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Über dieses Buch

This volume presents new methods and applications in longitudinal data estimation methodology in applied economic. Featuring selected papers from the 2020 the International Conference on Applied Economics (ICOAE 2020) held virtually due to the corona virus pandemic, this book examines interdisciplinary topics such as financial economics, international economics, agricultural economics, marketing and management. Country specific case studies are also featured.



Forecasting the South African Financial Cycle: A Linear and Non-Linear Approach

Identifying optimal models to forecast economic cycles has been a point of great consideration in literate. A key point of debate in the literature is whether linear or non-linear models perform best at forecasting economic cycles. The literature largely forces on the forecasting of business cycles, and very limited work has been done on financial cycle forecasting. Given the proven destructiveness of financial cycles, the ability to accurately forecast future financial cycle movements in an economy could aid policymakers in managing such cycles. This article evaluates the forecasting performance of both the non-linear Markov Regime-Switching Autoregressive methodology and Smooth Transition Autoregressive methodology relative to the benchmark ARIMA model in forecasting the aggregate South African financial cycle over different time horizons. A fixed window rolling forecast approach is followed, whereby the performance of forecasting the aggregate South African financial cycle 3-steps forward, 6-steps forward, 12-steps forward, 18-steps forward and 24-steps forward is evaluated. The findings indicate that the linear ARIMA model outperforms the non-linear MSMV-AR and LSTAR models at forecasting short periods ahead such as 3–6 months ahead. However, both the MSMV-AR and LSTAR models outperform the ARIMA model, given a longer time horizon such as 12–24 months. Hence, to forecast the aggregate South African financial cycle 3–6 months ahead policymakers should use an ARIMA. However, the MSMV-AR and LSTAR models should be used to forecast the aggregate South African financial cycle 12–24 months ahead.

Milan Christian de Wet

From Clubs to Communities. From Tourists to International Friends. Crisis Legacy in Music Organizations with Revenue Management and Relationship Marketing

The prompt and cost-effective segmentation of audiences and stakeholders is, today, as essential as revenue diversification in US symphony orchestras and opera houses.The lack of resources was particularly heavy during crisis years and as from 2008. Fundraisers of these music organizations engaged both with clubs and communities. At the same time, marketing officers explored new audiences and their segmentation.Relationship marketing was a pivotal strategy, in order to enhance stakeholders’ engagement and loyalty.The crisis legacy allowed these organizations to survive with revenue management and relationship marketing.The purpose of this study is a profiling of a sample of 120 USA symphony orchestras and opera houses, with different marketing and fundraising. Thanks to a k-means cluster analysis of diversified revenues, expenses and gains from 2008 to 2015, the paper will separate this sample into two poles, according to average variations of economic performances and to the focus on relationship marketing in the whole period. One pole grew as concerns relationships, revenue management and diversification. The other pole was affected by diminishing intensity of marketing and increasing fundraising and, as a consequence, retrenchment of some revenues except for contributions. Relationship marketing was in this cluster supported by volunteers. This pole profited by the highest increase in gains.

Angela Besana, Annamaria Esposito

Measuring Dynamic Capabilities-Based Synergies in M&A Deals with Real Options: Amazon’s Acquisition of Whole Food

Acquisition-based dynamic capabilities have become well established as a new imperative for organizing M&A processes. However, understanding the full benefits and possible limits of real options applications to measure a dynamic capability-based (managerial) synergy remains a challenge. The paper draws on real options theory to describe some of these benefits and limits to value a synergy in highly strategic and not standard M&A deals. The acquisition of Whole Foods by Amazon makes it possible to combine two streams of research on dynamic capabilities and real options in a cohesive whole. More specifically, the author develops three propositions to justify the role of dynamic capabilities as antecedents of success or failures of M&A deals and to demonstrate real options application to measure synergies of M&A deals.

Andrejs Čirjevskis

Raising Rivals’ Costs When the Downstream Firms Compete in Stackelberg Fashion

The aim of this paper is to investigate the raising rivals’ cost effect when the downstream competition follows Stackelberg pattern. We find that the raising rivals’ cost effect occurs in such a market setup, and the effect is asymmetric. It means that the leader can via the unit R&D investment raise the overall marginal cost of the follower from 1/3 to 1/2, depending on the R&D externalities. The follower can, in turn, via the unit R&D investment raise the overall marginal cost of the leader from 1/6 to 1/2, depending on the R&D spillovers in the industry. We also find that under downstream Stackelberg competition, the larger R&D spillovers lead to the smaller R&D investment as well as the profit of the upstream firm, but the profits of the downstream Stackelberg follower are increasing with the larger R&D externalities. The behavior of output, prices of intermediate and final products as well as the profit of the downstream Stackelberg leader are nonmonotonic with respect to the research externalities. Comparing with the downstream monopoly, we conclude that downstream duopolists jointly invest more in R&D than does a downstream monopolist as long as the R&D spillovers are not very high. The profit of the downstream monopolist is higher than the joint profit of the downstream Stackelberg duopolists for any level of the R&D spillovers. However, the profit of the upstream firm is significantly lower when the downstream market is captured by a monopolist.

