European Financial systems 2016. Proceedings of the 13th International Scientific Conference

Hedging of Natural Gas on Selected Markets

Hedging of Natural Gas on Selected Markets
(Hedging of Natural Gas on Selected Markets)

Author(s):Luděk Benada, Dagmar Linnertová
Language:English
Subject(s):Business Economy / Management, Energy and Environmental Studies, International relations/trade, Economic development
Page Range:15-20
No. of Pages:6
Keywords:hedging; hedge ratio; spot; futures; forward;
Summary/Abstract:The following study focuses on one of the key primary energy commodities in the modern society. Two independent and different regional markets for natural gas are compared from the hedging point of view. The market of considered commodity is unique in its characteristics. In the paper will be examined the possibility of price risk hedging on two different markets with distinct level of market maturity and characteristics. One of markets is represented by the system of endogenous price mechanism while the other one is based on price indexed mechanism. The analysis will be carried out on US and European market of natural gas. In both cases, the methodology will be focused the short hedge position.

Bankruptcies of Companies in the Czech Republic after New Financial Crisis

Bankruptcies of Companies in the Czech Republic after New Financial Crisis
(Bankruptcies of Companies in the Czech Republic after New Financial Crisis)

Author(s):Karina Benetti
Language:English
Subject(s):National Economy, Business Economy / Management, Micro-Economics, Economic development, Law on Economics, Accounting - Business Administration
Page Range:21-25
No. of Pages:5
Keywords:corporate insolvency proposals; corporate auditions; dependence analysis; financial health; ISO standards;
Summary/Abstract: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 meant for bankruptcies of companies is an important milestone, not only with regard to the number of bankrupt companies, but especially to the emergence of new ISO standards dealing with much needed risk management in business practice. The value of bankrupt companies was according to statistics since the beginning of the recent financial crisis until the end of 2008 in the amount of US $ 14.5 trillion, which is more than 145 times the amount for the Marshall Plan to rebuild Europe after World War II. In the Czech Republic from 2008 to 2012 to increase the number of corporate bankruptcies by 288%, but their numbers began from 2012 to decline. The aim of this paper is to analyze the number of corporate insolvency proposals and corporate auditions in the Czech Republic since the beginning of the recent financial crisis until the present (i.e. the last eight years).

Would the Russian Economy Turn into a Lost Decade?

Would the Russian Economy Turn into a Lost Decade?
(Would the Russian Economy Turn into a Lost Decade?)

Author(s):Miloš Bikár, Katarína Vávrová, Marina Sedliačiková
Language:English
Subject(s):National Economy, Economic policy, Economic development, Financial Markets, Public Finances, Fiscal Politics / Budgeting
Page Range:26-33
No. of Pages:8
Keywords:fiscal and monetary policy; commodity prices; exchange rate volatility; currency movements; public finances;
Summary/Abstract:During the last couple of years the Russian economy was marked by a severe problems, those could turn into a quite long-lasting recession. The economic sanctions and low commodity prices caused significant damage and economic turmoil. The corporate and state-controlled investment into Russia significantly fell jointly with sharp rubble depreciation against major currencies. The paper deals with the analyses and predictions of the Russian economy development and the main factors influencing the current and future economy and the structure of GDP. The objective of this article is to analyse the time-varying nature among Russian GDP, oil prices and some major macroeconomic variables. The results of the carried out research reflected that the oil prices has played a key role and has indeed changed the nature of correlation relationship between analysed variables. The paper highlights the monetary policy including currency prediction, public debts, inflation levels, as well as commodity export dependency.

Oil Price and European Stock Markets

Oil Price and European Stock Markets
(Oil Price and European Stock Markets)

Author(s):Gábor Bóta, Mihály Ormos
Language:English
Subject(s):Supranational / Global Economy, Energy and Environmental Studies, Financial Markets
Page Range:34-42
No. of Pages:9
Keywords:asset pricing; oil price;
Summary/Abstract:In this paper we investigate the effects of oil price changes on European stock returns. We run regressions for extended versions of different market equilibrium models: (standard CAPM, Fama-French 3 factor model, Carhart four-factor model) incorporating oil price changes. We also separate different market situations based on the oil price. Our results suggest that from among the investigated European industry indexes oil and gas companies have higher exposure to oil price changes than other companies from other industries. When examining the broad oil and gas industry on a sub-sector level we can detect some significant differences.

Specific Factors of the Contemporary Development of the Czech Real Estate Market

Specific Factors of the Contemporary Development of the Czech Real Estate Market
(Specific Factors of the Contemporary Development of the Czech Real Estate Market)

Author(s):Roman Brauner
Language:English
Subject(s):National Economy, Economic policy, Economic development, Financial Markets
Page Range:43-49
No. of Pages:7
Keywords:financial system; interest rate; real estate market; central banks; inflation;
Summary/Abstract:The paper deals with the problems of the present development of the Czech real estate market in the conditions of long-term artificial under-valuation of the Czech koruna by the Czech National Bank. Primarily it analyzes the Czech real estate market development during the past 10 years, and investigates specific factors which influenced it in the course of that period. An integral part of the subject is also comparison of the Czech real estate market with other markets in the Czech Republic, mainly the stock and bond markets. Further, dependence of interest rates is analysed. In conclusion the paper predicts a future development based on the reached results, which would occur in case the artificial under-valuation of the Czech koruna continues over the long term.

Testing for Information Asymmetry in Automobile Insurance: Sample from Slovak Republic

Testing for Information Asymmetry in Automobile Insurance: Sample from Slovak Republic
(Testing for Information Asymmetry in Automobile Insurance: Sample from Slovak Republic)

Author(s):Zuzana Brokešová, Erika Pastoráková, Tomáš Ondruška
Language:English
Subject(s):Business Economy / Management, Financial Markets, Business Ethics
Page Range:50-56
No. of Pages:7
Keywords:moral hazard; adverse selection; insurance; motor insurance;
Summary/Abstract:Neoclassical economics assume perfect information to all market participants about prices and quality of goods and services offered in the market. However, in many cases individuals remain only partially informed, resulting in state where some market participants have more information than the others. Importance of information balance increases significantly, especially, in the case of services with no immediate outcome, such as financial products, and particularly insurance. The paper focuses on the information asymmetry in insurance market. We use the micro-data about automobile insurance from Slovak insurance company to verify presence of information asymmetry in insured-insurer relation. Based on the results of the empirical data analysis, we have not find any correlation between coverage and loss in our dataset. This result does not prove absence of information asymmetry in the insurance market and it could imply that private information of individuals affects this analysis.

The Limitations of E-commerce Development in Full Operating Cycle Firms: V4 Countries Case

The Limitations of E-commerce Development in Full Operating Cycle Firms: V4 Countries Case
(The Limitations of E-commerce Development in Full Operating Cycle Firms: V4 Countries Case)

Author(s):Emilia Brożyna, Grzegorz Michalski, Guenter Blendinger, Ahmed Ahmidat
Language:English
Subject(s):Supranational / Global Economy, Micro-Economics, Accounting - Business Administration, ICT Information and Communications Technologies
Page Range:57-64
No. of Pages:8
Keywords:financing e-commerce; financial analysis; financial performance; V4 financial reality; financial liquidity management;
Summary/Abstract:Financial efficiency of an entities operating in full operating cycle conditions is influenced by environmental characteristics. That paper analyzes one of the financial results measured by cash tied in inventories in e-commerce full operating cycle financially constrained V4 entities. In recent decades, the countries of Central and Eastern Europe there are significant changes in national economies. Many of them joined the European Union in 2004. Among the EU Member States noteworthy is the largest group of countries of Central and Eastern Europe: Czechia, Poland, Slovakia and Hungary. On 15 February 1991 they have concluded an agreement on the formation of the Visegrad Group. It was aimed at expanding cooperation between these countries and in the initial phase of accession to the European Union and NATO. Analysis of the changes that have taken place in companies using online sales in the countries of the Visegrad Group is the subject of this article.

Optimising the Slovak Tax Policy and Tax System Performance

Optimising the Slovak Tax Policy and Tax System Performance
(Optimising the Slovak Tax Policy and Tax System Performance)

Author(s):Emil Burak, Juraj Nemec
Language:English
Subject(s):National Economy, Economic policy, Public Finances, Fiscal Politics / Budgeting
Page Range:65-71
No. of Pages:7
Keywords:tax administration; Slovakia; optimizing; opinion of tax officials;
Summary/Abstract:There is a rich body of general scientific research dealing with issues such as optimum tax systems and optimum tax policies; however, there is limited scientific research focused on these issues specifically in Slovakia. To help fill this gap, our paper defines and discusses the most significant elements of the future optimisation of the Slovak tax system. The paper is based on primary and secondary data; it combines qualitative and quantitative research methods. The paper’s main basis is the comparison of perceived needs by tax officials, collected in the course of our research, with existing evidence. The most frequent responses (simplify tax collection, decrease tax bureaucracy, provide better information about the tax system to businesses and citizens, increase the level of risk connected with tax evasion, and improve tax administration services) are very much in line with the positions of existing scientific and professional literature. However, the second most frequent answer, to decrease the tax burden, indicates a level of tax illusion even at the level of tax administration professionals.

Stock Market Volatility in the European Emerging and Frontier Markets

Stock Market Volatility in the European Emerging and Frontier Markets
(Stock Market Volatility in the European Emerging and Frontier Markets)

Author(s):Lumír Kulhánek
Language:English
Subject(s):Supranational / Global Economy, Business Economy / Management, Financial Markets
Page Range:420-427
No. of Pages:8
Keywords:emerging markets; frontier markets; volatility; stock market return; risk;
Summary/Abstract:The main objective of this paper is to investigate and evaluate development both of stock market returns and volatility in the European emerging and frontier markets. Both main quantitative characteristics of the stock markets development will be analysed (daily returns, risk), as well as the relationships between daily stock market indices returns changes and volatility. The comparison with developed stock markets and MSCI European Union index is also performed. In analysis are used daily values of stock market indices for the sample period from May 2002 to May 2016, which is also divided into two non-equal length sub periods with the beginning of the Euro area sovereign debt crisis. We found that only three frontier markets of the European Union have positive returns both in pre-crisis and crisis period. The emerging stock markets in comparison with frontier markets are reasonably highly correlated with each other and with MSCI European Union index. Very weak correlations of frontier markets of the European Union furthermore decreased in Euro area sovereign debt crisis period.

Comparison of the Efficiency of Selected European Banking Sectors

Comparison of the Efficiency of Selected European Banking Sectors
(Comparison of the Efficiency of Selected European Banking Sectors)

Author(s):Liběna Černohorská
Language:English
Subject(s):Supranational / Global Economy, Business Economy / Management, Financial Markets, Accounting - Business Administration
Page Range:72-78
No. of Pages:7
Keywords:bank; banking sector; banks efficiency; cluster analysis; the Principal Components Analysis;
Summary/Abstract:There is no generally accepted concept of efficiency nor is there a uniform system of indicators for measuring bank efficiency. It is even possible to use the method of financial analysis to measure bank efficiency. In this paper, the following ratios are used for measuring bank efficiency: ROA, ROE, total assets, nonperforming loans/total loans, quick liquid assets/total assets, quick liquid assets/short-term liabilities, loans/deposits, and capital adequacy. The goal of this paper is to assess the efficiency of Czech banks using cluster analysis on the basis of selected ratios and to conduct a comparison with bank efficiency in Poland, Austria, Greece, Portugal, France, and Slovakia. The collective ratios for the entire banking sector will be compared for the selected countries for the years 2010–2014. The cluster analysis demonstrates that the Czech banking sector is the most similar to the Slovakian sector. According to a combination of selected ratios, it is possible to designate the cluster composed of the Czech and Slovak banking sectors as being the cluster with the highest banking sector efficiency. It differs extensively from the cluster of Greece and Portugal.

The Impact of Demographic Characteristics on Financial Literacy: An Empirical Study in Commercial Banks’ Customers

The Impact of Demographic Characteristics on Financial Literacy: An Empirical Study in Commercial Banks’ Customers
(The Impact of Demographic Characteristics on Financial Literacy: An Empirical Study in Commercial Banks’ Customers)

Author(s):Thi Anh Nhu Nguyen
Language:English
Subject(s):Education, Demography and human biology, Financial Markets, Socio-Economic Research
Page Range:508-516
No. of Pages:9
Keywords:financial literacy; basic financial knowledge; general investment knowledge; demographic characteristics and Vietnam;
Summary/Abstract:This study was conducted with the aim of assessing and analyzing financial literacy against the demographic characteristics of customers of commercial banks in emerging financial market in Vietnam. Primary data was collected by a structured questionnaire from 240 respondents in 12 branches of four commercial banks in Ho Chi Minh City. The results of descriptive statistics indicated that the average of basic financial and general investment knowledge of commercial banks' customers in Vietnam is moderated. Regression analyses revealed that levels of education, gender, and age scale (age over 55) are significant factors which enhance the basic financial knowledge and general investment knowledge while income, job status and marital status are insignificant to financial literacy. The results of this study assist to improve the level of personal financial knowledge by creating a wide range of education programs related to financial knowledge as well as implementing further research into this field in Vietnam.

Investment in Renewable Energy Technologies from the Perspective of Polish Venture Capital Funds

Investment in Renewable Energy Technologies from the Perspective of Polish Venture Capital Funds
(Investment in Renewable Energy Technologies from the Perspective of Polish Venture Capital Funds)

Author(s):Karolina Daszyńska-Żygadło, Tomasz Słoński, Magdalena Ligus
Language:English
Subject(s):National Economy, Energy and Environmental Studies, Environmental and Energy policy, Economic development, Financial Markets
Page Range:79-85
No. of Pages:7
Keywords:renewable energy; venture capital; environmental innovation; environmental policies;
Summary/Abstract:In the recent years ambitious targets to increase the share of renewable energy and reduce greenhouse gas emissions have been adopted by governments around the world. Variety of policies have been introduced. The question is what is the business potential and market response to that. This article adds a new perspective to the debate of business potential of investments in renewable energy sector. The aim of the paper is to focus on the venture capitalist interested in the new clean technology development and its diffusion. We analyze venture capitalists’ perception of investing in projects from that sector, possibilities of financing and barriers that they meet in the process. We conducted survey and field study with managers of private equity funds from Poland. Our research results show that in the overall business history of the surveyed entities 67% of funds invested in projects related to renewable energy sector. In order to assure specific competencies for investing in renewable energy sector they were using external experts in most cases or past experience. If they specialize in the RE sector investments they were likely to employ their own experts in the investment department While main reason for not investing in that sector was lack of competence, but also unstable situation in the sector.

Sustainable Value Creation - performance of European Manufacturing Companies

Sustainable Value Creation - performance of European Manufacturing Companies
(Sustainable Value Creation - performance of European Manufacturing Companies)

Author(s):Karolina Daszyńska-Żygadło
Language:English
Subject(s):Supranational / Global Economy, Business Economy / Management, Micro-Economics, Energy and Environmental Studies, Economic development
Page Range:86-93
No. of Pages:8
Keywords:sustainability; value creation; opportunity cost;
Summary/Abstract:The research problem of this paper is how to measure the impact of corporate sustainability performance on company’s value. Its aim is to show this impact in monetary terms, using opportunity costs based approach. Sustainable Value method presented and tested in this paper integrates environmental, social and economic factors. It measures the value created or destroyed by the company with the usage of particular set of resources, the value is referenced to the benchmark’s value creation that could potentially be realized with the same set of resources. Research was conducted on manufacturing companies from EU-15 countries. It analyzes the prospects and advancement in sustainable value creation as well as mitigation of negative environmental impact in reference to value created by companies examined in the research of Figge, Hahn and coauthors in ADVANCE project (2006). Results show that majority of companies which were creating sustainable value in the period of 2001-2003 continued to obtain positive values in the period of 2004-2012, the same applied to value destructing companies.

Systemic Risk Indicators in the Eurozone: An Empirical Evaluation

Systemic Risk Indicators in the Eurozone: An Empirical Evaluation
(Systemic Risk Indicators in the Eurozone: An Empirical Evaluation)

Author(s):Oleg Deev, Martin Hodula
Language:English
Subject(s):Supranational / Global Economy, Business Economy / Management, Micro-Economics, Methodology and research technology, Accounting - Business Administration
Page Range:94-101
No. of Pages:8
Keywords:systemic risk measures; Markov-switching models; DCC-GARCH models;
Summary/Abstract:In this brief paper, we use combination of Markov-switching models and dynamic conditional correlation models to ex-post evaluate the performance of three widely used systemic risk measures (SRISK, CISS and term-spread) based on their ability to predict financial turmoil. We first compare systemic risk measures based on their dynamic correlations. Second, we identify three regimes for each indicator and evaluate them based on their ability to capture crisis information. We found that in practice, the correlations between studied systemic risk measures are indeed high and indicators are successful in capturing regimes of high financial stress. We have however, identified a few periods when the indicators are not overlapping, especially in pre- and post-crisis period.

The Impact of Contingent Convertible Bond Issuance on Bank Credit Risk

The Impact of Contingent Convertible Bond Issuance on Bank Credit Risk
(The Impact of Contingent Convertible Bond Issuance on Bank Credit Risk)

Author(s):Oleg Deev, Vlad Morosan
Language:English
Subject(s):Business Economy / Management, Financial Markets
Page Range:102-110
No. of Pages:9
Keywords:contingent convertible bonds; event study; CDS prices; bank credit risk;
Summary/Abstract:Contingent convertible bonds are designed to provide additional capital to banks in times of distress and discourage the risk-taking incentives of the stockholders and, hence, decrease bank credit risk. In this paper, we study bank CDS spreads as a proxy of credit risk during the periods around the announcement of contingent convertible bond issuance. We analyze whether investors see these bonds as signs of possible bank distress or the stabilizing mechanism decreasing the probability of bank default. We use event study methodology where abnormal CDS spreads are identified based on constant mean return model and basic market model. Our data sample consists of 41 banks with 109 current unique issues taken from Bloomberg. Our results indicate that CDS spreads show a systemic reaction to the announcement of contingent convertible instruments and are economically significant for the bond holders that value the decreased default probability and reduced risk incentives of the issuing institution.

Hedging Case Study in the Exchange Rate Commitment Regime Environment

Hedging Case Study in the Exchange Rate Commitment Regime Environment
(Hedging Case Study in the Exchange Rate Commitment Regime Environment)

Author(s):Jaroslava Dittrichová, Libuše Svobodová, Ivan Soukal
Language:English
Subject(s):Business Economy / Management, Micro-Economics, International relations/trade, Financial Markets, Fiscal Politics / Budgeting, Accounting - Business Administration
Page Range:111-118
No. of Pages:8
Keywords:Financial derivatives; forward; hedge; foreign exchange risk; monetary policy;
Summary/Abstract:The paper deals with topic of hedging as an instrument of foreign exchange exposure treatment. This case study is focused on traditional export-oriented company PETROF, s. r. o. Analysis of scenarios is performed by the loss-profit comparison. The study dataset is consisted of internal financial statements gathered in period from 2010 to 2015 and provided the company representatives. Analyses are based on spot rates effective at studied periods and singed hedging contracts – forward derivatives. Analyses include data processing and proposals for consideration of macroeconomic factors that determine the company's business environment. Qualitative research is concluded with a discussion on proposed approaches and instruments. Despite the fact that in November 2013 Czech national bank entered foreign exchange interventions regime with exchange rate commitment of 27 CZK/EUR and so the companies knows the expected rate of the Czech currency, the topic is still current. The importance of the topic will be greater with the upcoming end of intervention regime in 2017 when we can expect increased volatility of the Czech crown again.

Influences on Consumer Rationality

Influences on Consumer Rationality
(Influences on Consumer Rationality)

Author(s):Bohuslava Doláková, Jan Krajíček
Language:English
Subject(s):Behaviorism, Socio-Economic Research
Page Range:119-124
No. of Pages:6
Keywords:consumption; behaviour; consumer behaviour; rationality; irrationality;
Summary/Abstract:The aim of this paper is to evaluate key components in consumer behaviour. Consumer behaviour is influenced by several factors; one with the greatest influence is genetic predisposition of each individual and also experience and knowledge acquired during the life of the society. The consumer is often irrational even in those cases in which we could expect rational behaviour (regarding to the prevailing economic opinion and rational choice theory). People are subjects to irrational influences. These influences come from their surroundings, feelings, emotions and other sources.

Analysis of the Relationship between Taxes and Social Benefits and Transfers in the EU

Analysis of the Relationship between Taxes and Social Benefits and Transfers in the EU
(Analysis of the Relationship between Taxes and Social Benefits and Transfers in the EU)

Author(s):Nadiya Dubrovina, Jana Péliová, Erika Neubauerová
Language:English
Subject(s):Supranational / Global Economy, Welfare systems, Public Finances, Fiscal Politics / Budgeting, Socio-Economic Research
Page Range:125-132
No. of Pages:8
Keywords:taxes; social contribution; social benefits; social transfers; econometric modeling;
Summary/Abstract:Taxes have main contribution to the government revenue, tax revenue made up about 90% of total government revenue in the European Union. Government revenue, expenditure and deficit/surplus are main objectives of fiscal policy and the analysis of their dynamics plays very important role in the formation and coordination of the strategic and tactic tasks for socio-economic development in the countries. For the more detail analysis of dependence between taxes and social benefits and transfers we used time series of these indicators for EU countries. For the modeling the initial data as absolute values of the different taxes, social contributions and social benefit and transfers per inhabitant were used for 2002-2012. It should be noted that most of time series included linear trends that is why for the panel data analysis we used the first differences of these indicators. These models explain the complicated relationship between changes of taxes, social contributions and social benefits and transfers with individual countries effects (fixed effects) for each EU countries and can be used for prediction of features of social benefits and transfers as results of changes in fiscal policy in different EU countries.

