Book review "Pricing. The New Frontier"
Review of: Gabor Rekettye, Jonathan Liu, Pricing. Th e New Frontier, Transnational Press London; Management Series, 2018 Number of pages: 304 ISBN 978-910781-33-3
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Review of: Gabor Rekettye, Jonathan Liu, Pricing. Th e New Frontier, Transnational Press London; Management Series, 2018 Number of pages: 304 ISBN 978-910781-33-3
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Bank loans are the most important source of the banks’ income and profitability. The structure of loan portfolio, such as maturity, currency, type of interest rate or credited sector, is also highly significant for banks’ business performance. In the latest global financial crisis, quality of the loans sharply deteriorated, thus increasing the percentage of non-performing loans in banks’ balance sheets and causing major problems in business activity for many banks. The events emphasized the importance and potential impact of non-performing loans not just on banks, but on the whole economy and society. The aim of this article is to analyse determinants of non-performing loans, future challenges and possible solutions of high NPL ratios in Bosnia and Herzegovina and Croatia. Multiple regression analysis was conducted to determine strength and coefficient of the independent micro and macro variables (GDP growth rate, unemployment rate, Consumer Price Index, amount of bank loans and value of stock exchange indexes) on the level of non-performing loans. Obtained results indicate that GDP growth rates are significant in both countries but with opposite impact. Additionally, unemployment rate is significant in Bosnia and Herzegovina and amount of loans in Croatia. Despite current economic expansion, banks are still slightly reluctant in approving loans, alert of the potential growth of the non-performing loans and its effect on banking performance. In recent years, the level of NPL ratio started decreasing in both countries, mostly due to the selling or writing off loans by the commercial banks, but this level is still higher than in the comparable countries. Therefore, more effort is needed to further improve loan portfolio and enforce economic growth, with possible measures being better banks’ NPL management, improvement of insolvency procedures and more transparent justice system.
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The article analyses the capital structure of small and medium-sized enterprises (SMEs). It presents the basic theories of capital structure relating to SMEs. The empirical verification covered 6727 enterprises from the SME sector for the period 2012–2016 (the article does not discuss micro enterprises). For the purposes of the analysis, the group of enterprises was divided into industries according to the Polish Classification of Activities. SME debt ratios remained at a relatively stable level, with a higher short-term than long-term. Debt ratios in individual industries were highly diversified.
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The paper presents good practice in IT and the use of DMS (Document Management System) for digital court records. The concept of good practice was formulated during the implementation of the project “Education in the area of time management and cost management of judicial proceedings – case management” (a part of the Human Capital Programme). This project was one of the components supporting the reform of the Polish judiciary and sought to increase the efficiency of the judicial system by lowering costs and increasing the skills of those employed in the judiciary. The article describes the use of digital acts in the courts and the conditions and background of this practice (available systems, means of implementation), the purpose and benefits of its implementation, and the basic assumptions, scope and functions that should be implemented at different maturity levels, costs and the conclusions of the implementation of good practice.
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This paper deals with probabilities of dividend changes for a given change in earnings. This so-called sensitivity of dividends to earnings changes was analyzed on a sample of Advanced economies and Emerging and developing economies, according to International Monetary Fund classification. The main goal of the research is to empirically verify the assumption that companies are generally reluctant to cut or reduce dividends regardless of the stage of economic development of the country. In addition, the probabilities of dividend changes for a given change in earnings in characteristic groups of countries - Baltic countries and former Yugoslavia countries - have been analyzed. Research results show that earnings are significant dividend factor in all sample countries, that companies are generally reluctant to cut or decrease dividends and that dividends are less sensitive to earnings changes in Advanced economies, compared to Emerging and developing economies. Research has also shown that dividends are less responsive to earnings changes in former Yugoslavia countries compared to Baltic countries. These findings are in line with Lintner (1956) who has shown that reduction in earnings is not necessarily followed by reduction in dividends. Such behavior of dividends can be explained even by prospect theory created by Kahneman and Tversky (1979). They have shown that investors are more sensitive to negative events than to positive events and that investors do not make decisions in relation to the overall wealth but in relation to a particular reference point, which is usually the status quo. If this is the case, the previous dividends represent a specific reference point in relation to which investors make decisions. Having in mind asymmetric reaction of the investing public to dividend increases and dividend decreases (or dividend cuts), companies are reluctant to cut or decrease dividends because they are trying to avoid negative market reaction.
