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Über dieses Buch

This volume presents selected papers on recent management research from the 20th Eurasia Business and Economics Society (EBES) Conference, which was held in Vienna in 2016. Its primary goal is to showcase advances in the fields of accounting, auditing, marketing, and human resources in emerging economies.

This volume is unique in its special focus on empirical research perspectives from countries such as Lithuania, Russia, and the Visegrád Group (the Czech Republic, Hungary, Poland and Slovakia), among others.

Inhaltsverzeichnis

Frontmatter

Accounting and Finance

Frontmatter

Auditing Quality: Some Empirical Studies

Abstract
Much has been written on audit quality, but there are still many differences in the literature. After two decades of research on audit quality, there is no universally accepted definition by researchers, who are still far from the establishment of a single framework of indicators which determine, unequivocally, whether the activity of statutory auditor has taken place according to the guidelines set forth in the applicable standards. Various definitions have been developed that are based on different approaches. Importantly, it is a topic in continuous evolution and the debate in the literature is now very open. It seems clear that the concept of audit quality has become, over the years, more and more important as a growing need was felt to ensure the truth and accuracy of the data contained in financial statements, ensuring the quality of financial information by transmitting confidence in this way to the markets and stakeholders who, in making decisions, legitimately rely on accounting records. In this paper, the definitions of quality that the literature has developed over the years will be presented and issues will be addressed related to the measurement of quality through proxies that researchers have used. Finally, the possible future studies to make further contributions to research will be briefly analyzed.
Maurizio Rija

Research on the Transparency of Information Regarding the Public-Private Partnership in the Public Hospitals from Romania

Abstract
The public-private partnership within the health public system from Romania is highly developed. The adoption of the public-private partnership is the alternative to attenuate the significant deficit of financial resources assigned to the health public system, the limitation and low quality of the medical service offer, as well as the discrepancy between the medical service demand and offer. There are difficult and debatable issues on the public-private partnership within the health public system from Romania. The undertaken research has as objective the identification of the degree of information transparency in respect of the public-private partnership in the public hospitals subordinated to the Health Ministry. The research has two dimensions. The first one takes into account the identification of approaches regarding the public-private partnership at the level of the professional literature and the regulations in the field. The second dimension features a qualitative research in respect of the degree of information transparency regarding the public-private partnership in the public hospitals subordinated to the Health Ministry. The results of the study show the limitation of the information transparency concerning the public-private partnership, as well as the heterogeneousness of this information from dimensional and temporal points of view.
Aurelia Ștefănescu, Monica Dudian

Insolvency of the Hotels Among Visegrad-Plus Countries

Abstract
The paper has focused on the problematic of corporate insolvency among hotels in Visegrad-PLUS countries. Visegrad Group, well known as V4 (Czech Republic, Hungary, Poland and Slovakia), is negotiating with two possible new members, Austria and Slovenia. However, the problem of insolvency affects the hotels as well. The aim of the study is to investigate how is the solvency of the hotels among V4 PLUS countries affected by their liquidity and the relations with their debtors. As the main estimation method it has been used GMM regression with pooled data of hotels from selected countries. It is obtained annual data for the hotels’ balance sheets and the profit and loss statements from Bureau van Dijk’s AMADEUS international statistical database. It is argued that turnover of creditors’ claims is positively affected by turnover of debtors’ receivables among hotels in all selected countries. In some cases even current liquidity has a significant impact on that. The situation is the most obvious in the case of the hotel industry of Hungary and Slovenia, two economies whose companies are considered as the most affected by the corporate insolvency due to Creditreform agency. Finally, there are some ideas for future research in that area.
Tomáš Heryán

Structural Changes in the Interdependence Among Polish and Key Capital Markets in the World in the Years 2004–2014

