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In mathematical economics there is a number of so called “turnpike theorems” proved mainly on the basis of multiproduct models of economic dynamics. According to these theorems, all optimal paths of economic growth over a long period of time converge to a certain path (turnpike) in which the economy achieves the highest growth rate while remaining in a specific dynamic (von Neumann) equilibrium. The article refers to this trend and presents some properties of optimal growth processes in the Gale-type model of the stationary economy when the quality criterion of growth processes is not the utility of production—which is normally postulated in the turnpike theory—but the time needed by the economy to achieve the desired final state, e.g. the level of production or production value. According to the author’s knowledge, the idea of using time as a criterion for growth in turnpike theory (especially in Gale-type economy) is innovative. It has been proven that changing the growth criterion does not deprive the Gale economy of its asymptotic / turnpike properties.
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As a result of previous multilateral negotiations tariff rates are generally low and cannot explain the reasons for recent proliferation of preferential trade agreements (PTAs). The aim of the paper is to look for other motivations of EU PTAs and to assess their importance for the EU. The main research methods are statistical, review and assessment of WTO documents and critical analysis of literature. First, the present level of tariff protection on selected import markets was estimated. This level illustrates the scale of countries’ interest in their elimination of the existing tariffs. Also the share of preferential imports in the EU extra-trade was calculated and compared with trade on MFN basis. Next, reasons for PTAs were identified. The conclusions prove that 21st century PTAs are mainly motivated not by a reduction of tariffs but by the willingness to reduce the regulatory barriers (contained in rules on public procurement, environmental protection, etc.). The most dynamic trade nowadays involves flows of accessories and services. In this situation the importance of PTAs results from the fact that they serve as instruments eliminating national regulatory barriers faced by exporters of goods and resources on foreign markets. Thus PTAs support production and sales abroad. In the EU political motivations of PTAs are important as well.
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The aim of this paper is to empirically analyse the relationship between the trade wars and modes of transport for selected countries. For this purpose the causality relationship between trade value and sea transport / air transportation for EU–G20 and US–G20 countries was examined. Panel causality analysis was used as a method in the study. The empirical findings of the study show the existence of a causality relationship between the trade value and modes of transport (sea transport and air transport) for country groups. This shows that the countries’ sea and air transport will be adversely affected by trade wars.
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The aim of the article is to conduct an empirical analysis of the impact ofaggregate and disaggregate private capital flows on economic growth in eleven MENAcountries between 1980 and 2018. Unlike prior empirical studies, the fixed effect panelquantile approach developed by Canay (2011) is implemented. Findings suggestthat there is a significant difference in the effects of private capital flows on economicgrowth across lower and higher quantiles. More specifically, the effects of total privatecapital flows, foreign direct investment flows, portfolio flows and debt flows are positiveand statistically significant only for low and medium quantiles, indicating thatthe enhancing impact of private capital flows in terms of economic growth is onlyconfirmed in countries with relatively low and medium growth rates. Moreover, debtflows affect economic growth in countries recording high growth rates, stressing theimportance of financial development in routing those flows into the most productiveprojects in the economy.
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The aim of the paper is to empirically estimate the growth-maximizing debtto-GDP ratio in the case of Turkey. To calculate the growth-maximizing debt-to-GDPratio FMOLS, DOLS, and CCR estimators are used for the period from 1960–2013.According to the empirical findings the growth-maximizing debt-to-GDP ratio variesbetween 34.3% and 38.7%. Based on a comparison of these ratios to current data(29.1% for 2018), Turkey has the capacity for additional borrowing to achieve a growthmaximizingdebt-to-GDP ratio. If this additional borrowing capacity is used for publicinvestment with a return greater than the interest cost of the additional debt economicgrowth will be maximized and public debt sustainability supported.
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A bank, particularly in developing countries like Turkey, is one of the mostimportant institutions in the financial sector. Therefore knowing the factors affectingthe performance of banks is important for the development of the sector. One of thefactors affecting the risk and profitability of banking sector is the internal factors ofthe banks. The aim of this paper is to investigate the board of directors’ characteristicsand its effect on risk level measured by non-performing loans and on bank performancemeasured by asset profitability using the Generalized Method of Moments(GMM) estimator. Data from nineteen deposit banks for the period 2012–2018 wereused. The result of the study determined that the board size, foreign board membersand the independent board members have an effect on both non-performing loansand the return on assets.
