the operating activity, supporting organizations to make mergers and takeovers, an appropriate price model, quickness of implementing changes, standardization and transformation of processes. The analysis was made for the outsourcing businesses in the financial service sector conducting their activity on the territory of Poland. According to the respondents the most important determinants of profitability influencing profitability of operating of the outsourcing centers are: standardization and automation, providing services from many locations, and an appropriate level of employee abilities and competences. The data were collected on the basis of specially prepared questionnaire. The empirical results were verified using ANOVA variance analysis.

Competitiveness of V4 Countries in the Field of Higher Education

Competitiveness of V4 Countries in the Field of Higher Education
(Competitiveness of V4 Countries in the Field of Higher Education)

Author(s):Elena Šira, Dana Kiseľáková, Beata Šofranková
Language:English
Subject(s):Higher Education , State/Government and Education
Page Range:773-779
No. of Pages:7
Keywords:V4 countries; higher education; Global Competitiveness Index;
Summary/Abstract:The aim of the article is to analyse the competitiveness of selected countries in the field of higher education. We choose countries from the group named V4 - the Czech Republic, The Slovak Republic, Hungary and Poland. From the organisations, that evaluate the competitiveness of the countries, we choose the World Economic Forum. This organisation published the Global Competitiveness Index. The fifth pillar of that index is dedicated to higher education and training. So we analyse the position of V4 countries in this 5th pillar during the 5 years period and try to show, which country is the most competitive in this pillar. In the next part of the article, we analyse other factors, which may affect the competitiveness in higher education. The dependence between selected indicators, the position in the 5th pillar of GCI is analysed according to position of the countries in world known ranking from the area of education.

Copulas and Credit Risk Models

Copulas and Credit Risk Models
(Copulas and Credit Risk Models)

Author(s):Yuan Tian
Language:English
Subject(s):Methodology and research technology, Financial Markets
Page Range:780-787
No. of Pages:8
Keywords:credit risk; copula; CreditMetrics™; distribution function; Value-at-Risk;
Summary/Abstract:The topic of this paper is copulas and credit risk models. Generally, there is a core implicit assumption of credit risk models that the critical variables are normally distributed, which is too simplified in the reality. There is no compelling reason for choosing the normal distribution. Therefore, the goal of this paper is to find out the real distributions based on the concept of copulas and then better quantify the credit risk. There is a portfolio that consists of ten bonds issued by quoted companies in the Frankfurt Stock Exchange (FSE) with a 10-million-euro total nominal value over one year, from January 9th, 2017 to January 8th, 2018. The credit risk of the portfolio is quantified under the framework of the CreditMetrics™ model, a typical industry example of the threshold models. Two main types of copulas include elliptical copulas and Archimedean copulas. The parameters of a parametric copula are estimated by MLE and then the copula is selected by computing AIC and BIC. Compared with the original CreditMetrics™ model with an assumption of normal distribution, the probability density curve obtained based on copulas are more right-tailed and the credit risk of the portfolio is better quantified.

Impact of Mergers on the Company Performance

Impact of Mergers on the Company Performance
(Impact of Mergers on the Company Performance)

Author(s):Petr Valouch, Josef Nešleha
Language:English
Subject(s):Business Economy / Management, Accounting - Business Administration
Page Range:788-793
No. of Pages:6
Keywords:Merger; impact; profitability; ROE; statistical test;
Summary/Abstract:The paper deals with the impact of a merger on the company financial profitability. A merger usually leads to a stronger position on the market as this is the most frequent reason why companies decide to venture into such a form of synergy. For the purposes of this research, the following criterion has been taken into account when defining the company performance: ROE (Return On Equity). The test is based on a comparison of the indicators at the moment of the merger and five years after the moment of the merger. To enhance the validity of the test, companies that experienced a merger and companies that have not experienced it are used. The usage of both of the files should help to confirm that the merger itself stands for the indicators improvement. In total, the data file consists of 277 merged companies and 232 companies that have never merged.