Abstract
Globalization process and main determinants of development increase the level of interrelationships among highly developed economies. The role of these factors especially in relation to capital markets has become an important subject of economic research. As a result, the main aim of the article was to analyze the changes in the interdependence among the most important capital markets in the world and Polish capital market with special consideration of potential influence of the last global financial crisis. Thus, the interdependence among capital markets of United States, Great Britain, Germany and Poland were analyzed. In the research DCC-GARCH model was used. In the first stage the interdependence among the selected markets was analyzed. A research hypothesis pointing to a similar course and changes of the interdependence among the markets was verified. Then the analysis of breakpoints for the received conditional correlations processes was performed. The procedure enabled to verify the influence of the global financial crisis on the interdependence among the markets and divide the analyzed period in three sub-periods: a time of prosperity, a time of financial distress and a period of return to relative stability.
Michał Bernard Pietrzak, Adam P. Balcerzak, Edyta Łaszkiewicz

Identifying Risk Factors Underlying the U.S. Subprime Mortgage-Backed Securities Market

Abstract
The devastating credit crunch and subsequent liquidity freeze of 2007–2008 plunged the global financial market into one of its worst crises ever experienced. It is now clear that subprime mortgage-backed securities lay at the heart of this catastrophe and that the risk underlying these securities was vastly underestimated. This paper examines this risk by performing principal component analysis, OLS regression analysis and rolling regression analysis on ABX.HE Indexes data. The results of the principal component analysis results show that the main principal component falls in importance with each new vintage issuance, suggesting that there were other unobserved factors contributing to the variation in the data. The OLS regression analysis also suggests that other factors were coming into play as the crisis evolved and the rolling regression analysis allows us to link these changes to important events in the crisis, namely the onset of the liquidity crisis in September 2008. Overall the results indicate that these are assets are heterogeneous in nature, and not simply a continuation of the previous issuance.
Lisa Sheenan

A Comparison of Financial Results Based on Accrual and Cash Accounting Data

Abstract
This article aims to investigate the relationship between the indicators commonly used to assess a financial situation based on accrual and cash flow accounting. A company’s financial result is distorted in different ways. Cash flows compared to financial results are not subject to manipulation resulting from accounting policies employed in a given business entity. Hence, formulated hypothesis assumes that the assessment of profitability carried out with the use of cash flow indicators reflects the true and reliable image of a company, in contrast to the indicators based on a financial result. The hypothesis about dissimilarity of the assessment of a financial condition has been proven by the analysis of the correlation between the accrual and cash results The analysis of a financial situation based on cash flows led to a conclusion that a financial situation is more complete, reliable and not affected by balance and tax policy, but there are also differences between the assessment based on financial ratios calculated on the basis of accrual data (the balance sheet and the profit and loss account) and the financial situation of the studied companies based on cash data The article uses the method of economic analysis, descriptive statistics and correlation analysis.
Edyta Mioduchowska-Jaroszewicz

Research on Risk-Based Common European Union Deposit Insurance System in Lithuanian Banks

Abstract
Global 2008 financial crisis has shown that the deposit insurance system did not help to maintain depositor confidence and the whole banking sector financial stability in the beginning of banks’ failure. Scientific discussions emphasized that the main problem associated with the current deposit insurance system is the fact that many EU countries, current deposit systems do not evaluate the banks’ risks calculating deposit insurance premiums, and thus do not provide sufficient stability of the banking system. The aim of the research is to evaluate the risk-based common European deposit insurance system impact on deposit insurance premiums to Lithuanian banks. The research period for the analysis of deposit insurance premiums to Lithuanian banks is 2010–2014. In the risk-based model, the main risk indicators are evaluated by European Banking Authority. Performed deposit insurance system problem analysis showed that deposit insurance system has positive characteristics, it is a key tool in the fight against depositors panic and helps to maintain confidence in the financial institutions, but it also has a negative impact. Theoretical deposit insurance models evaluation showed that in many EU countries, the existing deposit insurance systems do not provide sufficient protection on depositors because contributions are not based on banks’ risk assessment, which means that deposit insurance does not perform one of its basic functions. The introduction of risk-based deposit insurance system would redistribute contributions among the Lithuanian banks and thus contribute to the negative effects of deposit insurance systems mitigation and growth of all financial system stability.
Ausrine Lakstutiene, Aida Barkauskaite