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Regional Trade Agreements (RTAs), are Treaties between two or more states to liberalize mutual trade or other economic relations. Among such RTAs the European Union is the largest one and most complex, including 28 member states with developed high levels of trade, monetary and economic cooperation in 2018. Generally RTAs follow the idea that more free trade and more liberal environment for other economic cooperation activities among the integrated states create an environment enabling additional and accelerated economic growth of member states, together with some other positive structural and economic gains. After1992 the number of newly registered RTAs with GATT and later with WTO started to increase very fast in comparison to the entire period after the WW II. In May 2018 all WTO registered active RTAs reached the number of 287. The number of active RTA evidently exceeds the number of all world’s states. The number of 287 active RTAs suggests that at least some states participate in more than one form of RTA. Such fact further strongly suggests that at least before 2017 there was globally developed an intensive interest among states to join or create one or another form of the RTA. The growth of registered and active RTAs in the last 25 or so years confirms realization of the theoretically predicted positive economic impacts of the RTAs on the member states economic achievements. However Mr. Trump, as the actual President of the USA, started to question expected positive economic gains of the existing RTAs. The policy of unilateral increases of USA’simport tariffs introduced by new USA administration presents open violation of the WTO trading rules. The USA’s discriminatory trade policy has been further extended by the decided that USA has to exit from its existing RTAs. USA’s decision of dismantling of the existing RTAs creates questions about their real economic efficiency and generally about the future of such international trade agreements. The process and actions after the dismantling and renegotiating of the USA’s RTA with Mexico and Canada, known as North American Free Trade Agreement (NAFTA, established Jan.1, 1994) produce some insight into the weaknesses and into the potential changes of the future RTAs.In the paper we analyse expected economic gains and eventual disadvantages of the RTAs for the member states. The expected end of NAFTA and creation of a new trade agreement between USA, Mexico and Canada are analysed with the purpose to develop insights into the probable future existence and reforms of the RTAs in the global economy.
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The forced overthrow of the historic meter of commercial development, the monetary Gold Standard, as adopted originally in the USA on the first of August 1914’s, triggered, and led during the next decade, the great inflations in France, Germany, Russia and almost all other European Countries. The ensuing convulsions of the social order, the rise of the speculator opportunities, the obliteration of the savings of the laboring and middle classes, based on fixed incomes, produced directly and afterwards, the rise of Bolshevism, Fascism, and Nazism. They were follow-ups of the floating European currencies, perennial budgetary and balance of payments deficits, Central banks’ emergency money printing, currency wars and the neo-mercantilism practices.After Nixon 15 August 1971 second American repudiation of the new Gold Exchange Standard, we entered a slow replay of the first experience, trough inflation, large monetary quantitative expansions and, through bursting bubbles, recessions and stagnations and, finally, new consequent barriers and tariffs perspectives. The most relevant comment, I always share in my speeches is this, coming from a statement on the 100th anniversary of the birth of Jacques Rueff. The comment address has been formulated by Lewis E. Lehrman, at the parliament of France (Assemble Nationale), on November 7, 1996: “Money will decide the fate of mankind, because individual liberty is only possible - or even thinkable - when confined within the boundaries of a collective discipline, calculated to curb the disorders that uncontrolled action is bound to provoke”. (Rueff, 1971).
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Important aspect of ongoing discussions on the choice of exchange rate regime is its reaction to crisis as a strong and unexpected external shock; such was the case of Great Recession from 2008.-onwards. It is generally accepted that pegged exchange rate regimes are more sensitive to external shocks that might cause their long-term destabilization. Still, the soft pegged regimes (also entitled intermediate regimes) have fewer limits, with rules that allow more maneuver space for national strategy. The group of soft pegged regimes is wider, both in structure and scope, then those of hard pegged regimes. While countries with more flexible regimes might use exchange rate fluctuations as automatic stabilisator, (hard and/or soft) pegs impose some limitations. In the first place, there is stability goal that, in combination with strict regulatory rules, limits the monetary and exchange rate policy, demanding the use of other strategies, such is the internal devaluation. Secondly, these countries do not use wide scope of instruments and their crisis strategy is more rigid than those of other regimes. Finally, there are dilemmas on the optimality of exchange rate strategy during the pre-eurozone membership period, including the euro introduction strategy. These dilemmas deepen in terms of crisis. This paper focuses on comparison of hard and soft pegged regimes (the latter also entitled intermediate regimes) in selected European union accession countries, using „de facto“ classification scale developed by International Monetary Fund. Despite the crisis, there have not been dramatic turbulences in terms of exchange rate policy in observed countries, but the general economic indicators clearly show the real depth of crisis and slow recovery. The question open for further discussion is whether such regimes should be obtained or abandoned during the crisis and what is their contribution to national economy. Furthermore, there are pros and cons of possible strategies, considering the European integration process.