Jacek Prokop, Adam Karbowski

Comparing Five Generational Cohorts on Their Sustainable Food Consumption Patterns: Recommendations for Improvement Through Marketing Communication

Contemporary food consumption patterns are regarded as one cause of environmental deprivation, so new sustainable food consumption patterns are vital for this world’s future. This paper presents the results of field research that studies the sustainable food consumption patterns of five generational cohorts, namely Generation Z, Generation Y, Generation X, Baby Boomers, and the Silent Generation. Specifically, it explores if the subjects of the five generational cohorts (N = 1561) have adopted or are willing to adopt sustainable food consumption behavior. Additionally, it investigates differences amongst the generational cohort’s sustainable food consumption behavior.

Irene Kamenidou, Spyridon Mamalis, Ifigeneia Mylona, Evangelia Zoi Bara

The Effect of Budgetary Policies on the Economy Activity in Algeria: A Markov Switching Approach

This study aims to highlight the effect of budgetary policies on the economy activity in Algerian for the period 1986 to 2014. Contrary to prior studies, our analysis opts for a recent and robust technical setting within the framework of Markov switching models. The findings indicate that a deterioration of the balance is favorable to the activity; this situation describes a Keynesian nature (Budget deficit helps boost economic activity). The improvement of budget balance improves economic activity. This is the classic nature (according to the Classics, the financing of activity by the budget deficit has a negative effect on economic activity) according to the terminology of the study. The findings could help policymakers to establish efficient economic decisions to boost the economy. Favorable economic repercussions may result from an effective policy coordination in decision-making.

Touitou Mohammed

Structure of Bond Pension Funds During Decreasing Yield Curves

Pension system in Slovakia has been transformed from a single-pillar system to a three-pillar system since 2004. Following outbreak of financial crisis between years 2008 and 2009, pension sector has been subjected to several regulatory changes in order to protect retirement savings. Bond pension funds are currently the most dominant element in pension system with 70% of total assets allocated in this kind of pension funds. Aim of this manuscript is to analyse the structure of assets owned by bond pension funds and to identify key portfolio components that impact returns of these funds. This relationship has been analysed on sample of all five bond pension funds operating in Slovakia for period from 2009 to 2017. Relationship between individual components of portfolio and portfolio returns has been described by two linear regression models with mixed effects. Statistically significant variables have been identified as bonds evaluated at fair value with maturity less than 3 months and bonds evaluated at fair value with maturity longer than 5 years, both denominated in Euros. This manuscript has showed that bond pension portfolios, that are evaluated mainly at fair value and with long maturity, are prone to increased interest rate risks in than in the past. Higher interest rate risk could have negative impact on pension’s savings in the future.

Mário Papík

Extracting Common Factors from Liquidity Measures with Principal Component Analysis on the Polish Stock Market

According to the literature, the principal component analysis (PCA) can be utilized to extract common features of a set of economic variables. Therefore, the aim of this research is to assess a possibility of using the PCA to extract common components of liquidity across a sample of equities, and from a set of liquidity measures on the Polish stock market. The database contains the group of 86 WSE-listed companies. Seven liquidity proxies, namely percentage relative spread, percentage realized spread, percentage price impact, percentage order ratio, modified version of the Roll estimator, modified turnover and modified Amihud measure, are utilized in the study. The PCA results reveal that common latent factors in liquidity estimates exist on the Polish stock market. Moreover, the robustness analyses confirm the evidence of common sources in liquidity variation within the whole sample period and three subsamples: the pre-crisis, crisis and post-crisis periods. To the best of the authors’ knowledge, all empirical findings reported here are novel and have not been presented in the previous literature.

Joanna Olbrys, Elzbieta Majewska

The Mechanism of Political Budget Cycles in Greece

Extended empirical research has established the existence of political budget cycles in Greece but remains agnostic about the mechanism which generates them. In this paper we contribute to the literature by investigating precisely this mechanism of the creation of political budget cycles using data from the Greek economy for the last four decades (1980–2018). We find that it is via the manipulation of public expenditure rather than through the handling of public revenue that opportunistic politico-economic behaviour arises. We go on to build a novel empirical model linking government spending and revenue and estimate that, in years of general elections, public expenditure rises by around 2.2% of GDP. This level is not typical of a developed economy. Still, our finding is robust to various specifications of our model, both linear and non-linear, and hints towards a severe decline in the underlying political culture of the country. We conclude that, in the case of Greece, future fiscal rules aiming to suppress the political budget cycles phenomenon should target the control of pre-election transfer payments instead of resorting to tax increases.