The Impact of Internal Rating System Application on Credit Risk Management in Banks

Abstract
Credit risk is the most important risk for banks which means that it is one of the most important factors for banks’ stability. The source of credit risk is the weakness of credit ability of a client which leads to bank’s losses. Losses are daily reality of every bank and according to that should be recognized, measured and implemented in credit risk managing models. The aim of this paper is to investigate how banks in Croatia are using internal rating system in their business on a daily basis, i.e. is the application of rating included in all phases of credit process. Data that will be presented in the paper will be collected through a questionnaire. The application of ratings in daily business of a bank is one of the most important minimal requirements for internal rating based approach application. Internal rating based approach is a significant in the process of validation and measurement of credit risk after Basel I approach.
Sanja Broz Tominac

Management and Marketing

Frontmatter

Successful Practices of Russian Medium-Sized Enterprises

Abstract
The paper pays attention to an important issue—increase the success of medium-sized enterprises. On the basis of comparative analysis across sectors of economic activity (trade and construction) the most successful business practices are studied. Based upon the authors’ methodology for assessing the success of small and medium-sized businesses an integral indicator of success has been identified, which allowed comparing the selected companies. Then the most successful enterprises (leaders of success) have been studied details by a number of characteristics: financial and operational. This eventually, helped to identify factors of success and to develop a portrait of the leader of success in the studied sectors. By means of an integrated description of the leaders of the success guidelines for similar medium-sized enterprises have been developed to enable them to improve their efficiency and to move into the rank of success.
Ekaterina Nikolaeva, Dmitri Pletnev

The Impact of Organizational Politics Fact on the Act of Social Media Usage in Higher Education Institutions

Abstract
In today’s business life experiencing unspecific, complicated and continuous changes, the climate is getting more and more political for the organizations. The employees to display behaviors after comprehending the organizational climate in a political manner are becoming one of the critical elements of the organizational climate. It is possible to say that the employees that take part in any section of the organization are interested in such activities. Within this context, the political behavior, which can be named as manipulative behaviors exhibited deliberatively by individuals in order to actualize their expectations, is only a small part of the organizational politics fact. The political behaviors are explicitly exhibited in certain organizations, while they develop esoterically in other organizations. Therefore, an individual starts to exhibit political behaviors once he/she realizes that the organization is political, and then this turns into a cyclical action due to the interactions among the employees. In this context, it can be clearly set forth that the organizational politics fact redounds up the personal behaviors in an individual’s life. After the massive development in technology, social media has turned into a platform on which an individual reflects his/her inner world by sharing his/her emotions, situations and thoughts on a daily basis. In this study, the objective is to reveal the importance concerning the impact of organizational politics perception on individuals’ social media usage on the basis of higher education institutions, based on the current literature. The quantitative data shall be subjected to evaluation in line with survey study by carrying out a literature review using qualitative method in this research.
Erdal Şen, Emel Tozlu, Sibel Aybar, Hülya Ateşoğlu

Relational Capital of Enterprises: Identification of the Phenomenon

Abstract
Today’s world is based on relationships. Every organization—being an open system—transfers tangible and intangible assets to its business environment. In order to stay in the market, it has to establish various business networks—with customers, suppliers or competitors since they are not interested in a one-off, accidental transaction, but in long-term cooperation based on trust. Maintaining good relationships with customers and contractors is a prerequisite for management rationality. Identifying the needs of contractors and customers is necessary for them to be addressed properly, and for the sound relationships to be established and maintained. Maintaining good mutual relationships between employees and customers allows, in turn, to better identify the needs and tastes of the latter to maximize their fulfilment. Good relationships foster understanding and cooperation between entities, they are a source of creativity, innovativeness and entrepreneurship, as well as of a broadly defined activity. This entails increased loyalty towards the company on the part of its contractors, as well as enhanced customer satisfaction. Due to that, the company has an opportunity to build a competitive advantage. This is a survey study. It discusses the literature on the relational capital of an enterprise.
Anna Walecka