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The executive compensation issue continues to cause protest due to the increasingnumber of cases of an unjustifiably high level of pay. The main conflict arisesfrom the misalignment of interests between the short-term expectations of the managerand long-term needs of the shareholders. Since there are no universal rules on how toprice the executive performance companies reach for different means of establishingthe CEO’s compensation and ascertaining manager’s commitment towards maintaininga company’s value. The issue becomes more complex once the compensation rules arenot a direct effect of the market power game but are additionally restricted by government.The aim of the paper is to discuss corporate government policies introduced inIsrael and their impact on executive compensation level and structure. Israel is amongstthose countries that partially regulate CEO compensation and thus the Israeli experiencecan add to the understanding of the effectiveness of modern corporate governance.
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In this paper an extension of the well-known binomial approach to optionpricing is presented. The classical question is: What is the price of an option on therisky asset? The traditional answer is obtained with the help of a replicating portfolioby ruling out arbitrage. Instead a two-person game from the Nash equilibrium of whichthe option price can be derived is formulated. Consequently both the underlying asset’sprice at expiration and the price of the option on this asset are endogenously determined.The option price derived this way turns out, however, to be identical to theclassical no-arbitrage option price of the binomial model if the expiration-date pricesof the underlying asset and the corresponding risk-neutral probability are properlyadjusted according to the Nash equilibrium data of the game.
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The main goal of this research is to analyse the investment benefits from anincorporation of the volatility exposure to the diversified portfolio from the perspectiveof a Polish investor. Volatility, treated as a new asset class, may improve the performanceof the portfolio due to its negative correlation with most types of assets. This topic hasbeen widely investigated for the United States and Europe whereas the Polish marketappears to be not heavily researched and this study may fill this gap. The research coversthe period from October 2010 to July 2018 and is performed on daily close prices. Toconstruct the portfolios the analysis uses the mean-variance framework and the naïvediversification approach. The comparison of risk-adjusted returns between investmentswith and without volatility exposure enables an answer to the research question aboutan improvement of the results by the addition of a non-standard asset to the diversifiedportfolios. The VXX is considered as the proxy for volatility as it is the most popularETN which follows the volatility index derivatives with the given maturity. To test therobustness of the results the portfolios are constructed with a broad range of differentparameters and assumptions imposed on the optimization procedure.
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Following Chilean experiences as well as the World Bank suggestions post‑communist Poland and post-collectivist Israel—underwent deep reforms which led to the privatization of old age security. The aim of the article is to compare the Polish and Israeli paths of pension privatization in the last thirty years. The main conclusions are: (1) the economic, demographic and political environments at the moment of the design and implementation of the pension reform were quite similar in both countries; however (2) the scope and scale of the privatization was different: in Poland there was only partial shift towards private pension system while in Israel full privatization of the system was implemented; (3) the decisive factors were: the inertia of the already existing pension systems and the power of foreign influencers; (4) the retreat from privatization in Poland and the increase in Israel took place due to the different mix of disadvantages of the new pension arrangements, short-term political aims and international pressure.
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The aim of this paper is to bring together some of the foundational and recentliterature interlinking corporate governance and the leadership role of the boardof directors. Strategic leadership is widely assumed to be a responsibility that defaults tothe Chief Executive Officers (CEOs). However, in practice, what most CEOs do is strategicmanagement rather than strategic leadership. While strategic management doesshare key aspects of strategic leadership CEOs are expected to prioritize the managerialside over the leadership side. This is just one of the situations in which the boardroomassumes the leadership role. This paper discusses how boards of directors conductthe process of strategic leadership in their organizations. In recent years there hasbeen an increasing interest among scholars to understand how boards strategize froma behavioral point of view. This growing interest has resulted in the development ofvarious typologies regarding boards’ involvement in the strategic leadership processes.
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This study aims to investigate the impact of savings and foreign direct investment on economic growth in Poland. Savings play an important role in achieving sustainable growth. High saving rates are also an important tool to increase resilience to financial shocks. The economic climate that emerged following the financial crisis revealed problems with the economy of Poland to obtain foreign financing. The decrease in foreign direct investment has led to an unpredictable economic environment for developing countries such as Poland. The decrease in foreign direct investment has led to lower growth rates for an emerging market such as the economy of Poland. The relationship economic growth rate, saving and foreign direct investment are examined for Poland over the period 1992-2016 by using the Autoregressive Distributed Lag (ARDL) bounds testing approach. According to this approach there is a cointegration relationship between the series and a 1% increase in savings which leads to a 0.81% increase on economic growth rate. Also a 1% increase in foreign direct investment (FDI) leads to a 1.52% increase in the economic growth rate.