The Role of Life Insurance in the Context of Cover the Needs of the People in the Czech Republic

The Role of Life Insurance in the Context of Cover the Needs of the People in the Czech Republic
(The Role of Life Insurance in the Context of Cover the Needs of the People in the Czech Republic)

Author(s):Eva Ducháčková
Language:English
Subject(s):National Economy, Financial Markets, Socio-Economic Research
Page Range:133-140
No. of Pages:8
Keywords:life insurance; death; unit linked life insurance; technical provision of life insurance; risk portion of premium; investment portion of premium;
Summary/Abstract:The life insurance is considered to be an instrument to cover the needs of people, on the one hand, a tool of covering the consequences of the risk (death and other risks – accident, invalidity, illness etc.), and on the other hand, a tool for savings to cover the needs of people in post-productive age. At present, many factors affect the development of life insurance and especially its efficiency. In the use of life insurance as a means of addressing the needs of people in old age is in the last period on the Czech insurance market a number of problems. The problems arise from the form of life insurance products, from regulatory approaches in life insurance, from approaches to selling life insurance contracts. The paper focuses on the analysis and evaluation of the role of life insurance in current conditions and on the question of consumer protection issues in connection with the life insurance. The aim of the paper: analyze the role of the life insurance by the cover the needs of the people nowadays in the Czech Republic in the context new changes on the market, in the new conditions on the insurance market.

Quality and Efficiency of Bank Branch Services

Quality and Efficiency of Bank Branch Services
(Quality and Efficiency of Bank Branch Services)

Author(s):Vlastimil Farkašovský, Ľubomír Pinter
Language:English
Subject(s):Business Economy / Management, Financial Markets, Socio-Economic Research
Page Range:141-148
No. of Pages:8
Keywords:quality; technical efficiency; the SBM model; correspondence map; cartogram;
Summary/Abstract:The goal of the paper is to deepen understanding between the two key indicators of bank branch production, the quality of services and the technical efficiency. The indicator of service quality is a composite indicator harmonized at the European level that includes the assessment of three main areas: the quality of customer service, the quality of sale of financial products, and customer satisfaction. The technical efficiency of the bank branches is analysed with the aid of non-radial SBM model by Tone. A spatial aspect is found to be a factor that affects both, quality and technical efficiency of the bank's branches. The paper reveals, that individual managers have still enough room to improve their skills in managing their branches.

The Access to Instrument of Countercyclical Capital Reserves in the European Union and the USA

The Access to Instrument of Countercyclical Capital Reserves in the European Union and the USA
(The Access to Instrument of Countercyclical Capital Reserves in the European Union and the USA)

Author(s):Luboš Fleischmann
Language:English
Subject(s):Supranational / Global Economy, Law on Economics, Financial Markets
Page Range:149-156
No. of Pages:8
Keywords:countercyclical capital reserve; Basel III; regulatory capital; cyclical risk capital ratio;
Summary/Abstract:Repeating financial crisis brings new actions in regulatory rules of the financial markets each time. Regulatory authorities seek to increase the resilience of the banking sector through modified and brand new instruments, especially against cyclical risks associated with fluctuations in credit activity. The same is happening in the post-lehman approach to macro-prudential tools. This paper deals with the impact of countercyclical capital reserves, one of the new supplementary capital reserves, which introduces the Third Basel Accord (Basel III). The paper analyzes the objectives of the countercyclical capital reserve instrument and the method for determining its amount. A comparison is performed among rates set in other European Union countries and approach to the countercyclical capital reserve in the USA. The method also carries out a comparison between the European and American approach. The primary question of the paper is answered using empirical data that relates to the effectiveness of the chosen instrument to achieve the objective, which is to ensure the stability of the banking sector during the crisis and what rate of the countercyclical capital reserve matches the above objectives. The paper also aims to assess whether the tool can fulfill the high expectations of regulatory authorities.

Hedging of Portfolios and Transaction costs

Hedging of Portfolios and Transaction costs
(Hedging of Portfolios and Transaction costs)

Author(s):Hana Florianová, Tomáš Dráb
Language:English
Subject(s):Business Economy / Management, Financial Markets, Accounting - Business Administration
Page Range:157-165
No. of Pages:9
Keywords:warrants; hedging; portfolio; transaction costs;
Summary/Abstract:The aim of this paper is to decide whether to rebalance hedged portfolios often to reduce risk or to rebalance them less often to lower transaction costs. In this paper we use delta-hedging for portfolios consisting of warrants and shares. We focus on how portfolio rebalancing works on real financial markets with an emphasis on situation on European stock exchanges. The motivation for this research is to gain knowledge for investing in real markets more effectively than just by using theoretical methods. In our research we achieved interesting results under the terms of transaction costs and different frequency of rebalancing portfolios. We constructed 30 portfolios consisting of American style plain vanilla call warrants and correspondent amount of underlying shares. We compared one week and two weeks period of rebalancing with no rebalancing. The results are that you pay more money on transaction costs to reduce one percent of risk as the rebalancing is more frequent.

Comparative Study of Banking Sector in Republic of Moldova and Czech Republic

Comparative Study of Banking Sector in Republic of Moldova and Czech Republic
(Comparative Study of Banking Sector in Republic of Moldova and Czech Republic)

Author(s):Irina Frunza
Language:English
Subject(s):National Economy, Economic policy, Economic development, Financial Markets
Page Range:166-174
No. of Pages:9
Keywords:banking system; financial indicators; efficiency; banks; Moldova; Czech Republic;
Summary/Abstract:The paper deals with the factors affecting the development of the Moldovan banking system and what experience can Moldova take from Czech Republic to meet the standards of EU integration. In this meaning, was evaluated the situation in the sector compared to the banking system from Czech Republic, based on series of conventional indicators. The result explain the causes of high cost of credit, high levels of inefficiency and the systemic weaknesses, as well as other major factors hindering dynamic development of the banking sector. The experience of the Czech Republic as an EU Member State, is useful for Moldova in terms of transformation of the banking sector into a competitive and functional, which meets the requirements of the post-transformation economy and meet the EU accession standards. Research results highlight the main features of the banking system and solutions for a stable banking system with high performance.

Competitiveness Assessment of Slovak Republic Regions

Competitiveness Assessment of Slovak Republic Regions
(Competitiveness Assessment of Slovak Republic Regions)

Author(s):Beata Gavurova, Tatiana Vagašová, Viliam Kováč
Language:English
Subject(s):National Economy, Economic policy, International relations/trade, Economic development
Page Range:175-182
No. of Pages:8
Keywords:competitiveness; region; Slovak Republic;
Summary/Abstract:The issue of competitiveness is directly related to international trade. The theories explain the factors of international trade in such a way that there is visible indication of a need to change an approach to understand competitiveness in economic policy. Despite the fact competitiveness is discussed in many studies, there is still no clear definition of this term in the literature. Competitiveness can be viewed from multiple angles. Therefore, it can be analysed at the international level and at the national level too. Besides this introduction, the theoretic part of the paper offers an overview of the approaches applied to not only describe competitiveness as part of trade, but also to measure it and to evaluate it. The special attention is paid to the analysis devoted to the Slovak regions. Local targeting lies in observation the data from the particular regions. One of the approaches understands competitiveness in form of gross domestic product. Our analysis takes it in this way. There are the eleven indicators selected that are able to model the level of competitiveness. These indicators are based on distribution of population, patents, households’ income, employment, tertiary educated employed population, unemployment, economic activity of population, health insurance, criminality, municipal waste, and road network.

Keynesian Model in Small and Medium Enterprises Development: Puzzling Case of Russian Regions

Keynesian Model in Small and Medium Enterprises Development: Puzzling Case of Russian Regions
(Keynesian Model in Small and Medium Enterprises Development: Puzzling Case of Russian Regions)

Author(s):Maria Ginzburg, Nadezhda Yashina, Elena Ivanova
Language:English
Subject(s):National Economy, Business Economy / Management, Micro-Economics, Economic policy, Methodology and research technology, Economic development
Page Range:183-190
No. of Pages:8
Keywords:Keynesian model; small and medium enterprises; Russian regions; economic development; economic policy;
Summary/Abstract:This study explores the potential effects of Keynesian demand stimulation for small and medium-size businesses in Russian regions. The authors tested the following hypotheses: (1) is there a connection between small and medium-size business development in any given region of Russia and regional output (Gross Regional Product – GRP); (2) the higher the share of electric power consumption in GRP of a given region, the more regional product is created in this region and the higher the share of this regional product can be redistributed by means of small businesses. To test these hypotheses, the authors developed three indices related to the development of small and medium-size enterprises and the GRP, produced in the provinces of the Russian Federation. One index (SMEDI) summarizes the level of development of small and medium-size businesses in a region; another (GRPI) – the level of Gross Regional Product, produced in a given region; and finally (EPCI) - the level of electric power consumption in the GRP of a corresponding region. Correlation analysis was used to analyze data for 83 federal subjects of the Russian Federation for 2010-2014. The results indicate a moderate relationship between SMEDI and GRPI, and no relationship between SMEDI and EPCI. We conclude that the level of development of SMEs in the regions of Russia in 2010-2014 depends on the level of GRP to a certain degree. The level of development of SMEs is directly proportional to increases in GRP. But Keynesian model of demand stimulation, if applied to the Russian economy, stumbles upon the problems of fiscal federalism and the excessive centralization of economic governance, and this fact does not create effective stimulus for economic growth and small business development in Russia.

Pension-related Application of the Cohort Life Table

Pension-related Application of the Cohort Life Table
(Pension-related Application of the Cohort Life Table)

Author(s):Ján Gogola, Ondřej Slavíček
Language:English
Subject(s):Demography and human biology, Economic development, Financial Markets, Socio-Economic Research
Page Range:191-198
No. of Pages:8
Keywords:longevity risk; annuity; stochastic mortality; life table; Lee-Carter model;
Summary/Abstract:Longevity risk, the risk that people will live longer than expected, weighs heavily on those who run pension schemes and on insurers that provide annuities. Hence the prediction of future mortality rates is an issue of fundamental importance for the insurance and pensions industry. Our analysis focuses on mortality at higher ages (65-95), given our interest in pension-related applications where the risk associated with longer-term cash flow is primarily linked to uncertainty in future rates of mortality. The Lee-Carter model became one of the most applied models and it is used to forecast agespecific death rates. The main goal of this paper is to apply the Lee-Carter model to construct the so-called “cohort life tables” for calculation of a 30-year annuity to a person aged 65 in 2015. We use data on deaths and exposures for the Czech Republic from the Human Mortality Database (HMD). The HMD provides evidence that life expectancy is increasing. We have shown that if the today rate of increase will continue, it will at age 65 concluded (after calculation) to increase the present value of pension liabilities in defined-benefit schemes about 5 % if we use cohort life table instead of period life table. Probability statements derived from the use of a single model and parameter set should be treated with caution. Hence, there is a need for awareness of model risk when assessing longevity-related liabilities.

Influence of selected environmental factors on the efficiency of commercial insurers

Influence of selected environmental factors on the efficiency of commercial insurers
(Influence of selected environmental factors on the efficiency of commercial insurers)

Author(s):Eva Grmanová, Peter Hošták
Language:English
Subject(s):Energy and Environmental Studies, Financial Markets, Socio-Economic Research
Page Range:199-206
No. of Pages:8
Keywords:environmental factors; efficiency; insurance companies;
Summary/Abstract:Paper aims to analyze the specifics of the efficiency of Czech and Slovak commercial insurers arising from the impact of environmental factors. Models of data envelopment analysis (DEA) are used to analyze the efficiency of insurance companies. Efficiency is evaluated based on the efficiency score. DEA models allow for the evaluation of factors which in the short term are not under the influence of the analyzed entities. These are called environmental factors. Impact of environmental factors is studied based on an approach proposed by Charnes, Cooper and Rhodes (1981). This procedure divides the analyzed subjects into and in each subgroup efficiency scores are determined. Target values corresponding to the full efficiency are calculated for inefficient subjects. In the next step the efficiency score is expressed on the basis of above mentioned target values and a statistical hypothesis testing is used to determine the statistical significance of the difference between the efficiency scores in groups. This approach allows to compare differences in the efficiency of various groups of insurance companies.

Holdings of Government Bonds by Commercial Banks during the Financial and Debt Crisis in Europe

Holdings of Government Bonds by Commercial Banks during the Financial and Debt Crisis in Europe
(Holdings of Government Bonds by Commercial Banks during the Financial and Debt Crisis in Europe)

Author(s):Vladimír Gvozdják, Božena Chovancová
Language:English
Subject(s):Supranational / Global Economy, Governance, Economic policy, Economic development, Financial Markets, Public Finances
Page Range:207-213
No. of Pages:7
Keywords:government bonds; commercial banks; debt crisis;
Summary/Abstract:The government bonds of the EU countries were considered a safe investment amongst investors and asset managers. The main motive for their holding by commercial banks was to achieve additional revenue from investing spare funds and to store liquidity in them since they can be quickly sold on the secondary market or used as a collateral in refinancing operations. In this working paper we focus on the current issues related to government bond holdings by commercial banks. With the advent of financial and debt crisis some countries failed to meet their liabilities connected with bonds towards investors. This changed the global view of sovereign bonds as the safest form of investment. Based on the analysis of data provided by the Statistical Data Warehouse of the European Central Bank we focus on the evolution of government bond holdings by commercial banks during the debt crisis in Europe in 2010 – 2014 in selected EU countries. By using the panel data regression we will try to estimate the impact of some of the significant determinants which influenced the volume of the holdings – namely credit rating of the sovereign bonds and their interest rates. This regression suggests that there is a correlation between these independent variables and the holdings by commercial banks.

Foreign Trade Finance: What is the Impact of the Global Financial Crisis of 2007-2009?

Foreign Trade Finance: What is the Impact of the Global Financial Crisis of 2007-2009?
(Foreign Trade Finance: What is the Impact of the Global Financial Crisis of 2007-2009?)

Author(s):Peter Haiss, Franz Binder, Kushtrim Hajzeri, Wadim Kalmykov
Language:English
Subject(s):Supranational / Global Economy, Economic policy, International relations/trade, Economic development
Page Range:214-221
No. of Pages:8
Keywords:trade finance; foreign trade; financial crisis; ECA;
Summary/Abstract:We analyze the impact of the global financial crisis of 2007-2009 on international trade finance. Two different perspectives are covered: the demand side and the supply side of trade finance. Additionally, the implications for trade insurance and Export Credit Agencies are investigated. Furthermore, the role of the state is discussed as the link between trade, finance and GDP growth is of utmost importance for economic policy actors. Our research draws on survey and financial market data and gives a global overview. We find that on the demand side, both the volume of finance and its mix changed. On the supply side, volume and prices were affected as well. The role of the state has risen in course of the crisis in terms of insuring trade via Export Credit Agencies (ECAs). Ever since, the market moved back to normal, and will be more digital soon.

The Influence of the Size of the Region on the Financial Situation of Hospitals

The Influence of the Size of the Region on the Financial Situation of Hospitals
(The Influence of the Size of the Region on the Financial Situation of Hospitals)

Author(s):Taťána Hajdíková
Language:English
Subject(s):Business Economy / Management, Health and medicine and law, Public Finances, Accounting - Business Administration
Page Range:222-226
No. of Pages:5
Keywords:public finance; hospitals; profitability; indebtedness; revenue;
Summary/Abstract:The presented paper will focus on selected financial indicators. When selecting indicators, their application for the non-profit sector, particularly hospitals, will be taken into account. The study of literature suggests that there are opinions about the use of specific indicators in the healthcare system. In recent years, many European countries have undergone reforms in the management of the healthcare market to improve the quality of hospital services. Some of the taken measures resulted in the closure of hospitals, which were characterized by worse financial performance, particularly in rural areas. The literature also suggests that hospitals located in rural areas are more economically sensitive, especially to economies of scale. The aim of the research is to determine whether there are differences in the results of selected indicators of hospitals located in different areas. The assumption is that hospitals located in areas with smaller population are characterized by lower profitability, higher debt and by overall lower financial situation. In the paper data from public sources and from annual reports of hospitals for the year 2013 will be used. Hospitals will be chosen according to the division of the Institute of Health Information and Statistics of the Czech Republic.

Analysis of Various Entrepreneurial Activities and their Development in the Czech Republic from 2008 to 2015

Analysis of Various Entrepreneurial Activities and their Development in the Czech Republic from 2008 to 2015
(Analysis of Various Entrepreneurial Activities and their Development in the Czech Republic from 2008 to 2015)

Author(s):Eva Hamplova, Jaroslav Kovarnik, Pavel Jedlička
Language:English
Subject(s):National Economy, Business Economy / Management, Micro-Economics, Economic development
Page Range:227-233
No. of Pages:7
Keywords:business; business environment; national economy;
Summary/Abstract:This contribution analyses the number of newly established as well as closed down entrepreneurial units in the Czech Republic between 2008 and 2015 with regard to the legal form of business as well as the field of business activity. The aim is to use the non-public sources of Czech Statistical Office and assess the trend in the number of entrepreneurial units in the Czech Republic. The methods of comparative analysis and trend analysis were used to monitor individual types of business activities as for the number of established and closed entrepreneurial units. The types of economic activities with high entrepreneurial activity were determined by means of net balance and average annual growth rate. The contribution reacts to the conclusions of a European Commission study Flash Eurobarometer (2012), which assesses the Czech Republic as one of four EU countries where a growing number of people prefers self-employment to employment. The authors consider the differences among various entrepreneurial activities and among legal forms of business to be a starting point for a discussion about support to particular fields of business, about private investment and forms of financial flows on both national and international levels.

Development and the Current Situation of the Mortgages for the Czech Households

Development and the Current Situation of the Mortgages for the Czech Households
(Development and the Current Situation of the Mortgages for the Czech Households)

Author(s):Martina Hedvičáková, Libuše Svobodová
Language:English
Subject(s):National Economy, Financial Markets, Socio-Economic Research
Page Range:234-241
No. of Pages:8
Keywords:mortgage loan; interest rate; bank; households;
Summary/Abstract:The paper is focused on the specialized financial product, esp. on mortgages that are the most often used products in the field of own housing financing in the Czech Republic. These products provide selected banks on the Czech market. The aim of the paper is to analyze the situation on the financial market focused on the mortgages. The organization of the paper is as follows: firstly a theoretical background with a review of the literature is provided, then research methodology is described, the key part brings results of development of mortgages according to the purpose of use since 2005, development of interest rates and the analysis of the current situation on the mortgage market. Interest rates on mortgage loans have on the Czech market downward trend. Statistical data suggest that people are not afraid to borrow money after the economic crisis and invest more in housing funds. Hypoteční banka was classified as the main player on the market closely followed by Česká spořitelna and Komerční banka. The article is based on primary and secondary sources. A detailed research together with the analysis and critical assessment of accessible materials will enable to identify the main objectives in the field of study. The analysis of the initial state will consequently enable to identify the key factors and knowledge.

The Process of Harmonization of Accounting in the Czech Republic

The Process of Harmonization of Accounting in the Czech Republic
(The Process of Harmonization of Accounting in the Czech Republic)

Author(s):Irena Honková
Language:English
Subject(s):National Economy, Methodology and research technology, Law on Economics, Accounting - Business Administration
Page Range:242-248
No. of Pages:7
Keywords:International Financial Reporting Standards (IFRS); Czech accounting standards (CAS); harmonization of accounting;
Summary/Abstract:The article was written in response to the amendment to Decree No. 250/2015 Coll., which came into effect from January 1, 2016. This amendment shows the harmonization of the Czech accounting system with the International Financial Reporting Standards (IFRS), e.g. in reporting of extraordinary income and expenses, of formation expenses, or in valuation of inventory produced internally. Consequently, a survey has been conducted, in which 24 persons having experience with the accounting under the IAS/IFRS commented on how they coped with the differences between the Czech Accounting Standards (CAS) and the IAS/IFRS. It has been found that these companies normally keep the accounts simultaneously in both systems (CAS and IAS/IFRS). However, some companies decided to keep the accounts only in one accounting system, supplemented with the differences between the two systems. It is undisputed that the process of harmonization of accounting systems continues. However, the final unification of our national system with the European one has not happened so far. There is a need to harmonize accounting and tax regulations as well.