State Support Programs of Small and Medium-Sized Enterprises in Russia

Abstract
Development and state support of small and medium-sized enterprises in Russia is a necessary condition for growth of the national economy. The state support is becoming especially significant, which effective implementation depends on efficient tools and mechanisms. Relevant issues are the creation and development of infrastructure of the state support. The aim of the article is the analysis of state support programs of small and medium-sized enterprises in modern Russian conditions. Works of the domestic and foreign scientists dealing with problems of functioning of small and medium-sized enterprises including their state support and its efficiency formed the methodological base of this research. As information base of research were used internet portals of the Russian Federation authorities. General scientific research methods were used in the data processing: the comparative analysis, synthesis, grouping, generalization. The Russian authorities and the development institutions through which the state performs its support for small and medium-sized enterprises are revealed in the article. The features of state support programs within each subject of management are researched. The main recipients of support, condition of obtaining and the amount of support are provided. The advantages and disadvantages of state support programs are revealed. Advantages are connected with the diversified nature of state support programs, the formation of a multi-channel support system. Disadvantages are connected with the presence of a set of restrictions that affect the development of Russian small and medium-sized enterprises, the lack of policy to encourage the regions and municipalities to implement their own support programs, adapted to the economic condition of the subject. The results of the analysis will allow estimating the influence of state support programs on indicators of success of small and medium-sized enterprises in Russia in further researches.
Victor Barhatov, Irina Belova

Applying the AHP Method into the Assessment of Project Attitudes

Abstract
The purpose of this article is to present the concept regarding the assessment of project attitudes, described by the DIA Model (Disposition-Internal stability-Activities). In pursuing this goal, a review of the literature was provided. Focus was placed on the useful concepts from the point of view of the description of the project attitudes. Next, the methodology of the study was described, indicating the course of the research procedure based on the method of analytic hierarchy process (AHP). Then, the dimensions of AHP model were presented. The subsequent section of the paper presents the results of the pilot studies, which verify the model and the measurement procedure of the project attitudes. The study was conducted on three groups of students: full-time students specializing in project management, full-time students specializing in finance and banking, and finally post-graduate students specializing in project management. Conclusions based on the study were drawn in the following dimensions: cognitive, methodological and utilitarian. Further plans for research in developing the presented concept were mentioned as well.
Jacek Strojny, Joanna Szulc, Małgorzata Baran

Selected Aspects of Network Structure Dynamics

Abstract
The article encompasses the description of selected issues related to the dynamics of organizational networks. Referring to issues related to the chaos theory, the factors stabilizing and destabilizing cooperation within organizational networks have been discussed, and subsequently, the concepts and selected models of the dynamics of organizational networks have been presented. In the further part, the article presents the problem of defining boundaries of networks, indicating the controversies and approaches related to this issue.
Beata Barczak

The Impact of Cultural Attitudes Toward Environmental Issues on the Green Entrepreneurship Entry Level: A Comparative Study of Three European Countries

Abstract
Recently, the topic of green entrepreneurship, even green nascent entrepreneurship, has been gathering momentum and emerging as a reality, which may play a major role in the development of a more sustainable global economy. This article focuses exclusively on the so-called green-green companies, therefore on companies that were conceived with an ecological approach since their beginnings. Numerous studies lend support to the argument that social norms, which certainly are a manifestation of the given cultural context, are among the most significant determinants of entrepreneurial activity. The objective of this study is to explore how the cultural factors, which influence the attitude toward environment, may or may not affect the ratio of green entrepreneurship initiatives in a region. Consequently, we try to answer as well the question if there are cultures more likely to start green enterprise ventures than others do. Apart from exposing the recent efforts to find the connection between environmental attitudes and green entrepreneurship commitment, this papers offers data collected in Spain, Portugal and Austria regarding four variables: environment legislation, non-governmental initiatives to preserve the environment, ratio of sustainable cities and measures undertaken in environmental and ecopreneurship education. These variables evidence the embedded environmental awareness in the three different cultural areas. The methodological approach consists of an exploratory data analysis in order to unveil the kind of relation between the above-mentioned variables and the green entrepreneurship initiatives in these regions. The results do not show a clearly positive relation between a friendly culture toward environmental aspects and the rate of green entrepreneurial initiatives and further research much be done to investigate if there is however a cause–effect influence but in a longer time spam. The authors still believe on the important part played by culture not only in the level of business venture creation, but also in the type of venture initiatives.
Maria Azucena Perez Alonso, Jose Carlos Sanchez Garcia, Maria João Cardoso Pinto