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This paper argues that provision of industrial commons (IC), might be consideredas a crucial factor of a cluster’s attractiveness in digital transformation, e.g. inIndustry 4.0 (I4.0) time. By drawing on the qualitative case study method of HamburgAviation cluster (HAv), it aims at exploring the nature of IC in the leading GermanI4.0 cluster. Proximity emerges, even if sometimes not explicitly, as the recurring topicfacilitating the provision of IC, along with the advancement of I4.0. As Industry 4.0stipulates much uncertainty, the closeness featuring in clusters, seems to bring variousbenefits, which can help address challenges associated with I4.0, and faced mainly bysmall and medium firms (SMEs). The vicinity to key actors and the gains of networking,reflect the importance of (un)articulated proximity
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Countries can check the performance of their logistics’ activities to determinetheir competitiveness in trade logistics. One way to check these performancesis to analyze the country’s LPI value in detail which is released by the WB every twoyears. When calculating the LPI, six indicators (criteria) are taken into account. Theweights (importance level) of these criteria are important for countries which wouldlike to focus more on the most important criteria and move their ranking up in theLPI list. However the WB takes into account indicators (criteria) weights equally whencalculating LPI values. In order to overcome this problem some studies have used subjectiveweighting methods and others have used objective weighting methods. Bothmethods have advantages and disadvantages. The aim of this study is to integrate twoweighting methods (subjective (SWARA) and objective (CRITIC)) in determining theweights of criteria in order to balance the two weighting methods. Unlike other studiesin the literature this study combines two weighting methods. Additionally the PIVmethod, which is seldom used to address any MCDM problem, is used in this studyand a new integrated MCDM model is introduced to literature. In this respect thisstudy contributes to the literature.
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Corporate Governance (CG) in India has undergone major transformationin the recent past with the enactment of Companies Act, 2013 and revision of SEBI’sListing Agreement. Though some studies were undertaken in the Indian context fewconventional aspects of CG have been repetitively addressed with conflicting results.The aim of this study is to examine the impact of some prominent CG attributes suchas board size, board independence, role duality, board’s gender diversity, ownershipconcentration and audit committee independence on both market as well as accountingbased measures of firm performance (FP). To this end the study uses a sampleof top 100 non-financial and non-utility firms listed on the Bombay Stock Exchange(BSE) for the period of 2014-2018 and employs two stage least square with instrumentalvariables technique of estimation which takes into account potential endogeneityin CG-FP relationship. The findings reveal a significant positive impact of board size,ownership concentration and audit committee independence on market based measureof FP while board independence is found to have a significant negative impact onaccounting based measure of FP. Moreover role duality and gender diversity are notassociated with FP. The outcome of this study highlights how the relationship betweenCG and FP works in the unique institutional setting of India and it should be of interestto regulators, practitioners and other market participants.
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The new audit regulation came into force in Poland in 2017 and imposedmandatory audit rotation. The new regulation aims to strengthen the auditor’s independencebut it might also affect concentration on the audit market. The aim of thispaper was to analyse whether mandatory audit rotation has a potential to reduce theaudit market concentration in Poland. The sample included 198 capital groups withthe parent company listed on the Warsaw Stock Exchange. The own compilation wasprepared based on the audit opinions which included information about appointedaudit firms in the period 2011-2017 (1,386 observations in total). The paper includesthe analysis of audit tenures, their length, frequency of changing the audit firm anddirection of the changes (to Big-4 or to Non-Big-4). The results showed that the biggestcapital groups tend to appoint Big-4 audit firms and if they change auditor—theychoose another firm from the Big-4. Additionally, the high number of short-term tenures(up to five years) suggests that Big-4 firms have strong bargaining power and theybenefit more from the rotation of the clients rather than from their retention. The findingssignificantly contribute to the hypothesis that mandatory audit rotation will notreduce the concentration on the audit market in Poland. The findings might be valuablefor the regulators and supervisory authorities responsible for the monitoring ofthe concentration level on the audit market.
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Art is increasingly perceived as an investment asset among investors inPoland. In order to achieve high rates of return it is crucial to identify the main factorsaffecting the value of the works of art in the art market. Death of the artist seemsto be one of the essential determinants influencing art market prices. The main aimof the study is to examine if the artist’s living status (i.e. information whether the artistdid or did not live when the transaction was held) affects the prices of the works ofart. According to the findings the largest percentage of the works of art that showeda price increase between the first and second auction was in the group of artists aliveat the time of the first sale and deceased at the time of the second sale in comparisonwith artists alive and deceased at the time of both transactions.
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