Technical Provisions As One of the Risk Management Modes of Commercial Insurance Companies Operating on the Czech Insurance Market

Technical Provisions As One of the Risk Management Modes of Commercial Insurance Companies Operating on the Czech Insurance Market
(Technical Provisions As One of the Risk Management Modes of Commercial Insurance Companies Operating on the Czech Insurance Market)

Author(s):Eva Vávrová, Lenka Přečková
Language:English
Subject(s):Business Economy / Management, Accounting - Business Administration
Page Range:794-802
No. of Pages:9
Keywords:commercial insurance company; creation and investment of technical provisions; insurance market; risk management; Solvency II Regulatory Directive;
Summary/Abstract:The aim of this paper is to identify differences between classical approaches to the creation and investment of technical provisions and the approaches resulting from the implementation of the Solvency II Regulatory Directive into insurance markets in the European Union member states. With regard to the interpreting the results of the analyses, the subsequent aim of this paper is to draw specific conclusions to evaluate the adequacy of the creation and investment of technical provisions in selected commercial insurance companies operating on the Czech insurance market and to propose recommendations in the case of identified deficiencies.

Activities Classification for Controlling Purposes in the State Administration Unit

Activities Classification for Controlling Purposes in the State Administration Unit
(Activities Classification for Controlling Purposes in the State Administration Unit)

Author(s):Jana Vodáková, Nela Sglundová
Language:English
Subject(s):Public Administration, Accounting - Business Administration
Page Range:803-809
No. of Pages:7
Keywords:controlling; management accounting; state administration; activity; public sector accounting;
Summary/Abstract:This paper deals with activities proceeding within the Ministry of Defence of the Czech Republic (MoD CR) included into the Czech state administration and their classifications for planning, budgeting and accounting purposes. The main aim of the paper is to analyze existing planning, budgeting and accounting classifications of activities and evaluate their mutual linkage and applicability for controlling purposes. Authors come to the conclusion that though planning, budgeting and accounting classifications are not identical at present they may be relatively easily modified and harmonized and so used for cost controlling purposes. Main data sources represent scientific articles, legal directives and regulations, internal directions and MoD CR internal databases. In the first part of the paper the authors analyze and compare planning, budgeting and accounting documentation, in the second part of the paper they select one representative planned activity and link it with its real costs utilizing MoD CR controlling software RON and Data cube.

Banking System Development and Economic Growth: Evidence from a Sample of High Income Countries and Low & Middle Income Countries

Banking System Development and Economic Growth: Evidence from a Sample of High Income Countries and Low & Middle Income Countries
(Banking System Development and Economic Growth: Evidence from a Sample of High Income Countries and Low & Middle Income Countries)

Author(s):Lukáš Vodička
Language:English
Subject(s):National Economy, Business Economy / Management, Economic history, Economic development, Transformation Period (1990 - 2010), Present Times (2010 - today)
Page Range:810-817
No. of Pages:8
Keywords:banking; GMM; economic growth;
Summary/Abstract:This paper evaluates the relationship between banking system development and economic growth using data from 141 countries over the 1998 – 2015 period. Observed countries are also divided into two groups: high income countries and low & middle income countries. The set of explaining determinants describes three characteristics of the banking system – depth, efficiency and stability. The data is collected from following databases: World Development Indicators, Global Financial Development, KOF Index of Globalization and Financial Access Survey. Two-step system GMM estimator is used to address the issue of endogeneity. Robustness of the obtained results is tested with fixed-effects estimator. Using these methods we find that bigger banking system per se does not foster economic output, however its quality does. In case of high-income countries greater effect of banking sector instability on economic growth is observed.