High-Frequency Trading and Price Volatility in the Paris Euronext Stock Market

High-Frequency Trading and Price Volatility in the Paris Euronext Stock Market
(High-Frequency Trading and Price Volatility in the Paris Euronext Stock Market)

Author(s):Juraj Hruška, Oleg Deev
Language:English
Subject(s):Business Economy / Management, Methodology and research technology, Financial Markets, ICT Information and Communications Technologies
Page Range:249-255
No. of Pages:7
Keywords:volatility; high frequency trading; general method of moments; Markow switching model; GARCH;
Summary/Abstract:Algorithmic trading has become the crucial part of security trading on world equity markets influencing many of its characteristics. In this paper, we consider the effects of high frequency trading on the short term volatility. The aim of the paper is to analyze the relationship between high frequency trading (HFT) and spot volatility in high frequency as well as low frequency data from the French stock market. We employ GMM, GARCH and Markov switching models to estimate the relationship between changes in stock returns and changes in the activities of high frequency traders. We propose our own methodology to proxy changes in the activity of algorithmic traders. We also address the problem of optimal sampling to avoid possible biases in our empirical findings, since high frequency data contain a disruptive volatility component (market microstructure noise), by incorporating Bundi-Russell (2008) test and test of Lagrangian multipliers. Most actively traded stocks listed on the Paris stock exchange are chosen for the empirical analysis. Sampling tests suggest that optimal frequency should be approximately 60 minutes. Results from models confirm the hypotheses of positive impact of high-frequency trading on market volatility.

The Prediction of Economic Activity Growth by Sovereign Bond Spread in France, Germany and Great Britain

The Prediction of Economic Activity Growth by Sovereign Bond Spread in France, Germany and Great Britain
(The Prediction of Economic Activity Growth by Sovereign Bond Spread in France, Germany and Great Britain)

Author(s):Jana Hvozdenská
Language:English
Subject(s):National Economy, Methodology and research technology, Policy, planning, forecast and speculation, Economic development, Financial Markets
Page Range:256-261
No. of Pages:6
Keywords:bonds; slope; spread; yield curve;
Summary/Abstract:The steepness of the bond yield curve should be an excellent indicator of a possible future economic activity. A rise in the short rate tends to flatten the yield curve as well as to slow down real growth the near term. The relationship between the spread and future GDP activity was proved already before. One question remains – which spread is the best for the future prediction? Is it the spread between sovereign 10-year bonds and 3-month bonds or 30-year and 1- year or 10-year and 1-year sovereign bonds? This paper aims to analyze which spread is the most suitable for predicting of future economic growth in France, Germany and Great Britain between the years 2000 and 2016. The natural and probably the most popular measure of economic growth is GDP growth, taken quarterly. We have found out that the best predictive spreads in France, Germany and Great Britain are the spreads of 30-year and 1-year and 10-year and 1-year government bond yields. These findings might be beneficial for investors and provide further evidence of the potential usefulness of the yield curve spreads as indicators of the future economic activity.

Difference in Financial Knowledge of Finance Students in the Czech Republic

Difference in Financial Knowledge of Finance Students in the Czech Republic
(Difference in Financial Knowledge of Finance Students in the Czech Republic)

Author(s):Barbora Chmelíková, Martin Svoboda
Language:English
Subject(s):Business Economy / Management, Higher Education , Financial Markets, Socio-Economic Research
Page Range:262-266
No. of Pages:5
Keywords:financial literacy; university students; financial education;
Summary/Abstract:The aim of this article is to analyze the results of the study regarding financial literacy topics. The study was implemented at Masaryk University among the students of the Faculty of Economics and Administration. The paper presents the results of empirical study conducted in two consecutive years 2013-2014 testing the students’ knowledge in the areas of personal budgeting, numerical literacy, price literacy, payment methods, how to search for relevant information, breach of a contract and its consequences, indebtedness, right and obligation of consumers in the financial markets. The results of data gathered from the studies over the time enable an insight into the shift of the financial knowledge of the surveyed target group.

The Use of Financial Advisory in Czech Republic: Self-confidence

The Use of Financial Advisory in Czech Republic: Self-confidence
(The Use of Financial Advisory in Czech Republic: Self-confidence)

Author(s):Věra Jančurová, Petra Formánková
Language:English
Subject(s):National Economy, Behaviorism, Financial Markets, Socio-Economic Research
Page Range:267-271
No. of Pages:5
Keywords:behavioral finance; financial advisory; overconfidence; self-evaluation; financial decision;
Summary/Abstract:The study of behavioral finance and decision making, especially in finance, have grown on importance during last decades. There were conducted many studies of decision making at financial markets all around the world. This study was conducted to analyze financial decision making and behavioral characteristics of Czech population. The purpose of this study is to show how people in Czech Republic control their financial affairs; one of the studied areas is if they use the help of financial advisors, especially, if this is influenced by gender, the level of education or even by the self-evaluation of own financial skills and knowledge. There was conducted a field research based on electronic and printed questionnaire that was answered by 302 respondents. Based on the results of the testing it was confirmed that level of education is significant for both selfevaluation and the use of financial advisors. However the hypothesis that higher education level increase the probability of self-evaluation and decreases the need to use the help of financial advisors was not confirmed. One of possible explanation could be the overconfidence of individuals that is strongly shown by the sample; 70,52% of total respondents consider their financial knowledge better than average and only 3,32% of the respondents consider them worse than average. And only 29,6% pf the respondents use for their financial decisions the help of financial advisor.

Face Nominal Effect on Capital Market Transactions. The Case of Poland

Face Nominal Effect on Capital Market Transactions. The Case of Poland
(Face Nominal Effect on Capital Market Transactions. The Case of Poland)

Author(s):Magdalena Jasiniak
Language:English
Subject(s):National Economy, Behaviorism, Financial Markets, Socio-Economic Research
Page Range:272-277
No. of Pages:6
Keywords:face nominal effect; behavioral finance;
Summary/Abstract:Psychological features have an important role in evaluation processes. Studies indicate that investment decisions are strongly determined by behavioral factors. As a result investors behave irrationally. One of parameters that influence purchasing decision is price. Perceiving price as high generally discourage the purchase. As a consequence, goods at lower price are more attractive to bought what creates higher demand and influence companies’ revenues. Following paper analyze whether the face nominal effect observed at consumer market also occur in stock exchange market. The main aim of this article is to verify whether investors are influenced by face nominal values on stock market exchange. Author state that cheap assets characterized by nominally lower prices are more attractive to buy and bring higher profits (as a consequence of increased demand) in comparison to assets described as expensive. In order to verify the hypothesis, database of 13789 quotations from 1.07.1999 to 30.12.2013 was created. The sample was divided into three groups – cheap, average and expensive stocks. Finally the statistical analysis was conducted among 2924 records including only cheap and expensive units. Statistical analysis confirm that assets defined as “cheap” generate higher profits and lower losses.

Compensation for Income Lost – Long-term Effects on the Victim's Personal Finance

Compensation for Income Lost – Long-term Effects on the Victim's Personal Finance
(Compensation for Income Lost – Long-term Effects on the Victim's Personal Finance)

Author(s):Anna Jędrzychowska, Ewa Poprawska
Language:English
Subject(s):Health and medicine and law, Victimology, Welfare services, Socio-Economic Research
Page Range:278-285
No. of Pages:8
Keywords:personal injuries; annuities; MTPL insurance; technical provisions;
Summary/Abstract:The purpose of the article is to estimate the consequences that can arise in the household of the injured person, when they discontinue to pay social security insurance contributions because disability caused by motor accident. If the accident causes inability to work arose from someone's guilt, the offender shall bear the cost to repair the damage. If the damage is long-term, this compensation should be based on the payment of annuity, where there can be used two concepts: lifetime annuity, the value of the first payment at the level of net salary of the injured person, term life annuity paid till retirement age, the value of the first payment at the level of the gross salary of the injured person (including contributions to retirement insurance) and indexed by eg. the rate of inflation. In the second case, it is assumed that the injured person receives greater amount and spend it on pension contributions. The authors will make a comparison, which of these two methods of compensation for lost income is more favourable for victims of different age categories from three European countries: Czech Republic, Germany, Poland.

Crop Insurance as the Instrument for Risk Financing in Polish Farms

Crop Insurance as the Instrument for Risk Financing in Polish Farms
(Crop Insurance as the Instrument for Risk Financing in Polish Farms)

Author(s):Monika Kaczała
Language:English
Subject(s):National Economy, Business Economy / Management, Micro-Economics, Agriculture
Page Range:286-293
No. of Pages:8
Keywords:agricultural insurance; crop insurance; state aid; risk management; financing of risk;
Summary/Abstract:Risk management is one of the main priorities in the Common Agricultural Policy (CAP) for 2014-2020. Crop insurance belongs to the three CAP indicated types of instruments for financing risks, along with mutual funds and income stabilization tool. In Poland crop insurance is the only available instrument and despite its obligatoriness and subsidizing the market penetration amounts to 40%. The aim of this paper is to present development of agricultural insurance in quantitative terms and its main contributory factors. The answers were provided based on the qualitative and quantitative analysis. The data come mainly from the official statistics and information provided by The Ministry of Agriculture and Rural Development. The results show that apart from very high costs of crop insurance, resulting from a long-term loss ratio of more than 100% for , a very important determinant affecting crop insurance purchasing decisions is the subjective assessment of prosperity in agriculture as well as the scope and type of state aid (investment-related benefits are stimulating while revolving loans are inhibitive).

The Influence of a Low Interest Rate on Life Insurance Companies

The Influence of a Low Interest Rate on Life Insurance Companies
(The Influence of a Low Interest Rate on Life Insurance Companies)

Author(s):Silvie Kafková, Dagmar Linnertová
Language:English
Subject(s):Financial Markets, Socio-Economic Research
Page Range:294-299
No. of Pages:6
Keywords:life insurance; low interest rates; guaranteed returns;
Summary/Abstract:A protracted period of low interest rate threatens the stability of the life insurance industry, especially in the countries, where life insurance with comparatively high guaranteed returns disposed in the past represents a major portion of the total portfolio. The aim of this paper is to provide an introduction to evaluation of the effects of the actual low interest rate period on the balance sheet of a representative life insurance company. Firstly the balance sheet of insurance companies is introduced. We show the valuation of the assets and liabilities. Then the Solvency Capital Requirement and risk margin is defined. Finally the solvency situation of insurers is valuated.

Impact of the REPO Rate on Commercial Rates in the Czech Republic

Impact of the REPO Rate on Commercial Rates in the Czech Republic
(Impact of the REPO Rate on Commercial Rates in the Czech Republic)

Author(s):František Kalouda
Language:English
Subject(s):National Economy, Business Economy / Management, Economic policy, Financial Markets
Page Range:300-305
No. of Pages:6
Keywords:banking system; cybernetics; REPO rate; commercial rate;
Summary/Abstract:The paper is focused to further description and analysis the new aspects of behavior of Czech banking as a cybernetic system. The aim of the paper is analysis of the managing system relations (regulator – central bank) to managed system (controlled system – commercial banks) as relationships between operational indicator (REPO rate) and regulated indicator (commercial rates). Methodology of the paper is strategically focused to the time series methods (first of all correlation) and trends analysis. The usual analytic-synthetic methods, literary research, description and comparison are used here as well.The main expected result of the paper are working conclusions related to the fundamental linkages (still not explored) between REPO rate and the commercial rates.

The Interaction between Venture Capital and Innovation in Europe

The Interaction between Venture Capital and Innovation in Europe
(The Interaction between Venture Capital and Innovation in Europe)

Author(s):Özcan Karahan
Language:English
Subject(s):Supranational / Global Economy, Business Economy / Management, Economic development, Financial Markets
Page Range:306-313
No. of Pages:8
Keywords:venture capital; innovation; Europe;
Summary/Abstract:Venture Capital (VC) has been a significant source of finance for technologybased investments. Thus VC has played a key role in fostering innovative entrepreneurship and technological progress in new economies. Accordingly, it is generally argued that there is a positive causal relationship from venture capital to innovation, which called “venture capital-first hypothesis”. However, some studies in literature indicates an opposite causality that innovation stimulates venture capital, which called “innovation-first hypothesis”. The aim of this paper is to test these hypothesis to determine direction of causality between Venture Capital and Innovation in European countries. We use dynamic panel data analysis in order to investigate the direction of causality between innovation and venture capital based on annual data set related to European patent applications and venture capital investment. Empirical results of our study provide a strong evidence in favour of “innovation-first hypothesis” that innovation induces venture capital investment in Europe. This result presents significant implications for innovative entrepreneurship capacity of Europe. It seems that, although policymakers aim to make more financial resources available for innovation, the absence of innovative ideas is the big issue rather than the lack of available fund for innovative entrepreneurships in Europe.

Preventing Crises in the Banking Sector and the Role of Internal Audit in Corporate Governance

Preventing Crises in the Banking Sector and the Role of Internal Audit in Corporate Governance
(Preventing Crises in the Banking Sector and the Role of Internal Audit in Corporate Governance)

Author(s):Mária Klimiková, Martina Muchová
Language:English
Subject(s):Business Economy / Management, Financial Markets, Accounting - Business Administration
Page Range:314-321
No. of Pages:8
Keywords:corporate governance; internal audit; financial crisis; management; financial sector;
Summary/Abstract:Analysis of the causes of the financial crisis led to define different views and to seek factors triggering the crisis. The financial crisis has revealed that there has been no effective system of governance of financial institutions in crisis, and that there are very few measures that should be adopted by banks in the event of a banking crisis. At the same time, the fall of a number of major financial institutions turned his attention to the Corporate Governance. The attention of the professional public has focused on revising of the Corporate Governance´s role and thereby increasing the role of Internal Audit in the Corporate Governance. This paper focuses on implementation of the Corporate Governance in financial institutions as well as on impact of the updated rules of Corporate Governance and the role of Internal Audit in Corporate Governance.

Mobile Technology on the Retail Banking Market

Mobile Technology on the Retail Banking Market
(Mobile Technology on the Retail Banking Market)

Author(s):Monika Klimontowicz, Karolina Derwisz
Language:English
Subject(s):Social Informatics, Financial Markets, ICT Information and Communications Technologies, Socio-Economic Research
Page Range:322-330
No. of Pages:9
Keywords:mobile banking; mobile service suppliers; banking market; consumer expectations; mobile technology adoption;
Summary/Abstract:For the last few decades, the retail banking market has been influenced by many economic, political, legal, technological and social factors. Mobile technology has changed both the information and communication sharing, and customers’ market behaviour. The social revolution has already happened and changed customers’ expectations concerning banking services. Today there are 2,6 billion smartphone subscriptions globally. It is estimated that by 2020 the number of smartphone users will reach 6,1 billion. Mobile phones haves increasingly become tools that consumers use for banking, payments, budgeting and shopping. Today they enable using a different kind of financial applications offered not only by banks but also by other providers as telecoms or FinTech enterprises. The increasing number of offerings makes the choice much more difficult for customers. The purpose of the paper is to presents global and regional trends relating to mobile technology application on the retail banking market, customers’ expectations and selected factors influencing the adoption of this technology. The paper includes desk research of existing data. The authors try to answer the question if the implementation of mobile technology on retail banking market means the future of retail banking or just new distribution channel.

The Role of Accounting Policy in Management of Polish Hospitals

The Role of Accounting Policy in Management of Polish Hospitals
(The Role of Accounting Policy in Management of Polish Hospitals)

Author(s):Magdalena Kludacz-Alessandri
Language:English
Subject(s):Business Economy / Management, Methodology and research technology, Health and medicine and law, Accounting - Business Administration
Page Range:331-338
No. of Pages:8
Keywords:accounting policy; hospitals; accounting rules; balance sheet policy;
Summary/Abstract:The Polish accounting Act is not able to create an ideal accounting model for all organizations which carry out diversified activities in various economic conditions. Therefore, managers have the right to choose their own legally accepted accounting principles, in order to present a true and fair view of their financial results in financial statements. However, the freedom to choose accounting principles may also lead to use such tools of accounting policy that have a direct impact on the manner of recognizing revenues and costs and allow the creation of financial performance and other elements of financial statements. The aim of the article is to describe the essence of the accounting policy and analyze the use of selected instruments of material accounting policies in management of Polish hospitals that have impact on financial results and other components included in financial statements. The article presents the results of an empirical survey conducted in selected Polish hospitals in the years 2012 - 2013. The respondents gave information regarding various instruments of accounting policy used in their hospitals and evaluated their use in creating financial performance. The study showed that accounting policy is not the essential tool in the management of the hospitals in Poland. From one point it is good because it means that accounting policy isn't the tool of any manipulative practices in hospitals. On the other hand the managers don't use their possibilities and rights to choose the accounting methods to achieve the most desirable financial results. They don't try to optimize the financial statements of their hospitals using the instruments of accounting policy which don't violate the balance sheet law.

Revenue Efficiency in European Banking

Revenue Efficiency in European Banking
(Revenue Efficiency in European Banking)

Author(s):Kristína Kočišová
Language:English
Subject(s):Business Economy / Management, Methodology and research technology, Financial Markets, Accounting - Business Administration
Page Range:339-348
No. of Pages:10
Keywords:banking sector; revenue efficiency; DEA;
Summary/Abstract:This paper analyses revenue efficiency of banking sectors in the European Union countries over the period 2008-2014. The Data Envelopment Analysis (DEA) method is applied. The results show decrease of the average revenue efficiency in the whole sample. The results of DEA analysis, by country, indicate that the efficiency ranged from 52.47% in case of Romania to 100% in case of Germany, United Kingdom, Netherlands, Sweden, Malta, and Luxembourg. The revenue efficiency was also analyzed in three groups of banking sectors, classified according to the volume of total assets. Large banking sectors seem to be most efficient, where the average revenue efficiency during the whole analyzed period was 97.11%. On the second place, there were banking sectors within the medium-sized group (85.3%) and the least efficient were banking sectors in the small sized group (71.6%). In the last part of our analysis there were determined four main European “regions” and the average revenue efficiency was analyzed within them. According to the results of analysis, levels of efficiency in case of Northern (89.4%) and Western European (89.5%) banking sectors were higher than the average in the whole sample (79.8%); on the other hand, the average revenue efficiencies in case of Southern (76.7%) and Eastern European (63.5%) banking sectors were under the total average.

Impact of Transfer Pricing Regulation on MNEs' Behaviour

Impact of Transfer Pricing Regulation on MNEs' Behaviour
(Impact of Transfer Pricing Regulation on MNEs' Behaviour)

Author(s):Michal Kolář
Language:English
Subject(s):Business Economy / Management, Micro-Economics, Economic policy, Fiscal Politics / Budgeting
Page Range:349-356
No. of Pages:8
Keywords:transfer pricing; safe harbour; Amadeus database; factor analysis; cluster analysis;
Summary/Abstract:Tax administrations worldwide provide taxpayers with favour and offer them the opportunity to set up transfer pricing system according to pre-agreed criteria. When taxpayer´s system complies with, tax administrator does not dispute the transaction. Any predefined arrangement leading to the recognition of transfer pricing system by tax administrator can be defined as a safe harbour. During the review process of current sources, it was found out that there is no relevant research available focused on assessing the appropriateness of introducing safe harbour system for both businesses and government. At the same time even the OECD does not work with data that would conclusively prove the impact of transfer pricing regulation on companies´ behaviour. For this reason, a research was conducted in this area with focus on the potential of safe harbour to affect tax contributions of enterprises. Financial data were rendered from Amadeus database. The impact of safe harbour system was observed on the time series development of taxation of particular cluster. Cluster analysis was selected as the most suitable method for grouping companies.

The Electronic Record of Sales and Impact on the Reduction of Tax Evasion

The Electronic Record of Sales and Impact on the Reduction of Tax Evasion
(The Electronic Record of Sales and Impact on the Reduction of Tax Evasion)

Author(s):Eva Kolářová, Eva Podolská
Language:English
Subject(s):National Economy, Fiscal Politics / Budgeting, Accounting - Business Administration, ICT Information and Communications Technologies
Page Range:357-364
No. of Pages:8
Keywords:revenues; electronic records of sales; tax; value added tax;
Summary/Abstract:Tax evasion is a problem not only in the Czech Republic but in other countries as well. Combating tax evasion and more efficient tax collection is one of the priorities of the government. Implementation of Electronic Records of Sales will cut down shadow economics and ensure straightening of market environment. This implementation will affect most of business subjects. The research is based on a survey. It deals with electronic revenue registry and the impact of its introduction on small businessman, natural persons and micro legal entity. The aim of this article is to identify the attitude of surveyed subject on the Electronic Records of Sale implementation. Results of the research confirms that the entrepreneurs’ view of ERR differs from the view of non - entrepreneurial public.

The Comparison of the Selected Aspects of Taxation in Visegrad Four Countries

The Comparison of the Selected Aspects of Taxation in Visegrad Four Countries
(The Comparison of the Selected Aspects of Taxation in Visegrad Four Countries)

Author(s):Jaroslav Kovarnik, Pavel Jedlička, Eva Hamplova
Language:English
Subject(s):National Economy, Economic policy, Economic development, Fiscal Politics / Budgeting
Page Range:365-372
No. of Pages:8
Keywords:GDP development; taxation; Visegrad Four countries;
Summary/Abstract:Visegrad Four countries, namely the Czech Republic, Slovakia, Poland, and Hungary, share not only same geographical position in the Central Europe, but also similar history, and similar economic development. All countries were under the influence of Soviet Union, they went through the economic transformation in the nineties of the last century, they joined the European Union in the same year, and they also experienced the economic crisis. However, even if the economic development before crisis was similar in all analysed countries, the after-crisis development has been different, where some countries have been developing faster than the others in terms of GDP. The aim of this article is to analyse not only GDP development in Visegrad Four countries, but also analyse the development of selected aspects of taxation, namely tax collection and tax burden (more precisely tax quota). The authors analyse whether the development of mentioned tax problems corresponds with the GDP development or not. The analysis shows that even if the Slovakia has been developing in terms of GDP after crisis, there is the lowest tax collection and tax burden. Details of this analysis are described in this article.