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The European Union (EU) has shown considerable interest in receiving the Western Balkan countries into the EU, as did the mentioned countries show considerable interest to join the EU. Although this is a historically very turbulent region, the EU has clearly, unambiguously and unanimously expressed the political attitude towards the Western Balkans:"The Future of the Balkans is in the European Union". In addition to goodwill, the EU is also ready to assist in this process but also each country must do its part of the job in the accession process. The very process of EU accession means defining and meeting necessary criteria for potential new EU members, as well as the process of accession negotiations for the full membership of the new member states. The main objective of this article is to indicate which expansion criteria or Copenhagen criteria will be the most critical to achieve for Bosnia and Herzegovina(B&H), as one of the Western Balkan countries, in the process of access into the EU. In the process of meeting Copenhagen criteria, unlike other Western Balkan countries, B&H shows the least success. In our research, Bosnia and Herzegovina has a problem primarily by satisfying political Copenhagen criteria and then meeting economic and legal criteria. The lack of meeting Political Copenhagen criteria is found primarily in the absence of political consensus in B&H, which stems from the special features of the Government in Bosnia and Herzegovina (two entities and Bosnia's three main ethnic populations). With the lack of political unity in B&H, it is not possible to establish stable institutions that ensure democracy, the rule of law, respect for human rights and the right to protect minorities (Sejdić and Finci case, corruption, non-transparent elections, nondependent media and labour unions) Fulfilling the Copenhagen Economic Criteria - a functioning market economy is also dependent on political influence (which is also fractured). The economy of B&H is structurally unregulated and is based on the processing of basic raw materials without the high-tech industry in order to deal with the competition of the European Single Market. During the research, the used scientific methods (analysis and syntheses, descriptions and classifications, historical and comparative, induction and deduction, and quantitative analysis) showed that it would be most difficult to achieve the political and economic Copenhagen criteria for the above reasons.
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Corporate governance provides an answer to the question who controls the corporation and how. It involves a set of relationships between management, shareholders and stakeholders. Corporate governance in Bosnia and Herzegovina is within the legal jurisdiction of entities, and consequently there are two substantially aligned and yet completely distinct corporate governance systems, which separates Bosnia and Herzegovina as a state in the international environment into a specific category in terms of corporate governance. This paper will analyze ownership concentration in order to identify the characteristics of the corporate governance systems, then it will present the principles on which the legal framework for corporate governance in Bosnia and Herzegovina is defined, compare the business transparency standards with the transparency directive in the EU, and measure the quality level of corporate governance in order to define key areas for improvement of corporate governance in Bosnia and Herzegovina. The development and characteristics of the corporate governance systems in Bosnia and Herzegovina will be explored and compared with the regulatory framework and standards of corporate governance in the European Union. Special emphasis is on comparing the transparency principles and standards of corporations in Bosnia and Herzegovina with corporations in the European Union. The aim of the research is to compare the regulatory framework and characteristics of the corporate governance system in corporations in Bosnia and Herzegovina with the standards in the European Union, to identify similarities and differences and to define key areas for improvement of corporate governance in Bosnia and Herzegovina.
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In recent years a couple of methods aimed at time series symbolic representation have been introduced or developed. This activity is mainly justified by practical considerations such memory savings or fast data base searching. However, some results suggest that in the subject of time series clustering symbolic representation can even upgrade the results of clustering. The article contains a proposal of a new algorithm directed at the task of time series abridged symbolic representation with the emphasis on efficient time series clustering. The idea of the proposal is based on the PAA (piecewise aggregate approximation) technique followed by segmentwise correlation analysis. The primary goal of the article is to upgrade the quality of the PAA technique with respect to possible time series clustering (its speed and quality). We also tried to answer the following questions. Is the task of time series clustering in their original form reasonable? How much memory can we save using the new algorithm? The efficiency of the new algorithm was investigated on empirical time series data sets. The results prove that the new proposal is quite effective with a very limited amount of parametric user interference needed.