Equality In Old-Age Security In Poland

Equality In Old-Age Security In Poland
(Equality In Old-Age Security In Poland)

Author(s):Damian Walczak
Language:English
Subject(s):Gerontology, Socio-Economic Research
Page Range:818-824
No. of Pages:7
Keywords:equality; pension; social security; savings;
Summary/Abstract:Defining the scope and form of old-age security should be based, among other things, on the principles of social justice and equality. Equality is the manifestation, and the instantiation of social justice and it means the equal treatment of equals. Therefore, distribution, especially the one made in the pension system, does not have to be equal, but it is to serve everyone, so it has to be fair and based on the cooperation system. Unfortunately, many pension privileges in Poland are not implementing the principle of equality. The study analysed, on the basis of a nationwide survey conducted in 2016, public opinions on equality in the pension system. In addition, in the paper, I show expenditures for retirement benefits of privileged persons in the Polish pension system. The aim of the article is to present the equality in the pension system in Poland, both in the theoretical aspect, and in the practical aspect. The logistic regression method was applied while attempting to reach the research aim of this study. In the paper, also, the following research methods were applied: statistical analysis, economic analysis of the law and analysis of documents.

The Use of Different Methods of the Tax Base Estimation in Income Taxes in the Light of SAC Rulings in 2017 in Poland

The Use of Different Methods of the Tax Base Estimation in Income Taxes in the Light of SAC Rulings in 2017 in Poland
(The Use of Different Methods of the Tax Base Estimation in Income Taxes in the Light of SAC Rulings in 2017 in Poland)

Author(s):Radosław Witczak
Language:English
Subject(s):Economic policy, Government/Political systems, Public Finances, Fiscal Politics / Budgeting
Page Range:825-830
No. of Pages:6
Keywords:taxation; tax fraud; income taxes; the estimation of tax base; tax collection;
Summary/Abstract:Important issue for public finance is tax evasion. This problem concerns also income taxes. In order to protect the interests of the State Treasury and to ensure fair competition in the economy, measures must be available to prevent the occurrence of such attempts. One way to combat tax evasion is estimation of the tax base. The Polish legislation points out different methods of the tax base estimation. The provisions provide tax authorities with a list of six tax base estimation methods they can use. However, tax authorities may use other methods serving the same purpose, but the law (the Tax Ordinance Act) does not indicate what these methods should be. The aim of the article is to indicate methods of the tax base estimation used by the tax administration in the light of SAC rulings in 2017. The analyse of using the methods of estimating of tax base by the tax authorities was given. The scope of the analyse were different cases from the administrative court. The cases concerned different types of methods of tax estimation used by the tax administration. In all analysed cases the other methods than pointed out in the provisions were used. The implementation of rules concerning other methods of estimating of tax base was proposed.

Debt Capacity and Capital Structure of the Companies Managed by Overconfident CEO

Debt Capacity and Capital Structure of the Companies Managed by Overconfident CEO
(Debt Capacity and Capital Structure of the Companies Managed by Overconfident CEO)

Author(s):Elżbieta Wrońska-Bukalska
Language:English
Subject(s):Business Economy / Management, Present Times (2010 - today), Accounting - Business Administration
Page Range:831-838
No. of Pages:8
Keywords:overconfidence; capital structure; debt capacity;
Summary/Abstract:Overconfidence is one of the psychological biases that have impact on financial decisions. Still, as for financing decisions there is no consensus on the direction of the impact, and in assessing this - some research show using excessive debt while others debtconservatism. We, in turn, assume that inconsistency on the capital structure decisions of overconfident managers might be explained by debt capacity of the their companies. We think that companies managed by overconfident managers have lower debt capacity and, at the same time, they use a higher debt ratio than their debt capacity allows. We collected a unique sample composed of 145 non-listed companies and their financial data for the 2010-2015 period. We then divided the sample into two subsamples depending on managerial overconfidence. We found that debt capacity is lower for companies managed by overconfident managers. There are also differences in sources of debt capacity: for companies managed by overconfident managers the main source is size and tangibility. Moreover, companies managed by overconfident managers have lower debt ratio. This might indicate safe financing strategy, but using a low debt ratio means that companies managed by overconfident managers are constrained to use equity because they exhaust their debt capacity.