George Petrakos, Konstantinos Rontos, Chara Vavoura, Ioannis Vavouras

Examination of Business Interest in Level of Complexity of Facial Biometric Technology Implementation in Slovakia

Increase in the requirement of still more demanding customers forces businesses to improve their processes, especially in meeting their needs with the highest efficiency. In order to reach this aim, one of the possibilities is utilization of new technologies, what improves whole business performance at all. It is not a secret that biometric technologies are spreading quickly within distinctive sectors and their popularity increases. Related to this, utilization range of these technologies in private sectors and the required level of their complexity is an interesting issue for examination. The main aim of this paper is to reveal the level of complexity of facial biometric technology implementation, which businesses operating in Slovakia would be interested in. Notably, we devoted our attention to the identification of certain level of complexity among business, we focused on identification of possible relationship between complexity level and added value/usefulness or AIDA/STDC model. Within our research was proved assumption that at least half of businesses in Slovakia are interested in some form of facial biometric technology implementation. In addition, our research confirmed dependence between the required level of implementation complexity and distinctive factors. Based on the results were formulated several managerial implications. This paper contains partial results of complex research focused on the examination of market potential of facial biometric technology implementation in Slovakia.

Michal Budinský, Janka Táborecká-Petrovičová

Innovation and Sales Growth Among Heterogeneous Albanian Firms: A Quantile Approach

This study contributes to the stream of research that critically questions the relationship between innovation and firm’s growth performance. Using the 2019 World Bank Group enterprise survey data, Ordinary least square (OLS) and Quantile regression (QR) have been employed to examine the effect of various measures of innovation on the sales growth of Albanian firms. The two-regression analysis offer inconsistent results. OLS study results show that the adoption by firms of new processes is the only innovation measure that positively affects sales growth. Controversially, the more nuanced QR results show that the impact of innovation on sales growth is significant only for those firms located at the 90th percentiles. Product innovation and internal R&D appear to be the drivers of high-growth firms’ performance. Surprisingly, process innovation and external R&D have a negative impact on the growth performance of such firms. For the rest of the quantiles, the results show that innovation does not affect sales growth. Our study results show that innovation explanatory power is weak and noteworthy only for high-growth firms.

Blendi Gerdoçi, Sidita Dibra

Quantitative Analysis of Inequalities at ICT Sector in Visegrad Countries

The information and communication technology sector significantly influences business models, companies or processes. It is an integral part of the economy and a part of key innovations. It is also the essence and bearer of the great economic paradoxes of today. Rapid advances in ICT create opportunities to gain market advantage and evoke challenges in relation to consumption, distribution, allocation of factors of production, evaluation of efficiency and effectiveness. Inequalities between market players occur in each market and relate to the unequal distribution of income, assets or access to scarce resources throughout society. In the quantitative analysis of the ICT sector, we focus on economic disparities and inequalities between different categories of business entities. To identify inequalities in the ICT sector, the procedures used to quantify income inequalities are used. The results of the study of the ICT sector in the V4 countries show significant differences in the shares of individual size categories of companies in total turnover, total assets and intangible fixed assets. This indicates inequalities, the magnitude of which is reflected in both the Lorenz curves and the Gini coefficients. The results of research in the V4 countries confirmed the dynamic changes in the level of concentration as well as the reduction of inequalities between different size categories of companies in the market.

Tatiana Corejova, Roman Chinoracky, Alexandra Valicova

Does Government Spending Cause Investment?: A Panel Data Analysis

Government spending has increased recently in almost all countries to ease the severely negative economic impacts of the current health crisis. Similar expansionary fiscal and monetary policies were observed during other economic downturns too. The effectiveness of expansionary policies, especially in terms of their effects on investment, has been discussed widely. Thanks to the possible multiplier effect of higher government expenditures, it is expected that government spending would generate a higher amount of income and therefore consumption in economies. At some point, this higher government spending with glowing economic activities is expected to increase private investment—an important item to promote job creations and improvements in production. Although one of the direct or indirect expected outcome of higher government spending is larger investment, many empirical studies in the literature cannot observe this positive expected effect of government spending on investment. As a result, even the necessity of increased government expenditures during economic crisis has been questioned. In this paper, the causal and correlation relationship between government spending and investment is investigated in a panel data setting to better evaluate the importance of higher government spending during economic downturns. The findings show that country classifications based on income, time periods covered in the analysis, measures of government spending and investment, and the time lag of government policies can make a difference. There are cases where government spending highly significantly causes private investment, and high correlations between two variables are observed. Therefore, accurate evaluations of the impacts of government spending on investment may require detailed data analysis.