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Purpose: This paper explores the 21st-century emerging leadership competencies in a Malaysian higher learning institution. As the forces of change are transforming the leadership landscape, new leadership capabilities are required for the 21st-century evolving globalized environment. Hence, research is needed to determine the key emerging leadership competencies in the higher learning institutions. Findings: The significance of the results were the relevance of the leadership competency concept in the context of higher learning institution, future leaders need competencies for effective leadership, and the core competencies of academic leaders are necessary. Additionally, besides the discussion on the emerging leadership competencies of visioning and strategic thinking, leadership agility, adaptability and change, relationship and collaboration, the new findings from the field data were corporate leadership and cross-cultural competence. Research limitations/implications: This qualitative case study focused on one higher learning institution. At the same time the research also provided the in-depth context-rich information. Practical implications: The knowledge and adoption of the emerging leadership competencies concept would enhance the development of progressive leadership. Originality/value: There is limited study on the emerging leadership competencies in the higher learning institutions. Hence, there is value in this research. The findings were original contributions to knowledge. Also, this study showed the link between the expected attributes of institutional leadership to the dimensions of transformational leadership and the key emerging leadership competencies.
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Indonesian women migrant workers are a big population in most Asian countries. Past research indicates a large percent of Indonesian domestic workers being exposed to exploits, verbal and sexual abuse that further exposes them to various problems such as psychological, social, cognitive, behavioural, and physical challenges. Few subjects have thus far have been taken out on the prevalence of and associate factors with depression among Indonesian domestic workers in Malaysia. The objective is to know the prevalence of and the associated elements of depression among Indonesian domestic workers in Malaysia. This study engaged mix method. Quantitative information was accepted from 380 respondents by using Beck depression inventory (BDI-II), while qualitative data was collected from selected 32 respondents who have moderate depression (BDI-II) through interview. The questionnaire of total randomly 380 subjects were retrieved and 228 where participants who have depression symptom according to BDI-II. Three from five Indonesian domestic workers in Malaysia are having a depression symptom (60 percent). This study found that occupation, financial hardship, social support, and level education are the associate factors of depression among Indonesian domestic workers in Malaysia. Meanwhile, most of domestic workers who live with their employer have a moderate to severe depression. The awareness created through this study will enable proper government-to-government policy on domestic migrant workers matters, hence reducing the low rate and policy level intervention. It will as well contribute to the consistency of knowledge on depression of Indonesian domestic workers in a foreign country, especially the advocates and the social workers employed by the Indonesia embassies in all countries.
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Occupational safety on ships during inland shipping is a complicated subject due to particular working conditions, quite different from those on land. Depending on the tasks carried out, the size and the technical state of the inland shipping ships, harmful and onerous factors include noise, vibrations, high or low temperature, as well as limited space of both workplaces and social rooms. The work on the inland shipping ships is also connected with the particular work time distribution. Since the age of the majority of inland shipping ships in Poland exceeds 50 years, occupational safety is a very serious issue. Working conditions largely rely on the owner’s due diligence and the crew’s sufficient work culture, whereas they should also come from suitable regulations. The problem is that currently only work time distribution is regulated via legal code in relation to work on inland shipping ships. Since 2002 there have been no detailed regulation concerning occupational safety towards crews of the inland shipping ships. This gap in the Polish regulations seems to be a problem requiring a fast reaction.
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This paper presents the application of Benford's law in psychological pricing detection. Benford's law is naturally occurring law which states that digits have predictable frequencies of appearance with digit one having the highest frequency. Psychological pricing is one of the marketing pricing strategies directed on price setting which have the psychological impact on certain consumers. In order to investigate the application of Benford's law in psychological pricing detection, Benford's law is observed in the case of first and last digits. In order to inspect if the first and last digits of the observed prices are distributed according to the Benford’s law distribution or discrete uniform distribution respectively, mean absolute deviation measure, chi-square tests and Kolmogorov-Smirnov Z tests are used. Results of the analysis conducted on three price datasets have shown that the most dominating first digits are 1 and 2. On the other side, the most dominating last digits are 0, 5 and 9 respectively. The chi-square tests and Kolmogorov-Smirnov Z tests have showed that, at significance level of 5%, none of the three observed price datasets does have first digit distribution that fits to the Benford’s law distribution. Likewise, mean absolute deviation values have shown that there are large differences between the last digit distributions and the discrete uniform distribution implying psychological pricing in all price datasets.