Building a Conceptual Model for Brand Meanings in Wearable Sports Technology

Abstract
The purpose of this study is to build a conceptual model for understanding brand meanings in wearable sports technology. Wearable sports technology is a complex concept, because it integrates characteristics of clothing related issues like aesthetics and comfort as well as properties of electronic devices such as usability. Due to the lack of previous literature within the field of wearable sports technology three domains of literature are combined in the conceptual model to gain deeper understanding of the phenomenon. These three domains include the field of sports brands, technology and fashion. The connection between the two central theoretical constructs of brand meanings and brand relationships is elaborated in the proposed conceptual model.
Hilla Karamaki, Sonja Lahtinen, Pekka Tuominen

An Investigation of the Effect of Personal Values on the Students’ Ethical Decision-Making Process

Abstract
Recently, a number of researchers have sought to determine variables that may affect the ethical decision-making process. One of these variables is personal values that are guidelines for doing the ethical behavior. Personal values play an important role in the ethical decision-making process. In this study, we examined the effects of business students’ terminal and instrumental values on the ethical decision-making process. We considered ethical decision-making process as an ethical awareness, ethical orientation, and ethical intention. In order to measure ethical awareness, we tested whether a particular action was ethical/unethical based on ethical theories like justice, deontology, utilitarianism, relativism. Students’ intentions to perform ethical behaviors were measured by the probability of doing questionable action. Therefore, the purpose of this research is to investigate the effects of personal values on the students’ ethical decision-making criteria and intention to perform the ethical behavior. For this purpose, we used a self-administrated questionnaire method in order to collect data from business department students in Turkey. The 406 usable questionnaires were received from the voluntarily participated students in this research. During the analysis process, Partial Least Squares Path Modeling (PLS-PM) analysis method was used. The analysis results reveal that an instrumental value positively affects the students’ ethical decision-making criteria. Particularly, utilitarianism, justice, and relativism dimensions have the strongest effect on students’ intention to perform ethical behaviors.
Zeynep Turk, Mutlu Yuksel Avcilar

Human Resources and Education

Frontmatter

Idiosyncratic Deals at Work: A Conceptual and Empirical Review

Abstract
Idiosyncratic deals, or i-deals, describe non-standard work arrangements individual employees negotiate with employer agents (e.g., supervisors or managers) to obtain personally desirable resources or conditions (e.g., flexibility in scheduling work, special assignments, or training opportunities). Despite growing interest in the construct, its complete scope and conceptual underpinnings are hardly well understood. This contribution seeks to inform and advance research on this complex and still understudied workplace phenomenon in two ways. First, theoretical assumptions will be structured and clarified by contrasting disciplinary perspectives of Organizational Theory, Human Resource Management, Organizational Behavior, and Industrial Relations. Second, the assimilation of a meta-model of i-deals is reported, based on the combined results of a series of eight studies. The majority focused on flexibility and development i-deals. Antecedents included organizational (e.g., work structures), individual (e.g., personal initiative), and interpersonal (e.g., leader relationship) factors. Outcomes captured individual (e.g., reduced strain) and organizational benefits (e.g., task performance) and mediating processes (e.g., work characteristics). The proposed multi-disciplinary view and the compiled model are used to illustrate key aspects of a better understanding of i-deals, discuss constraints and limitations, and outline some implications for research and practice.
Severin Hornung

Primary Factors Keeping Employees at Their Positions: Cases from Turkish Workplaces