Nihal Bayraktar

An Exploratory Study of Fans’ Motivation in Albanian Football Championship

Football continues to excite and attract more and more people to most countries. This phenomenon that is now bypassing all the borders of the world has been starting up in Albania in the last few years. As one of the most attractive sports which have long roots in Albanian history, football is trying to give important signals, both in terms of the game and for the participation of the fans attending the events in the stadium. Based on the overview of the football championship, we verified that more and more fans particularly female and youngest people are heading to the stadiums to enjoy the football game. With the beginning of the twenty-first century, FIFA and EUFA have changed their program, giving particular importance to increase participation in football activities regardless of gender and age. Even football fans like in other sports are influenced by their motivation which leads them to behave or act in different ways. Precisely, the study aims to examine football fans’ motivation factors of attendance using a nation-wide representative sample (N = 768). Using exploratory factor analysis, a group of motivation factors is analyzed, testing constructs that explain attendance. The study identifies three main factors affecting attendance of Albanian football fans, considered as entertainment, tradition, and group involvement. Entertainment is identified as the most important factor. MANOVA was later used to identify differences in motivation factors between age groups and participation in an organized fan group (support group/ultras).

Julian Bundo, Mirdaim Axhami

Evaluation of Knowledge in Accounting of Regional Economic University Students

At present, education is considered not only as an integral part of everyone’s life but also as an important element of their personal development. Therefore, most young people in developed countries seek to acquire professional knowledge by graduating from university. The aim of this paper is to present the results of the research focused on the basic knowledge of accounting issues of regional economic university students and their dependence on aspects of university education. Research shows that almost one-third of students achieved very good knowledge and 43% of students showed good accounting skills. Only 9% of students had insufficient knowledge of accounting issues. Using the Kruskal–Wallis test, the dependence of the accounting knowledge of SBA students on aspects of university study was researched. Dependence on two aspects, the study field and students’ work experience, has been demonstrated. This was confirmed by Pearson’s Chi-square test. The intensity of dependence was then researched using Pearson contingency coefficient. Based on the resulting values, it was possible to conclude that this is not a close dependence.

Ivana Koštuříková, Markéta Šeligová

Corporate Governance Disclosure in Slovak Banks

Effective corporate governance is essential for proper functioning of the banking sector and the economy as a whole. Banks play an important role in the economy by channelling savings and depositors’ funds into activities that support entrepreneurship and help drive economic growth. From this point of view, safety and reliability of banks are key to financial stability, and therefore the way they do business is crucial to economic health. We assume that the significance of the banking sector and of systemically important banks, in particular, should also be reflected in more accurate reporting on corporate governance compared to other banks. The aim of our paper is to examine the compliance of information reported under the current legislation in the Slovak Republic with the principles of the G20/OECD on corporate governance, which were accepted by the Slovak Association of Corporate Governance. Specifically, we focus on those principles that are outlined in Part V. Disclosure and Transparency. Through the research we examine accuracy of reporting in the banks on the Slovak financial market, and subsequently we determine their order. We also compare reporting in systemic and nonsystemic banks, and for the issuers of securities and banks whose securities are not issued on the regulated market in Slovakia. The research is done through Friedman test, Wilcoxon Signed Ranking Test, Kruskal–Wallis test and Kendall’s coefficient of concordance. Our findings indicate that reporting on corporate governance is more accurate in the systemic banks and issuers of securities in comparison with other banks.

Janka Grofčíková, Katarína Izáková, Dagmar Škvareninová

Implementation of Critical Reflection Analysis in Teaching and Learning Focused on Developing Critical Thinking Skills

Traditional approaches in teaching and learning do not seem to be satisfactory for students at higher education institution. They do not fully focus on students’ improvement in the process of reality understanding, evaluating the huge amount of data, making the decisions and taking the responsibility for their behaviour. In order to foster those learning processes in formal education, the development of the critical thinking skills became the biggest challenge for higher education institutions (HEI). Critical thinking (CT) is one of the key competences of a university-educated person. This cannot be achieved without changing the perspective of what is the role of the teacher together with the implementation of the teaching techniques which are fostering the critical thinking. Creation of the new types of relationship between teacher and students has significant impact on critical thinking. In this paper, preliminary results of the ongoing national research project conducted at the Matej Bel University in Slovakia are presented. The current level of the critical thinking skills among the students of various study programs were tested. The main aim of this paper is to identify the processes of teaching and learning with the elements of the critical thinking. The project research strategy and methodology has been developed upon the implementation of the Critical Reflection Analyses which assess and evaluates the observed processes as well as provides a room for improvement. The new approach for teaching and learning in higher education which enhance critical thinking skills of students is considered as the key project outcome.