Application of Selected Machine Learning Methods to Companies’ Insolvency Prediction

Application of Selected Machine Learning Methods to Companies’ Insolvency Prediction
(Application of Selected Machine Learning Methods to Companies’ Insolvency Prediction)

Author(s):Joanna Wyrobek
Language:English
Subject(s):Business Economy / Management, Methodology and research technology, Transformation Period (1990 - 2010), Present Times (2010 - today)
Page Range:839-848
No. of Pages:10
Keywords:machine learning; bankruptcy prediction; corporate finance;
Summary/Abstract:The purpose of the paper was to test the efficiency of various modern machine learning methods on the representative sample of Polish companies for the time period 2008 – 2017. The novelty factor in the paper is that it uses a representative sample of companies, which seems to improve the efficiency of the models and that the training sample and the validation sample include data from different time periods and different companies (the training sample data covered the period of 2008 – 2013 and the validation sample covered the period 2014 – 217). The hypothesis verified in the paper is [H1] that: the most efficient algorithms in bankruptcy prediction are: Gradient Boosting Decision Trees and Random Decision Forest.

Methodical Approaches to Assessing the Budget Potential of the Region Taking into Account the Innovative Development of Hightech Industries

Methodical Approaches to Assessing the Budget Potential of the Region Taking into Account the Innovative Development of Hightech Industries
(Methodical Approaches to Assessing the Budget Potential of the Region Taking into Account the Innovative Development of Hightech Industries)

Author(s):Sergey N. Yashin, Nadezhda Yashina, Natalia N. PRONCHATOVA-RUBTSOVA, Oksana Kashina
Language:English
Subject(s):Business Economy / Management, Methodology and research technology, Fiscal Politics / Budgeting
Page Range:849-856
No. of Pages:8
Keywords:budget potential; innovative development; high-tech industries; consolidated standardized indicator; rating;
Summary/Abstract:The basis for successful social and economic regional development is a stable and flexible financial system. It is required to conduct state financial policy, taking into account the innovative character of changes in all spheres of life. It is necessary to find a balance between the effective functioning of the budget system in the conditions of economic volatility, limited financial resources, fierce competition and often unavailability of borrowed funds and the inevitable transition to the model of innovative development in the knowledge economy. The study aims at developing a methodology for assessing the region’s budget potential, taking into account the innovative development of high-tech industries to increase the population’s well-being. The authors developed a methodology for assessing the region’s budget potential, taking into account the innovative development of high-tech industries based on a number of principles and a specially developed system of indicators. Indicators should comprehensively characterize the region's budget potential from the standpoint of financial sustainability and the region's economic development through high-tech industries. It is proposed to form two blocks of indicators: "Revenues, Economy, Innovations" and "Expenses, Socio-Economic Indicators". The methods of economic, system analysis and mathematical statistics were used. Approbation of the methodology was carried out on the official open data of the Federal State Statistics Service and the Federal Treasury of Russia for 2016. Practical implementation of the methodology makes it possible to rank the regions on the basis of a consolidated standardized indicator of the region’s budget potential including the innovative development of high-tech industries. Monitoring the rank and analysis of the numerical value of the region's consolidated indicator allow: to establish that the problems of the region's budget potential development are related to the lack of a developed innovation environment and a unified productive system for managing budget resources; to develop effective managerial decisions considering innovative character’s transformations to increase the population’s well-being.

Methodical Approaches to the Formation of Model Budgets in order to Improve the Effectiveness of the Budget Process in Russia

Methodical Approaches to the Formation of Model Budgets in order to Improve the Effectiveness of the Budget Process in Russia
(Methodical Approaches to the Formation of Model Budgets in order to Improve the Effectiveness of the Budget Process in Russia)