Abstract
The aim of this study is to identify the primary factors, which keep Turkish white-collar employees at their current positions. Using a convenience sampling method, surveys were conducted with 29 full-time white-collar employees in different sectors—predominantly in higher education, banking, and IT research and development. The primary factors keeping employees at their positions were dominantly motivators such as the work itself, achievement, responsibility, appreciation and recognition. Moreover, employees are more likely to be willing to stay longer at their positions, if it is rather motivators keeping them there.
Cigdem Asarkaya, Sefa Zeynep Siretioglu Girgin

The Relationship Between Work-Related Behavior and Experience Patterns and Organizational Commitment

Abstract
The challenges of today’s working life lead to stressful experiences and therefore to different types of coping patterns. The relationship between these coping patterns and organizational and professional commitment is not yet fully researched. This study has been conducted with about 180 participants using the questionnaires Work-related Behavior and Experience Patterns (AVEM—AVEM is the acronym for “Arbeitsorientiertes Verhaltens—und Erlebensmuster”which translates to Work-related Behavior and Experience Patterns) and the Test of Affective, Normative and Continuous Commitment to the Organization, the Profession and the Type of Employment. The results showed a significant correlation between coping patterns and organizational and professional commitment. The findings support the assumption that coping patterns indicate certain types of commitment and individual attitudes. The type of coping pattern should therefore be monitored closely in order to avoid the negative withdrawal behavior that entails a lack of commitment.
Michael Hager, Tatjana Seibt

Moodle as a Key Tool in Students Organization and Communication When Participating in Online Distance Courses

Abstract
The aim of this study is to demonstrate how Moodle helps students in their distance electronic learning process. The survey results are intended to show how Moodle can help the distance electronic courses in three Greek universities, the Piraeus University of Applied Sciences, Hellenic Open University and TEI of Epirus, to investigate any problems and to propose improvement measures for qualitative learning. The working methodology will be based on the collection of primary and secondary data. The original data will be collected by conducting quantitative research using questionnaire as main tool. The sample will be undergraduates and postgraduates students. Results revealed that students consider Moodle as an easy platform, which does not require specialized knowledge on how to use it. This is an important factor in encouraging students and the continuation of their studies. Students seem to prefer Moodle as they find it easy and revisory though is not effective enough in learning as students are not completely satisfied by the communication with their teachers, the media used and the study suggests. Finally, we found that women evaluate Moodle higher in comparison to men.
Boulouta Konstantina, Karagiannis Stephanos

Transatlantic Trade and Investment Partnership (TTIP) Essay Writing Competition: Case Study for Exploring Writing Skills Issues in English for Specific Purposes (ESP)

Abstract
In the digital era and the twenty-first century labor market context, more and more emphasis is placed on the prospective employees‘ transversal or transferable skills, which are not limited to a specific academic discipline or knowledge area but are applicable to many occupations and professional environments. In this context, the importance of effective written communication in a foreign language has been recognized by many employers, which is a foreign language skill that requires systematic development and more detailed assessment. The aim of this paper is to explore the main dilemmas surrounding the writing skills issues in ESP, with particular emphasis on English for Academic Purposes (EAP), as observed and analyzed in an essay writing competition featuring the topic of TTIP agreement, which was organized by the Faculty of Economics and Business in Zagreb, the British Embassy in Zagreb and the Student Association eStudent in November, 2015. 131 students from 34 higher education institutions in Croatia entered the competition, while 41 qualified for the online essay writing and 23 submitted their full essays. The essays have served as a discourse analysis and a case study taking into consideration the following criteria: task achievement, academic relevance and referencing, professional and practical relevance, cohesion and organization of the text, standard of English and completeness of the work. In addition to the aforementioned categories, a range of frequently highlighted transferable skills such as critical thinking skills, research and investigation skills, information and media literacy skills, personal and social responsibility as well as global awareness are also examined in this context. The Assessment Committee consisted of members of the Department of Business Foreign Languages, the Department of Organization and Management, the Department of Trade and officials from the British Embassy in Zagreb, whose assessment criteria are compared to the observations based on practical teaching experience in ESP classes and the relevant sources that have been used in this research. The findings cannot generate answers to the dilemmas presented in this paper but can suggest ways of improving students’ writing skills and academic competence, which might in the long run ensure their future employability as well.
Ankica Knezović