Lenka Theodoulides, Gabriela Nafoussi (Kormancová)

Comparison of Methods of Poverty Rates Measurement

There is a lot of poverty lines used in the world. Commonly lines employed to determine the level of global poverty are the World Bank’s poverty lines. This institution used in the past one international poverty line ($1 from 1990 and $1.25 from 2008 to 2014), but now the World Bank employs a few poverty lines to adapt them to income situation in the countries. There are used $1.9, $3.2 and $5.5 lines. Calculations of the percentage of poor people (so-called poverty rate) using these three lines give different results. Besides, each country employs its own line (so-called national lines) to determine the poverty rate in own country. To assess the agreement between international and national methods of measurement of poverty rates, Bland-Altman plots and Passing-Bablok regression were applied. The data about poverty rates in 102 countries were used in the study. The analysis was conducted for all countries and in groups of countries according to their income situation (low-income, lower-middle-income, upper-middle-income, and high-income countries). The analysis was preceded by an assessment of the strength of association between income group and poverty prevalence (Cramer’s V), and of the degree of correlation between national and international poverty rates (Spearman’s rank correlation). The study showed that national and international poverty lines are not substitutes and give different information about the poverty level. International poverty lines give information about global poverty, but they do not include regional specificity which is incorporated in national poverty lines.

Anna Sączewska-Piotrowska

The Role of Strategic Agility and Economic Environment’s Friendliness-Hostility in Explaining Success of Polish SMEs

The main purpose of this chapter is to present and discuss two elements influencing the success of Polish SMEs: perceived environmental hostility and strategic agility. Strategic agility has been operationalized through the distinction between firms applying mono-strategy (less agile firms, doing business with customers on similar terms) or multi-strategy (more agile firms, differentiating conditions depending on the customer) in two aspects: price level and product quality level. Environmental friendliness-hostility has been operationalized as the properties of the external (or macro) environment in which firms operate as perceived by respondents. This concept is measured by bipolar scales reflecting the continuum from “friendly” or “benign” to “hostile” environment.Research results show that, in the case of pricing strategy, the majority of firms were multi-strategic, i.e., they applied two or more price levels for the same product. But for the product quality strategies, the situation is opposite and mono-strategic firms prevail. Results of ANOVA analyses revealed that multi-strategic firms achieved better results (profits, sales dynamics) in the case of pricing strategy, but not in the case of product quality strategy. Firms operating in friendly environment achieved better results compared to firms operating in neutral or hostile environment. The differences in results between mono- and multi-strategic firms were particularly strong in favor of multi-strategic firms (both for price strategy and to a lesser extent for quality strategy) in hostile environment. Stepwise regression analyses performed separately for exporters and non-exporters with the two explanatory variables (strategic agility and environment characteristics) and one control variable (size of enterprise) transformed into binary variables show that strategic agility and environment are significant but weak predictors of market performance.

Tomasz Sikora, Ewa Baranowska-Prokop

Macroeconomic Determinants of NPLs Using an Extended Sample and Dominance Analysis

This chapter aims at revisiting the empirical literature on the determinants of Non-Performing Loans (NPLs) using an extended dataset of selected OECD countries (augmented by EU countries not yet members of the OECD) and the latest data available for “traditional” macroeconomic variables with the addition of variables only recently proposed and not yet adequately tested. We endeavor to measure the effect of these determinants, but even more so for specific variables for which no clear consensus exists in the preexisting literature as for the direction of their impact. Our panel data specifications performed quite well, allowing us to address two additional research questions; whether the recent financial/economic crisis has changed the magnitude of the impact of the determinants of NPLs while also quantifying the relative importance of each determinant using the analytical tool of Dominance Analysis. The macroeconomic approach we opt for regarding the determinants of NPLs explains a more than satisfactory part of the variability of the dependent variable, while the crisis seems, as expected, to have affected the magnitude of the impact for most of the regressors. Last but not least, the unemployment rate and the degree of financial intermediation are topping the list of most important determinants followed by lending rates.