Author(s):Nadezhda Yashina, Natalia N. PRONCHATOVA-RUBTSOVA, Sergey Petrov, Oksana Kashina
Language:English
Subject(s):Economic policy, Methodology and research technology, Fiscal Politics / Budgeting
Page Range:857-864
No. of Pages:8
Keywords:budget resources; effectiveness; model budget; inter-budgetary relations; integrated indicator;
Summary/Abstract:The purpose of the study is the formation of model budgets based on assessing the effectiveness of budget resources management of the territories for improving interbudgetary relations. A methodology for assessing the effectiveness of budget resources management of the territories, considering the formed indicators in order to develop the model budgets, is proposed. The integrated indicator of the effectiveness of budget resources management is adopted as a basic criterion for classifying budget stability, which will allow to determine the type of model budget for the purpose of forming inter-budgetary relations in the region. The methodological basis was the methods of economic, system analysis and mathematical statistics. The methodology has been tested on the official data of the Finance Ministry of the Nizhny Novgorod region for 2014-2016. The result of the assessment is the rating of municipalities, and two classes of model budgets are established. The first class is characterized: by high financial stability due to a growth of the distributions' norms of regulatory taxes to municipalities, increasing the share of own revenues to 80-90%, a reduction in subsidies, subventions, increased dotations, the possible growth of municipal borrowing; by norms of social standards per unit of consumers of budget services, established with an increased coefficient. The second class is characterized by sufficient financial stability of municipalities, requires a balanced approach to establishing the structure of income and financing of expenditures. This methodology will help to match the amount of expenditure obligations to the amount of disposable income and balanced budgets. The formation of model budgets will increase the responsibility of the regional state authorities and local governments for ensuring effective spending of funds, for creating a base for expanding their own revenue potential; will contribute to improving the budgetary process management effectiveness and the introduction of budgeting principles based on results.

European Financial Systems 2018 - Proceedings of the 15th International Scientific Conference European Financial Systems 2018 - Proceedings of the 15th International Scientific Conference

The Financial Analysis of the Education Support Fund: Recent Results from Slovakia

The Financial Analysis of the Education Support Fund: Recent Results from Slovakia (The Financial Analysis of the Education Support Fund: Recent Results from Slovakia)

Life Insurance in the Czech Republic: New Challenges?

Life Insurance in the Czech Republic: New Challenges? (Life Insurance in the Czech Republic: New Challenges?)

Corporate Bankruptcies in the Czech Republic: The Development Over the Last Decade

Corporate Bankruptcies in the Czech Republic: The Development Over the Last Decade (Corporate Bankruptcies in the Czech Republic: The Development Over the Last Decade)

Retirement Decisions of Seniors in Poland in the Light of the Qualitative Research

Retirement Decisions of Seniors in Poland in the Light of the Qualitative Research (Retirement Decisions of Seniors in Poland in the Light of the Qualitative Research)

Determination and Verification of the Key Assessment Indicators for the Insurance Market by Applying the Decomposition Multiattribute Methods and Regression Analysis

Fractal Dimension vs. Non-fractal Risk Measures – Correlation Analysis

Fractal Dimension vs. Non-fractal Risk Measures – Correlation Analysis (Fractal Dimension vs. Non-fractal Risk Measures – Correlation Analysis)

Measuring Efficiency in Clinical Departments Using the DEA Approach - A Case of the Polish Hospital

Measuring Efficiency in Clinical Departments Using the DEA Approach - A Case of the Polish Hospital (Measuring Efficiency in Clinical Departments Using the DEA Approach - A Case of the Polish Hospital)

The Impact of Educational Expenditures and Higher Education Attainment on Employment in V4 Countries

The Impact of Educational Expenditures and Higher Education Attainment on Employment in V4 Countries (The Impact of Educational Expenditures and Higher Education Attainment on Employment in V4 Countries)

Sustainable Finance Instruments' Risk - Green Bond Market Analysis

Sustainable Finance Instruments' Risk - Green Bond Market Analysis (Sustainable Finance Instruments' Risk - Green Bond Market Analysis)

Debt Literacy and Its Importance in the Czech Republic

Debt Literacy and Its Importance in the Czech Republic (Debt Literacy and Its Importance in the Czech Republic)

Patterns of Currency Co-movement: Changes in the Impact of Global Currencies

Patterns of Currency Co-movement: Changes in the Impact of Global Currencies (Patterns of Currency Co-movement: Changes in the Impact of Global Currencies)