Alternative Investments in Voluntary Pension Security

Alternative Investments in Voluntary Pension Security
(Alternative Investments in Voluntary Pension Security)

Author(s):Patrycja Kowalczyk-Rólczyńska, Tomasz Rólczyński
Language:English
Subject(s):Financial Markets, Socio-Economic Research
Page Range:373-379
No. of Pages:7
Keywords:alternative investments; traditional assets; rate of return; risk; pension security;
Summary/Abstract:Voluntary pension security plans play an important role in every pension system. Demographic changes in European countries cause that the value of pension benefits from the mandatory part of the pension system will be getting lower in the following years. This will have a significant effect on quality of life and consumption of retired people. In order not to increase the group of people at risk of poverty, one needs to increase the number of economically active persons who voluntarily save for their retirement. As part of the voluntary forms of pension security different products, mainly financial ones, are offered (often by banks, insurance companies, investment funds and pension funds). The contributions paid are invested mostly on the capital market (both safe and risky financial assets). However, on the market there are also alternative assets which in the long term can generate higher rates of return than investments in traditional assets. People who save money should consider including in the portfolio alternative assets which would affect also the diversification of the portfolio constituting voluntary pension security plans. Among alternative assets a special attention should be paid to real estate, gold, silver, arts, wine and whisky as well. In those types of assets investors can invest both directly and indirectly. The aim of the article is to assess the role which alternative investments play in voluntary pension security on the Polish market. To achieve that purpose, statistical methods, such as for example correlation coefficient, are used to assess the relationship between characteristics of describing alternative and traditional assets.

Impact of the Interest Rates in the Economy, the Banking and Financial System

Impact of the Interest Rates in the Economy, the Banking and Financial System
(Impact of the Interest Rates in the Economy, the Banking and Financial System)

Author(s):Jan Krajíček, Bohuslava Doláková
Language:English
Subject(s):Business Economy / Management, Economic development, Financial Markets
Page Range:380-384
No. of Pages:5
Keywords:liabilities; profit; rates; risk; management;
Summary/Abstract:The continued decline of interest rates, pointing to negative interest rates is reflected in the economy, banking and financial sector. 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 main reason for their creation is the need to secure the necessary amount of profit. Similarly, the decline in risk aversion is also reflected in the design of new products, where risk is transferred to raise immediate profits.

Accrual Accounting in the Army of Great Britain - Clarity, Transparency, and Accounting Data Analysis Options

Accrual Accounting in the Army of Great Britain - Clarity, Transparency, and Accounting Data Analysis Options
(Accrual Accounting in the Army of Great Britain - Clarity, Transparency, and Accounting Data Analysis Options)

Author(s):Miroslav Krč, Vladimír Golik, Jana Vodáková
Language:English
Subject(s):National Economy, Military policy, Public Finances, Fiscal Politics / Budgeting, Accounting - Business Administration, Corruption - Transparency - Anti-Corruption
Page Range:385-391
No. of Pages:7
Keywords:resource accounting and budgeting; effective allocation; resource / capital; annually managed expenditure;
Summary/Abstract:The article "Accrual accounting in the Great Britain army - clarity, transparency, and easy accounting data analyze" analyzes the application of the accrual accounting and resulting consequences of the introduction of resource accounting and budgeting in the Great Britain Armed Forces. The analysis was based on the selected financial statements: Summary of Resource Outturn; Operating Cost Statement, Balance sheet. The horizontal analysis was used to analyze trends of the changes on the annually managed expenditure limits during the period of RAB implementation. The Great Britain army was monitored as a business. Analyzed reports show data for the current and last year. Using data from individual years there was calculated the increase in absolute terms and as well as in percentage terms (growth rate). The original absolute data from financial statements are monitored in certain contexts. Analysis of the trends examined the changes of absolute indicators over time. Change is expressed in percentage or index. How many units of the item has changed over time? (Absolute change) and how many percent of the item has changed over time? (Percentage change). In the horizontal analysis we measured the development of selected items of expenditure limits and capital resources (Resource / Capital DEL) and Annually managed expenditure (AME).

The Impacts of the Directive No. 2013/34 / EU Transposition into National Accounting Modifications in the Czech and Slovak Republic

The Impacts of the Directive No. 2013/34 / EU Transposition into National Accounting Modifications in the Czech and Slovak Republic
(The Impacts of the Directive No. 2013/34 / EU Transposition into National Accounting Modifications in the Czech and Slovak Republic)

Author(s):Michaela Krejčová, Milena Otavová, Jana Gláserová
Language:English
Subject(s):National Economy, Methodology and research technology, Law on Economics, Accounting - Business Administration
Page Range:392-399
No. of Pages:8
Keywords:European Directives; accounting entity; accounting principles; financial statements; Czech and Slovak accounting system;
Summary/Abstract:The obligation of all EU Member States was to implement Directive No. 2013/34 / EU on the annual financial statements, the consolidated financial statements and related reports of certain types of business corporations. The implementation of Directive No. 2013/34/EU was the duty for all EU state members no later than 1. 1. 2016. Member states have acceded to this obligation differently, since the Directive has in some areas only recommendatory character. The goal of this article is therefore to identify the differences; and then evaluate the impacts of the directive transposition into national accounting adjustments in the Czech and Slovak Republic. The main focus is primarily the classification of accounting units by their size and the subsequent determination of their accounting obligations. Based on the identified differences the conclusions for the users of financial statements with respect to their economic and financial decisions will be also determined. The starting point of the paper is processing a comparative analysis of the Accounting Act, including implementing regulations in the monitored countries. The identified differences will provide a basis for an appraisal of level of implementation of the directive into national accounting adjustments for these countries. The impact on reporting framework for micro, small, medium and large enterprises will also be defined including links to basic accounting principles - in particular a true and fair picture of the accounting and principle of prudence.

Current Issues of Accounting for Intangibles in Various Reporting Systems

Current Issues of Accounting for Intangibles in Various Reporting Systems
(Current Issues of Accounting for Intangibles in Various Reporting Systems)

Author(s):Zuzana Křížová
Language:English
Subject(s):Methodology and research technology, Accounting - Business Administration
Page Range:400-407
No. of Pages:8
Keywords:accounting; intangibles; measurement; reporting standards;
Summary/Abstract:In today’s economy value is often created by intangible assets that represent intellectual capital. The accounting standard setters try to meet the challenge of recognition and reporting the results of knowledge-based entities. The problems relating to the accounting for intangibles are international in scope. This paper briefly reviews existing IFRS, US, UK and Czech accounting standards relating to Intangibles. Inconsistencies are highlighted, and evidence is provided that suggests that recognition of Intangible Assets is in accordance with existing accounting principles. This article is based on analysis and comparisons of relevant literature resources, mainly articles and conference papers, but also legislative acts and monographs.

Analysis of Financial Statements Focusing on Detection of Ponzi Schemes Using XBRL

Analysis of Financial Statements Focusing on Detection of Ponzi Schemes Using XBRL
(Analysis of Financial Statements Focusing on Detection of Ponzi Schemes Using XBRL)

Author(s):Zuzana Kubaščíková, Zuzana Juhászová
Language:English
Subject(s):Methodology and research technology, Accounting - Business Administration, Corruption - Transparency - Anti-Corruption
Page Range:408-412
No. of Pages:5
Keywords:financial statements; Ponzi scheme; XBRL; financial analysis; fraud;
Summary/Abstract:A number of companies are asked to provide the relevant financial information in electronic form for the needs of national and international regulators of trading with securities and for the purposes of supervisors of financial institutions. To fulfill these requirements there is also a need to ensure effective electronic communication that allows grouping, organizing, and analyzing data according to the requirements of the user. This paper deals with the possibilities of using XBRL (eXtensible Business Reporting Language) for this purpose with a focus on tracking features of a Ponzi scheme. Typical characteristics of a Ponzi scheme are often found in a high-risk type of investment companies called HYIP (High-yield Investment Programs) many of which belong to bankrupt non-bank entities investigated since 2000.

The Success of Business Failure Prediction Using Financial Creditworthy Models

The Success of Business Failure Prediction Using Financial Creditworthy Models
(The Success of Business Failure Prediction Using Financial Creditworthy Models)

Author(s):Michal Kuběnka
Language:English
Subject(s):Micro-Economics, Methodology and research technology, Policy, planning, forecast and speculation, Accounting - Business Administration
Page Range:413-419
No. of Pages:7
Keywords:credibility index; Rudolf Doucha's Balance analysis; Kralicek´s Q-test; failure; predictive power;
Summary/Abstract:Financial creditworthy models are popular for their simplicity and fast applications. Above all, quantitative evaluation of financial health guarantees an unbiased assessment of company. On the other hand, these models do not take into account the soft factors. Probably, the most famous Czech financial models known as creditworthy are Credibility Index, Rudolf Doucha´s Balance analysis, and Kralicek´s Q-test. They were created for the purpose of assessing the creditworthiness usually without using statistical methods. Can they be used for prediction of business failure despite this drawback? What is their success rate? Which of these classic financial models achieves the highest accuracy? To find answers a dataset of financial statements of 92 companies in manufacturing industry was analysed. These companies went bankrupt between 2010-2014.

Perspective of Sustainability of Fiscal Policy in Czech Republic

Perspective of Sustainability of Fiscal Policy in Czech Republic
(Perspective of Sustainability of Fiscal Policy in Czech Republic)

Author(s):Dušan Litva
Language:English
Subject(s):National Economy, Economic policy, Policy, planning, forecast and speculation, Economic development, Fiscal Politics / Budgeting
Page Range:428-435
No. of Pages:8
Keywords:fiscal policy; sustainability; prediction; SFP;
Summary/Abstract:Each country entering monetary union automatically gives up one of key macroeconomic tool- monetary policy. Hence second tool which is fiscal policy has increasing influence and significance. In this papers are discussed in theoretical part basic principles of fiscal policy, its tools and possible consequences of use. Emphasis is put on derivation of theoretical relationships using Wickens approach which is based on general dynamic equilibrium in economy and its application on evaluation of sustainability of fiscal stance. Needed data for model construction are inflation, GDP, and debt to GDP ratio. In this article was used data prediction of IMF for Czech Republic for period 2015- 2020 for formulation of hypothesis for sustainability of fiscal policy. For expression of degree of sustainability was established SFP index while comparing Czech Republic with other chosen countries. Based on predicted data fiscal policy of Czech Republic seems to be sustainable for explored period. Key drivers for this result are high and stable predicted growth of GDP, stable and low predicted inflation, but mainly decrease of overall predicted debt (resulting in decrease of debt and GDP ratio as a result of cumulative surpluses of government budget).

Interrelation between Concentration in Banking Sector and its Main Performance Indicators: Case of Russia

Interrelation between Concentration in Banking Sector and its Main Performance Indicators: Case of Russia
(Interrelation between Concentration in Banking Sector and its Main Performance Indicators: Case of Russia)

Author(s):Rogneda I. Vasilyeva
Language:English
Subject(s):National Economy, Financial Markets
Page Range:436-443
No. of Pages:8
Keywords:bank; market structure; concentration; assets; liabilities;
Summary/Abstract:The research is aimed at determining the interrelation of Russian banking sector concentration for most assets and liabilities in 2008-2015 with its main performance indicators, such as Return on Assets, Return on Equity and Capital Adequacy. We used a set of indices from the industrial organization theory to evaluate the level of concentration and unevenness in Russian banking sector and proposed the method of Herfindahl-Hirshman index decomposition to separate concentration caused by reduction in number of banks and by growing heterogeneity in banking sector. Having tested 4 statements concerning correlation between banking sector concentration and its main performance indicators, we have not found any functional connection between a particular bank share in total capital or assets and its performance, but revealed positive influence of concentration in banking system as a whole on its performance both at a snapshot and in time series. Additionally, we recognized a relatively negative contribution of small and medium-sized banks to Russian banking system's efficiency in the period of recession, whilst during recovery they, though being less effective than larger banks, form a zone of stability. Taking into account the support given to large banks by the state, we still bear in mind not only natural but also artificial origin of such a result. Finally, we state the need of effective control over the structure of the banking system.

Risks and Efficiency of Tax System at Different Budget System Levels: Revenue Formation and Sharing in the Russian Federation Regions

Risks and Efficiency of Tax System at Different Budget System Levels: Revenue Formation and Sharing in the Russian Federation Regions
(Risks and Efficiency of Tax System at Different Budget System Levels: Revenue Formation and Sharing in the Russian Federation Regions)

Author(s):Rogneda I. Vasilyeva, Rodion Vladiirovich Balakin
Language:English
Subject(s):National Economy, Economic policy, Public Finances, Fiscal Politics / Budgeting
Page Range:444-450
No. of Pages:7
Keywords:tax system; budget; region; Markowitz portfolio theory; risk; profitability; Sharpe ratio;
Summary/Abstract:The research is aimed at analyzing tax systems at the stages of tax revenue formation and its distribution among different budget levels to compare risks and efficiency of tax systems. H. Markowitz portfolio theory is applied to the tax system risk assessment. The deflation of tax revenue and regional gross product (GRP) was employed to adjust the price scale of the analysed time series. The ratio between the tax yield to GRP applied to 8 basic taxes and tax groups was viewed as the profitability of the ‘tax portfolio’. For evaluation of the tax risks we used the intertemporal standard deviation of tax yield ratio to GRP. In order to identify the influence of tax variance and tax covariations on general risk of the tax system at the stages of tax revenue formation and its distribution, decomposition method of tax portfolio risk index is used. W. Sharpe ratio is employed to assess the efficiency of a tax system, on the assumption that riskfree return equals zero. According to the results obtained, Russian tax system shows the highest risks and profitability rates at the stage of federal budget formation, whereas the risks and yield rates of the regional consolidated budgets are lower. It works the same way when it comes to regional tax return’s distribution among regional and local budgets. However the tax system efficiency, according to the calculated Sharpe ratio, at a regional level generally compares favorably with that at the federal or local levels. The policy of interregional inequalities levelling forms the basis of tax return distribution among different budget levels. Hence the federal level shows the highest rate of interregional inequality of tax system efficiency, while regional level is characterized by a lower rate, the lowest one found at the local budget level.

Analysis of the Relationship between Adopting and Using XBRL as a Reporting Language for Small and Medium Sized Entities and the Development Status of the Country and the Existence of XBRL Jurisdiction

Analysis of the Relationship between Adopting and Using XBRL as a Reporting Language for Small and Medium Sized Entities and the Development Status of the Country and the Existence of XBRL Jurisdiction
(Analysis of the Relationship between Adopting and Using XBRL as a Reporting Language for Small and Medium Sized Entities and the Development Status of the Country and the Existence of XBRL Jurisdiction)

Author(s):Anton Marci, Zuzana Juhászová
Language:English
Subject(s):Micro-Economics, Methodology and research technology, Accounting - Business Administration
Page Range:451-458
No. of Pages:8
Keywords:XBRL; XBRL taxonomy; extensible business reporting language; SMEs; small and medium-sized enterprises;
Summary/Abstract:The aim of the paper is to explore possible relationship between adopting and using XBRL as a reporting language for small and medium sized companies and development status of the economy and to explore possible relationship between adopting and using XBRL as a reporting language for small and medium sized companies and the existence of XBRL Jurisdiction. Methodology used in the research project is focused on the current experiences of using XBRL by insurance and banking sector companies and by companies in other sectors with accordance to regulations for insurance and banking sector companies and for small and medium sized enterprises in European Union member states. Research is then focused also on the existing relationship between XBRL usage and the development status of the economy and other social factors. Preliminary results in the field of problems in the process of creating and implementing XBRL by small and medium sized enterprises in the future are dependence of automation on taxonomy preparation level. The second side of problems to overcome is linked to costs of adopting XBRL, which are highly changeable and not easily predictable. The other problem is linked to taxonomies already in use, which are subject to changes and transformations what can cause problems for software systems designed for older taxonomies. In some European Union countries XML reporting format is required by state legislation for small and medium sized enterprises with no other option. XBRL also requires more skills from accounting experts than simpler XML based reporting.

Corporate Tax Revenues of Selected European Countries Using Dynamic Conditional Correlation Approach

Corporate Tax Revenues of Selected European Countries Using Dynamic Conditional Correlation Approach
(Corporate Tax Revenues of Selected European Countries Using Dynamic Conditional Correlation Approach)

Author(s):Slavomíra Martinková, Jakub Danko
Language:English
Subject(s):Micro-Economics, Methodology and research technology, Fiscal Politics / Budgeting, Accounting - Business Administration
Page Range:459-466
No. of Pages:8
Keywords:corporate tax revenues; dynamic conditional correlations;
Summary/Abstract:The present paper focuses on the comparison of the development of corporate tax revenue of the largest European countries for the period of 1965 - 2014, followed by identification of selected differences between the countries and characterization of causes of this different development. Different amount of the corporate tax revenue is often affected by different types of fiscal policy and existing deficit tendencies of fiscal economy of countries. The main aim of this paper is to analyze and compare the differences in the development of tax revenues between the countries themselves in space and time by using the method of dynamic conditional correlations, while interpretation of the results is based on traditional macroeconomic indicators. The method allows us to compare the development of corporate tax revenue and structure of tax components between each pair of analyzed countries separately, what is in comparison with the commonly used (e. g. panel) models considered to be its main positive aspect. A new look on the measurement and evaluation of the selected revenues allows us to explain the structure of revenue components (especially the tax ones) for the implementation and testing of fiscal consolidation.

The Characteristics of the Investment through the Airbag Certificates

The Characteristics of the Investment through the Airbag Certificates
(The Characteristics of the Investment through the Airbag Certificates)

Author(s):Peter Mokrička
Language:English
Subject(s):Business Economy / Management, Financial Markets
Page Range:467-472
No. of Pages:6
Keywords:return; risk; airbag certificate; investment;
Summary/Abstract:The aim of this paper is to examine the change in the fundamental investment characteristics, especially a change in the expected return and the risk of investment, provided that the investor will use the selected certificate with a partial guarantee on invested capital instead of a direct investment in the underlying asset. First will be selected an underlying asset. It will be then modeled the development of its value by Monte Carlo simulation. This development also affects the development of the value of alternative investments through a certificate. The certificate will be divided into components from which it is comprised, and these will be priced. Then it will be statistically evaluated and assessed the change in investment characteristics compared with investment characteristics of direct investment in the underlying asset. Finally, discussions will be carried out and formulated recommendations for the retail investor.

Friendship of Stock Indices

Friendship of Stock Indices
(Friendship of Stock Indices)

Author(s):László Nagy, Mihály Ormos
Language:English
Subject(s):Business Economy / Management, Financial Markets, ICT Information and Communications Technologies
Page Range:473-480
No. of Pages:8
Keywords:cluster analysis; equity index networks; machine learning;
Summary/Abstract:The aim of this study is to cluster different stock indices based on historical time series data. The current research shows that tail events have minor effect on the equity index structure. It also turns out that major part of the total variance can be explained by clusters. In addition, cluster wise regressions are reliable, hence CAPM with clusters gives real information about risk and reward.

CCTB and CCCTB Implementation and its Impact on the Tax Bases Allocated in the Slovak Republic

CCTB and CCCTB Implementation and its Impact on the Tax Bases Allocated in the Slovak Republic
(CCTB and CCCTB Implementation and its Impact on the Tax Bases Allocated in the Slovak Republic)

Author(s):Danuše Nerudova, Veronika Solilova
Language:English
Subject(s):Supranational / Global Economy, Micro-Economics, Economic policy, Fiscal Politics / Budgeting, EU-Legislation
Page Range:481-489
No. of Pages:9
Keywords:CCCTB; CCTB; allocation; corporate tax base; European Union;
Summary/Abstract:On 17th June 2015 the European Commission has introduced an action plan for fairer taxation of corporates within the EU. Very important part of the action plan represents the re-launching of CCCTB in the EU through two steps. Firstly, only common rules for tax base construction (CCTB) should be introduced with the possibility of crossborder loss-offsetting instead of consolidation regime. Common consolidated corporate tax base should be introduced only in the second step. The paper deals with the impacts of both implementation stages on the tax bases allocated in the Slovak Republic. The research shows that in case of cross-border loss offsetting, Slovak Republic would be facing the decrease of the allocated corporate tax bases by 0.27 %. On the other hand, the implementation of full CCCTB would result into the increase of the corporate tax bases allocated in the Slovak Republic by 3.02 %.