George Sfakianakis, George M. Agiomirgianakis, George Manolas

Aspects of Financial Accounting and Managerial Accounting Outputs in Connection with the Decision-Making Processes of Accounting Units

The aim of this chapter is to evaluate how information from financial accounting statements and managerial accounting outputs determine the economic and financial position of accounting entities in the Czech Republic in the context of identifying factors that may affect the amount of profit. This is mainly the cash conversion cycle (including accounts receivables, accounts payables, and inventory), financial assets, and financial debt. In order to fulfill the aim of this chapter, the method of comparison and the generalized method of moments (GMM method) will be used. The data sample will include data for the period 2007–2018. The analysis will include companies operating according to the CZ-NACE classification in manufacturing industry and in the Czech Republic. We used a sample of 3645 manufacturing companies. Using the comparison method and the GMM method was found a statistically significant relationship between the indicators affecting the profit of the company such as cash conversion cycle, financial assets, financial debt, and the gross operating profit and economic value added in manufacturing companies in the Czech Republic. It was also found that the determination of the financial position of companies in the manufacturing industry is distorted within the information from the financial accounting statements in comparison with the outputs of managerial accounting.

Markéta Šeligová

Movies Performance: Empirical Evidence from Italy

In this chapter, we partition all the movies released in Italy over a time of 4 years (2016–2019) into groups with the aim to analyze their performance and their characteristics.Movies released are heterogeneous among them with respect to nationalities, production costs, release strategies, gross box office collections, and the number of screens dedicated. We use original data on all the movies released in Italy over the years from 2016 to 2019 and, using cluster analysis, we identify four clusters of movies, each characterized by different trends. The results allow us to investigate and better understand some aspects of the movie sector in Italy and could suggest areas where cultural policies could be strengthened.

Anna Maria Bagnasco

Patterns of Knowledge Creation in European Regions: An Analysis by the Phases of the EU-Enlargements

This chapter studies the determinants of regional knowledge production in Europe discriminating by the phases of the EU-enlargement (as a proxy for the degree of economic development). For this purpose, we combine factorial analysis with a regression model based on a knowledge production function. Our results evidence that there are clearly differentiated patterns in the knowledge production function of European regions according to the time of entrance of their corresponding countries into the EU: the less developed regions are, the more important the role of the Universities and of the Public administration in their Innovation Systems is; in more developed regions, however, the leading role is taken over by the Regional economic environment, the Sophistication of the (technological) demand as well as by the availability of financing in the form of Venture capital. We conclude that policy actions aimed to drive innovation should carefully consider the relative stage of development of the specific regional innovation system.

Thomas Baumert

Influence of Economic Sanctions: Empirical Evidence for Iran and Russia

In this chapter, the issues of the impact of sanctions on macroeconomic indicators in the Islamic Republic of Iran and the Russian Federation have been investigated. For this purpose, we used macroeconomic data during 1988–2018. Thus, to investigate sanctions’ influence on the economies of Iran and Russia panel vector autoregression model has been constructed. Impulse response functions of model’s variables identify deterioration of macroeconomic indicators of both countries in short run with stabilizing in 5 year-period. Dynamics of export and imports of goods and services, gross capital formation, final consumption expenditure of households, oil rent is characterizing by growing trends in short run. At the same time, Dubai oil price index is falling, and then slightly increasing during this period. However, unlike most variables, foreign direct investments inflow demonstrates an inconsiderable increase. From our point of view, it can be explained by returning of earlier withdrawn capital. Nevertheless, the unemployment rate is rising insignificantly. Analysis of variance decomposition shows increase of significant dependence on oil price growing from 5.6% in the first period to 25% in the second one. Gross capital formation is the second most significant factor of GDP growth in both countries. Imposing of sanctions constitutes near 4% of GDP growth fluctuations in Iran and Russia.

Anton Filipenko, Olena Bazhenova, Roman Stakanov, Ihor Chornodid

Corporate Governance and Its Association with Audit Opinion: The Case of Greece

This study assesses the impact of: (1) internal controls and audit compliance disclosures, (2) compliance with good corporate governance practices, and (3) the level of earnings management, on the type of audit opinion issued by the external auditor (unmodified opinion vs. unmodified with emphasis of matter paragraph), in a “comply-or-explain” corporate governance regime. This study also examines if these disclosures affect the number of issues identified in the emphasis of matter paragraph of an unmodified opinion. Data on disclosures were hand-collected from the annual reports of 341 companies listed on the Athens Stock Exchange, for the period 2014–2015. The results indicate that internal controls and corporate governance disclosures seem to have an impact on the type of audit opinion issued by the external auditor, as well as on the number of issues included in the unmodified opinion with emphasis of matter paragraph.

Georgia Boskou, Maria Tsipouridou, Charalambos Spathis

CO2 Emissions, Energy Consumption, Economic Growth, Trade, and Urbanization in Greece

The objective of this study is to explore the relationship between energy consumption, carbon dioxide (CO2) emissions, urbanization, trade, and economic growth of Greece, in the environmental Kuznets curve (EKC) model, for the period 2000–2017. We investigate this relationship using the vector error correction model (VECM) and we employ the Granger causality technique in order to explore the presence of causality among the examined variables. The long-run results confirm bidirectional causal relationships between economic growth and CO2 emissions, as well as between CO2 emissions and trade openness. In addition, there exist unidirectional Granger causalities that run from energy consumption to trade and from urbanization to CO2 emissions. In the short run, the results reveal that there is a causal relationship between economic growth and urbanization, with direction from economic growth and urbanization. The Greek government is advised to emphasize on the use of renewable energy and clean technologies of renewable energy in order to achieve lower levels of emissions.