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Over the past two decades, the environment in which a management accounting has been playing its role begins to change rapidly. In line with changes that have taken place in the environment, businesses and management, accountants had to redesign the existing accounting information system. Considering that management accounting is the most dynamic part of this system, according to expectations, it has had most of the changes. The aim of the research in this paper is to demonstrate the evolution of management accounting, its current position and future directions of development. Starting from the above, the methodological procedures and techniques related to social sciences will be applied, that is qualitative methodology based on the study and descriptive analysis of the defined goal of the research. The most important conclusion is that management accounting changes more its focus towards the strategic dimension of business and the concept of sustainable development, as well as that there is imbalance between the theory and practice of management accounting.
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Modern digital economy era is characterized by new concepts and trends, that are completely changing business models, tasks and transactions performance, making business decisions and overall business management of companies’ governance structures and other stakeholders, which are connected with the process of digital business transformation. In that sense, process of company’s digital business transformation should be appropriately planned and implemented by governance structures and conducted by all company’s employees. In that process, the key role has internal audit function, so, today, internal auditors had become important advisory partners of governance structures in the process of ensuring an effective, efficient and successful business management where beside the traditional, mandatory engagements of internal audit function, assurance services, growing significance are getting non-mandatory, consulting services and providing insights. The goal of this paper is to give a review of the most important new and innovative information and communication technologies, connected concepts and trends in companies’ business that have or, in the near future, will have greater impact on internal audit function’s work. In that sense, technology should be looked at two aspects, as a part of the system in which internal auditors are conducting their activities and as an instrument and tool by which they are performing their assignments. In this paper is also analysed and shown how these new information and communication technologies are changing the internal audit process and improving its effectiveness, so it can innovate and establish enhanced audit approaches in regard with providing risk based assurance, consulting services and providing insights. Thus, the impact of technology on internal audit activity has double effect, because, on the one side, technology affects on digital business transformation of a company where the object and subject of internal audit are changed, and on the other side, new technologies change the operation mode and the process of internal auditing. In order to accomplish all tasks, be effective and contribute in the process of digital business transformation, the imperative is that internal audit function must digitally transform its process, educate and train internal auditors. However, this is not a simple process, because relevant studies have shown that majority of internal audit functions are still followers or observers who are taking notice and following evolvers in technology adoption at a slower pace or do not still use new technologies in any sense in their process. Causes for this situation can be found in audit resources limitations, governance structures misunderstanding of the importance of digital business transformation for their company and internal audit function. Thereat, the key problem is the lack of internal auditors ‘digital’ knowledge, skills and abilities in the industrial revolution 4.0. In the end, it can be concluded that in front of modern internal audit functions around the world are set numerous challenges that are constantly evolving. In order to accomplish its assurance and advisory role and become strategic partners of governance structures, internal auditors need to be proactive leaders in the whole company with the emphasis on their professional education and training.
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The European Union statutory audit Directive and Regulation require that public interest entities must have an organized audit committee. Audit reform, initiated by the new regulatory framework at the European Union level, has introduced new rules that, among other things, strengthen the role of audit committee in terms of its composition and competences of its members. Accordingly, the majority of the audit committee members should be independent, while committee members as a whole must possess knowledge of the sector in which the audit subject operates. In addition to the tasks of supervising the process of conducting the statutory audit of financial statements, its findings and conclusions, the audit committee is now responsible for the election procedure and the nomination of a certified auditor or audit firm. In addition, the audit committee informs the board of directors or the supervisory board of the statutory audit outcomes, as well as examines and monitors the auditor’s independence. Therefore, it is evident that the audit Directive gives significant responsibility to audit committees in terms of overseeing the auditor’s independence. The main objectives of this paper are: 1) to outline and summarize key responsibilities of the audit committee in the context of achieving corporate governance goals, 2) to investigate the results of previous research on the contribution of the audit committees to the quality of external audit, 3) to examine whether auditors and audit users perceive audit committees as important factor of external audit quality. The presented findings of the primary research conducted on a sample of respondents in Croatia show that all respondents on average evaluate the impact of the existing active and expert audit committee, as well as its timely communication with auditors, positive from the aspect of its impact on audit quality. This is particularly emphasized at the level of internal audit users as employees of audited entities. Accordingly, audit committees may be considered as an important factor in the quality of external audit.
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