Study of Financial Literacy in the Field of Insurance Products

Study of Financial Literacy in the Field of Insurance Products
(Study of Financial Literacy in the Field of Insurance Products)

Author(s):Josef Nešleha, Karel Urbanovský
Language:English
Subject(s):Education, Financial Markets, Socio-Economic Research
Page Range:490-495
No. of Pages:6
Keywords:insurance; financial literacy; customer; protection;
Summary/Abstract:The protection of customers who take out life insurance becomes to be more important, as there is an increasing number of such products. Therefore, it is more likely that customers do not have all decisive information they need to deal with an insured event. The goal of this article is to verify the level of financial literacy in the field of life insurance products. Consequently, the goal is to investigate whether customers of insurance companies are provided with sufficient amount of information related to the products they look for, or whether some important information is missing, and such clients have to search for it on their own. The research is based on an electronic questionnaire. The target audience of this research is limited to those who have already taken out life insurance, since this group of people should be more familiar with conditions, restrictions and other features of such products. In terms of used methods, Pearson chi-squared test is employed in order to reveal a link between financial literacy of insurance products and between different criteria. Other methods are descriptive statistics and basic statistical data processes.

Local Economic Impact of Domestic and International Students: Case of University of Economics in Bratislava

Local Economic Impact of Domestic and International Students: Case of University of Economics in Bratislava
(Local Economic Impact of Domestic and International Students: Case of University of Economics in Bratislava)

Author(s):Tetyana Nestorenko, Nadiya Dubrovina, Jana Péliová
Language:English
Subject(s):Business Economy / Management, Higher Education , Economic development, Human Resources in Economy, Socio-Economic Research
Page Range:496-501
No. of Pages:6
Keywords:university; international students; domestic students; economic impact; Bratislava;
Summary/Abstract:The economic role of universities should be considered not only in terms of their contribution to the creation of human capital as a key factor of economic growth. By teaching of international students, universities thus impact on city's economy and contribute to increase of service exports. In their turn, international students have the economic impact on a host city. The study examines the University of Economics in Bratislava (EUBA) as an exporter of education, and employs survey data for calculating direct economic effects of international students for Bratislava. The calculations of this impact are conducted on the basis of the survey data of international students of University of Economics in Bratislava (2015/2016 academic year). The main areas of local expenditure by international students of EUBA are defined. The direct effect of economic impact of EUBA international students is calculated. We compare this economic with the direct economic impact of domestic students of EUBA on the local economy.

The Performance Ranking of Chosen Manufacturing Division

The Performance Ranking of Chosen Manufacturing Division
(The Performance Ranking of Chosen Manufacturing Division)

Author(s):Inka Neumaierová, Ivan Neumaier
Language:English
Subject(s):Business Economy / Management, Accounting - Business Administration
Page Range:502-507
No. of Pages:6
Keywords:ranking; performance; other manufacturing; Economic Value Added; spread;
Summary/Abstract:The goal of the article is to create the performance ranking of production groups within manufacturing division CZ-NACE 32 - Other manufacturing. We would like to know, which group was the most powerful driver of this heterogeneous division in course of 2008 – 2014. For determination of order is used criterion of Economic Value Added, which is considered as a crucial indicator of competitiveness. It facilitate to view on the behaviour of the chosen group in the chronological order. Further we are taking in account the “Relative Economic Value Added“, which enable to make comparisons among groups. The results show, that the best performing productive group is CZ-NACE 32.4 – Production of toys, followed by group 32.5 – Production of medical and dental tools and equipment.

Private Health Insurance and Medical Subscriptions – Two Faces of the Private Pre-paid Funding of Health Care in Poland

Private Health Insurance and Medical Subscriptions – Two Faces of the Private Pre-paid Funding of Health Care in Poland
(Private Health Insurance and Medical Subscriptions – Two Faces of the Private Pre-paid Funding of Health Care in Poland)

Author(s):Magdalena Osak
Language:English
Subject(s):National Economy, Health and medicine and law, Financial Markets, Socio-Economic Research
Page Range:517-525
No. of Pages:9
Keywords:private health insurance; medical subscriptions; pre-paid plans; health care financing; Poland;
Summary/Abstract:Health care in Poland is financed from mixed sources, both private and public. Similarly to the majority of developed countries, public funds are the main source of financing. However, since the 1990s private expenditure has constituted a significant proportion of the total expenditure on health. Apart from out-of-pocket payments, which are the main source of generating private resources, pre-paid plans are used. The paper presents the legal and market coexistence of private health insurance (PHI) and other pre-paid schemes in the form of the so-called “medical subscriptions”. The analysis will be focused, inter alia, on: the value of collected funds, the number of operating providers, and the percentage of the population covered. One of the leading goals will be to stress the specific character of the Polish legal state of affairs among private pre-paid plans. This is especially important when making international comparisons devoted to PHI schemes as a different legal status can influence the findings of the market analysis. The need to draw public attention to legal differences is critically important if they are not rooted in the functional aspect of different mechanisms of funding, which is the case in Poland.

Payment Card Frauds with a Hidden Camera, Touch Sensors and a Counterfeit Payment Card and Protection Techniques against these Types of Frauds

Payment Card Frauds with a Hidden Camera, Touch Sensors and a Counterfeit Payment Card and Protection Techniques against these Types of Frauds
(Payment Card Frauds with a Hidden Camera, Touch Sensors and a Counterfeit Payment Card and Protection Techniques against these Types of Frauds)

Author(s):Gabriela Oškrdalová
Language:English
Subject(s):Criminology, Financial Markets, Socio-Economic Research
Page Range:526-533
No. of Pages:8
Keywords:e-banking; payment card; security; risk; fraud;
Summary/Abstract:rauds with a hidden camera, touch sensors and a counterfeit payment card belong to the basic types of frauds in the e-banking and e-shopping field. The principle of frauds with a hidden camera and touch sensors is the same - by installing of a special equipment to obtain the PIN code. The knowledge of user’s PIN code is not sufficient to abuse the payment card. Therefore these frauds are often combined with a Lebanese loop, a theft of a payment card or with skimming and producing of a counterfeit payment card. Recommendations to reduce security risks are variable. The aim of this paper is to describe payment card frauds with a hidden camera, touch sensors and a counterfeit payment card, identify the usual ways for realizing these types of frauds and its warning signs, create a scheme of the usual ways for these types of payment card frauds, introduce and interpret results of own quantitative research focused on knowledge of these frauds and define the basic recommendations for payment card users, banks and other subjects to reduce security risks connected with using of payment cards.

Comparison of Health Care Results in Public Health Systems of European Countries

Comparison of Health Care Results in Public Health Systems of European Countries
(Comparison of Health Care Results in Public Health Systems of European Countries)

Author(s):Viera Pacáková, Pavla Jindrová, David Zapletal
Language:English
Subject(s):Supranational / Global Economy, Welfare systems, Methodology and research technology, Health and medicine and law, Public Finances, Socio-Economic Research
Page Range:534-541
No. of Pages:8
Keywords:public health systems; health status; comparison; multivariate methods;
Summary/Abstract:Health of citizens is a precondition for economic prosperity. Ensuring optimal functioning of health systems at limited financial resources of countries and regions is a difficult task. Its solution requires a lot of information that can be obtained only by appropriate analysis of data collected by authorized world, European and national institutions. About the state of public health systems there are collected and published a number of data on the regional, national, EU or OECD countries, continental and the world level. These databases can be used for comparative analyses on health status, risk factors to health, health care resources and utilization, as well as health expenditure and financing. Huge differences in health and healthcare exist between and within countries and regions. The aim of this article is to present the results of application of multivariate comparison statistical methods, regression analysis, factor analysis and cluster analysis, which provide an overview of the health care status and public health systems expenditures, various causal relations and regional differences or similarities. This information is essential to the development of national and international health policies for treatment and financial budget of public health systems.

The Policy of Monetary Easing of Central Banks

The Policy of Monetary Easing of Central Banks
(The Policy of Monetary Easing of Central Banks)

Author(s):Dalibor Pánek
Language:English
Subject(s):Economic policy, Financial Markets, Fiscal Politics / Budgeting
Page Range:542-546
No. of Pages:5
Keywords:central bank; policy of monetary easing; macroeconomic goal; affectiveness of instrument;
Summary/Abstract:The text explains the essence of the concept of the policy of monetary easing. Contains the reasons, methods and objectives of the policy of monetary easing carried out in the selected central banks. Compares the effects and the connection of the policy of monetary easing with the selected macroeconomic variables and evaluate the achieved goals in this area of activity of the central bank. Selected macro-economic trends are monitored in the period of the last seven years. The text covers the comparison of the development of the macroeconomic values. In the conclusion the author evaluates the success of the policy of monetary easing of central banks and summarizes the fulfillment of macroeconomic goals.

Composition of Pension Funds' Investment Portfolio and its Impact on Profit

Composition of Pension Funds' Investment Portfolio and its Impact on Profit
(Composition of Pension Funds' Investment Portfolio and its Impact on Profit)

Author(s):Mário Papík
Language:English
Subject(s):National Economy, Financial Markets
Page Range:547-555
No. of Pages:9
Keywords:pension funds; assets; composition of assets; financial revenues;
Summary/Abstract:In 2004, pension reform with fundamental influence on the function of the pension system was implemented in Slovakia. After the pension system reform, each Slovak citizen can save their money in pension funds. Since January 2013, pension fund management companies have had to establish at least two pension funds, one guaranteed bond fund and at least one unguaranteed equity fund. Nowadays, pension funds own a wide range of assets. The aim of this article is to monitor the composition of financial assets and relation between pension funds’ profit and components of financial assets they own. This relation will be described by linear regression model which aims to determine significant variables affecting the profit of these funds. The underlying model data will be chosen from balance sheet and income statements of Slovakia-based pension funds, managed by six pension fund management companies, from the time period 2009 to 2014. The results of this research contribute to a better understanding of the importance of certain types of financial assets owned by pension funds, and thus help improve the legislative management of pension funds in Slovakia and their impact on macroeconomics.

Contribution to the Research for Adequate and Sustainable Pensions – The Study of the Slovak Republic and the Czech Republic

Contribution to the Research for Adequate and Sustainable Pensions – The Study of the Slovak Republic and the Czech Republic
(Contribution to the Research for Adequate and Sustainable Pensions – The Study of the Slovak Republic and the Czech Republic)

Author(s):Erika Pastoráková, Zuzana Brokešová, Tomáš Ondruška, Eleonóra Zsapková
Language:English
Subject(s):National Economy, Demography and human biology, Financial Markets, Socio-Economic Research
Page Range:556-563
No. of Pages:8
Keywords:pension systems; Aaron´s rule; population aging; individual old-age security; dependency ratio;
Summary/Abstract:Pension systems have been under great pressure in the last years due to the changes of paradigms which formed the basis for these systems. Therefore systems are undergoing more or less important changes starting with increasing the age of retirement, lowering the amount of pensions and finally introducing a new pension system as it happened in Sweden in the year 2000. The European Commission (“EC”) is aware of the necessity to reform pension systems and therefore the EC asked EIOPA to help and search for measures which are necessary for creating the common market in the area of personal pension products. The EC in the White Paper on Adequate, Safe and Sustainable Pensions encourages to look for and develop supplementary private pension systems and appeals to member states to support them by optimization of tax and other stimuli (Brussels, 16.2.2012). The paper´s ambition is to contribute to the discussion concerning the pension systems. It concentrates on the demographic and economic starting points and predictions valid for the Slovak Republic and the Czech Republic and it discusses the possibilities of more radical changes in the pension systems that have already been realised in some countries.

Economies of Scale in M&A in the Manufacturing Industry in the Czech Republic

Economies of Scale in M&A in the Manufacturing Industry in the Czech Republic
(Economies of Scale in M&A in the Manufacturing Industry in the Czech Republic)

Author(s):Jan Pěta, Mária Režnáková
Language:English
Subject(s):National Economy, Business Economy / Management, Micro-Economics
Page Range:564-571
No. of Pages:8
Keywords:mergers and acquisitions; economies of scale; Mann-Whitney U test; manufacturing;
Summary/Abstract:This paper presents partial results of the research focused on the success of completed M&A transactions in the manufacturing industry in the Czech Republic. The M&A topic has been frequently debated owing to the impossibility of unambiguously determining the associated effects. One of the M&A reasons consists in achieving the economies of scale, which should be reflected in decreasing costs. Our research is based on the sample of 59 transactions taking place in 2004 – 2011. The transactions involved 102 companies. These companies were examined for seven years, i.e. three years before the merger, and three years after the merger. The obtained data on the transactions were analysed separately for the group of successful and unsuccessful transactions. The success of the transactions was assessed by the amount of the achieved sales and the net income in the three years following the transaction. The aim of our research was to determine whether the mergers resulted in achieving economies of scale and in what areas. Testing the indicators was based on the Mann-Whitney U test. The research results have shown that only part of the mergers have been successful. The performed statistical tests confirmed the assumption that in the case of successful M&A transactions, there are savings in labour costs.

Examination of Stock Market “Temperature” Using Price-Dividend Dependence for European Shares

Examination of Stock Market “Temperature” Using Price-Dividend Dependence for European Shares
(Examination of Stock Market “Temperature” Using Price-Dividend Dependence for European Shares)

Author(s):Sergey Petrov, Oksana Kashina, Roman Murashkin
Language:English
Subject(s):Supranational / Global Economy, Methodology and research technology, Financial Markets
Page Range:572-580
No. of Pages:9
Keywords:heterogeneous expectations of investors; overvalued and undervalued shares; dividend discount model for common stock pricing; price-dividend dependence analysis; overheated stock market;
Summary/Abstract:The paper aims to investigate some European stock markets (whether they are overheated or undervalued) on the basis of price-dividend dependence analysis for a number of liquid shares. Our approach applies the procedure of revealing of shareholders’ expectations through econometric analysis of share price movement compared to changes in the dividend payments. As a result one may comprehend whether speculative motive of shareholders is responsible for market evaluating of the share or, on the contrary, shareholders are predominantly attracted by dividend payments on it. In such a way analysis of changes in price-dividend dependence for representative group of assets makes it possible to monitor when stock market overheats and generates a bubble. Moreover, the model developed permits to investigate how the company's industry is related to predominant motive of the representative shareholder when investors’ expectations are substantially heterogeneous.

Personal Finance in Terms of Income and Expenditure Aspects

Personal Finance in Terms of Income and Expenditure Aspects
(Personal Finance in Terms of Income and Expenditure Aspects)

Author(s):Marlena Piekut
Language:English
Subject(s):Micro-Economics, Economic development, Socio-Economic Research
Page Range:581-587
No. of Pages:7
Keywords:consumption; households; expenditures;
Summary/Abstract:The aim of this paper was to emerge the groups of households having similar level of both incomes and expenditures per equivalent unit and to give their in socioeconomic, demographic characteristic as well as the characteristic connected with the household localization. The data came from unpublished CSO data for household budget investigations. The applied testing methods were both k-means cluster analysis and discriminant function analysis. Five groups of households were distinguished, they differ with respect to their incomes and expenditures. The determinant most seriously affecting both incomes and expenditures of the households turned out the following: household head education level, household size and its socio-economic situation. Households with the lowest incomes and expenditures were connected with variables such as lower household head education level, larger number of family members and the location in rural areas. On the other side, the households with the best financial situation were the ones in which household head had university degree, was employed at white-collar position and the household was placed in a city.

Willingness of Polish Households to Save for Retirement

Willingness of Polish Households to Save for Retirement
(Willingness of Polish Households to Save for Retirement)

Author(s):Sylwia Pieńkowska-Kamieniecka, Damian Walczak
Language:English
Subject(s):National Economy, Micro-Economics, Financial Markets, Socio-Economic Research
Page Range:588-595
No. of Pages:8
Keywords:savings; household; income; financial behaviour; pension;
Summary/Abstract:Savings are an essential element of planning the future, in particular this objective is attained by saving for old age. The saved amount depends on numerous factors. Additionally, each of them can have the effect of a stimulant or destimulant. This article determines the influence of particular factors, which allowed to formulate specific recommendations for the future. Recommendations, which by influencing e.g. the level of the citizens’ education or certainly their income, can result in the future in an increase of the savings amount. The objective of this article is to present the scale of and the determining characteristics of saving, in particular the tendency to save money with the intention to financially secure the old age period. This article uses a representative, nationwide research, namely Diagnoza Społeczna 2015 (Social Diagnosis 2015), conducted with a test group of 11,740 households with 35,279 members.

Application of DEA Methods for Evaluating Efficiency in Museums, Galleries, and Monuments in the Czech Republic

Application of DEA Methods for Evaluating Efficiency in Museums, Galleries, and Monuments in the Czech Republic
(Application of DEA Methods for Evaluating Efficiency in Museums, Galleries, and Monuments in the Czech Republic)

Author(s):Michal Plaček, Milan Půček, František Ochrana, Milan Křápek
Language:English
Subject(s):Museology & Heritage Studies, National Economy, Business Economy / Management, Methodology and research technology
Page Range:596-601
No. of Pages:6
Keywords:museums; DEA; relative efficiency; Czech Republic;
Summary/Abstract:The article analyzes the efficiency of a specific section of Czech culture; specifically, in the areas of museums, galleries, and monuments. Based on a literature review we can state that apart from one project on performance indicators designed for benchmarking, evaluations of efficiency and effectiveness in this area have not been fully exploited. Our pilot study focuses on the use of the method of data envelopment analysis for evaluating the efficiency of museums, galleries, and monuments in the Czech Republic. This analysis is applied to entities established by the central government. We draw the necessary data from the annual reports of individual entities for the years 2011-2013. The evaluation criterion is the result of an objective function, where if the value is equal to one, we consider the institution to be efficient, but if the value is 0, the institutions are deemed inefficient. An analysis showed relatively large differences in the efficiency among the individual institutions. There is therefore room for increased efficiency which can be achieved by implementing appropriately structured performance indicators.

The Impact of Using an External Authority on the Quality of Public Procurement

The Impact of Using an External Authority on the Quality of Public Procurement
(The Impact of Using an External Authority on the Quality of Public Procurement)

Author(s):Michal Plaček, Martin Schmidt, František Ochrana, Milan Půček
Language:English
Subject(s):Public Administration, Economic policy, Public Finances, Corruption - Transparency - Anti-Corruption
Page Range:602-608
No. of Pages:7
Keywords:public contracts; outsourcing; Office for Protection of Competition;
Summary/Abstract:The article deals with the empirical verification part of the hypothesis of "bureaucratic safety" applied to the example of public procurement in the years 2010-2014. We presume that the contracting authorities are trying to minimize the risk of conflict and therefore are entrusting the administration of contracts to external authorities, or perhaps it is their view that these external authorities would administer them in a higher quality fashion. For the purposes of this article, we consider quality to be represented as the odds ratio that the Office for Protection of Competition will conclude that a public contract was managed improperly. The aim of this article is to compare in-house and external administration of public contracts in terms of the probability of an appeal, the initiation of an investigation, and the finding of any violations by the Office for Protection of Competition. For the purposes of our analysis, we used data on 69,959 public contracts, which we paired with 1965 first instance decisions of the Office for the Protection of Competition. We then applied logistic regression to this data. The achieved results are very surprising because we were unable to demonstrate a statistically significant difference between in-house and external administration, which should affect the decisions of the Office for the Protection of Competition. The results are very challenging for public policy since the current size of the procurement market is around 577 billion CZK. Additionally, the amount of transaction costs associated with procurement is very important. Each partial streamlining of public procurement can bring significant savings of public funds.

Forecasting Exchange Rate Volatility: Suggestions for Further Research

Forecasting Exchange Rate Volatility: Suggestions for Further Research
(Forecasting Exchange Rate Volatility: Suggestions for Further Research)

Author(s):Tomáš Plíhal
Language:English
Subject(s):Methodology and research technology, Policy, planning, forecast and speculation, Financial Markets
Page Range:609-613
No. of Pages:5
Keywords:exchange rate volatility; forecasting volatility; GARCH model; HAR-RV model;
Summary/Abstract:The market volatility plays an important role in the world of finance and it is essential part of risk management, asset management and valuation of derivatives. Several models for volatility forecasting exist. The aim of this paper is to provide a theoretical background for further research in forecasting exchange rate volatility. The first part describes essential information about market volatility and its importance. Analysis of commonly used methods for volatility forecasting follows along with a comparison of individual econometric models. Empirical literature, which measures predicting abilities of different models on the real data from the foreign exchange market, is also examined. According to our results, one of the best model for forecasting exchange rate volatility is simple GARCH(1,1) model. However, the latest empirical evidence highlights relatively new HAR-RV model which is able to provide even better results.

Functioning of Bancassurance in Selected Countries in Which the Financial Group Erste Group Bank Operates

Functioning of Bancassurance in Selected Countries in Which the Financial Group Erste Group Bank Operates
(Functioning of Bancassurance in Selected Countries in Which the Financial Group Erste Group Bank Operates)

Author(s):Lenka Přečková
Language:English
Subject(s):Supranational / Global Economy, Business Economy / Management, Financial Markets
Page Range:614-622
No. of Pages:9
Keywords:financial group; insurance group; bancassurance; assurfinance;
Summary/Abstract:This paper shall evaluate the level of internal integration among bancassurance products and financial institutions belonging to the financial group Erste Group Bank AG in selected countries of Europe. There shall be selected six countries which are located in Central and Eastern Europe: the Czech Republic, Slovak Republic, Hungary, Romania, Croatia and Serbia. These are the countries in which a strategic partnership agreement between the Vienna Insurance Group and the Erste Group Bank was concluded in 2008 which shall be taken into consideration in the evaluation. The research was conducted as of February 1, 2016. This paper aims at determining whether similarities in how the financial group Erste Group Bank is organized also mean similarities in how bancassurance in the selected countries functions. To make this possible, a critical analysis of bancassurance-related literature shall be conducted and a hypothetical basis for the practical evaluation shall be formulated. Characteristics for evaluation of the level of integration inside the financial group and also a banc-assurance product shall be also set. To evaluate how bancassurance functions in practice, a qualitative research based on data available on web sites and also financial and annual reports shall be used. The qualitative research shall contain a detailed analysis, sorting and a comparison of the set characteristics. Finally, it will be determined which attributes are identical and which are different in the integration of financial groups and bancassurance products.