Pavlos Stamatiou, Chaido Dritsaki, Dimitrios Niklis

Does the Time-Driven ABC Method Apply in a Construction Company

This chapter explores the role of ABC’s business and service business activities, citing the basic principles and structure of their costing, based on TDABC’s time activity. The aim of the TDABC selection is to reduce the complexity of calculating and allocating costs, which characterizes ABC systems, which are used by large companies. The new version of ABC is presented in the service sector.This chapter is based not only on theoretical and applying methods but also on new versions of ABC. The research that follows in the last part is the basis of the synthetic description of ABC and Time-Driven ABC methodologies, where an example is given, which shows the calculation of costs from service activities, using the TDABC method. The role of time equations in TDABC is explained as an illustrative example for those interested in accounting services to businesses, as exemplified by previous research, and also highlights the strengths and weaknesses of the new expenditure formula, based on the company’s activities.

N. Kartalis, Ath Patsios, I. Velentzas, G. Broni, G. Charitoudi, G. Panoy, G. Kiriakoylis

Economic Crisis Predictors Revisited in Preparation for the COVID-19 Aftermath

In this chapter we aim at revisiting the Economic crisis predictors empirical literature by focusing on unemployment, adding new predictors, and using novel analytical tools. More specifically, we use insights from the latest (2008–2014) crisis in order to draw conclusions and, possibly, policy implications about the imminent COVID-19 crisis. Using Panel Data for EU-28 countries, we complement the list of “traditional” predictors (such as Public Debt, GDP per capita, and Competitiveness) by adding an Inequality/Poverty index along with an Index to represent how heavily regulated Product and Labor Markets are in various countries (i.e., a proxy for the cumulative impact of implemented structural reforms). At the same time, we place emphasis on taking into account the countercyclical economic policy mix most countries (and Central Banks) opted to implement during the years of the crisis. Inequality/poverty stands out as the most important predictor thus validating previous findings. Relevant policy implications are drawn regarding a potential policy agenda to alleviate the impact of the new crisis currently unfolding.

Demosthenes Georgopoulos, Theodore Papadogonas, George Sfakianakis

Should Market Makers Hedge with Realised or Implied Volatility?

A major challenge faced by market makers is the hedging of contingent liabilities. Option sellers often hedge contingent claims in the classical Black–Scholes framework. Standard theory suggests that the value of an option can be replicated exactly by rebalancing a portfolio of shares and cash continuously. This is referred to as delta-hedging. In the Black–Scholes framework, an explicit solution is available to calculate delta. Market participants agree on most inputs in this formula. Volatility, however, remains an elusive parameter. This leads to the question: Should market makers hedge their liabilities using realised or implied volatility? In this paper, we show that a market maker should choose to hedge their portfolio with implied volatility, since this is less risky than hedging with realised volatility.

Alexis Levendis, Pierre Venter, Eben Maré

Stress Testing Option Sensitivities in a Stochastic Market

The Heston stochastic volatility model aims to parameterise the equity market with 5 specific parameters. It is arguably one of the most popular models used in option pricing, since it relaxes the Black–Scholes assumption of constant volatility, and can capture the observed equity skew. Another reason for its popularity is the fact that it has an analytical solution for European options and associated option sensitivities called the Greeks. In this paper, we analyse the sensitivity of the three main option sensitivities: Delta, Gamma, and Vega, to changes in market conditions. We specifically test what happens to each option sensitivity in a bear market—as we currently face in the wake of COVID-19. We find that the option sensitivities are linked to the Heston model parameters; therefore, the Heston model parameters should give market makers an idea of future option behaviour.

Alexis Levendis, Pierre Venter, Eben Maré

Firm Performances and the Onset of Shocks in India

A firm’s exhibition of its highest corporate governance (CG) standards determines its identity among the rest of the players within an economy. Albeit maintaining such standards, there are also external macroeconomic factors effecting firm performances that are beyond the control of the board and its stakeholders. This paper highlights the behavior of firms under such instances of macro shocks, in this chapter being, demonetization episode in India and the corporate tax cut reforms, that influence CG performances. A pooled estimation regression technique of top 30 listed firms in India is used to show the above relation with the period considered being, from FY2013-14 to FY2019-20. Regulatory frameworks on CG in India provide institutional stability for stakeholders and investors, which is evident with the increase in the number of listed firms in the stock market and rise in firms raising capital through the sale of shares (equity capital). With such frameworks on one hand, the influence of macro shocks and the instability that it causes on firm CG performances is depicted using a model. It can be seen that negative macroeconomic shocks lower debt-funded firm performance in India and there is a need for positive stimulus to increase firm performance and back to its equilibrium trajectory.