Planning Education in Economics and Business Studies: Perceptions on Factors Influencing the Planning

Abstract
This work presents a descriptive analysis of the perception of students and lecturers at a Faculty of Economics and Business Studies regarding the level of academic planning in the educational programmes comprising the degree courses on offer. We also analyse both students’ and lecturers’ satisfaction with the teaching-learning process. More specifically, we study the functionality of the course guides using a survey conducted during the 2014–2015 academic year to see whether there is sufficient student feedback and whether actions are implemented to pool the educational programmes in such a way as to promote interdisciplinarity. Finally, satisfaction with the teaching-learning process is assessed, using a 0–4 point Likert scale to analyse the responses given to the previously mentioned indicators. A correlation study shows the relationship between the indicators selected to measure this perception. A regression analysis concludes that sufficient student feedback on the review of the course guides (CG) explains 46.6% of lecturers’ satisfaction with the development of the teaching—learning process.
Elisa Amo, Carmen Córcoles, Inmaculada Carrasco, Maria Ángeles Tobarra, Angela Triguero, Rosario Pérez

Risk Management

Frontmatter

Institutional Risks: General Principles of Influence on Pension Systems

Abstract
The pension system is a complex institutional system functioning in a constantly changing internal and external environment. Pension systems are dynamic ones and their parameters are changed under the influence of various factors, the most significant of which are demographic, investment and institutional ones. Institutional factors influence on both the distributional and funded pension systems. However, the article examines the influence of various factors on institutional investment profitability as the key indicator of funded pension systems. There has obtained such factors influencing financial and, consequently, pension institutions as the quality of the legal system, quality of the government regulation, corruption level, religious beliefs, safety and freedom of doing business etc.
Nepp Alexander, Kazantseva Marina, Zhumash Kyzy Aidai, Shilkov Andrey

Barrier Option and Floating Barrier Option: Analysis of Delta Risk

Abstract
The objective of the paper is present the analysis of the impact of modification the payoff function (floating barrier) on the price and the delta risk of barrier options. This paper presents the properties of the floating barrier option: the instrument’s structure, pay-off functions, the effect of a change in the value of selected factors (price of the underlying instrument and floating barrier) on the price of option and the value of the delta coefficient. The article also contains a comparative analysis of the properties of standard barrier options and floating barrier options. The empirical illustration included in the paper is concerned with the pricing simulations of the currency barrier options on EUR/USD. The analysis concern the following class barrier options: down knock-in call, down knock-out call, up knock-in put and up knock-out put.
Ewa Dziawgo

Perspectives on Internal Control and Enterprise Risk Management

Abstract
Grounded on the literature review on Enterprise Risk Management (ERM) this paper aims to analyze the extent and the effectiveness of internal control as well as ERM and to explore their connection with the value creation. A theoretical lens is used to discuss whether effective internal control and ERM enhance performance and increase value creation ability. ERM is most frequently defined with the reference to the 2004 Guidance document published by Committee of Sponsoring Organizations of Treadway Commission (COSO). Proponents of COSO’s ERM Integrated Framework describe this framework as “a world-level template for best practice”, and claim that ERM used by management to enhance an organization ability to manage uncertainty and to consider how much risk to accept as it strives to increase stakeholder value. Additionally the Internal Control—Integrated Framework is a viable and suitable framework for designing, implementing, conducting and assessing the effectiveness of internal control and for reporting. The relationship between value creation and ERM is widely investigated in academic literature. Empirical studies on the value creation abilities of ERM and internal control suggest that there is a positive relation between value creation, internal control and ERM. These studies reveal that firm performance and value are enhanced by high-quality ERM adoption and implementation. Using different identifier of ERM such as Standard and Poor’s risk management ratings or presence of a Chief Risk Officer, the findings of empirical studies reveal that higher ERM quality is associated with less resource constraint, better corporate governance and better accounting performance. Additionally academic studies indicate that the risk-based communication is reinforced with ERM implication.
İdil Kaya
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