Financial Performance of Czech Subsidiaries under Control of the EU Listed Companies

Financial Performance of Czech Subsidiaries under Control of the EU Listed Companies
(Financial Performance of Czech Subsidiaries under Control of the EU Listed Companies)

Author(s):David Procházka
Language:English
Subject(s):Supranational / Global Economy, Methodology and research technology, Accounting - Business Administration
Page Range:623-629
No. of Pages:7
Keywords:IFRS adoption; financial performance; parent-subsidiary links;
Summary/Abstract:Entities under foreign control play an important role in economy. In the Czech context, companies with foreign owners generate around 50% of industrial output (Ernest, 2014). Many of these subsidiaries are controlled by parents listed at regulated markets, for which consolidated financial statements in compliance with the IFRS shall be prepared. Czech subsidiaries might form a significant share of corresponding group’s results, taking into evidence of Procházka (2016) that just 0.3% of Czech non-financial companies make 30% of aggregate output in non-financial sector (measured by share on total turnover). Furthermore, the analysis of individual corporate data and macroeconomic time series unveil a wide dispersion in the effective tax rates of these companies (Procházka, 2016). The finding implies a conjecture about two-way profit transfers both into and out of the Czech Republic. This paper aims at assessing empirically the financial performance of Czech subsidiaries under control of EU listed companies, including cross-sectional differences in terms of geographic affiliation of the parents. The results indicate relatively evenly distributed return on assets (ROA), but significant differences in return on equity (ROE). Furthermore, the values of ROA are on average higher than ROE, suggesting profit shifting in the groups.

Practical Application of Sentiment Indicators in Financial Analysis: Behavioral Finance Approach

Practical Application of Sentiment Indicators in Financial Analysis: Behavioral Finance Approach
(Practical Application of Sentiment Indicators in Financial Analysis: Behavioral Finance Approach)

Author(s):Zuzana Rakovská, Martin Svoboda
Language:English
Subject(s):Business Economy / Management, Behaviorism, Accounting - Business Administration, Socio-Economic Research
Page Range:638-645
No. of Pages:8
Keywords:sentiment indicator; behavioral finance; heuristics and biases;
Summary/Abstract:Behavioral finance assumes that individual financial decisions are influenced by emotions and mood. A public sentiment and its effect on collective decision-making have been studied in a number of publications giving the vast variety of research design. This paper examines various techniques in measuring market sentiment and its applications in analysis of financial data. Using a qualitative, exploratory approach, the study identifies trends in sentiment indicators and also tries to analytically categorize heuristics and behavioral biases connected to public mood.

The Impact of the Features of Healthcare Providers in Poland on their Costs in the Accounting System

The Impact of the Features of Healthcare Providers in Poland on their Costs in the Accounting System
(The Impact of the Features of Healthcare Providers in Poland on their Costs in the Accounting System)

Author(s):Monika Raulinajtys-Grzybek, Katarzyna Frankowska, Wojciech Matusewicz
Language:English
Subject(s):National Economy, Health and medicine and law, Accounting - Business Administration
Page Range:638-645
No. of Pages:8
Keywords:accounting system; cost data; healthcare providers;
Summary/Abstract:The article presents the analysis how costs of healthcare providers are explained by their main characteristic features. Cost data was obtained from the accounting systems of several healthcare providers operating in Poland. The study involved the costs of hospital wards, which are the final cost centers providing inpatient services. Cost data for each ward was grouped into categories related to main resources used. The information from the accounting system has been prepared in an uniform manner by the hospitals for the purpose of regulatory pricing of health services.The analysis included the impact of features of healthcare providers on the level of costs as well as unit costs of key resources, such as doctors, nurses, or the ward’s infrastructure. Explanatory variables were nonfinancial features describing the activity of the ward, including medical specialty, location, type of hospital, legal form (public or private), and number of mandays.

Prediction of Future Development of the World Economy under Conditions of Negative Interest Rates

Prediction of Future Development of the World Economy under Conditions of Negative Interest Rates
(Prediction of Future Development of the World Economy under Conditions of Negative Interest Rates)

Author(s):Oldřich Rejnuš
Language:English
Subject(s):Supranational / Global Economy, Economic policy, Policy, planning, forecast and speculation, Economic development, Financial Markets, Socio-Economic Research
Page Range:646-653
No. of Pages:8
Keywords:economy; financial system; interest rates; monetary policy; household wealth;
Summary/Abstract:The paper deals with the problems of contemporary way of using interest rates within the framework of monetary regulation, with special focus on cases when extremely low, or even negative rates are applied. The first part is focused on theoretic definition of the meaning and function of interest rates in financial and economic system in the sense of „standard“ economic theory, or in accordance with individual economic approaches. Subsequently, the influence of contemporary extremely low or even negative interest rates of central banks are analyzed, as well as their influence on the activities of economic subjects, with special attention to individual sorts of financial institutions, namely its influences on their economic results and on fulfilment of their mission. And, subsequently, it defines and characterizes the impacts of contemporary monetary policy of the world most important central banks on functioning of economy of individual the most important states or multinational economic units, as well as world global economy. Based on achieved results, future development is predicted, both from the point of view of economic development and from the standpoint of future impacts on contemporary human society.

Economic Condition of the European Union countries and Level of Rating

Economic Condition of the European Union countries and Level of Rating
(Economic Condition of the European Union countries and Level of Rating)

Author(s):Tomasz Rólczyński, Tomasz Kopyściański
Language:English
Subject(s):National Economy, Supranational / Global Economy, Economic development, Financial Markets
Page Range:654-660
No. of Pages:7
Keywords:ratings and ratings agencies; economic outlook; synthetic measure; Spearman's rank correlation coefficient;
Summary/Abstract:Credit rating agencies have a significant impact on the securities market facilitating investment decisions on the basis of ready-made benchmarks. In this way they contribute to reducing the asymmetries and costs of obtaining information necessary to make decisions regarding buying or selling financial instruments, taking into account the debtor’s estimated risk of default. The increased significance of the assessments made by the rating agencies refers closely to the rapid development of the debt security market and thus emerging demand on the part of the buyers of those securities for an independent analysis which would determine the issuer’s financial standing. The assessments which are published using special symbols reflects country’s ability to raise capital and its cost. The purpose of the article is to evaluate the relationship between the economic condition of the European Union countries and the assessment issued by the rating agencies such as Standard & Poor’s, Fitch, Moody's. The economic condition of country will be described using a synthetic variable, and ratings will be transferred to the ordinal scale, hence to assess the relationship with the use of Spearman's rank correlation coefficient.

Using of Venture and Equity Capital in Financing of SMEs in the Slovak Republic

Using of Venture and Equity Capital in Financing of SMEs in the Slovak Republic
(Using of Venture and Equity Capital in Financing of SMEs in the Slovak Republic)

Author(s):Katarína Rentková
Language:English
Subject(s):National Economy, Business Economy / Management, Micro-Economics, Financial Markets
Page Range:661-668
No. of Pages:8
Keywords:equity capital; investment; venture capital; Slovak Republic; SMEs;
Summary/Abstract:The economy of the Slovak republic is integrated within the frame of the global world economy. The companies are functioning in the highly competitive environment. SMEs dominate the Slovak economy, covering 99.5% of the enterprise population. The vast majority of SMEs were micro enterprises, employing up to 9 employees. Self-entrepreneurs are an important component of the enterprise population in the Slovak Republic. Available financial resources are a key factor for the development of SMEs, also in the Slovak Republic. SMEs may be funded from various sources. Venture capital funds are oriented towards financing establishment and growth of small innovative businesses. In this paper, we will define SMEs, the venture and equity capital and we will analyze the role of venture and equity capital in financing of SMEs in the Slovak Republic. The use of private equity capital and venture capital in Slovakia reached the peak in 2009. Since then, the only decline is noticeable or the stability of the compared period. The most important problem can be the lack of knowledge of entrepreneurs about the possibilities of funding for their projects by venture capital. It is clear that Slovakia has a high innovation potential and significant development begins in the area of start-ups.

Testing the Weak Form of Efficiency on Chinese Stock Market

Testing the Weak Form of Efficiency on Chinese Stock Market
(Testing the Weak Form of Efficiency on Chinese Stock Market)

Author(s):Petr Seďa, Juan Antonio Jimber del Río
Language:English
Subject(s):National Economy, Methodology and research technology, Economic development, Financial Markets
Page Range:669-677
No. of Pages:9
Keywords:China; information; efficiency; statistical tests; stock market;
Summary/Abstract:Efficient market hypothesis is one of possible analytical approaches to analyse a behavior of equities on financial markets. The basic idea of the efficient market hypothesis is based on determination of asset prices by relevant information. Thus, it is assumed that efficient market fully and accurately reflects all relevant information. The efficient market hypothesis has been a subject of many investigations that applied different approaches and methods. In this paper, we focused on testing the efficient market hypothesis in its weak form using data from Chinese stock market. Since China belongs to the world's largest economies the special aim of this paper is also to analyze empirically a potential influence of the global financial crisis of 2007-2009 years on the weak form of efficiency of the Chinese stock market. For the purpose of this paper there will be compared efficiency of Shanghai and Hong Kong stock markets in the form of random walk model using both linear and nonlinear statistical tests. These statistical tests delivered different results for both Hang Seng and Shanghai Composite indexes in all sub-periods. Hong Kong stock market became inefficient during the global financial crisis. Contrary to that, efficiency of Shanghai stock market in the crisis period cannot be explained by rational economic arguments.

Financial Statements in the Financial Decision Making

Financial Statements in the Financial Decision Making
(Financial Statements in the Financial Decision Making)

Author(s):Jaroslav Sedláček
Language:English
Subject(s):National Economy, Business Economy / Management, Methodology and research technology, Law on Economics, Accounting - Business Administration
Page Range:678-685
No. of Pages:8
Keywords:financial statements; financial decision; models of valuation; recognition; differences;
Summary/Abstract:The paper is devoted to the comparison of financial statements according to International accounting standards and Czech accounting legislation and impact assessment of identified differences on the decisions of investors and owners of corporations. The first objective is to identify accounting methods and practices that lead to differences in reporting of financial position and performance of corporations, analyze their causes and examine their impact on the statements. The second objective is to assess the impact of these differences using methods of financial analysis on data specific company. For this purpose is created parallel system of ratio indicators. Calculations of indicators and their development in time make it possible to assess the significance of these differences and the degree of influence on the decisions of users of financial statements. Research has proven that despite the ongoing harmonization efforts, there are still significant differences in both approaches and should be taken into account when making decisions.

Financial Literacy of Elementary School Pupils in Pardubice

Financial Literacy of Elementary School Pupils in Pardubice
(Financial Literacy of Elementary School Pupils in Pardubice)

Author(s):Kateřina Seinerová
Language:English
Subject(s):School education, Economic development, Socio-Economic Research, Sociology of Education
Page Range:686-691
No. of Pages:6
Keywords:financial literacy; financial education; personal budget;
Summary/Abstract:This paper analyses results of the comparative study, related to the financial literacy, conducted among the pupils of the 8th and 9th year of the basic education. The data were collected by the survey questionnaire covering topics of personal budgeting, currency, payment methods, price literacy and future financial visions of the respondents. This study compares the results obtained from the survey realized in three elementary schools of different types. In particular, common type of elementary school, elementary school with advanced courses of mathematics and eight-year type of elementary school.

Stress-testing Model for Structural Liquidity Risk

Stress-testing Model for Structural Liquidity Risk
(Stress-testing Model for Structural Liquidity Risk)

Author(s):Eugenia Schmitt
Language:English
Subject(s):Micro-Economics, Methodology and research technology, Economic development, Accounting - Business Administration
Page Range:692-699
No. of Pages:8
Keywords:liquidity risk; banking; stress-tests; value at risk; regulatory requirements;
Summary/Abstract:The financial crisis of past decades has shown the need to take into account liquidity risk in stress-testing frameworks in an explicit way. The stress-testing model presented in this paper provides an answer to the fundamental question of the risk management: What hypothetical costs a bank should expect for liquidity provision in a particular point of time by the negative development of future financing conditions? Its key components are the cash flow scenarios under consideration the counterbalancing capacity (CBC) and the liquidity spread scenarios developed by historical simulation approach. This enables the view on to the realistic risk, after exhaustion of compensation capacity. Multiple dimensions of liquidity risk are combined with two quantitative risk measures, Value-at-Risk (VaR) and Expected Shortfall (ES). The analytical components of liquidity risk management that are needed to address the new Basel III are taken into account. Additionally to calculation of liquidity costs, detailed analyses of liquidity needs are possible. An application on a typical middle sized bank in a case study illustrates how sensitive VaR and ES are to the shocks.

Factors Influencing Clients in Selection of Insurance Company

Factors Influencing Clients in Selection of Insurance Company
(Factors Influencing Clients in Selection of Insurance Company)

Author(s):Elena Šira, Katarina Radvanska, Zuzana Grančaiová
Language:English
Subject(s):Behaviorism, Financial Markets, Socio-Economic Research
Page Range:700-707
No. of Pages:8
Keywords:insurance market; importance of selection the insurance company;
Summary/Abstract:The aim of the article is to show, if clients have changed their preferences in selection of insurance company during 5 years. This article compares how the scheme of client’s behaviour has been changed. Our research compares the data from the years 2010 and the years 2015, which show factors influencing clients in selection of insurance company in Slovakia. We have also analysed and compared the factors with the biggest influence on clients in the year 2010 and 2015. In addition to analysis of client’s behaviour, we have also analysed and compared insurance market environment via selected indicators. We have analysed the volume of written premium, density, penetration and others. The level of economic development of the country may also affect clients in their preferences of the insurance company. We have analysed the unemployment, average monthly wage and other factors in the years 2010 and 2015 to gain the adequate findings.

The Optimized Indicators of Technical Analysis by Anticyclic Assets

The Optimized Indicators of Technical Analysis by Anticyclic Assets
(The Optimized Indicators of Technical Analysis by Anticyclic Assets)

Author(s):Martin Širůček, Karel Šima
Language:English
Subject(s):Business Economy / Management, Methodology and research technology, Financial Markets
Page Range:708-714
No. of Pages:7
Keywords:technical analysis; optimization; relative strength; moving average; Bollinger bands;
Summary/Abstract:The paper is focused on using the technical analysis and its indicators. It deals with the evaluation of investment strategies based on the optimized parameters of technical analysis indicators. The analysis focuses on using selected indicators of the technical analysis in the period from 11/1/2013 to 10/31/2014. The empirical analysis includes a back-test of optimized indicators, the results of which are compared with the recommended setting of these indicators, held in the period from 11/1/2014 to 10/31/2015. The optimization and the back-test were realized on anticyclical stocks, represented by the index S&P 500 Consumer Staples. The main aim of the paper is to bring to the speculators a higher investment return based on the change of the recommended (default) setting of these indicators.

Budgetary Gaming Behavior and its Determinants

Budgetary Gaming Behavior and its Determinants
(Budgetary Gaming Behavior and its Determinants)

Author(s):Ladislav Šiška
Language:English
Subject(s):Business Economy / Management, Micro-Economics, Accounting - Business Administration
Page Range:715-720
No. of Pages:6
Keywords:management accounting; budgeting; budgeting gaming; contingency factors;
Summary/Abstract:Budgetary gaming behavior (such as spending money at year end to avoid losing it, deferring necessary expenditures, accelerating sales near year end to meet the budget, negotiating easier targets) belongs among arguments against using budgets for company management. Especially proponents of Beyond Budgeting movement propose to abandon budgets for this reason. The paper presents results of the survey among 214 companies domiciled in the Czech Republic and Slovakia dealing with budgeting gaming and its context. Descriptive statistics and formal statistical test (Kruskal-Wallis, Mann-Whitney) revealed that the problem of budgetary gaming is more prevalent in larger companies that are subsidiaries. On the contrary, in the small enterprises it is less present problem, but more correspondents with the use of budgets for management purposes. Albeit the occurrence of budgetary gaming behavior, the companies in the sample did not intend to abandon budgeting at all.

Implications of Low/Negative Interest Rates for Banks’ Asset and Liability Management – An Example

Implications of Low/Negative Interest Rates for Banks’ Asset and Liability Management – An Example
(Implications of Low/Negative Interest Rates for Banks’ Asset and Liability Management – An Example)

Author(s):Ľudomír Šlahor, Daniela Majerčáková, Mária Barteková
Language:English
Subject(s):Business Economy / Management, Financial Markets
Page Range:721-727
No. of Pages:7
Keywords:asset and liability management; ultra-low interest rates; bank balance sheet; duration;
Summary/Abstract:Asset and liability management (ALM) in the current low/negative interest rate environment is a major concern for all banks. ALM is defined as the simultaneous planning of all asset and liability positions on the bank’s balance sheet under consideration of the different bank management objectives and legal, managerial and market constraints, for the purpose of mitigating interest rate risk, providing liquidity and enhancing the value of the bank. ALM is heavily dependent on the movement of interest rates in the market. The history of ALM suggests that it is very important for a financial institution to measure, manage and control interest rate risk. The aim of this paper is to show how a sample bank’s balance sheet might have looked like before and after the advent of the persistently low/negative interest rates environment. Further, we will show a duration structure of the example-bank´s balance sheet before the period of low and further falling rates sets in. Also in this paper we will present most important implications for ALM after the period of persistently low interest rates. To attain this goal, we analysed the 2008 and 2015 balance sheets of a medium commercial bank facing conflicting goals such as returns, liquidity, solvency, and expansion of deposits and loans under uncertainty.

The Recommendation of Safe Haven Interest Rates in the BEPS Context

The Recommendation of Safe Haven Interest Rates in the BEPS Context
(The Recommendation of Safe Haven Interest Rates in the BEPS Context)

Author(s):Veronika Solilova, Danuše Nerudova, Hana Bohušová, Patrik Svoboda
Language:English
Subject(s):Supranational / Global Economy, Law on Economics, Financial Markets, Fiscal Politics / Budgeting
Page Range:728-736
No. of Pages:9
Keywords:loans; safe harbours; arm’s length principle; Base Erosion and Profit Shifting project; thin capitalization rules;
Summary/Abstract:Intercompany financial transactions are subjected to scrutiny by tax authorities as they represent very popular tax planning instrument with results of a significant reduction of the group´s effective tax rate. Tax authorities have limited the use of intercompany debt or the tax-deductibility of interest by the arm’s length principle, thin capitalization rules or/and safe harbour for taxpayers. Moreover, the recent work of the European Union, OECD and G20 members as regards the BEPS project is also scrutinized with a focus on the elimination of profit shifting through intra-group debt financing. The aim of the paper is to recommend transfer pricing approaches for intra-group loans in EU, based on the analysis of experiences from the USA and recommendations of the BEPS project and the proposal of the EU Anti-Tax Avoidance Directive. We recommend to introducing safe haven rates for different compounding periods and amount of loan denominated in EUR altogether with the application of thin capitalization rules in the form of EBITDA ratio with the threshold of 30% or within a corridor of 10% to 30%. Based on it, the transfer pricing simplified measurements for loan can be ensured.

Foreign Exchange Intervention by the Czech National Bank and its Consequences

Foreign Exchange Intervention by the Czech National Bank and its Consequences
(Foreign Exchange Intervention by the Czech National Bank and its Consequences)

Author(s):Miroslav Sponer, Martina Sponerová
Language:English
Subject(s):National Economy, Economic policy, Financial Markets, Fiscal Politics / Budgeting
Page Range:737-744
No. of Pages:8
Keywords:deflation; exchange rate; foreign exchange interventions; monetary policy; zero lower bound;
Summary/Abstract:The article generally analyses the causes leading up to the foreign exchange intervention by the Czech National Bank in November 2013 and its consequences. The article examines the use of exchange rate by the Czech National Bank as a monetary policy instrument at the zero lower bound on interest rates. It explains the reasons for further easing monetary policy and for choosing the exchange rate instrument and its specific level, and discusses its expected benefits in the case of the Czech Republic.

Nexus of Bank Risk-taking and Interest Rates

Nexus of Bank Risk-taking and Interest Rates
(Nexus of Bank Risk-taking and Interest Rates)

Author(s):Martina Sponerová, Miroslav Sponer
Language:English
Subject(s):Business Economy / Management, Financial Markets, Accounting - Business Administration
Page Range:745-751
No. of Pages:7
Keywords:interest rate; risk-taking; banking industry; non-performing loan; profitability;
Summary/Abstract:Many researches proved that the gradual decrease of interest rates from the early 2000s to the present caused the increase of the risk-taking appetite of banks. This theory suggests that a low interest environment drives, ceteris paribus, bank margins and informational asymmetries down. As a consequence, banks react by softening their lending standards, thus raising the level of risk assets in their portfolios and increasing the risk of failure. This paper analyses impact of low interest rates to bank risk-taking in the Czech banking sector and answers following questions. Do low interest rates increase risk-taking appetite of banks in the Czech Republic? How the Czech banking sector faces to low interest rates in connection with profitability?