Elangovan Avinash

Filter or No Filter? An Instagram View on Modern Visual Culture

In the last decades, visual culture has been the focus of intense research and academic discussion. In addition, social media play a crucial role and influence modern societies and culture, and among them, Instagram holds a prominent role. This chapter presents the outcome of research regarding the perceptions of Greeks towards the impact of Instagram on visual culture, as well as gender and age effects on the use of the platform’s filters. Statistical analysis is employed to examine the hypothesized effects. Implications for marketers and content developers are discussed.

Aikaterini Stavrianea, Evangelia Besleme, Irene (Eirini) Kamenidou

The Neoclassical Approach for Measuring Total Factor Productivity: The Case of the Greek Economy

This chapter examines and measures the source of growth linked with disembodied technical progress, i.e., total factor productivity growth for the period 2010–2015 for the various sectors of the Greek economy, using data from input–output tables. This chapter also links technical diffusion with productivity growth using the measure of total factor productivity (TFP) which can be seen also as a measure of disembodied in the factors of production technical progress. It was found that most of the sectors, during the 2010–2015 period had experienced a negative TFP change; out of the 64 sectors, 16 present a positive TFP change and 48 negative. During the examined period, the effects of adjustment program for the public debt and the incurred recession have influenced both public and private R&D expenditure affecting TFP change. R&D expenditure has been found to be a determining factor for TFP change in the Greek economy.

Thomas Siskou, Nicholas Tsounis

Consumers’ Motives for Visiting Social Media Brand Pages and Social Media Advertisements

The aim of this study is to identify the main factors related to social media pages, social media content, and social media advertisements that attract consumers and motivate them to purchase brands. Data were collected using an online survey of 503 questionnaires. Factor analysis on the motives for visiting social media pages revealed five factors: information, social interaction, entertainment, remuneration, and contributing activities, while attractive content of social media pages has to do with Informational content, call to action, challenging content, and entertaining content. In terms of social media advertising, factor analysis revealed four factors: interactivity, relevance, performance expectancy, and information.

E. Iliopoulou, A. Vlachvei

Factors Affecting e-Marketing Adoption and Implementation in Food Firms: An Empirical Investigation of Greek Food and Beverage Firms

The objective of this study is to explore the implementation and adoption of e-Marketing in Food and Beverage firms in Greece. Implementation includes the use levels of e-marketing tools and adoption factors that are relating to the internal environment (internal factors), Technology Acceptance Model, and Innovation Diffusion Theory. The combined knowledge of both implementation and adoption responds to an effort to understand the firms’ performance from the use of innovative electronic services. In terms of adoption, e-Marketing enhances job performance, goes with firms’ organizational culture; it is easy for adopters to interact with e-Marketing tools and does not seem to be influenced by the size of businesses. It was also found that customers do not trust the e-Marketing tools due to security issues; and the adoption of digital marketing is due to state incentives and loss avoidance of market share, related to the businesses’ external environment. The study of the effect of e-Marketing implementation in firms’ marketing performance at present and in the future showed that e-Marketing implementation leads to changes in firm performance mainly in terms of the impact on the good customer relationships, fast customer communication, new product development, and the provision of better quality services.

Ourania Notta, Afroditi Kitta

An Application of Differential Equations on Anthropogenic Climate Change

The relationship between Carbon Dioxide (CO2) emissions, temperature change, and growth in Germany is examined with the use of a system of differential equations and data for the period 1991–2016. Two models are examined: the first considers that growth, measured as the proportionate change in the per capita Gross Domestic Product (GDP) is affected by per capita CO2 emissions and the level of per capita GDP. Also, the proportionate change in per capita CO2 emissions is affected by the level of the per capita GDP and the level of per capita CO2 emissions. The second model considers that growth is affected by the per capita CO2 emissions, temperature, and the level of per capita GDP. Also, the proportionate change in per capita CO2 emissions is affected by the level of the per capita GDP and the level of per capita CO2 emissions. Finally, in this model, the proportionate change in temperature is affected by the level of the per capita GDP and the level of per capita CO2 emissions. It was found that the signs of the estimated coefficients in the two models are the expected ones.

Gerassimos Bertsatos, Soultana Moustakli, Zacharoula Kalogiratou, Theodoros Monovasilis


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