Motor Vehicle Insurance in SMEs

Motor Vehicle Insurance in SMEs (Motor Vehicle Insurance in SMEs)

Ratio Bias under Conditions of Uncertainty – Experimental Results

Ratio Bias under Conditions of Uncertainty – Experimental Results (Ratio Bias under Conditions of Uncertainty – Experimental Results)

Actuarial Model for Pricing Disability Insurance Policy

Actuarial Model for Pricing Disability Insurance Policy (Actuarial Model for Pricing Disability Insurance Policy)

Effectivences of Commercial Banks in Poland versus Bank Tax

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Efficiency Hospitals in the Czech Republic: the Difference Between the Methods Used (Efficiency Hospitals in the Czech Republic: the Difference Between the Methods Used)

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Level of Industry Automation 4.0 in the Czech Republic and Impact on Unemployment (Level of Industry Automation 4.0 in the Czech Republic and Impact on Unemployment)

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Motives of Households for Saving in Poland (Motives of Households for Saving in Poland)

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The Relationship between Saving and Debt in Polish Households (The Relationship between Saving and Debt in Polish Households)

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The Selected Aspects of Foreign Trade in Central European Countries (The Selected Aspects of Foreign Trade in Central European Countries)

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European Financial Systems 2018 - Proceedings of the 15th International Scientific Conference

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(Effectivences of Commercial Banks in Poland versus Bank Tax)

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(Bitcoin Compared on Price, Liquidity and Volatility: Crypto “Currencies” or an Asset Class of Their Own?)

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(Specifics of the Reporting under International Accounting Standard IAS 41 Agriculture and its Usage on the Central European Stock Exchanges)

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(Efficiency Hospitals in the Czech Republic: the Difference Between the Methods Used)

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(Level of Industry Automation 4.0 in the Czech Republic and Impact on Unemployment)

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(Capital Creation Factors in Selected Banking Sectors of Europe)

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(How the Changes in Exchange Rate Affect the Turkish Economic Growth under Inflation Targeting Regime?)

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(The Efficiency of Health Systems in OECD Countries with Novel DEA Methodology)

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(Household Deposits’ Availability for Credit Institutions during Tensions on Funding Markets – A Case of the Euro Area Countries)

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(Motives of Households for Saving in Poland)

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(The Relationship between Saving and Debt in Polish Households)

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(The Selected Aspects of Foreign Trade in Central European Countries)

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(Labour Taxation in the European Union. Comparative Analysis and Conclusions for Poland)

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(Taxation of Consumption in Poland. Redistribution and Fiscal Effects)

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(Assessment of Factors Influencing of Final Corporate Income Tax Liabilities in Selected Sectors in the Czech Republic)

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(The Use of Backtesting in Assessment of the Value-at-Risk on Unites States, Great Britain and German Capital Markets)

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(Changes in Consumer Credit Market in Slovakia)

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(The Relationship between Debt and Equity in Social Economy Organizations – Polish Case)

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(The Role of Corporate Income Tax Differences on the Profit Shifting Behavior: Evidence from the Czech Republic)

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(Monetary Policy Normalization of the European Central Bank)

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(Internet shopping in the Czech Republic with the focus on the types of bought goods and services by consumers)

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(Investors’ Expectations, Price-Dividend Dependence and P/E Ratio for Common Stock: Specifics of Well-Developed Markets and Emerging Markets)

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(Long-term Stock Returns of Companies Implementing Diverse Dividend Policy: Evidence from Poland)

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(The Issue of Responsibility for Financial Security in Old Age and Additional Retirement Saving)

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(The Efficiency of Health Care Systems in OECD Countries. Does it Make a Difference?)

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(Going Public in Selected CEE Capital Markets: Empirical Evidence on IPO Volumes and Drivers)

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(Capital Market Determinants of Going Public: The Evidence from CEE Capital Markets)

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(Evaluation of Expense Ratio of Insurance Portfolios Belonging to Selected Insurance Companies Operating on Czech Insurance Market)

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(The Current Problems of the Eurozone and the Future Transformation of the European Union)