Selected Success Factors of Crowdfunding Projects

Selected Success Factors of Crowdfunding Projects
(Selected Success Factors of Crowdfunding Projects)

Author(s):Tomáš Štofa, Martin Zoričak
Language:English
Subject(s):Economic development, Financial Markets, Socio-Economic Research
Page Range:752-759
No. of Pages:8
Keywords:crowdfunding; Kickstarter; success factors; seasonality;
Summary/Abstract:Crowdfunding projects gained in popularity in the recent years. There is, however, significant number of projects which have failed. Our aim in this paper is to analyze following factors of failed projects: crowdfunding campaign timing, funding campaign goal and categories relative size. The study analyses approximately 100 000 finished projects from crowdfunding website Kickstarter for years 2009 - 2014. We used logistic regression models to analyze impact of mentioned factors on success of projects. Findings show correlation between success of project and campaign timing in the beginning of and in the middle of the year. Goal has impact on a project success, in general, the lower the goal is, the higher chance to success a project has. Both, in higher and lower competitive categories group, projects in creative categories (e.g. Art, Film & Video, Dance) have higher chance to succeed.

Reflection of Customer Satisfaction in Selected Performance Indicators of Food Enterprises

Reflection of Customer Satisfaction in Selected Performance Indicators of Food Enterprises
(Reflection of Customer Satisfaction in Selected Performance Indicators of Food Enterprises)

Author(s):Petr Suchánek, Maria Králová
Language:English
Subject(s):Business Economy / Management, Marketing / Advertising, Socio-Economic Research
Page Range:760-767
No. of Pages:8
Keywords:consumer satisfaction; performance; food industry; ratios; investors’ strategy;
Summary/Abstract:The aim of this article is to describe characteristic features of food industry enterprises in Czech Republic in relation to customer satisfaction with respect to investors’ diverse objectives. The performance of companies, measured by financial ratios such as ROA, ROE, ATO, EVA, etc., can be connected to different goals that investors might pursue (focusing on a long-term or short-term perspective, minimum risk, a preference for high turnover, etc.). The research shows what the typical values of selected financial ratios are in a group of companies with more satisfied or less satisfied customers and what financial ratios are significantly associated with customer satisfaction. These results may serve as a clue that helps investors to determine which companies best correspond with their goals. This paper is part of consumer satisfaction research based on a questionnaire on satisfaction completed by customers in 2015. The data related to the financial performance of enterprises are available in the Albertina database.

Evaluation of the Business Cycle Synchronisation in Europe

Evaluation of the Business Cycle Synchronisation in Europe
(Evaluation of the Business Cycle Synchronisation in Europe)

Author(s):Veronika Šulíková, Marianna Siničáková, Ľubica Štiblárová, Slavomíra Šuliková
Language:English
Subject(s):Supranational / Global Economy, Business Economy / Management, Micro-Economics, Evaluation research
Page Range:768-775
No. of Pages:8
Keywords:business cycle; synchronisation; Granger causality; clustering;
Summary/Abstract:The aim of the paper is to evaluate synchronisation in Europe throughout integration process in the European Union and/or the euro area. Gradually we apply Granger causality testing and cluster analysis to identify core and peripheral countries. These two alternative methodological approaches enable us to recognize synchronised countries, countries with rather asymmetric evolution, leading as well as lagging countries. Business cycle evolution is evaluated either through GDP growth or output gap indicators. In line with expectations, French and German business cycle have the most crucial impact on other countries´ cycles. Our findings prove that degree of integration process can lead to higher synchronisation. However there is still significant number of countries which are not synchronised with core countries. This fact complicates application of single monetary policy instruments in the euro area and economic performance in the EU as a whole.

Determination of Financial Strategy of Selected Company and its Importance for Other Business Development – Case Study

Determination of Financial Strategy of Selected Company and its Importance for Other Business Development – Case Study
(Determination of Financial Strategy of Selected Company and its Importance for Other Business Development – Case Study)

Author(s):Veronika Svatošová, Zuzana Svobodová
Language:English
Subject(s):Business Economy / Management, Micro-Economics, Economic development
Page Range:776-786
No. of Pages:11
Keywords:strategy; financial strategy; strategic management; business development;
Summary/Abstract:The current business practice shows that the key factor of business success is the originally created and implemented corporate and business strategy. However, the importance of strategy is underestimated. The consequence is the fact that partial functional strategies in business practice do not often exist. The paper deals with the selected functional strategy – financial strategy with the aim to analyze its importance in business development. The paper focuses on the theoretical framework with emphasis on financial strategy and other related aspects. The literature review discovered that this research field is not deeply developed. Based on the theoretical background, the case study of selected company is elaborated. The main aim of this case study is to analyze and evaluate the financial strategy of the selected company and its importance in further business development. The main research methods of this paper are: case study, the selected methods of financial analysis, personal interview, the selected methods of descriptive statistics and modelling and simulating of financial strategy with the help of Vensim program. The results of the case study discovered that financial strategy of selected company focuses on conservative strategy with emphasis on lower profitability and higher liquidity. This financial strategy does not correspond with corporate investment strategy into the further development of the company. It could be stated the current financial strategy of the selected company does not reflect the whole corporate strategy and goes against other business development. It is recommended to change the financial strategy on aggressive approach with higher profitability that could follow the current corporate investment strategy.

Algorithmic Trading Using Markov Chains: Comparing Empirical and Theoretical Yields

Algorithmic Trading Using Markov Chains: Comparing Empirical and Theoretical Yields
(Algorithmic Trading Using Markov Chains: Comparing Empirical and Theoretical Yields)

Author(s):Milan Svoboda, Pavla Říhová
Language:English
Subject(s):Methodology and research technology, Policy, planning, forecast and speculation, Financial Markets
Page Range:787-793
No. of Pages:7
Keywords:algorithmic trading; stock market predication; Markov chains analysis;
Summary/Abstract:This study is focused on comparing empirical and theoretical yield of business strategies applied to stock markets. We continue in our previous articles in which we deal with the short-term prediction of stock markets and with creating business strategies using Markov Chains analysis. When defining a state space we assume that the stock price moves in three types of trends: primary, secondary and minor. The object of our interest is a minor trend which usually lasts for several days. During this trend the stock price accumulates a certain profit or loss in relation to the price at the beginning of the trend. The state space is defined by the size of the accumulated profit or loss. Business strategies are formed in the way that the states in which the stock price decreases generate buying signals and the states in which the stock price increases generate selling signals. Theoretical profitability of a business strategy is modeled on the basis of a matrix of transition between states probability, a matrix of evaluation of these transitions and the expected number of transactions. We calculate the parameters of this model, as well as empirical profitability, with historical data of CEZ stock during the ten years period from early 2006 to the end of 2015. In some cases empirical and theoretical results were nearly the same, in other cases they differed significantly.

Comparison of Building Savings Banks on the Czech Market

Comparison of Building Savings Banks on the Czech Market
(Comparison of Building Savings Banks on the Czech Market)

Author(s):Libuše Svobodová, Martina Hedvičáková
Language:English
Subject(s):National Economy, Economic development, Financial Markets
Page Range:794-801
No. of Pages:8
Keywords:building savings; comparison; deposits; financial market; profitability;
Summary/Abstract:The paper is focused on the specialized financial product on savings and also on the second most used product in the field of own housing financing in the Czech Republic, building savings. These products provides five specialized banks on the Czech market. The aim of the paper is to analyze the situation on the financial market focused on the building savings in years 2014 and 2015. The organization of the paper is as follows. Firstly a theoretical background with a review of the literature is provided, then research methodology is described, the key part brings comparison of the share of individual building societies, market share by volume of loans, according to the proportion of the total amount of deposits and according of profit of building societies. The next part will be devoted to comparison of individual financial institutions in case of savings. Českomoravská stavební spořitelna was on the basis of the results classified as the main player on the market. The article is based on primary and secondary sources. A detailed research together with the analysis and critical assessment of accessible materials will enable to identify the main objectives in the field of study. The analysis of the initial state will consequently enable to identify the key factors and knowledge.

Co-operative Banks in Poland, Current Issues

Co-operative Banks in Poland, Current Issues
(Co-operative Banks in Poland, Current Issues)

Author(s):Łukasz Szewczyk
Language:English
Subject(s):National Economy, Economic policy, Economic development, Financial Markets
Page Range:802-807
No. of Pages:6
Keywords:co-operative banks; global financial crisis; financial system;
Summary/Abstract:The aim of this study is to present current problems that co-operative banks in Poland have to face. These banks play an important role in Polish financial system but they are seen as weak and vulnerable to changes (especially connected with new regulations). It is discussed if new capital requirement regulations and directive CRR/CRD IV will have an impact on capital position of these banks in a long period of time. It is also important that in 2015 one co-operative bank collapsed and it has been the first bankruptcy in Polish banking sector since 2001. This shows that co-operative banking sector should be assessed in terms of capital adequacy and other issues. The main problem that will be discussed in this paper is connected with the adjustment of cooperative banks in Poland to the new market conditions. Capital position and efficiency of these banks will be presented through various figures and ratios. It will also be discussed what are the main barriers for development of these banks. A main research method used in this paper is critical analysis of literature connected with the subject and reports issued by different institutions (e.g. Financial Supervisory Authority). Results of the research will help to understand current problems of co-operative banking sector in Poland in a better way.

Joint Deterministic and Stochastic Approach to Cash Balance Modelling: a Cash Model Specification and Verification

Joint Deterministic and Stochastic Approach to Cash Balance Modelling: a Cash Model Specification and Verification
(Joint Deterministic and Stochastic Approach to Cash Balance Modelling: a Cash Model Specification and Verification)

Author(s):Aleksandra Szpulak, Tomasz Michael
Language:English
Subject(s):Micro-Economics, Methodology and research technology, Accounting - Business Administration
Page Range:808-815
No. of Pages:8
Keywords:cash balance model; financial modelling; deterministic model; stochastic model;
Summary/Abstract:This paper refers to cash balance modelling at a company level. The goal is to specify a cash balance model that simultaneously satisfy 3 conditions: (1) it captures deterministic nature of cash flows, as cash is controllable variable, (2) it captures random component of cash flows, as cash flows are subjected to risk factors, and (3) it incorporates endogenous random component from real deviations, as typically a stochastic model build with Monte Carlo simulation technique captures exogenous random component. It is assumed in this research that a process generating cash balance can be broken down into two parts: (i) a core of a process giving base case cash balance under the managerial control, and (ii) a stochastic process generating random fluctuations about base case cash balance. It is hypothesized in the paper that separate modelling of a core and stochastic process yields a model that satisfy conditions (1) – (3) and therefore accurately describes the underlying cash balance process. Therefore, the core of a process is described by deterministic model, while a series of random fluctuations is described by compound Poisson stochastic process. In this paper, we derive and next verify a cash balance model under such joint deterministic and stochastic approach to cash balance modelling. Results indicate accurate description of the underlying process and provide promising evidence to support our research hypothesis.

Sovereign Wealth Fund Ownership and Financial Performance of Companies Listed on the Warsaw Stock Exchange

Sovereign Wealth Fund Ownership and Financial Performance of Companies Listed on the Warsaw Stock Exchange
(Sovereign Wealth Fund Ownership and Financial Performance of Companies Listed on the Warsaw Stock Exchange)

Author(s):Dariusz Urban
Language:English
Subject(s):National Economy, Financial Markets, Accounting - Business Administration
Page Range:816-823
No. of Pages:8
Keywords:sovereign wealth funds; institutional investor; investing; emerging economies;
Summary/Abstract:Sovereign Wealth Funds are investment vehicles established in order to manage in a profit oriented way pool of national wealth for future generations. Nowadays over 70 funds exist and operate on global financial markets. Similarly to other institutional investors, Sovereign Wealth Funds possess huge amounts of capital. What distinguishes them the most from other financial institutions is the fact that they are owned, managed and controlled by sovereign states, have limited liquidity needs, a lower-than-market-average-level of redemption risk, a long-term, intergenerational investment horizon and relatively high risk tolerance. The aim of this study is to test empirically the impact of Sovereign Wealth Funds’ ownership on the financial performance of targeted companies. Using the data of companies listed on the Warsaw Stock Exchange, we employ regression to analyze the relationship between the funds’ investment and financial performance of the company. The empirical findings of this research suggest that Sovereign Wealth Funds’ ownership has a positive influence on the price to book value of the firm. This article contributes to ongoing research in the field of studies related to financial aspects of SWF’s investment behavior by providing empirical evidence from emerging market.

Connection between Exchange Rate and Balance of Payments Accounts: The Case of the Czech Republic

Connection between Exchange Rate and Balance of Payments Accounts: The Case of the Czech Republic
(Connection between Exchange Rate and Balance of Payments Accounts: The Case of the Czech Republic)

Author(s):Tomáš Urbanovský
Language:English
Subject(s):National Economy, Financial Markets, Accounting - Business Administration
Page Range:824-831
No. of Pages:8
Keywords:Exchange rate; balance of payments; cointegration; VECM;
Summary/Abstract:Relationships between nominal exchange rate, current account and financial account of balance of payments in the Czech Republic have been investigated in presented paper. Implemented cointegration analysis and vector error correction model suggest one pair of Granger causality. It has been discovered that change in current account balance Granger-causes change in financial account balance. This relationship has nature of two-way Granger causality, which means that reversed relationship holds as well. Other relationships implying Granger causality were not found. Error terms were significant only in regressions with both accounts as dependent variables, which imply that only these variables return to their long-term equilibria. Because increase in financial account surplus leads to decrease in current account surplus (or deepening the current account deficit), excessive liberalization of Czech financial system can lead to large capital inflow, jeopardizes current account sustainability and results in currency crisis in the Czech economy.

Comparing Financial Performance of Slovak Excellent Companies

Comparing Financial Performance of Slovak Excellent Companies
(Comparing Financial Performance of Slovak Excellent Companies)

Author(s):Lukáš Vartiak
Language:English
Subject(s):National Economy, Business Economy / Management, Micro-Economics, Accounting - Business Administration
Page Range:832-838
No. of Pages:7
Keywords:Business Excellence; quality; financial performance; financial indicator;
Summary/Abstract:Every company tries to achieve financial prosperity and overall success which leads to an achievement of the Business Excellence status. In Slovakia, Business Excellence is being assessed annually in the National Quality Award (NQA). The EFQM Excellence Model serves as an assessment tool in the NQA. Based on the results of selfassessment, companies can be awarded as winners, finalists, performance improvers and participants. NQA’s winners gain the highest possible degree of recognition which empowers them to differentiate themselves from the competitors in the field of quality management and performance. The aim of the paper is to compare financial performance of the Slovak NQA winners within a specified time frame. To achieve the aim of the paper, financial performance of the Slovak NQA winners in the year before winning, in the year of winning and in the year after winning the Slovak NQA is being compared. These financial indicators were selected for a comparison of the Slovak NQA winners’ financial performance: sales revenue (T), earnings after taxes (EAT), return on assets (ROA), gross margin (GM) and total indebtedness (TI). A comparison is being performed with an assumption that achievement of the Business Excellence status improves financial performance of a company. Methods of analysis, comparison, selection and mathematics are being used. As a main finding may be considered that our assumption was not confirmed among all of the analyzed companies. There can be various reasons of non-improved financial performance of the Slovak NQA winners which obliges us to future research aimed at finding these reasons.

The Evaluation of Financial Health of the Insurance Sector in the World's Insurance Centers

The Evaluation of Financial Health of the Insurance Sector in the World's Insurance Centers
(The Evaluation of Financial Health of the Insurance Sector in the World's Insurance Centers)

Author(s):Eva Vávrová, Svatopluk Nečas
Language:English
Subject(s):Supranational / Global Economy, Evaluation research, Economic development, Financial Markets, Globalization
Page Range:839-847
No. of Pages:9
Keywords:financial crisis; insurance market; insurance company; premiums written; return on assets; return on equity;
Summary/Abstract:Within the world insurance market the processes associated with the globalization of markets and the integration of financial institutions concur. These processes have been affected by the outbreak, continuance and subsequent lingering of the global financial crisis. The financial crisis has manifested itself in various regions of the world insurance market in varying extent. The main objective of this paper is to assess the development of the financial health of the global insurance market during the lingering financial crisis and to adopt conclusions driven based on the analysis of the insurance sector.

Expenses and Revenue Classifications for Managerial Purposes in the Czech State Administration Units

Expenses and Revenue Classifications for Managerial Purposes in the Czech State Administration Units
(Expenses and Revenue Classifications for Managerial Purposes in the Czech State Administration Units)

Author(s):Jana Vodáková, Nela Sglundová
Language:English
Subject(s):National Economy, Business Economy / Management, Public Administration, Public Finances, Human Resources in Economy
Page Range:848-855
No. of Pages:8
Keywords:expense; revenue; expenses classification; cost allocation; state administration;
Summary/Abstract:This paper deals with classification of expenses and revenue mainly for managerial purposes in the area of the Czech state administration. From 2011 the Czech public sector units prepare accounting data under the accrual basis obligatorily. This means among others that they record and release expenses and revenue data to external users in accordance with mandatory regulations. The main aim of the paper it to examine obligatory rules of expenses and revenue classification used by the state administration units and possibilities of their utilization for managerial purposes. Further the paper concentrates on a current state of internal cost classifications and allocation especially in the context of financial management and 3E concept monitoring. As main data sources the paper uses the Ministry of Finance of the Czech Republic standardized data, the Ministry of Defence of the Czech Republic internal data, relating legal regulations and scientific papers. Description, analysis, comparison, and synthesis of main findings were used in the paper as basic scientific methods.

The Incorrectness of Estimating of Tax Base in Income Taxes in the Verdicts of Supreme Administrative Court in 2014 in Poland

The Incorrectness of Estimating of Tax Base in Income Taxes in the Verdicts of Supreme Administrative Court in 2014 in Poland
(The Incorrectness of Estimating of Tax Base in Income Taxes in the Verdicts of Supreme Administrative Court in 2014 in Poland)

Author(s):Radosław Witczak
Language:English
Subject(s):National Economy, Law on Economics, Public Finances, Fiscal Politics / Budgeting, Court case
Page Range:856-862
No. of Pages:7
Keywords:taxation; tax fraud; income taxes; the estimation of tax base; tax collection;
Summary/Abstract:Important task of the tax administration is diminishing the tax evasion of income taxes. One way of reduction the tax evasion is estimating of tax base. The provisions point out different methods of estimating of the tax base. The aim of the article was the identification of mistakes made by the tax administration in using the methods of estimating of tax base of income taxes. 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 Supreme Administrative Court. The cases concerned different types of methods of tax estimation used by tax administration. In the majority of analysed cases the use of methods of estimating of tax base was correct. However, there were cases where methods of estimating of tax base were used in not a proper way. Different kinds of mistakes have been identified.

Typology of the Municipal Bonds Risk – Application for Polish Organized Bonds Market

Typology of the Municipal Bonds Risk – Application for Polish Organized Bonds Market
(Typology of the Municipal Bonds Risk – Application for Polish Organized Bonds Market)

Author(s):Agnieszka Wojtasiak-Terech
Language:English
Subject(s):National Economy, Governance, Public Administration, Economic policy, Financial Markets
Page Range:863-871
No. of Pages:9
Keywords:municipal bonds; bonds risk; risk typology; bonds organized market;
Summary/Abstract:The objective of the paper was to work out municipal bonds financial risk categories and sub-categories from the investor and issuer point of view and verify which types of risk are crucial for municipal bonds traded on the Polish bonds organized market - Catalyst. Risk categorization was based on risk factors. Conducted research proved that both investors and issuers should consider: market risk, credit risk, liquidity risk, operational risk, legal risk, additional rights risk, business risk and political risk. However different risk sub-categories were identified or risk sub-categories were the same but consequences of risk factors influence were different. The analysis of the municipal bonds traded on the Catalyst market showed that in between all types of financial risk the most crucial for investors are liquidity and market risk, for issuers operational risk, market risk and legal risk.

Fiscal Federalism and Redistributive Politics for Income Tax: Case of Russia’s Regions

Fiscal Federalism and Redistributive Politics for Income Tax: Case of Russia’s Regions
(Fiscal Federalism and Redistributive Politics for Income Tax: Case of Russia’s Regions)

Author(s):Nadezhda Yashina, Maria Ginzburg, Louisa Chesnokova
Language:English
Subject(s):National Economy, Governance, Economic policy, Public Finances, Fiscal Politics / Budgeting
Page Range:872-880
No. of Pages:9
Keywords:fiscal federalism; income tax; tax revenues; coefficient of variation; weights;
Summary/Abstract:The budget system of the country with a federal form of government requires special attention to the allocation of tax revenues between levels of budgets in order to comply with the budgetary principles and to maintain capacities of the regions. Currently in Russian Federation taxes are allocated on the basis of the regulatory criteria. The authors of the study suggested that the use of the theory of weights for determining the amounts of taxes to the distribution in the Federal and regional budgets will increase the sustainability of each part of the budget system. Based on the results of current researches, the authors have developed a scorecard on the allocation of corporate income tax and personal income tax, and suggested an algorithm for derivation of tax revenues. While conducting this research, the authors were using data of economic indicators dynamics for years from 2008 to 2014 for 83 regions of Russian Federation. Regions were divided into groups according to the size of planned tax revenue. The algorithm of distribution allowed to differentiate income taxes between the regional and the federal budgets of Russian regions, taking into account the socio-economic characteristics of the territories. Application of algorithm developed by the authors, could give a solution to the following tasks facing regional budgets: expand the tax base, increase the territorial taxes collectability, raise the level of own income for regions, increase the capacity of regional budgets, related to the financing of expenditure commitments; reduce the dependency of regional budgets from federal budget transfers; improve the quality of life of the population in the regions of Russian Federation.

Cross-generational Investment Behavior and the Impact on Personal Finance

Cross-generational Investment Behavior and the Impact on Personal Finance
(Cross-generational Investment Behavior and the Impact on Personal Finance)

Author(s):Alexander Zureck, Janusz Reiter, Martin Svoboda
Language:English
Subject(s):Behaviorism, Demography and human biology, Economic development, Financial Markets, Socio-Economic Research
Page Range:881-885
No. of Pages:5
Keywords:Personal finance; investment behavior; young people; retirement;
Summary/Abstract:Money is an important topic for all generations. Young people are often stressed about money. They worry about not having enough money to retire or just to make it until the end of the month. In contrast to young people, old people often have a full understanding of the gravity of their financial situation. This paper analyzes the financial decision making in relation to the age in Germany. Within the paper we concentrate on the investment behavior in general and give an outlook to the retirement situation. The analysis is based on a logistic regression with data from an online survey in 2015. It includes data from 1,489 participants. The results of this analysis show that young people prefer secure financial investments like call money, fixed deposit, savings book, or building loan contract. In total, the participants save between 400 EUR and 500 EUR. Between 100 EUR and 200 EUR the save monthly for retirement.

European Financial systems 2016. Proceedings of the 13th International Scientific Conference European Financial systems 2016. Proceedings of the 13th International Scientific Conference

Hedging of Natural Gas on Selected Markets

Hedging of Natural Gas on Selected Markets (Hedging of Natural Gas on Selected Markets)

Bankruptcies of Companies in the Czech Republic after New Financial Crisis

Bankruptcies of Companies in the Czech Republic after New Financial Crisis (Bankruptcies of Companies in the Czech Republic after New Financial Crisis)

Would the Russian Economy Turn into a Lost Decade?

Would the Russian Economy Turn into a Lost Decade? (Would the Russian Economy Turn into a Lost Decade?)

Oil Price and European Stock Markets

Oil Price and European Stock Markets (Oil Price and European Stock Markets)

Specific Factors of the Contemporary Development of the Czech Real Estate Market

Specific Factors of the Contemporary Development of the Czech Real Estate Market (Specific Factors of the Contemporary Development of the Czech Real Estate Market)

Testing for Information Asymmetry in Automobile Insurance: Sample from Slovak Republic

Testing for Information Asymmetry in Automobile Insurance: Sample from Slovak Republic (Testing for Information Asymmetry in Automobile Insurance: Sample from Slovak Republic)

The Limitations of E-commerce Development in Full Operating Cycle Firms: V4 Countries Case

The Limitations of E-commerce Development in Full Operating Cycle Firms: V4 Countries Case (The Limitations of E-commerce Development in Full Operating Cycle Firms: V4 Countries Case)

Optimising the Slovak Tax Policy and Tax System Performance

Optimising the Slovak Tax Policy and Tax System Performance (Optimising the Slovak Tax Policy and Tax System Performance)

Stock Market Volatility in the European Emerging and Frontier Markets

Stock Market Volatility in the European Emerging and Frontier Markets (Stock Market Volatility in the European Emerging and Frontier Markets)

Comparison of the Efficiency of Selected European Banking Sectors

Comparison of the Efficiency of Selected European Banking Sectors (Comparison of the Efficiency of Selected European Banking Sectors)

The Impact of Demographic Characteristics on Financial Literacy: An Empirical Study in Commercial Banks’ Customers

The Impact of Demographic Characteristics on Financial Literacy: An Empirical Study in Commercial Banks’ Customers (The Impact of Demographic Characteristics on Financial Literacy: An Empirical Study in Commercial Banks’ Customers)

Investment in Renewable Energy Technologies from the Perspective of Polish Venture Capital Funds

Investment in Renewable Energy Technologies from the Perspective of Polish Venture Capital Funds (Investment in Renewable Energy Technologies from the Perspective of Polish Venture Capital Funds)

Sustainable Value Creation - performance of European Manufacturing Companies

Sustainable Value Creation - performance of European Manufacturing Companies (Sustainable Value Creation - performance of European Manufacturing Companies)

Systemic Risk Indicators in the Eurozone: An Empirical Evaluation

Systemic Risk Indicators in the Eurozone: An Empirical Evaluation (Systemic Risk Indicators in the Eurozone: An Empirical Evaluation)

The Impact of Contingent Convertible Bond Issuance on Bank Credit Risk

The Impact of Contingent Convertible Bond Issuance on Bank Credit Risk (The Impact of Contingent Convertible Bond Issuance on Bank Credit Risk)

Hedging Case Study in the Exchange Rate Commitment Regime Environment

Hedging Case Study in the Exchange Rate Commitment Regime Environment (Hedging Case Study in the Exchange Rate Commitment Regime Environment)

Influences on Consumer Rationality

Influences on Consumer Rationality (Influences on Consumer Rationality)

Analysis of the Relationship between Taxes and Social Benefits and Transfers in the EU

Analysis of the Relationship between Taxes and Social Benefits and Transfers in the EU (Analysis of the Relationship between Taxes and Social Benefits and Transfers in the EU)

The Role of Life Insurance in the Context of Cover the Needs of the People in the Czech Republic

The Role of Life Insurance in the Context of Cover the Needs of the People in the Czech Republic (The Role of Life Insurance in the Context of Cover the Needs of the People in the Czech Republic)

Quality and Efficiency of Bank Branch Services

Quality and Efficiency of Bank Branch Services (Quality and Efficiency of Bank Branch Services)

The Access to Instrument of Countercyclical Capital Reserves in the European Union and the USA

The Access to Instrument of Countercyclical Capital Reserves in the European Union and the USA (The Access to Instrument of Countercyclical Capital Reserves in the European Union and the USA)

Hedging of Portfolios and Transaction costs

Hedging of Portfolios and Transaction costs (Hedging of Portfolios and Transaction costs)

Comparative Study of Banking Sector in Republic of Moldova and Czech Republic

Comparative Study of Banking Sector in Republic of Moldova and Czech Republic (Comparative Study of Banking Sector in Republic of Moldova and Czech Republic)

Competitiveness Assessment of Slovak Republic Regions

Competitiveness Assessment of Slovak Republic Regions (Competitiveness Assessment of Slovak Republic Regions)

Keynesian Model in Small and Medium Enterprises Development: Puzzling Case of Russian Regions

Keynesian Model in Small and Medium Enterprises Development: Puzzling Case of Russian Regions (Keynesian Model in Small and Medium Enterprises Development: Puzzling Case of Russian Regions)

Pension-related Application of the Cohort Life Table

Pension-related Application of the Cohort Life Table (Pension-related Application of the Cohort Life Table)

Influence of selected environmental factors on the efficiency of commercial insurers

Influence of selected environmental factors on the efficiency of commercial insurers (Influence of selected environmental factors on the efficiency of commercial insurers)

Holdings of Government Bonds by Commercial Banks during the Financial and Debt Crisis in Europe

Holdings of Government Bonds by Commercial Banks during the Financial and Debt Crisis in Europe (Holdings of Government Bonds by Commercial Banks during the Financial and Debt Crisis in Europe)

Foreign Trade Finance: What is the Impact of the Global Financial Crisis of 2007-2009?

Foreign Trade Finance: What is the Impact of the Global Financial Crisis of 2007-2009? (Foreign Trade Finance: What is the Impact of the Global Financial Crisis of 2007-2009?)

The Influence of the Size of the Region on the Financial Situation of Hospitals

The Influence of the Size of the Region on the Financial Situation of Hospitals (The Influence of the Size of the Region on the Financial Situation of Hospitals)

Analysis of Various Entrepreneurial Activities and their Development in the Czech Republic from 2008 to 2015

Analysis of Various Entrepreneurial Activities and their Development in the Czech Republic from 2008 to 2015 (Analysis of Various Entrepreneurial Activities and their Development in the Czech Republic from 2008 to 2015)

Development and the Current Situation of the Mortgages for the Czech Households

Development and the Current Situation of the Mortgages for the Czech Households (Development and the Current Situation of the Mortgages for the Czech Households)

The Process of Harmonization of Accounting in the Czech Republic

The Process of Harmonization of Accounting in the Czech Republic (The Process of Harmonization of Accounting in the Czech Republic)

High-Frequency Trading and Price Volatility in the Paris Euronext Stock Market

High-Frequency Trading and Price Volatility in the Paris Euronext Stock Market (High-Frequency Trading and Price Volatility in the Paris Euronext Stock Market)

The Prediction of Economic Activity Growth by Sovereign Bond Spread in France, Germany and Great Britain

The Prediction of Economic Activity Growth by Sovereign Bond Spread in France, Germany and Great Britain (The Prediction of Economic Activity Growth by Sovereign Bond Spread in France, Germany and Great Britain)

Difference in Financial Knowledge of Finance Students in the Czech Republic

Difference in Financial Knowledge of Finance Students in the Czech Republic (Difference in Financial Knowledge of Finance Students in the Czech Republic)

The Use of Financial Advisory in Czech Republic: Self-confidence

The Use of Financial Advisory in Czech Republic: Self-confidence (The Use of Financial Advisory in Czech Republic: Self-confidence)

Face Nominal Effect on Capital Market Transactions. The Case of Poland

Face Nominal Effect on Capital Market Transactions. The Case of Poland (Face Nominal Effect on Capital Market Transactions. The Case of Poland)

Compensation for Income Lost – Long-term Effects on the Victim's Personal Finance

Compensation for Income Lost – Long-term Effects on the Victim's Personal Finance (Compensation for Income Lost – Long-term Effects on the Victim's Personal Finance)

Crop Insurance as the Instrument for Risk Financing in Polish Farms

European Financial systems 2016. Proceedings of the 13th International Scientific Conference
European Financial systems 2016. Proceedings of the 13th International Scientific Conference

Hedging of Natural Gas on Selected Markets
(Hedging of Natural Gas on Selected Markets)

Bankruptcies of Companies in the Czech Republic after New Financial Crisis
(Bankruptcies of Companies in the Czech Republic after New Financial Crisis)

Would the Russian Economy Turn into a Lost Decade?
(Would the Russian Economy Turn into a Lost Decade?)

Oil Price and European Stock Markets
(Oil Price and European Stock Markets)

Specific Factors of the Contemporary Development of the Czech Real Estate Market
(Specific Factors of the Contemporary Development of the Czech Real Estate Market)

Testing for Information Asymmetry in Automobile Insurance: Sample from Slovak Republic
(Testing for Information Asymmetry in Automobile Insurance: Sample from Slovak Republic)

The Limitations of E-commerce Development in Full Operating Cycle Firms: V4 Countries Case
(The Limitations of E-commerce Development in Full Operating Cycle Firms: V4 Countries Case)

Optimising the Slovak Tax Policy and Tax System Performance
(Optimising the Slovak Tax Policy and Tax System Performance)

Stock Market Volatility in the European Emerging and Frontier Markets
(Stock Market Volatility in the European Emerging and Frontier Markets)

Comparison of the Efficiency of Selected European Banking Sectors
(Comparison of the Efficiency of Selected European Banking Sectors)

The Impact of Demographic Characteristics on Financial Literacy: An Empirical Study in Commercial Banks’ Customers
(The Impact of Demographic Characteristics on Financial Literacy: An Empirical Study in Commercial Banks’ Customers)

Investment in Renewable Energy Technologies from the Perspective of Polish Venture Capital Funds
(Investment in Renewable Energy Technologies from the Perspective of Polish Venture Capital Funds)

Sustainable Value Creation - performance of European Manufacturing Companies
(Sustainable Value Creation - performance of European Manufacturing Companies)

Systemic Risk Indicators in the Eurozone: An Empirical Evaluation
(Systemic Risk Indicators in the Eurozone: An Empirical Evaluation)

The Impact of Contingent Convertible Bond Issuance on Bank Credit Risk
(The Impact of Contingent Convertible Bond Issuance on Bank Credit Risk)

Hedging Case Study in the Exchange Rate Commitment Regime Environment
(Hedging Case Study in the Exchange Rate Commitment Regime Environment)

Influences on Consumer Rationality
(Influences on Consumer Rationality)

Analysis of the Relationship between Taxes and Social Benefits and Transfers in the EU
(Analysis of the Relationship between Taxes and Social Benefits and Transfers in the EU)

The Role of Life Insurance in the Context of Cover the Needs of the People in the Czech Republic
(The Role of Life Insurance in the Context of Cover the Needs of the People in the Czech Republic)

Quality and Efficiency of Bank Branch Services
(Quality and Efficiency of Bank Branch Services)

The Access to Instrument of Countercyclical Capital Reserves in the European Union and the USA
(The Access to Instrument of Countercyclical Capital Reserves in the European Union and the USA)

Hedging of Portfolios and Transaction costs
(Hedging of Portfolios and Transaction costs)

Comparative Study of Banking Sector in Republic of Moldova and Czech Republic
(Comparative Study of Banking Sector in Republic of Moldova and Czech Republic)

Competitiveness Assessment of Slovak Republic Regions
(Competitiveness Assessment of Slovak Republic Regions)

Keynesian Model in Small and Medium Enterprises Development: Puzzling Case of Russian Regions
(Keynesian Model in Small and Medium Enterprises Development: Puzzling Case of Russian Regions)

Pension-related Application of the Cohort Life Table
(Pension-related Application of the Cohort Life Table)

Influence of selected environmental factors on the efficiency of commercial insurers
(Influence of selected environmental factors on the efficiency of commercial insurers)

Holdings of Government Bonds by Commercial Banks during the Financial and Debt Crisis in Europe
(Holdings of Government Bonds by Commercial Banks during the Financial and Debt Crisis in Europe)

Foreign Trade Finance: What is the Impact of the Global Financial Crisis of 2007-2009?
(Foreign Trade Finance: What is the Impact of the Global Financial Crisis of 2007-2009?)

The Influence of the Size of the Region on the Financial Situation of Hospitals
(The Influence of the Size of the Region on the Financial Situation of Hospitals)

Analysis of Various Entrepreneurial Activities and their Development in the Czech Republic from 2008 to 2015
(Analysis of Various Entrepreneurial Activities and their Development in the Czech Republic from 2008 to 2015)

Development and the Current Situation of the Mortgages for the Czech Households
(Development and the Current Situation of the Mortgages for the Czech Households)

The Process of Harmonization of Accounting in the Czech Republic
(The Process of Harmonization of Accounting in the Czech Republic)

High-Frequency Trading and Price Volatility in the Paris Euronext Stock Market
(High-Frequency Trading and Price Volatility in the Paris Euronext Stock Market)

The Prediction of Economic Activity Growth by Sovereign Bond Spread in France, Germany and Great Britain
(The Prediction of Economic Activity Growth by Sovereign Bond Spread in France, Germany and Great Britain)

Difference in Financial Knowledge of Finance Students in the Czech Republic
(Difference in Financial Knowledge of Finance Students in the Czech Republic)

The Use of Financial Advisory in Czech Republic: Self-confidence
(The Use of Financial Advisory in Czech Republic: Self-confidence)

Face Nominal Effect on Capital Market Transactions. The Case of Poland
(Face Nominal Effect on Capital Market Transactions. The Case of Poland)

Compensation for Income Lost – Long-term Effects on the Victim's Personal Finance
(Compensation for Income Lost – Long-term Effects on the Victim's Personal Finance)

Crop Insurance as the Instrument for Risk Financing in Polish Farms
(Crop Insurance as the Instrument for Risk Financing in Polish Farms)

The Influence of a Low Interest Rate on Life Insurance Companies
(The Influence of a Low Interest Rate on Life Insurance Companies)

Impact of the REPO Rate on Commercial Rates in the Czech Republic
(Impact of the REPO Rate on Commercial Rates in the Czech Republic)

The Interaction between Venture Capital and Innovation in Europe
(The Interaction between Venture Capital and Innovation in Europe)

Preventing Crises in the Banking Sector and the Role of Internal Audit in Corporate Governance
(Preventing Crises in the Banking Sector and the Role of Internal Audit in Corporate Governance)

Mobile Technology on the Retail Banking Market
(Mobile Technology on the Retail Banking Market)

The Role of Accounting Policy in Management of Polish Hospitals
(The Role of Accounting Policy in Management of Polish Hospitals)

Revenue Efficiency in European Banking
(Revenue Efficiency in European Banking)

Impact of Transfer Pricing Regulation on MNEs' Behaviour
(Impact of Transfer Pricing Regulation on MNEs' Behaviour)

The Electronic Record of Sales and Impact on the Reduction of Tax Evasion
(The Electronic Record of Sales and Impact on the Reduction of Tax Evasion)

The Comparison of the Selected Aspects of Taxation in Visegrad Four Countries
(The Comparison of the Selected Aspects of Taxation in Visegrad Four Countries)

Alternative Investments in Voluntary Pension Security
(Alternative Investments in Voluntary Pension Security)

Impact of the Interest Rates in the Economy, the Banking and Financial System
(Impact of the Interest Rates in the Economy, the Banking and Financial System)

Accrual Accounting in the Army of Great Britain - Clarity, Transparency, and Accounting Data Analysis Options
(Accrual Accounting in the Army of Great Britain - Clarity, Transparency, and Accounting Data Analysis Options)

The Impacts of the Directive No. 2013/34 / EU Transposition into National Accounting Modifications in the Czech and Slovak Republic
(The Impacts of the Directive No. 2013/34 / EU Transposition into National Accounting Modifications in the Czech and Slovak Republic)

Current Issues of Accounting for Intangibles in Various Reporting Systems
(Current Issues of Accounting for Intangibles in Various Reporting Systems)

Analysis of Financial Statements Focusing on Detection of Ponzi Schemes Using XBRL
(Analysis of Financial Statements Focusing on Detection of Ponzi Schemes Using XBRL)

The Success of Business Failure Prediction Using Financial Creditworthy Models
(The Success of Business Failure Prediction Using Financial Creditworthy Models)

Perspective of Sustainability of Fiscal Policy in Czech Republic
(Perspective of Sustainability of Fiscal Policy in Czech Republic)

Interrelation between Concentration in Banking Sector and its Main Performance Indicators: Case of Russia
(Interrelation between Concentration in Banking Sector and its Main Performance Indicators: Case of Russia)

Risks and Efficiency of Tax System at Different Budget System Levels: Revenue Formation and Sharing in the Russian Federation Regions
(Risks and Efficiency of Tax System at Different Budget System Levels: Revenue Formation and Sharing in the Russian Federation Regions)

Corporate Tax Revenues of Selected European Countries Using Dynamic Conditional Correlation Approach
(Corporate Tax Revenues of Selected European Countries Using Dynamic Conditional Correlation Approach)

The Characteristics of the Investment through the Airbag Certificates
(The Characteristics of the Investment through the Airbag Certificates)

Friendship of Stock Indices
(Friendship of Stock Indices)

CCTB and CCCTB Implementation and its Impact on the Tax Bases Allocated in the Slovak Republic
(CCTB and CCCTB Implementation and its Impact on the Tax Bases Allocated in the Slovak Republic)

Study of Financial Literacy in the Field of Insurance Products
(Study of Financial Literacy in the Field of Insurance Products)

Local Economic Impact of Domestic and International Students: Case of University of Economics in Bratislava
(Local Economic Impact of Domestic and International Students: Case of University of Economics in Bratislava)

The Performance Ranking of Chosen Manufacturing Division
(The Performance Ranking of Chosen Manufacturing Division)

Private Health Insurance and Medical Subscriptions – Two Faces of the Private Pre-paid Funding of Health Care in Poland
(Private Health Insurance and Medical Subscriptions – Two Faces of the Private Pre-paid Funding of Health Care in Poland)

Payment Card Frauds with a Hidden Camera, Touch Sensors and a Counterfeit Payment Card and Protection Techniques against these Types of Frauds
(Payment Card Frauds with a Hidden Camera, Touch Sensors and a Counterfeit Payment Card and Protection Techniques against these Types of Frauds)

Comparison of Health Care Results in Public Health Systems of European Countries
(Comparison of Health Care Results in Public Health Systems of European Countries)

The Policy of Monetary Easing of Central Banks
(The Policy of Monetary Easing of Central Banks)

Composition of Pension Funds' Investment Portfolio and its Impact on Profit
(Composition of Pension Funds' Investment Portfolio and its Impact on Profit)

Contribution to the Research for Adequate and Sustainable Pensions – The Study of the Slovak Republic and the Czech Republic
(Contribution to the Research for Adequate and Sustainable Pensions – The Study of the Slovak Republic and the Czech Republic)